Range Resources reports that, prior to year-end, it had reached an agreement with the holder of its 5.9% Convertible Preferred Stock to convert the preferred stock into common stock. Under the agreement, the $50 million of preferred stock was converted into 5.9 million shares of common stock at the prescribed conversion price specified in the security's certificate of designation. Range's right to convert the preferred stock did not begin until September 2005. In exchange for converting early, the holder received $2.2 million, representing the dividend payments it would have received had it maintained the preferred stock through September 2005. The payment will be recognized as additional preferred dividends in the fourth quarter of 2004 bringing total preferred dividends recognized in the fourth quarter to $2.95 million. As a result of the transaction, at year-end 2004, Range had 81.2 million common shares outstanding and no convertible securities outstanding. The holder of the preferred advises that it will use the converted shares to cover its short position in the stock. No further preferred dividends will be payable in 2005.
John H. Pinkerton, Range's President and Chief Executive Officer, stated, "We are pleased to have converted the preferred stock prior to year-end, further simplifying our balance sheet. Our capital structure now consists of only our bank credit facility, senior subordinated notes and common stock. Since our diluted financial results have reflected the future conversion of the preferred stock, the early conversion will have no impact. Looking ahead, we believe our future financial results will be easier to understand for our shareholders and the investment community."