Note 7—Shareholders' and Owners' Equity

Shareholders’ Equity (Successor)

At December 31, 2016, the Company had authorized 621,000,000 shares of capital stock, consisting of (a) 620,000,000 shares of common stock, including (i) 600,000,000 shares of Class A Common Stock, (ii) 20,000,000 shares of Class C Common Stock and (b) 1,000,000 shares of preferred stock, including one share of Series A Preferred Stock and 104,400 shares of Series B Preferred Stock.

On October 11, 2016, in connection with Business combination the Company issued and sold in private placements (i) 81,005,000 shares of Class A Common Stock to Riverstone Centennial Holdings, L.P. and (ii) the issuance and sale of 20,000,000 shares of Class A Common Stock to certain other accredited investors in a private placement, resulting in net cash proceeds of approximately $1.0 billion. The outstanding shares of Class B Common Stock, par value $0.0001 per share, converted into shares of Class A Common Stock on a one-for-one basis in connection with the Business Combination. Additionally, the Company issued 20,000,000 shares of Class C Common Stock to the Centennial Contributors and one share of Series A Preferred Stock to CRD in connection with the Business Combination. Holders of Class C Common Stock, generally have the right to cause CRP to redeem all or a portion of their CRP Common Units in exchange for shares of the Company's Class A Common Stock or, at CRP's option, an equivalent amount of cash. The Company may, however, at its option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption by CRP. Upon the future redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock will be canceled.

On December 28, 2016, in connection with the Silverback Acquisition, the Company issued and sold in private placements (i) 3,473,590 shares of Class A Common Stock and 104,400 shares of Series B Preferred Stock to Riverstone VI Centennial QB Holdings, L.P., Riverstone Non-ECI USRPI AIV, L.P. and REL US Centennial Holdings, LLC, which are affiliates of Riverstone Investment Group LLC and (ii) 33,012,380 shares of the Company’s Class A Common Stock to certain other investors, resulting in net cash proceeds of approximately $889.6 million. The Company used the proceeds from the private placements to fund the cash consideration for the Silverback Acquisition and expect to use any remaining proceeds for general corporate purposes. The shares of Series B Preferred Stock are automatically convertible into shares of the Company’s Class A Common Stock on a 250-to-one basis (subject to certain adjustments for stock splits, stock dividends, reorganization, recapitalizations and the like) at such time as the Company receives stockholder approval for the issuance of such shares of Class A Common Stock in compliance with NASDAQ listing rules.

Class A Common Stock

The Company had 201,091,646 shares of Class A Common Stock outstanding as of December 31, 2016, consisting of (i) 50,000,000 shares of Class A Common Stock issued as part of Units in connection with the IPO, (ii) 12,500,000 shares of Class A Common Stock issued upon conversion of the Company’s Class B Common Stock, par value $0.0001 per share, in connection with the Business Combination (iii) 101,005,000 shares of Class A Common Stock issued in private placements in connection with the Business Combination, (iv) 844,079 shares of Class A Common Stock issued upon the redemption of CRP Common Units and cancellation of shares of Class C Common Stock, (v) 36,485,970 shares of Class A Common Stock issued in private placements in connection with the Silverback Acquisition and (vi) 256,597 restricted shares of Class A Common Stock issued to the Company’s directors and executive officers. Additional shares of Class A Common Stock may be issued by the Company upon the exchange of CRP Common Units and cancellation of shares of Class C Common Stock pursuant to the A&R LLC Agreement (as defined below), the conversion of the Series B Preferred Stock and the exercise of the Company’s outstanding Warrants.

Holders of the Company's Class A Common Stock are entitled to one vote for each share held on all matters to be voted on by the Company's stockholders. Holders of the Class A Common Stock and holders of the Class C Common Stock will vote together as a single class on all matters submitted to a vote of the Company's stockholders, except as required by law. Unless specified in the Charter (including any certificate of designation of preferred stock) or Bylaws, or as required by applicable provisions of the Delaware General Corporation Law or applicable stock exchange rules, the affirmative vote of a majority of the Company's shares of common stock that are voted is required to approve any such matter voted on by the Company's stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors (subject to the right of the holder of the Company’s Series A Preferred Stock to nominate and elect one director). Subject to the rights of the holders of any outstanding series of preferred stock, the Company's stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.

