Common Stock Common Stock (Notes)

3 Months Ended

Mar. 31, 2020

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

COMMON STOCK

Stock-Based Compensation Plans

2018 Equity Incentive Plan. In May 2018, our stockholders approved a long-term equity compensation plan for our employees and non-employee directors (the “2018 Plan”). The 2018 Plan provides for a reserve of 1,800,000 shares of our common stock that may be issued pursuant to awards under the 2018 Plan and a term that expires in March 2028. Shares issued may be either authorized but unissued shares, treasury shares or any combination. Additionally, the 2018 Plan permits the reuse or reissuance of shares of common stock which were canceled, expired, forfeited or paid out in the form of cash. However, shares tendered or withheld to satisfy the exercise price of options or tax withholding obligations, and shares covering the portion of exercised stock-settled stock appreciation rights ("SARs") (regardless of the number of shares actually delivered), count against the share limit. Awards may be issued in the form of options, SARs, restricted stock, restricted stock units ("RSUs"), performance stock units ("PSUs") and other stock-based awards. Awards may vest over periods of continued service or upon the satisfaction of performance conditions set at the discretion of the Compensation Committee of the Board (the "Compensation Committee"), with a minimum one-year vesting period applicable to most awards. With regard to SARs and options, awards have a maximum exercisable period of ten years. As of March 31, 2020, there were 485,079 shares available for grant under the 2018 Plan.

2010 Long-Term Equity Compensation Plan. Our Amended and Restated 2010 Long-Term Equity Compensation Plan, which was most recently approved by stockholders in 2013 (as the same has been amended and restated from time to time, the "2010 Plan"), will remain outstanding and we may continue to use the 2010 Plan to grant awards. As of March 31, 2020, there were 78,011 shares available for grant under the 2010 Plan.

2015 SRC Equity Incentive Plan. Pursuant to the closing of the SRC Acquisition, SRC granted 155,928 PSUs to certain SRC executives under the 2015 SRC Equity Incentive Plan (the “2015 SRC Plan”). These PSUs (the “SRC PSUs”) were granted immediately prior to execution of the Merger Agreement, were assumed and converted into PDC PSUs at a rate of 0.158 per share and remain subject to the same terms and conditions (including performance-vesting terms) that applied immediately prior to the closing of the SRC Acquisition. The PSUs will result in a payout between zero and 200 percent of the target PSUs awarded. As of March 31, 2020, there were no shares available for grant under the 2015 SRC 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 March 31,
	2020			2019
	(in thousands)

Stock-based compensation expense	$	5,672		$	4,683
Income tax benefit	(1,375		)	(1,120		)
Net stock-based compensation expense	$	4,297		$	3,563

Restricted Stock Units

Time-Based Awards. The fair value of the time-based RSUs is amortized ratably over the requisite service period, primarily three years. The time-based RSUs generally vest ratably on each anniversary following the grant date provided that a participant is continuously employed.

The following table presents the changes in non-vested time-based RSUs to all employees, including executive officers, for the three months ended March 31, 2020:



	Shares		Weighted-Average Grant Date Fair Value per Share

Non-vested at December 31, 2019	795,926		$	45.51
Granted	316,778		22.73
Vested	(168,998	)	47.34
Forfeited	(21,927	)	44.89
Non-vested at March 31, 2020	921,779		37.36

The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented:



	As of/Three Months Ended March 31,
	2020		2019
	(in thousands, except per share data)

Total intrinsic value of time-based awards vested	$	3,748	$	3,311
Total intrinsic value of time-based awards non-vested	5,724		28,544
Market price per share as of March 31	6.21		40.68
Weighted-average grant date fair value per share	22.73		38.59

Total compensation cost related to non-vested time-based awards and not yet recognized in our condensed consolidated statements of operations as of March 31, 2020 was $23.5 million. This cost is expected to be recognized over a weighted-average period of 2.0 years.

Performance Stock Units

Market-Based Awards. The fair value of the market-based PSUs is amortized ratably over the requisite service period, primarily three years. The market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of three years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved.

The Compensation Committee awarded a total of 278,889 market-based PSUs to our executive officers during the three months ended March 31, 2020. 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, 2022, 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 weighted-average grant date fair value per PSU granted was computed using the Monte Carlo pricing model using the following assumptions:



	Three Months Ended March 31,
	2020		2019

Expected term of award (in years)	3		3
Risk-free interest rate	1.4	%	2.5	%
Expected volatility	46.6	%	41.4	%

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 historical volatility.

SRC Performance Stock Units. Terms of the SRC PSUs are substantially the same as PDC PSUs, except that the awards do not require continuous employment and the performance period associated with the awards of January 1, 2019 through December 31, 2021, predates the grant date. The fair value of the SRC PSU awards was determined on the grant date of January 13, 2020 using the Monte Carlo pricing model using the following assumptions:



	Three Months Ended March 31,
	2020

Expected term of awards (in years)	2
Risk-free interest rate	1.6		%
Expected volatility	56.9		%
Weighted-average grant date fair value per share	$	33.35

The expected term of the awards is based on the number of years from the grant date through the end of the performance period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant, extrapolated to approximate the life of the awards. The expected volatility was based on our historical volatility, as well as that of our peer group.

The following table presents the change in non-vested market-based awards, including SRC PSUs, during the three months ended March 31, 2020:



	Shares	Weighted-Average Grant Date Fair Value per Share

Non-vested at December 31, 2019	221,142	$	61.61
Granted	434,817	33.46
Non-vested at March 31, 2020	655,959	42.95

The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented:



	As of/Three Months Ended March 31,
	2020		2019
	(in thousands, except per share data)

Total intrinsic value of market-based awards non-vested	$	4,074	$	9,849
Market price per common share as of March 31,	6.21		40.68
Weighted-average grant date fair value per share	33.46		56.68

Total compensation cost related to non-vested market-based awards not yet recognized in our condensed consolidated statements of operations as of March 31, 2020 was $15.3 million. This cost is expected to be recognized over a weighted-average period of 2.1 years.

Stock Appreciation Rights

The SARs vest ratably over a three-year period and may generally be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance. The following table presents the change in SARs during the three months ended March 31, 2020:



	Shares		Weighted-Average Grant Date Fair Value per Share

Outstanding at December 31, 2019	290,258		$	46.64
Exercised	(7,807	)	24.44
Expired	(56,162	)	45.39
Outstanding at March 31, 2020	226,289		47.72

All outstanding SARs as of March 31, 2020 have vested and the related compensation cost has been fully recognized.

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 the Board from time to time. Through March 31, 2020, no shares of preferred stock have been issued.

Stock Repurchase Program

In April 2019, the Board approved the acquisition of up to $200 million of our outstanding common stock, depending on market conditions (the "Stock Repurchase Program"). Effective upon the closing of the SRC Acquisition, our Board approved an increase and extension to the Stock Repurchase Program from $200 million to $525 million. Repurchases under the Stock Repurchase Program can be made in open markets at our discretion and in compliance with safe harbor provisions, or in privately negotiated transactions. The Stock Repurchase Program does not require any specific number of shares to be acquired, and can be modified or discontinued by the Board at any time. During the three months ended March 31, 2020, we repurchased 1.3 million shares of our outstanding common stock at a cost of $23.8 million. The last repurchases occurred in early March 2020. Approximately $346.8 million of our outstanding common stock remains available for repurchase under the Stock Repurchase Program; however, further repurchases pursuant to the program have been suspended and, if we resume the program, we expect to slow the pace of previously planned share repurchases as we continue to prioritize our financial strength and liquidity.