Capital Stock

12 Months Ended

Dec. 31, 2023

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.

Dividends

Common Stock

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.

The following table summarizes the dividends the Company has paid on its common stock during 2023, 2022 and 2021:

	Rate per share
	Base		Variable		Total		Total Dividends Paid (In millions)
2023:
First quarter	$	0.20	$	0.37	$	0.57	$	438
Second quarter	0.20		—		0.20		153
Third quarter	0.20		—		0.20		153
Fourth quarter	0.20		—		0.20		151
Total year-to-date	$	0.80	$	0.37	$	1.17	$	895
2022:
First quarter	$	0.15	$	0.41	$	0.56	$	455
Second quarter	0.15		0.45		0.60		484
Third quarter	0.15		0.50		0.65		519
Fourth quarter	0.15		0.53		0.68		533
Total year-to-date	$	0.60	$	1.89	$	2.49	$	1,991
2021:
First quarter	$	0.10	$	—	$	0.10	$	40
Second quarter	0.11		—		0.11		44
Third quarter	0.11		—		0.11		44
Fourth quarter(1)	0.13		0.67		0.80		651
Total year-to-date	$	0.45	$	0.67	$	1.12	$	779

_______________________________________________________________________________

(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 2024, the Company’s Board of Directors approved an increase in our base quarterly dividend from $0.20 per share to $0.21 per share beginning in the first quarter of 2024, and approved a quarterly base dividend of $0.21 per share.

Treasury Stock

In February 2023, the Company’s Board of Directors terminated the previously authorized share repurchase program and approved a new share repurchase program which authorizes the purchase of up to $2.0 billion of the Company’s common stock. During 2023, the Company repurchased and retired 17 million shares of common stock for $418 million under its new repurchase program. As of December 31, 2023, the Company’s had $1.6 billion remaining under its current share repurchase program.

In February 2022, the Company’s Board of Directors authorized a share repurchase program up to $1.25 billion of the Company’s common stock in the open market or in negotiated transactions, which was fully executed at December 31, 2022.

During 2023, 2022 and 2021, the Company withheld and retired 332,634, 320,236 and 125,067 shares of common stock, respectively, valued at $9 million, $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, and provided that 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. Accordingly, as of December 31, 2023 and 2022, there were no common shares held in treasury stock on the Consolidated Balance Sheet.

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 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 Company accounts for the Preferred Stock as a non-controlling interest, which is immaterial for reporting purposes.

During the years ended December 31, 2023 and 2002, holders of a portion of the Preferred Stock elected to convert their Preferred Stock into Coterra common stock and cash as follows:

	2023		2022
Preferred stock converted into Coterra common stock	2,000		21,900
Coterra common stock issued	79,285		809,846
Cash paid for conversion (in millions)	$	1	$	10
Book value of preferred shares at conversion (in millions)	$	3	$	39

Upon conversion of the Preferred Stock, the excess of carrying value over cash paid was credited to additional paid-in capital in the Consolidated Balance Sheet. There was no gain or loss recognized on the transactions as the shares were converted in accordance with the original terms of the Certificate of Designations for the Preferred Stock. At December 31, 2023, there were 4,265 shares of Preferred Stock outstanding with a carrying value of $8 million.