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Capital Stock
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Capital Stock Capital Stock
Issuance of Common Stock
Following the effectiveness of the Merger, on October 1, 2021, the Company issued approximately 408.2 million shares of its common stock to Cimarex stockholders under the terms of the Merger Agreement.
In October 2021, in accordance with the Merger Agreement, the Company issued 3.4 million shares of restricted stock to replace Cimarex restricted stock awards granted to certain employees. Because these awards have non-forfeitable rights to dividends or dividend equivalents, the Company considers these shares as issued common stock.
Increase in Number of Authorized Shares
On September 29, 2021, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to increase the number of authorized shares of Company common stock from 960,000,000 shares to 1,800,000,000 shares. That amendment became effective on October 1, 2021.
Dividends
Common Stock
The following table summarizes the dividends the Company has paid on its common stock during 2022, 2021 and 2020:
Rate per share
BaseVariableTotalTotal Dividends Paid (In millions)
2022:
First quarter$0.15 $0.41 $0.56 $455 
Second quarter0.150.45 0.60 484 
Third quarter0.150.50 0.65 519 
Fourth quarter0.150.53 0.68 533 
Total year-to-date$0.60 $1.89 $2.49 $1,991 
2021:
First quarter$0.10 $— $0.10 $40 
Second quarter0.11— 0.11 44 
Third quarter0.11— 0.11 44 
Fourth quarter (1)
0.130.67 0.80 651 
Total year-to-date$0.45 $0.67 $1.12 $779 
2020:
First quarter$0.10 $— $0.10 $40 
Second quarter0.10 — 0.10 40 
Third quarter0.10 — 0.10 40 
Fourth quarter0.10 — 0.10 39
Total year-to-date$0.40 $— $0.40 $159 
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(1)Includes a special dividend of $0.50 per share on the Company’s common stock that was paid in connection with the completion of the Merger.
Subsequent Event. In February 2023, the Company’s Board of Directors approved an increase in the base quarterly dividend from $0.15 per share to $0.20 per share beginning in the first quarter of 2023, and approved a quarterly base dividend of $0.20 per share and a variable dividend of $0.37 per share, resulting in a base-plus-variable dividend of $0.57 per share on the Company’s common stock.
Cimarex Redeemable Preferred Stock
During 2022 and 2021, the Company paid dividends of $1 million each year, or $20.3125 per share on the outstanding shares of Preferred Stock (as defined below) issued by Cimarex.
Treasury Stock
In February 2022, the Company’s Board of Directors terminated the previously authorized share repurchase program and authorized a new share repurchase program. This new share repurchase program authorized the Company to purchase up to $1.25 billion of the Company’s common stock in the open market or in negotiated transactions.
During 2022, the Company repurchased 48 million shares of common stock for $1.25 billion under the February 2022 share repurchase program. During 2021 and 2020, there were no share repurchases under the prior share repurchase program. As of December 31, 2022, the Company’s February 2022 repurchase program was fully executed.
During 2022 and 2021, the Company withheld 320,236 and 125,067 shares of common stock, respectively, valued at $9 million and $3 million, respectively, related to shares withheld for taxes upon the vesting of certain restricted stock awards.
In December 2022, the Company’s Board of Directors authorized the retirement of the Company’s common stock held in treasury and as of December 31, 2022, there were no common shares held in treasury stock on the Consolidated Balance Sheet. Prospectively, share repurchases and shares withheld for the vesting of stock awards will be retired in the period in which they are repurchased or withheld.
Subsequent Event. In February 2023, the Company’s Board of Directors approved a new share repurchase program which authorizes the purchase of up to $2.0 billion of the Company’s common stock.
Dividend Restrictions
The Board of Directors of the Company determines the amount of future cash dividends, if any, to be declared and paid on the common stock depending on, among other things, the Company’s financial condition, funds from operations, the level of its capital and exploration expenditures and its future business prospects. None of the senior note or credit agreements in place have restricted payment provisions or other provisions which currently limit the Company’s ability to pay dividends.
Cimarex Redeemable Preferred Stock
In October 2021, in connection with the Merger, the Company effectively assumed the obligations associated with Cimarex’s preferred stock, par value $0.01 per share, designated as 8 1/8% Series A Cumulative Perpetual Convertible Preferred Stock (the “Preferred Stock”). The Preferred Stock was originally issued by Cimarex and remains on the Cimarex balance sheet after the Merger. The fair value of the Preferred Stock as of the effective date of the Merger was $50 million. The Company accounts for the Preferred Stock as a non-controlling interest, which is immaterial for reporting purposes.
In May 2022, the holders of 21,900 shares of Preferred Stock elected to convert their Preferred Stock into Coterra common stock and cash. As a result of the conversion, the holders received 809,846 shares of Coterra common stock and $10 million in cash according to the terms of the Certificate of Designations for the Preferred Stock. The book value of the converted shares was $39 million, and upon conversion the excess of carrying value over cash paid was credited to additional paid-in capital. There was no gain or loss recognized on the transaction because it was completed in accordance with the original terms of the Certificate of Designations for the Preferred Stock. At December 31, 2022, there were 6,125 shares of Preferred Stock outstanding with a carrying value of $11 million.