Net Income Per Common Share

9 Months Ended

Sep. 30, 2023

Net Income Per Common ShareNet income per common share—basic is calculated by dividing Net income by the weighted average number of shares of common stock outstanding during the period. Net income per common share—diluted assumes the conversion of all potentially dilutive securities and is calculated by dividing Net income by the sum of the weighted average number of shares of common stock, as defined above, outstanding plus potentially dilutive securities. Net income 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 per common share is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2023		2022		2023		2022
Net income attributable to Earthstone Energy, Inc.	$	61,358	$	211,456	$	179,948	$	322,863

Net income attributable to Earthstone Energy, Inc. from assumed conversion of Series A Convertible Preferred Stock	—		1,068		—		12,388

Net income attributable to Earthstone Energy, Inc. - Diluted	$	61,358	$	212,524	$	179,948	$	335,251

Net income per common share attributable to Earthstone Energy, Inc.:
Basic	$	0.58	$	2.01	$	1.69	$	3.91
Diluted	$	0.57	$	1.94	$	1.67	$	3.61

Weighted average common shares outstanding
Basic	106,332,278		105,254,778		106,172,873		82,483,635
Add potentially dilutive securities:
Unvested restricted stock units	326,041		353,889		313,342		466,453
Unvested performance units	1,626,910		2,024,871		1,255,489		2,133,158
Series A Convertible Preferred Stock	—		1,645,123		—		7,761,608
Diluted weighted average common shares outstanding	108,285,229		109,278,661		107,741,704		92,844,854

The Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and net income attributable to noncontrolling interest of $25.8 million for the three months ended September 30, 2023 and net income attributable to noncontrolling interest of $75.9 million for the nine months ended September 30, 2023 would be added back to Net income attributable to Earthstone Energy, Inc. for the periods then ended, having no dilutive effect on Net income per common share attributable to Earthstone Energy, Inc.

The Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and net income attributable to noncontrolling interest of $87.9 million for the three months ended September 30, 2022 and net income attributable to noncontrolling interest of $142.6 million for the nine months ended September 30, 2022 would be added back to Net income attributable to Earthstone Energy, Inc. for the periods then ended, having no dilutive effect on Net income per common share attributable to Earthstone Energy, Inc.