Chesapeake Energy 2013 Annual Report Download - page 112

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
104
Preferred Stock
Following is a summary of our preferred stock, including the primary conversion terms as of December 31, 2013:
Preferred Stock
Series Issue Date
Liquidation
Preference
per Share
Holder's
Conversion
Right Conversion
Rate Conversion
Price
Company's
Conversion
Right From
Company's
Market
Conversion
Trigger(a)
5.75% cumulative
convertible
non-voting May and
June 2010 $ 1,000 Any time 37.1850 $ 26.8926 May 17, 2015 $ 34.9604
5.75% (series A)
cumulative
convertible
non-voting May
2010 $ 1,000 Any time 35.9339 $ 27.8289 May 17, 2015 $ 36.1776
4.50% cumulative
convertible September
2005 $ 100 Any time 2.2969 $ 43.5375 September 15,
2010 $ 56.5988
5.00% cumulative
convertible
(series 2005B) November
2005 $ 100 Any time 2.5990 $ 38.4757 November 15,
2010 $ 50.0184
___________________________________________
(a) Convertible at the Company's option if the trading price of the Company's common stock equals or exceeds the
trigger price for a specified time period or after the conversion date indicated if there are less than 250,000 shares
of 4.50% or 5.00% (series 2005B) preferred stock outstanding or 25,000 shares of 5.75% or 5.75% (series A)
preferred stock outstanding.
The following reflects the shares outstanding of our preferred stock for 2013, 2012 and 2011:
5.75% 5.75% (A) 4.50% 5.00%
(2005B)
(in thousands)
Shares outstanding as of January 1, 2013 and December 31,
2013 ....................................................................................... 1,497 1,100 2,559 2,096
Shares outstanding as of January 1, 2012 and December 31,
2012 ....................................................................................... 1,497 1,100 2,559 2,096
Shares outstanding as of January 1, 2011................................ 1,500 1,100 2,559 2,096
Conversion of preferred shares into common stock................ (3) — — —
Shares outstanding at December 31, 2011............................... 1,497 1,100 2,559 2,096
In 2011, 3,000 shares of our 5.75% Cumulative Convertible Preferred Stock were converted into 111,111 shares
of our common stock. There was no gain or loss associated with this conversion.
Dividends
Dividends declared on our common stock and preferred stock are reflected as adjustments to retained earnings
to the extent a surplus of retained earnings will exist after giving effect to the dividends. To the extent retained earnings
are insufficient to fund the distributions, such payments constitute a return of contributed capital rather than earnings
and are accounted for as a reduction to paid-in capital.
Dividends on our outstanding preferred stock are payable quarterly. We may pay dividends on our 5.00%
Cumulative Convertible Preferred Stock (Series 2005B) and our 4.50% Cumulative Convertible Preferred Stock in
cash, common stock or a combination thereof, at our option. Dividends on both series of our 5.75% Cumulative
Convertible Non-Voting Preferred Stock are payable only in cash.