Part IV
Item 15.
Exhibits and Financial Statement Schedules
XTO ENERGY INC. Notes to Consolidated Financial Statements
9. Equity
Stock Splits
We effected a five-for-four stock split on December 13, 2007 and a four-for-three stock split on March 15, 2005. All common stock shares, treasury stock shares and per share amounts have been retroactively restated to reflect these stock splits.
Common Stock
The following reflects our common stock activity:
Shares Issued |
Shares in Treasury |
||||||
(in thousands) |
2007 |
2006 |
2005 |
2007 |
2006 |
2005 |
|
| Balance, January 1 | 464,342 | 456,526 | 435,536 | 4,900 | 2,069 | 1,563 | |
| Issuance/vesting and forfeiture of performance, restricted and unrestricted shares | 1,413 | 1,521 | 540 | 240 | 81 | 506 | |
| Stock option and warrant exercises | 3,117 | 3,101 | 3,783 | – | – | – | |
| Treasury stock purchases | – | – | – | – | 2,750 | – | |
| Common stock offering | 21,562 | – | – | – | – | – | |
| Issuance for acquisition of corporation | – | 3,194 | 16,667 | – | – | – | |
| Balance, December 31 | 490,434 | 464,342 | 456,526 | 5,140 | 4,900 | 2,069 | |
In February 2008, we completed a public offering of 23 million common shares at $55.00 per share. After underwriting discount and other offering costs of $42 million, net proceeds of $1.2 billion were used to fund a portion of the $1.0 billion of property acquisitions expected to close in first quarter 2008 and to repay indebtedness under our commercial paper program. (Note 13).
In June 2007, we completed a public offering of 21.6 million common shares at $48.40 per share. After underwriting discount and other offering costs of $35 million, net proceeds of $1.0 billion were used to fund a portion of the acquisition of natural gas and oil properties from Dominion Resources, Inc. (Note 13).
Our acquisition of Peak Energy Resources, Inc. in June 2006 was partially funded through issuance to the seller of 3.2 million shares of common stock (Note 13). We registered these shares under our shelf registration statement (see below) in June 2006.
Our acquisition of Antero Resources Corporation in April 2005 was partially funded through issuance to the seller of 16.7 million shares of common stock (Note 13). We filed a shelf registration with the Securities and Exchange Commission for the resale of the common stock including shares to be issued upon exercise of warrants. See Common Stock Warrants below.
Treasury Stock
In August 2004, our Board of Directors authorized the repurchase of up to 25 million shares of our common stock which may be purchased from time to time in open market or negotiated transactions. In June 2006, we repurchased 2.8 million shares of our common stock on the open market at $30.24 per share, or a total of $83 million. As of December 31, 2007, we have repurchased 2.8 million shares.
Stockholder Rights Plan
In August 1998, the Board of Directors adopted a stockholder rights plan that is designed to assure that all stockholders receive fair and equal treatment in the event of any proposed takeover of the Company. Under this plan, one preferred share purchase right is attached to each outstanding share of common stock. Each right entitles stockholders to buy one one-thousandth of a share of newly created Series A Junior Participating Preferred Stock at an exercise price of $80, subject to adjustment in the event a person acquires or makes a tender or exchange offer for 15% or more of the outstanding common stock. In such event, each right entitles the holder (other than the person acquiring 15% or more of the outstanding common stock) to purchase shares of common stock with a market value of twice the right’s exercise price. At any time prior to such event, the Board of Directors may redeem the rights at one cent per right. The rights can be transferred only with common stock and expire in August 2008.
Shelf Registration Statement
In June 2006, we filed a shelf registration statement with the Securities and Exchange Commission to potentially offer securities which could include debt securities or common stock. The securities will be offered at prices and on terms to be determined at the time of sale. Net proceeds from the sale of such securities will be used for general corporate purposes, including reduction of bank debt.
Common Stock Warrants
Our purchase of Antero Resources Corporation was partially funded by issuance of warrants to purchase 2.6 million shares of common stock at $20.78 per share (Note 13). The warrants expire in April 1, 2010.
Common Stock Dividends
The Board of Directors declared quarterly dividends of $0.04 per common share for the first three quarters of 2005, $0.06 per common share for fourth quarter 2005 and the first three quarters of 2006, $0.072 per common share for fourth quarter 2006 and $0.096 per common share for the first three quarters of 2007. In November 2007, the Board of Directors declared a five-for-four stock split of its common stock and increased its quarterly dividend to $0.12 per common share for the fourth quarter 2007, effecting a 25% dividend increase. On February 19, 2008, the Board of Directors declared a first quarter 2008 dividend of $0.12 per common share.
In January 2006, the Board of Directors declared a dividend to common stockholders, consisting of all 21.7 million Hugoton Royalty Trust units owned by us. The dividend ratio of 0.047688 trust units for each common share outstanding was set on the record date of April 26, 2006. The units were distributed on May 12, 2006, when this dividend was recorded. We recorded this dividend at $614 million, or approximately $1.35 per common share, the fair market value of the units based on the May 12, 2006 average high and low New York Stock Exchange trade price of $28.31.
The determination of the amount of future dividends, if any, to be declared and paid is at the sole discretion of the Board of Directors and will depend on our financial condition, earnings and cash flow from operations, the level of our capital expenditures, our future business prospects and other matters the Board of Directors deems relevant.
See Note 12.