Note 7 - Net (Loss) Income Per Common Share

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 7. Net (Loss) Income Per Common Share

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

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In thousands, except per share amounts)	2020			2019		2020			2019
Net (loss) income attributable to Earthstone Energy, Inc.	$	(5,445	)	$	11,770	$	(5,076	)	$	3,343
Net (loss) income per common share attributable to Earthstone Energy, Inc.:
Basic	$	(0.18	)	$	0.41	$	(0.17	)	$	0.12
Diluted	$	(0.18	)	$	0.41	$	(0.17	)	$	0.12
Weighted average common shares outstanding
Basic		30,073,635			29,032,842		29,810,705			28,883,907
Add potentially dilutive securities:
Unvested restricted stock units (1)		—			—		—			—
Unvested performance units (1)		—			—		—			—
Diluted weighted average common shares outstanding		30,073,635			29,032,842		29,810,705			28,883,907

(1)     For the three and nine months ended September 30, 2020 and 2019, the Company had no dilutive effect related to unvested restricted stock units or performance units as, under the treasury stock method, the proceeds from the average unrecognized expense for both during these periods were in excess of the weighted average outstanding fair value for the unvested shares for the same periods.

Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and net loss attributable to noncontrolling interest of $6.4 million for the three months ended September 30, 2020 and net loss attributable to noncontrolling interest of $6.0 million for the nine months ended September 30, 2020 would be added back to Net (loss) income attributable to Earthstone Energy, Inc. for the periods then ended, having no dilutive effect on Net (loss) income per common share attributable to Earthstone Energy, Inc.

Class B Common Stock has been excluded, as its conversion would eliminate noncontrolling interest and net income attributable to noncontrolling interest of $14.4 million for the three months ended September 30, 2019 and net income attributable to noncontrolling interest of $3.9 million for the nine months ended September 30, 2019 would be added back to Net (loss) income attributable to Earthstone Energy, Inc. for the periods then ended, having no dilutive effect on Net (loss) income per common share attributable to Earthstone Energy, Inc.