In the event of a liquidation, dissolution or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the Class A Common Stock. The Company's stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class A Common Stock.

Class C Common Stock

The Company had 19,155,921 shares of Class C Common Stock outstanding as of December 31, 2016, which represent the portion of the 20,000,000 shares of Class C Common Stock issued to the Centennial Contributors in connection with the Business Combination that had not been redeemed or exchanged as of such date.

Holders of Class C Common Stock, together with holders of Class A Common Stock voting as a single class, will have the right to vote on all matters properly submitted to a vote of the stockholders. In addition, the holders of Class C Common Stock, voting as a separate class, will be entitled to approve any amendment, alteration or repeal of any provision of the Company’s Charter that would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class C Common Stock. Holders of Class C Common Stock will not be entitled to any dividends from the Company and will not be entitled to receive any of its assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of its affairs.

Shares of Class C Common Stock may be issued only to the Centennial Contributors, their respective successors and assigns, as well as any permitted transferees of the Centennial Contributors. A holder of Class C Common Stock may transfer shares of Class C Common Stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder's CRP Common Units to such transferee in compliance with the A&R LLC Agreement (as defined below). Holders of Class C Common Stock generally have the right to cause CRP to redeem all or a portion of their CRP Common Units in exchange for shares of the Company's Class A Common Stock or, at CRP's option, an equivalent amount of cash. The Company may, however, at its option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption by CRP. Upon the future redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock will be canceled.

Preferred Stock

As of December 31, 2016, the Company had outstanding one share of Series A Preferred Stock, issued to CRD in connection with the Business Combination, and 104,400 shares of Series B Preferred Stock, issued and sold to certain affiliates of Riverstone in connection with the Silverback Acquisition.

CRD, as the holder of the Series A Preferred Stock, will not be entitled to any dividends from the Company, but will be entitled to preferred distributions in liquidation in the amount of $0.0001 per share of Series A Preferred Stock and will have a limited voting right as described below. The Series A Preferred Stock will be redeemable by the Company (a) at such time as CRD and its affiliates cease to own, in the aggregate, at least 5,000,000 CRP Common Units and/or shares of Class A Common Stock (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions), (b) at any time at CRD's option or (c) upon a breach by CRD of the transfer restrictions relating to the Series A Preferred Stock. In addition, for so long as the Series A Preferred Stock remains outstanding, CRD will be entitled to nominate one director for election to the Company’s board of directors in connection with any vote of the Company’s stockholders for the election of directors, and the vote of CRD will be the only vote required to elect such nominee to the Company’s board of directors.

Holders of Series B Preferred Stock generally will not have any voting rights, except as required by law. Notwithstanding the foregoing, the affirmative vote of holders of a majority of the Series B Preferred Stock then outstanding, voting as a separate class, is required to (a) approve any amendment, alteration or repeal of any provision of the Certificate of Designation relating to the Series B Preferred Stock or the Charter that adversely affects the rights, preferences, privileges or voting powers of the Series B Preferred Stock or (b) authorize the issuance of any senior securities or parity securities. With respect to any matter on which the holders of Series B Preferred Stock are entitled to vote, each share of Series B Preferred Stock will be entitled to one vote on such matter.

Beginning on December 28, 2019, the third anniversary of the closing date of the Silverback Acquisition, the Company will have the right, but not the obligation, to redeem all (but not less than all) of each holder's shares of Series B Preferred Stock for a redemption price per share, determined on an as-converted basis, equal to the average of the last reported sale price for a share of Class A Common Stock on NASDAQ for each of the last ten consecutive trading days prior to the redemption date or, if such shares are no longer traded, at the fair market value of the Class A Common Stock, as determined in good faith by the Company’s board of directors. In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of the Series B Preferred Stock will first be entitled to receive the liquidation preference per share of $0.0001 before any distribution of assets is made to holders of any junior securities.

The shares of Series B Preferred Stock are automatically convertible into shares of the Company’s Class A Common Stock on a 250-to-one basis (subject to certain adjustments) at such time as the Company receives stockholder approval for the issuance of such shares of Class A Common Stock in compliance with NASDAQ listing rules.

