Basis of Presentation

9 Months Ended

Sep. 30, 2013

BASIS OF PRESENTATION: [Abstract]

Basis of Presentation

BASIS OF PRESENTATION:

The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for future periods.

The balance sheet at December 31, 2012 has been derived from the Audited Consolidated Financial Statements at that date but does not include all the notes required by generally accepted accounting principles for complete financial statements. For further information, refer to the Consolidated Financial Statements and related notes for the year ended December 31, 2012 included in CONSOL Energy Inc.'s Form 10-K.

Certain amounts in prior periods have been reclassified to conform with the report classifications of the year ended December 31, 2012, with no effect on previously reported net income or stockholders' equity.

Basic earnings per share are computed by dividing net (loss) income attributable to shareholders by the weighted average shares outstanding during the reporting period. Dilutive earnings per share are computed similarly to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, performance stock options, and CONSOL share units, and the assumed vesting of restricted and performance share units, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options, performance share options, and CONSOL share units were exercised, that outstanding restricted stock units and performance share units were released, and that the proceeds from such activities were used to acquire shares of common stock at the average market price during the reporting period. CONSOL Energy Inc. (CONSOL Energy or the Company) includes the impact of pro forma deferred tax assets in determining potential windfalls and shortfalls for purposes of calculating assumed proceeds under the treasury stock method. The table below sets forth the share-based awards that have been excluded from the computation of the diluted earnings per share because their effect would be anti-dilutive:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Anti-Dilutive Options	4,833,174	5,740,444	4,833,174	2,412,502
Anti-Dilutive Restricted Stock Units	1,243,207	1,348,046	1,243,207	13,302
Anti-Dilutive Performance Share Units	97,142	488,179	97,142	—
Anti-Dilutive Performance Share Options	602,101	501,744	602,101	501,744
	6,775,624	8,078,413	6,775,624	2,927,548

The table below sets forth the share-based awards that have been exercised or released:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Options	11,655	108,477	256,768	159,611
Restricted Stock Units	130,523	22,025	698,664	548,492
Performance Share Units	—	—	159,228	229,730
	142,178	130,502	1,114,660	937,833

The weighted average exercise price per share of the options exercised during the three months ended September 30, 2013 and 2012 was $17.40 and $7.13, respectively. The weighted average exercise price per share of the options exercised during the nine months ended September 30, 2013 and 2012 was $10.49 and $8.39, respectively.

The computations for basic and dilutive earnings per share are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net (Loss) Income Attributable to CONSOL Energy Inc. Shareholders	$	(63,651	)	$	(11,368	)	$	(77,741	)	$	238,567
Weighted average shares of common stock outstanding:
Basic	228,876,336			227,654,395			228,640,671			227,491,284
Effect of stock-based compensation awards	—			—			—			1,700,586
Dilutive	228,876,336			227,654,395			228,640,671			229,191,870
Earnings per share:
Basic	$	(0.28	)	$	(0.05	)	$	(0.34	)	$	1.05
Dilutive	$	(0.28	)	$	(0.05	)	$	(0.34	)	$	1.04

Changes in Accumulated Other Comprehensive Income / (Loss) by component, net of tax, were as follows:

	Gains and Losses on Cash Flow Hedges			Postretirement Benefits			Total
Balance at December 31, 2012	$	76,761		$	(824,103	)	$	(747,342	)
Other comprehensive income before reclassifications	40,400			61,912			102,312
Amounts reclassified from accumulated other comprehensive income	(56,595		)	51,729			(4,866		)
New current period other comprehensive income	(16,195		)	113,641			97,446
Balance at September 30, 2013	$	60,566		$	(710,462	)	$	(649,896	)

The following table shows the reclassification of adjustments out of Accumulated Other Comprehensive Loss:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Derivative Instruments (Note 12)
Natural gas price swaps	$	(38,379	)	$	(77,492	)	$	(93,146	)	$	(251,357	)
Tax benefit	14,025			29,683			36,551			97,760
Net of tax	$	(24,354	)	$	(47,809	)	$	(56,595	)	$	(153,597	)
Actuarially Determined Long-Term Liability Adjustments*(Note 3 and Note 4)
Amortization of prior service costs	$	(8,212	)	$	(13,915	)	$	(24,635	)	$	(39,937	)
Recognized net actuarial loss	21,055			26,611			69,802			79,688
Settlement loss	6,296			—			38,498			—
Total	19,139			12,696			83,665			39,751
Tax expense	(7,306		)	(4,775		)	(31,936		)	(14,946		)
Net of tax	$	11,833		$	7,921		$	51,729		$	24,805

*Excludes amounts related to the remeasurement of the Actuarially Determined Long-Term Liabilities for the three months and nine months ended September 30, 2013 and September 30, 2012.