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 March 31, 2017, respectively.

Non-controlling Interest Economic Interest



	The Company		NuDevco Retail and Retailco^{(1) (2)}
December 31, 2016	38.85	%	61.15	%
March 31, 2017	37.70	%	62.30	%

(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 134,731 and 383,090 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 March 31,
	2017			2016

Net income allocated to non-controlling interest	$	8,660		$	12,008
Income tax expense (benefit) allocated to non-controlling interest	(457		)	440
Net income attributable to non-controlling interest	$	9,117		$	11,568

Class A Common Stock

The Company had a total of 6,499,504 and 6,496,559 shares of its Class A common stock outstanding at March 31, 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.

Class B Common Stock

The Company has a total of 10,742,563 and 10,224,742 shares of its Class B common stock outstanding at March 31, 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.

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 134,731 and 383,090 shares of Class B common stock (and related Spark HoldCo units). Refer to Note 8 "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.

The following table presents the computation of earnings per share for the three months ended March 31, 2017 and 2016 (in thousands, except per share data):



	Three Months Ended March 31,
	2017		2016
Net income attributable to Spark Energy, Inc. stockholders	$	2,269	$	4,173
Less: Accumulated dividend on Series A preferred stock	$	183	$	—
Net income attributable to stockholders of Class A common stock ⁽²⁾	$	2,086	$	4,173

Basic weighted average Class A common shares outstanding	6,498		3,756
Basic EPS attributable to stockholders	$	0.32	$	1.11

Net income attributable to stockholders of Class A common stock ⁽²⁾	$	2,086	$	4,173
Effect of conversion of Class B common stock to shares of Class A common stock	—		6,094
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⁾	—		(413		)
Diluted net income attributable to stockholders of Class A common stock	2,086		9,854

Basic weighted average Class A common shares outstanding	6,498		3,756
Effect of dilutive Class B common stock	—		10,113
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⁾	—		493
Effect of dilutive restricted stock units	136		158
Diluted weighted average shares outstanding	6,634		14,520

Diluted EPS attributable to stockholders	$	0.31	$	0.68

(1) The CenStar Note and Oasis Note converted into 134,731 and 383,090 shares of Class B common stock on January 8, 2017, and January 31, 2017, respectively.

(2) In accordance with GAAP, net income attributable to stockholders of Class A common stock is presented net of cumulative Series A Preferred Stock dividends of $183 as of March 31, 2017.

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 months ended March 31, 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 March 31, 2017 (in thousands):



	March 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	24,784
Accounts receivable	108,754
Other current assets	57,997
Total current assets	191,535
Non-current assets:
Goodwill	79,407
Other assets	40,392
Total non-current assets	119,799
Total Assets	$	311,334

Liabilities
Current liabilities:
Accounts payable and Accrued Liabilities	$	77,633
Intercompany payable with Spark Energy, Inc.	37,636
Current portion of Senior Credit Facility	22,236
Contingent consideration	12,103
Other current liabilities	7,170
Total current liabilities	156,778
Long-term liabilities:
Contingent consideration	4,083
Other long-term liabilities	4,964
Total long-term liabilities	9,047
Total Liabilities	$	165,825