14. Earnings per Share

Basic earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during the period by the weighted average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during that period by the weighted average number of common shares outstanding assuming all potentially dilutive shares were issued.

We use the “if-converted” method to determine the potential dilutive effect of outstanding CW Units (and corresponding shares of outstanding Class B common stock), and the treasury stock method to determine the potential dilutive effect of unvested restricted stock units assuming that the proceeds will be used to purchase shares of Class A common stock.

There were no shares of Class A common stock or Class B common stock outstanding prior to February 12, 2018, therefore no earnings per share information has been presented for any period prior to that date.

The following table summarizes the basic and diluted earnings per share calculations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Numerator:
Net income attributable to Cactus Inc.—basic	$	19,339	$	18,672	$	67,554	$	34,759
Net income attributable to non-controlling interest (1)		—		—		45,683		—
Net income attributable to Cactus Inc.—diluted (1)	$	19,339	$	18,672	$	113,237	$	34,759
Denominator:
Weighted average Class A shares outstanding—basic		47,095		35,821		44,260		30,182
Effect of dilutive shares (2)		227		408		31,077		340
Weighted average Class A shares outstanding—diluted (2)		47,322		36,229		75,337		30,522

Earnings per Class A share—basic	$	0.41	$	0.52	$	1.53	$	1.15
Earnings per Class A share—diluted (1) (2)	$	0.41	$	0.52	$	1.50	$	1.14

(1)

Under the if-converted method for the nine months ended September 30, 2019, the numerator is adjusted in the calculation of diluted earnings per share to include $60.1 million of additional pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 24%.

(2)

Diluted earnings per share for the three months ended September 30, 2019 excludes 28.0 million shares of Class B common stock as the effect would be anti-dilutive. Diluted earnings per share for the nine months ended September 30, 2019 includes 30.8 million shares of Class B common stock assuming conversion, plus the dilutive effect of 0.3 million shares of restricted stock unit awards. Diluted earnings per share for the three and nine months ended September 30, 2018 excludes 39.1 million and 44.7 million shares of Class B common stock, respectively, as the effect would be anti-dilutive.