Noncontrolling Interest

As a result of the Bold Transaction, Earthstone became the sole managing member of, and has a controlling interest in, EEH. As the sole managing member of EEH, Earthstone operates and controls all of the business and affairs of EEH and its subsidiaries. Immediately following the Bold Transaction, Earthstone and Lynden US owned a 38.6% membership interest in EEH while Bold Holdings owned the remaining 61.4%.

The Bold Transaction was recorded in accordance with FASB ASC Topic 805, Business Combinations, and is consolidated in these financial statements in accordance with FASB ASC Topic 810, Consolidation, which requires the recording of a noncontrolling interest component of net income (loss), as well as a noncontrolling interest component within equity, including changes to Additional paid-in capital to reflect the noncontrolling interest within equity in the Consolidated Balance Sheet as of December 31, 2017 at the noncontrolling interest’s respective membership interest in EEH. A reconciliation of the equity attributable to the noncontrolling interest as of May 9, 2017 is as follows (in thousands):



Total considerations transferred (1)	$	491,879
Change to additional paid-in capital to reflect the noncontrolling interest within equity at their membership interest	(12,872		)
Portion of equity attributable to noncontrolling interest (2)	$	479,007


(1)	See Note 3. Acquisitions and Divestitures.


(2)	Represents 61.4% of total equity attributable to EEH as of May 9, 2017.

Earthstone consolidates the financial results of EEH and its subsidiaries, and records a noncontrolling interest for the economic interest in Earthstone held by the members of EEH other than Earthstone and Lynden US. Net loss attributable to noncontrolling interest in the Consolidated Statements of Operations for the year ended December 31, 2018 represents the portion of net income or loss attributable to the economic interest in the Company held by the members of EEH other than Earthstone and Lynden US. Noncontrolling interest in the Consolidated Balance Sheet as of December 31, 2018 represents the portion of net assets of the Company attributable to the members of EEH other than Earthstone and Lynden US.

The following table presents the changes in noncontrolling interest for the year ended December 31, 2018:



	EEH Units Held By Earthstone and Lynden US	%		EEH Units Held By Others		%		Total EEH Units Outstanding
As of December 31, 2017	27,584,638	43.3	%	36,052,169		56.7	%	63,636,807
EEH Units issued in connection with the vesting of restricted stock units and issuance of Class A Common Stock	511,692			—				511,692
EEH Units and Class B Common Stock converted to Class A Common Stock	599,991			(599,991	)			—
As of December 31, 2018	28,696,321	44.7	%	35,452,178		55.3	%	64,148,499

The following table summarizes the activity for the equity attributable to the noncontrolling interest for the year ended December 31, 2018 (in thousands):



	2018
As of December 31, 2017	$	446,558
EEH Units and Class B Common Stock converted to Class A Common Stock	(7,594		)
Net income attributable to noncontrolling interest	52,888
As of December 31, 2018	$	491,852