Earnings Per Share

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

EARNINGS PER SHARE:

Basic earnings per share is computed by dividing net income attributable to CNX shareholders by the weighted average shares outstanding during the reporting period. Diluted earnings per share is computed similarly to basic earnings per share, except that the weighted average shares outstanding are increased to include, if dilutive, additional shares from stock options, performance stock options, restricted stock units, performance share units, and shares issuable upon conversion of CNX's outstanding Convertible Notes (See Note 9 - Long-Term Debt). The number of additional shares is calculated by assuming that outstanding stock options and performance share options 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.

Pursuant to the Merger (See Note 13 - Acquisitions and Dispositions for more information), all outstanding phantom units previously granted under the CNXM long-term incentive plan were converted into the right to receive 0.88 shares of common stock of CNX. As such, all outstanding phantom units were converted, effective as of the closing of the Merger, into CNX restricted stock units. Each CNX restricted stock unit will be subject to the same vesting, forfeiture and other terms and conditions applicable to the converted CNXM phantom units. Under Accounting Standards Codification Topic 718, Compensation - Stock Compensation, it was determined that there was no additional compensation cost to record as the conversion of awards did not result in incremental fair value.

The table below sets forth the share-based awards that have been excluded from the computation of diluted earnings per share because their effect would be antidilutive:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2020	2019	2020	2019
Anti-Dilutive Options	4,237,319	2,035,273	4,237,319	2,035,273
Anti-Dilutive Restricted Stock Units	2,180,548	814,183	2,180,548	813,266
Anti-Dilutive Performance Share Units	780,335	—	780,335	—
Anti-Dilutive Performance Stock Options	—	927,268	—	927,268
	7,198,202	3,776,724	7,198,202	3,775,807

Additionally, the 32,242,975 shares underlying the Convertible Notes are not considered in the calculation of diluted net loss per share for the three and nine months ended September 30, 2020 as these Convertible Notes were not convertible as of September 30, 2020. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, and therefore will use the treasury stock method for calculating any potential dilutive effect of the conversion spread on diluted net income per share, if applicable.

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


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2020	2019	2020	2019
Options	21,864	6,953	261,703	27,794
Restricted Stock Units	21,186	28,769	525,226	1,002,003
Performance Share Units	—	—	274,716	342,882
	43,050	35,722	1,061,645	1,372,679

Pursuant to the terms of the change in control severance agreements of certain CNX employees and CNX officers, outstanding equity awards held by such employees and officers vest upon a stockholder (or stockholder group) becoming the beneficial owner of more than 25% of the Company's outstanding common stock. During the nine months ended September 30, 2019, Southeastern Asset Management, Inc. and its affiliates ("SEAM") acquired shares of CNX's common stock in the open market which resulted in SEAM's aggregate share ownership exceeding more the 25% of CNX's common stock outstanding. This transaction, as such, constituted a change in control event under the severance agreements, resulting in the accelerated vesting of 473,126 restricted stock units and 903,100 performance share units held by the aforementioned employees and officers that were issued prior to 2019. Those affected employees and officers each consented to waive the change in control vesting provision included in the change in control severance agreements with respect to their restricted stock unit and performance share unit awards that were issued during 2019. The accelerated vesting resulted in $19,654 of additional long-term equity-based compensation expense for the nine months ended September 30, 2019, and is included in Selling, General and Administrative Costs in the Consolidated Statements of Income. The performance share unit awards that vested continue to be subject to the attainment of performance goals as determined by the Compensation Committee of CNX's Board of Directors after the end of the applicable performance period.

The computations for basic and diluted (loss) earnings per share are as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2020		2019		2020		2019
Net (Loss) Income	$	(188,793)	$	143,960	$	(624,502)	$	272,004
Less: Net Income Attributable to Non-Controlling Interest	15,905		28,422		55,031		81,325


Net (Loss) Income Attributable to CNX Resources Shareholders	$	(204,698)	$	115,538	$	(679,533)	$	190,679

Weighted-Average Shares of Common Stock Outstanding	198,727,472		187,448,749		191,015,680		188,012,044
Effect of Diluted Shares*	—		982,210		—		1,548,899
Weighted-Average Diluted Shares of Common Stock Outstanding	198,727,472		188,430,959		191,015,680		189,560,943

(Loss) Earnings per Share:


Basic	$	(1.03)	$	0.62	$	(3.56)	$	1.01



Diluted	$	(1.03)	$	0.61	$	(3.56)	$	1.01

*During periods in which the Company incurs a net loss, diluted weighted average shares outstanding are equal to basic weighted average shares outstanding because the effect of all equity awards is antidilutive.