GULFPORT ENERGY CORP

8. EARNINGS (LOSS) PER SHARE

Basic income or loss per share attributable to common stockholders is computed as (i) net income or loss less (ii) dividends paid to holders of preferred stock less (iii) net income or loss attributable to participating securities divided by (iv) weighted average basic shares outstanding. Diluted net income or loss per share attributable to common stockholders is computed as (i) basic net income or loss attributable to common stockholders plus (ii) diluted adjustments to income allocable to participating securities divided by (iii) weighted average diluted shares outstanding. The "if-converted" method is used to determine the dilutive impact for the Company's convertible preferred stock and the treasury stock method is used to determine the dilutive impact of unvested restricted stock.

During the three months ended September 30, 2025, the Company redeemed 2,449 shares of preferred stock for cash totaling $31.3 million. Additionally, direct transaction-related costs of $1.1 million were incurred as part of the redemption. The excess of the cash settlement and direct transaction-related costs over the carrying value of the redeemed shares of preferred stock, totaling approximately $29.9 million, was treated as a deemed dividend and recorded as a reduction to retained earnings. The deemed dividend reduced net income available to common shareholders and impacted both basic and diluted earnings per share.

There were 0.2 million and 0.2 million shares of restricted stock that were considered dilutive for the three and nine months ended September 30, 2025, respectively. There were 0.2 million shares of restricted stock that were considered anti-dilutive for the three months ended September 30, 2024, and 0.3 million shares of restricted stock that were considered dilutive for the nine months ended September 30, 2024. There were 3.1 million potential shares of common stock issuable due to the Company's convertible preferred stock as of September 30, 2024. The Company redeemed all outstanding preferred stock during the three months ended September 30, 2025.

Reconciliations of the components of basic and diluted net income (loss) per common share are presented in the tables below (in thousands):

(1) Reflects the difference between the carrying value of the preferred stock and the cash settlement, including $1.1 million in direct transaction-related costs.

(2) Preferred stock represents participating securities because it participates in any dividends on shares of common stock on apari passu, pro rata basis. However, preferred stock does not participate in undistributed net losses.

(1) Reflects the difference between the carrying value of the preferred stock and the cash settlement, including $1.1 million in direct transaction-related costs.

(2) Preferred stock represents participating securities because it participates in any dividends on shares of common stock on apari passu, pro rata basis. However, preferred stock does not participate in undistributed net losses.