XML 27 R16.htm IDEA: XBRL DOCUMENT v3.19.1
Related Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions  
Related Party Transactions

9.   Related Party Transactions

From time to time, we rent a plane under dry-lease from a company owned by a member of Cactus LLC. These transactions are under short-term rental arrangements. During the three months ended March 31, 2019 and 2018, expense recognized in connection with these rentals totaled $0.1 million for the respective periods. As of March 31, 2019 and December 31, 2018, Cactus LLC owed less than $0.1 million, respectively, to the related party which is included in accounts payable in the consolidated balance sheets.

We are also party to a TRA with certain direct and indirect holders of CW Units, including certain of our officers, directors and employees. These TRA Holders have the right in the future to receive 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. The total TRA liability as of March 31, 2019 was $224.5 million. The estimated annual amounts and timing of this liability is presented in Note 10.

Distributions made by Cactus LLC are generally required to be made pro-rata among all of its members. For the three months ended March 31, 2019, Cactus LLC paid a cash distribution of $0.2 million. Prior to our IPO, Cactus LLC paid a cash distribution of $26.0 million to pre-IPO owners on January 25, 2018. This distribution was funded by borrowing under the Prior Revolving Credit Facility. The purpose of the distribution was primarily to provide funds to these owners to pay their federal and state tax liabilities associated with taxable income recognized by them for periods prior to the completion of our IPO as a result of their ownership interests in Cactus LLC. The borrowings under the Prior Revolving Credit Facility were repaid during the first quarter of 2018.