4. Equity

Non-controlling Interest

The Company holds an economic interest and is the sole managing member in Spark HoldCo, with NuDevco Retail and Retailco holding the remaining economic interest in Spark HoldCo. As a result, the Company has consolidated the financial position and results of operations of Spark HoldCo and reflected the economic interest retained by NuDevco Retail and Retailco as a non-controlling interest.

The Company and NuDevco Retail and Retailco owned the following economic interests in Spark HoldCo at December 31, 2016 and June 30, 2017, respectively.

Non-controlling Interest Economic Interest



	The Company		NuDevco Retail and Retailco^{(1) (2)}
December 31, 2016	38.85	%	61.15	%
June 30, 2017	38.12	%	61.88	%

(1) In January 2016, Retailco succeeded to the interest of NuDevco Retail Holdings of its Class B common stock and an equal number of Spark HoldCo units it held pursuant to a series of transfers.

(2) In January 2017, Retailco converted the CenStar Note and Oasis Note into 269,462 and 766,180 shares, respectively, of Class B common stock.

The following table summarizes the portion of net income and income tax expense (benefit) attributable to non-controlling interest (in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016

Net income allocated to non-controlling interest	$	3,164		$	16,777	$	11,569		$	28,785
Income tax expense (benefit) allocated to non-controlling interest	(428		)	124		(885		)	564
Net income attributable to non-controlling interest	$	3,592		$	16,653	$	12,454		$	28,221

Stock Split

On May 22, 2017, the Company authorized and approved a two-for-one stock split of the Company's issued Class A common stock and Class B common stock, which was effected through a stock dividend (the "Stock Split"). Shareholders of record at the close of business on June 5, 2017 were issued one additional share of Class A common stock or Class B common stock of the Company for each share of Class A common stock or Class B common stock, respectively, held by such shareholder on that date. Such additional shares of Class A common stock or Class B common stock were distributed on June 16, 2017. All shares and per share amounts in this report have been retrospectively restated to reflect the Stock Split.

Share Repurchase Program

On May 23, 2017, the Company authorized a share repurchase program of up to $50.0 million of Spark Class A common stock through December 31, 2017. The Company funds the program through available cash balances, its credit facilities, and operating cash flows. The shares of Class A common stock may be repurchased from time to time in the open market or in privately negotiated transactions based on ongoing assessments of capital needs, the market price of the Class A common stock, and other factors, including general market conditions. The repurchase program does not obligate Spark to acquire any particular amount of Class A common stock and it may be modified or suspended at any time, and can be terminated prior to completion.

The Company uses the cost method to account for its treasury shares. Purchases of shares of Class A common stock are recorded at cost, and the gross cost of the Class A common stock purchased is charged to a contra equity account entitled "Treasury Stock."

During the three and six months ended June 30, 2017, the Company repurchased 59,726 shares of its Class A common stock at a weighted-average price of $21.52 per share, for a total cost of approximately $1.3 million.

Class A Common Stock

The Company had a total of 13,175,356 and 12,993,118 shares of its Class A common stock outstanding at June 30, 2017 and December 31, 2016, respectively, and 59,726 and zero shares of treasury stock at June 30, 2017 and December 31, 2016, respectively. Each share of Class A common stock holds economic rights and entitles its holder to one vote on all matters to be voted on by shareholders generally. All shares and per share amounts in this Quarterly Report on Form 10-Q have been retrospectively restated to reflect the Stock Split.

Class B Common Stock

The Company has a total of 21,485,126 and 20,449,484 shares of its Class B common stock outstanding at June 30, 2017 and December 31, 2016, respectively. Each share of Class B common stock, all of which are held by NuDevco Retail and Retailco, have no economic rights but entitles its holder to one vote on all matters to be voted on by shareholders generally. All outstanding shares and per share amounts in this Quarterly Report on Form 10-Q have been retrospectively restated to reflect the Stock Split.

Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to our shareholders for their vote or approval, except as otherwise required by applicable law or by our certificate of incorporation.

