EARNINGS PER COMMON UNIT

6 Months Ended

Jun. 30, 2020

Earnings per common unit on the consolidated statements of operations is based on the net income of the Partnership for the three months ended June 30, 2020 since this is the amount of net income that is attributable to the Partnership’s common units. The Partnership’s net income is allocated wholly to the common units, as the General Partner does not have an economic interest.

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 June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(In thousands, except per unit amounts)
Net income attributable to Rattler Midstream LP	$	2,822	$	4,803	$	15,853	$	4,803
Less: net income allocated to participating securities⁽¹⁾	(644)		—		(1,296)		—
Net income attributable to common unitholders	$	2,178	$	4,803	$	14,557	$	4,803
Weighted average common units outstanding:
Basic weighted average common units outstanding	43,812		43,197		43,756		43,197
Effect of dilutive securities:
Potential common units issuable⁽²⁾	—		1,143		—		1,143
Diluted weighted average common units outstanding	43,812		44,340		43,756		44,340
Net income per common unit, basic	$	0.05	$	0.11	$	0.33	$	0.11
Net income per common unit, diluted	$	0.05	$	0.11	$	0.33	$	0.11

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

(2) For the three and six months ended June 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.