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## Table of Contents 

## Index to Financial Statements 

2019 and 2018, respectively. As of December 31, 2020, there was $1 million of total unrecognized compensation cost related to unvested shares of restricted stock that is expected to be recognized over a weighted-average period of less than one year. 

The following table summarizes the restricted stock activity for the years 2020, 2019 and 2018, and provides information for restricted stock outstanding at December 31 of each year: 

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(1) Includes 171,813 shares forfeited as a result of the reduction in workforce for the year end December 31, 2020. 

(2) Includes 65,196 shares forfeited as a result of the reduction in workforce for the year ended December 31, 2019. 

(3) Includes 1,287,636 shares forfeited as a result of the reduction in workforce for the year ended December 31, 2018. 

The fair values of the grants were $2 million for 2020, $2 million for 2019 and $2 million for 2018. The total fair value of shares vested were $6 million for 2020, $11 million for 2019 and $19 million for 2018. 

## Equity-Classified Restricted Stock Units 

As a result of the Merger with Montage, certain Montage employees became employees of Southwestern and retained their original equity awards. The amount of compensation costs related these equity-classified restricted stock units recorded by the Company was immaterial for the year ended December 31, 2020. As of December 31, 2020, there was less than $1 million of total unrecognized compensation cost related to unvested equity-classified restricted stock units that is expected to be recognized over a weighted-average period of approximately one year. 

The following table summarizes equity-classified restricted stock unit activity to be paid out in Company stock for the year ended December 31, 2020. 

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## Equity-Classified Performance Units 

The Company recorded compensation costs related to equity-classified performance units for the years ended December 31, 2020, 2019 and 2018. The performance units awarded in 2017 included a market condition based on relative Total Shareholder Return (“TSR”). The grant date fair value is calculated using the closing price of the Company’s common stock at the grant date and a Monte Carlo model to estimate the TSR market condition. The estimated fair value is amortized to compensation expense on a straight-line basis over the vesting period of the award. There were no equity-classified performance units awarded in 2020, 2019 or 2018. 

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The Company also recorded a deferred tax asset of less than $1 million related to equity-classified performance units for the year ended December 31, 2020, compared to deferred tax assets of less than $1 million and $1 million in 2019 and 2018, respectively. As of December 31, 2020, there are no more equity-classified performance units outstanding. 

