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Earnings Per Share

3 Months Ended

Mar. 31, 2020

11. 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.

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


	Three Months Ended March 31,
	2020		2019
Numerator:
Net income attributable to Cactus Inc.—basic	$	18,983	$	26,807
Net income attributable to non-controlling interest ⁽¹⁾		11,166		17,505
Net income attributable to Cactus Inc.—diluted ⁽¹⁾	$	30,149	$	44,312
Denominator:
Weighted average Class A shares outstanding—basic		47,270		38,719
Effect of dilutive shares ⁽²⁾		28,125		36,527
Weighted average Class A shares outstanding—diluted ⁽²⁾		75,395		75,246

Earnings per Class A share—basic	$	0.40	$	0.69
Earnings per Class A share—diluted ^{(1) (2)}	$	0.40	$	0.59

(1)

Under the if-converted method for the three months ended March 31, 2020 and 2019, the numerator is adjusted in the calculation of diluted earnings per share to include $11.2 million and $17.5 million, respectively, attributable to the non-controlling interest calculated as its pre-tax income adjusted for a corporate effective tax rate of 26% and 24%, respectively.

(2)

Diluted earnings per share for the three months ended March 31, 2020 and 2019 includes 28.0 million and 36.3 million, respectively, weighted average shares of Class B common stock assuming conversion, plus the dilutive effect of restricted stock unit awards.