Warrants

As of December 31, 2016, the Company had 24,666,643 warrants outstanding, consisting of 16,666,643 public warrants originally sold as part of the Units in the IPO and 8,000,000 Private Placement Warrants sold to the Company’s Sponsor in a private placement. Each whole warrant entitles the holder to purchase one whole share of Class A Common Stock for $11.50 per share. The warrants became exercisable on March 1, 2017 and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

On March 1, 2017, the Company delivered a notice of redemption of the Public Warrants, announcing its intention to redeem any unexercised and outstanding Public Warrants on March 31, 2017 for $0.01 per Public Warrant. As permitted under the warrant agreement that provides the terms of the Public Warrants, the notice of redemption requires all holders exercising their Public Warrants prior to March 31, 2017 to do so on a “cashless basis” and surrender their Public Warrants for a number of shares of Class A Common Stock equal to the product of the quotient equal to (i) the difference between $11.50 and $18.44 (the average last sale price of the Class A Common Stock for the ten trading days ending on February 24, 2017) divided by (ii) $18.44, or approximately 0.376, multiplied by the number of Public Warrants held by such holder, rounded down to the nearest whole share. Assuming all warrants are exercised by holders, Centennial will issue approximately 6.27 million shares of Class A Common Stock to the Public Warrant holders, resulting in a share count of approximately 253 million shares outstanding, which includes Class A Common Stock shares, the shares of Series B Preferred Stock held by Riverstone (assuming conversion to Class A Common Stock on a 250-to-one basis), and the shares of Class C Common Stock held by the Centennial Contributors. The Private Placement Warrants are non-redeemable so long as they are held by our Sponsor or its permitted transferees.

Noncontrolling Interest

As a result of the exchange of CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock (discussed in Note 12—Transactions with Related Parties) on October 11, 2016, the Company’s ownership in CRP increased from 89.1% to 89.6% and the ownership of the other holders of CRP Common Units in CRP decreased from 10.9% to 10.4%. Because the increase in the Company’s ownership interest in CRP did not result in a change of control, the transaction was accounted for as an equity transaction under ASC Topic 810, Consolidations, which requires that any differences between the amount by which the carrying value of the Company’s basis in CRP and the fair value of the consideration received are recognized directly in equity and attributed to the controlling interest.

As a result of the December 28, 2016 private placements and the issuance of shares of Class A Common Stock and Series B Preferred Stock to the investors therein (discussed in Note 12—Transactions with Related Parties), the net proceeds of which were contributed by the Company to CRP, the Company’s ownership of CRP increased from 89.6% to 92.2% and the other holders of CRP Common Units decreased from 10.4% to 7.8%.

The Company has consolidated the financial position and results of operations of CRP and reflected that portion retained by the other holders of CRP Common Units as a noncontrolling interest.

The following table summarizes the noncontrolling interest income (loss):



	Successor			Predecessor
	October 11, 2016 through December 31, 2016			January 1, 2016 through October 10, 2016		Year Ended December 31,
	October 11, 2016 through December 31, 2016			January 1, 2016 through October 10, 2016		2015		2014
Net loss attributable to noncontrolling interest	$	(904	)	$	—	$	—	$	(2	)

Owners’ Equity (Predecessor)

At October 10, 2016 (prior to the Business Combination), members included Centennial HoldCo, Celero and Follow-On, owning an approximate 61.2%, 21.2% and 17.6% membership interest in Centennial OpCo, respectively. CRP has two classes of membership interests outstanding: Class A, which consist of membership interests held by CRD and Follow-On; and Class B, which consist of membership interests held by Celero. On October 10, 2016 CRP recorded a deemed contribution attributable to the consummation of the Business Combination, which resulted in a Fundamental Change with respect to the incentive units and CRP recorded $165.4 million of compensation expense. Refer to Note 7—Shareholders' and Owners' Equity. Additionally, CRP recorded a deemed contribution of $14.0 million attributable to certain transaction costs related to the Business Combination paid by the Centennial Contributors. Refer to Note 2—Business Combination.

As of December 31, 2015, CRD had contributed $289.4 million and had a remaining capital commitment of $32.5 million, Follow-On had contributed $84.2 million and had a remaining capital commitment of $100.3 million, and Celero had contributed $125.4 million and has no remaining capital commitment.

In 2015 Follow-On contributed $84.2 million to Centennial OpCo in exchange for membership interests in Centennial CRP. In addition, CRD contributed approximately $27.2 million to CRP in exchange for additional membership interests in CRP.