Net Income (Loss) Per Common Share

12 Months Ended

Dec. 31, 2022

Net Income (Loss) Per Common ShareNet income (loss) per common share—basic is calculated by dividing Net income (loss) by the weighted average number of shares of common stock outstanding during the period. Net income (loss) per common share—diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing Net income (loss) by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income (loss) per common share—diluted considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares, as defined above, would have an anti-dilutive effect.

A reconciliation of Net income (loss) per common share is as follows:


	Years Ended December 31,
(In thousands, except per share amounts)	2022		2021		2020
Net income (loss) attributable to Earthstone Energy, Inc.	$	452,485	$	35,484	$	(13,547)

Net income (loss) attributable to Earthstone Energy, Inc. from assumed conversion of Series A Convertible Preferred Stock (1)	12,388		—		—

Net income (loss) attributable to Earthstone Energy, Inc. - Diluted	$	464,873	$	35,484	$	(13,547)

Net income (loss) per common share attributable to Earthstone Energy, Inc.:
Basic	$	5.12	$	0.75	$	(0.45)
Diluted	$	4.83	$	0.71	$	(0.45)
Weighted average common shares outstanding
Basic	88,349,088		47,169,948		29,911,625
Add potentially dilutive securities:
Unvested restricted stock units	416,031		539,803		—
Unvested performance units	1,757,841		2,242,342		—
Series A Convertible Preferred Stock(1)	5,805,257		—		—
Diluted weighted average common shares outstanding	96,328,217		49,952,093		29,911,625

(1)On April 14, 2022, Earthstone issued 280,000 shares of Series A Convertible Preferred Stock which automatically converted into 25,225,225 shares of Class A Common Stock on July 6, 2022. Under the “If-Converted” method, the shares would have been assumed issued on April 14, 2022, which would have resulted in an additional allocation of Net income (loss) attributable to Earthstone Energy, Inc. of $12.4 million for the year ended December 31, 2022.

The Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and Net income attributable to noncontrolling interest of $198.1 million for the year ended December 31, 2022, Net loss attributable to noncontrolling interest of $26.0 million for the year ended December 31, 2021, and Net income attributable to noncontrolling interest of $15.9 million for the year ended December 31, 2020 would be added back to Net income (loss) attributable to Earthstone Energy, Inc. for the years then ended, having no dilutive effect on Net income (loss) per common share attributable to Earthstone Energy, Inc. For the year ended December 31, 2020, the Company excluded 1.1 million and 1.9 million shares, respectively, for the dilutive effect of restricted stock units and performance units in calculating diluted earnings per share as the effect was anti-dilutive due to the net loss incurred for the period.