EARNINGS PER COMMON UNIT (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of basic and diluted net income per common unit

Basic and diluted earnings per common unit is calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common units and participating securities. Basic earnings per common unit is calculated by dividing net income by the weighted-average number of common units outstanding during the period. Diluted earnings per common unit also considers the dilutive effect of unvested common units granted under the LTIP, calculated using the treasury stock method.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
	(In thousands, except per unit amounts)
Net income (loss) attributable to Rattler Midstream LP	$	9,218	$	11,531	$	25,071	$	16,334
Less: net (income) loss allocated to participating securities(1)	(524)		—		(1,820)		—
Net income (loss) attributable to common unitholders	$	8,694	$	11,531	$	23,251	$	16,334
Weighted average common units outstanding:
Basic weighted average common units outstanding	43,996		43,700		43,837		43,564
Effect of dilutive securities:
Potential common units issuable(2)	—		1,136		—		1,146
Diluted weighted average common units outstanding	43,996		44,836		43,837		44,710
Net income per common unit, basic	$	0.20	$	0.26	$	0.53	$	0.37
Net income per common unit, diluted	$	0.20	$	0.26	$	0.53	$	0.37

(1) Distribution equivalent rights granted to employees are considered participating securities.

(2) For the three and nine months ended September 30, 2020, no potential common units were included in the computation of diluted earnings per unit because their inclusion would have been anti-dilutive under the treasury stock method for the periods presented. However, such potential common units could dilute basic earnings per unit in future periods.