Conversion of CenStar and Oasis Notes

On January 8, 2017 and January 31, 2017, respectively, the CenStar Note and Oasis Note were converted into 269,462 and 766,180 shares of Class B common stock (and related Spark HoldCo units). Refer to Note 9 "Debt" for further discussion.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income attributable to stockholders (the numerator) by the weighted-average number of Class A common shares outstanding for the period (the denominator). Class B common shares are not included in the calculation of basic earnings per share because they are not participating securities and have no economic interest in the Company. Diluted earnings per share is similarly calculated except that the denominator is increased (1) using the treasury stock method to determine the potential dilutive effect of the Company's outstanding unvested restricted stock units, (2) using the if-converted method to determine the potential dilutive effect of the Company's Class B common stock and (3) using the if-converted method to determine the potential dilutive effect of the outstanding convertible subordinated notes into the Company's Class B common stock. All shares and per share amounts in this Quarterly Report on Form 10-Q have been retrospectively restated to reflect the Stock Split.

The following table presents the computation of earnings per share for the three and six months ended June 30, 2017 and 2016 (in thousands, except per share data):



	Three Months Ended June 30,					Six Months Ended June 30,
	2017		2016			2017		2016
Net income attributable to Spark Energy, Inc. stockholders	$	1,079	$	2,341		$	3,349	$	6,514
Less: Accumulated dividend on Series A preferred stock	991		—			1,174		—
Net income attributable to stockholders of Class A common stock	$	88	$	2,341		$	2,175	$	6,514

Basic weighted average Class A common shares outstanding	13,104		12,086			13,050		9,799
Basic EPS attributable to stockholders	$	0.01	$	0.19		$	0.17	$	0.66

Net income attributable to stockholders of Class A common stock	$	88	$	2,341		$	2,175	$	6,514
Effect of conversion of Class B common stock to shares of Class A common stock	—		—			—		—
Effect of conversion of convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock ⁽¹⁾	—		(332		)	—		(312		)
Diluted net income attributable to stockholders of Class A common stock	88		2,009			2,175		6,202

Basic weighted average Class A common shares outstanding	13,104		12,086			13,050		9,799
Effect of dilutive Class B common stock	—		—			—		—
Effect of dilutive convertible subordinated notes into shares of Class B common stock and shares of Class B common stock into shares of Class A common stock ⁽¹⁾	—		986			—		986
Effect of dilutive restricted stock units	272		206			207		174
Diluted weighted average shares outstanding	13,376		13,278			13,257		10,959

Diluted EPS attributable to stockholders	$	0.01	$	0.15		$	0.16	$	0.57

(1) The CenStar Note and Oasis Note converted into 269,462 and 766,180 shares of Class B common stock on January 8, 2017, and January 31, 2017, respectively.

The conversion of shares of Class B common stock to shares of Class A common stock was not recognized in dilutive earnings per share for the three and six months ended June 30, 2017 as the effect of the conversion was antidilutive.

Variable Interest Entity

Spark HoldCo is a variable interest entity due to its lack of rights to participate in significant financial and operating decisions and inability to dissolve or otherwise remove its management. Spark HoldCo owns all of the outstanding membership interests in each of the operating subsidiaries through which the Company operates. The Company is the sole managing member of Spark HoldCo, manages Spark HoldCo's operating subsidiaries through this managing membership interest, and is considered the primary beneficiary of Spark HoldCo.

The assets of Spark HoldCo cannot be used to settle the obligations of the Company except through distributions to the Company, and the liabilities of Spark HoldCo cannot be settled by the Company except through contributions to Spark HoldCo.

The following table includes the carrying amounts and classification of the assets and liabilities of Spark HoldCo that are included in the Company's condensed consolidated balance sheet as of June 30, 2017 (in thousands):



	June 30, 2017
Assets
Current assets:
Cash and cash equivalents	$	13,043
Accounts receivable	95,690
Other current assets	122,590
Total current assets	231,323
Non-current assets:
Goodwill	80,947
Other assets	41,927
Total non-current assets	122,874
Total Assets	$	354,197

Liabilities
Current liabilities:
Accounts payable and Accrued Liabilities	$	74,688
Intercompany payable with Spark Energy, Inc.	23,927
Current portion of Senior Credit Facility	7,500
Contingent consideration	5,856
Other current liabilities	12,060
Total current liabilities	124,031
Long-term liabilities:
Long-term portion of Senior Credit Facility	76,500
Subordinated debt — affiliate	15,000
Contingent consideration	3,986
Other long-term liabilities	5,041
Total long-term liabilities	100,527
Total Liabilities	$	224,558