Common Stock Common Stock (Notes)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Common Stock

NOTE 12 - COMMON STOCK

Stock-Based Compensation Plans

2018 Equity Incentive Plan. In May 2020, our stockholders approved an amendment to increase the number of shares of our common stock reserved for issuance pursuant to our long-term equity compensation plan for employees and non-employee directors (the “2018 Plan”) to 7,050,000 shares. As of June 30, 2022, there were 3,829,031 shares available for grant under the 2018 Plan.

2010 Long-Term Equity Compensation Plan. Our Amended and Restated 2010 Long-Term Equity Compensation Plan, approved in 2013 (the “2010 Plan”), remains outstanding and we continue to use the 2010 Plan to grant awards. No awards may be granted under the 2010 Plan on or after June 5, 2023. As of June 30, 2022, there were 248,843 shares available for grant under the 2010 Plan. 

The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
General and administrative expense	$	6,738	$	6,113	$	11,920	$	10,941
Lease operating expense	558		382		850		574
Total stock-based compensation expense	$	7,296	$	6,495	$	12,770	$	11,515

    Restricted Stock Units

The following table presents the changes in non-vested time-based RSUs to eligible employees, including executive officers, for the six months ended June 30, 2022:

	Shares	Weighted Average Grant-Date Fair Value per Share
Non-vested at beginning of period	1,165,187	$	25.33
Granted	344,106	70.58
Vested	(538,750)	25.78
Forfeited	(32,552)	38.87
Non-vested at end of period	937,991	41.21

The weighted average grant-date fair value of restricted stock units was $70.58 and $33.32 for the six months ended June 30, 2022 and 2021, respectively. The total grant-date fair value of restricted stock units that vested for the six months ended June 30, 2022 and 2021 was $13.9 million and $12.9 million, respectively. Total compensation cost related to non-vested time-based awards and not yet recognized on our condensed consolidated statements of operations as of June 30, 2022 was $33.5 million. This cost is expected to be recognized over a weighted average period of 1.8 years.

Performance Stock Units

The Compensation Committee awarded a total of 102,098 market-based PSUs to our executive officers during the six months ended June 30, 2022. In addition to continuous employment, the vesting of these PSUs is contingent on a combination of absolute stock performance and our total stockholder return (“TSR”), which is essentially our stock price change, including any dividends, over a three-year period ending on December 31, 2024, as compared to the TSR of a group of peer companies over the same period. The PSUs will result in a payout between zero and 250 percent of the target PSUs awarded.

The grant-date fair value was estimated using a Monte Carlo valuation model. The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. The expected term of the awards was based on the requisite service period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant and extrapolated to approximate the life of the award. The expected volatility was based on our common stock historical volatility, as well as that of our peer group.

The following table summarizes the key assumptions and related information used to determine the grant-date fair value of performance stock units awarded during the periods presented:

	Six Months Ended June 30,
	2022	2021
Expected term of award (in years)	2.9	2.9
Risk-free interest rate	1.7%	0.2%
Expected volatility	86.3%	84.6%
Weighted average grant date fair value per share	$107.85	$54.01

The following table presents the change in non-vested market-based awards during the six months ended June 30, 2022:

	Shares	Weighted Average Grant-Date Fair Value per Share
Non-vested at beginning of period	439,229	$	43.21
Granted	102,098	107.85
Granted for performance multiple (1)	241,183	43.10
Released (1)	(241,183)	43.10
Non-vested at end of period	541,327	55.40

_____________

(1) Upon completion of the performance period for the PSUs granted in 2019 and a portion of the PSUs granted in 2020, a performance multiple of 190% was applied to each of the grants resulting in additional grants of PSUs in January 2022.

Total compensation cost related to non-vested market-based awards not yet recognized on our condensed consolidated statements of operations as of June 30, 2022 was $16.9 million. This cost is expected to be recognized over a weighted average period of 1.3 years.

Preferred Stock

We are authorized to issue 50,000,000 shares of preferred stock, par value $0.01 per share, which may be issued in one or more series, with such rights, preferences, privileges, and restrictions as shall be fixed by our board of directors from time to time. Through June 30, 2022, no shares of preferred stock have been issued.

Stock Repurchase Program

In 2019, our board of directors approved a program pursuant to which we may acquire shares of our common stock from time to time. At December 31, 2021, $187.3 million of the approved $525.0 million remained available for repurchase under the stock repurchase program. In February 2022, our board of directors approved a new stock repurchase program that reset the total repurchase value to $1.25 billion, which we currently anticipate fully utilizing by December 31, 2023. The stock repurchase program does not require any specific number of shares to be acquired and can be modified or discontinued by our board of directors at any time. Repurchases under the program can be made in open markets at our discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. Pursuant to the program, we repurchased 4.3 million and 1.3 million shares of outstanding common stock at a cost of $300.0 million and $48.6 million during the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, $978.1 million remained available under the program for repurchases of our outstanding common stock.

Dividends

During the first and second quarters of 2022, our board of directors approved the declaration and payment of quarterly cash dividends of $0.25 and $0.35 per share of common stock, respectively. For the six months ended June 30, 2022, our dividends totaled $59.1 million or $0.60 per share of outstanding common stock. All RSUs and PSUs receive a dividend equivalent per unit, recognized as a liability included in other liabilities on our condensed consolidated balance sheets, until the recipients receive the equivalents upon vesting. Dividends declared were recorded as a reduction of additional paid-in capital as there were no retained earnings as of the date of declaration. Future dividend payments must be approved by our board of directors and will depend on our liquidity, financial requirements, and other factors considered relevant by our board.