Earnings per Share

9 Months Ended

Sep. 30, 2020

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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net income attributable to Cactus Inc.—basic	$	6,233	$	19,339	$	31,244	$	67,554
Net income attributable to non-controlling interest (1)	3,522		—		17,271		45,683
Net income attributable to Cactus Inc.—diluted (1)	$	9,755	$	19,339	$	48,515	$	113,237
Denominator:
Weighted average Class A shares outstanding—basic	47,510		47,095		47,406		44,260
Effect of dilutive shares (2)	28,112		227		28,021		31,077
Weighted average Class A shares outstanding—diluted (2)	75,622		47,322		75,427		75,337

Earnings per Class A share—basic	$	0.13	$	0.41	$	0.66	$	1.53
Earnings per Class A share—diluted (1) (2)	$	0.13	$	0.41	$	0.64	$	1.50

(1)The numerator is adjusted in the calculation of diluted earnings per share under the if-converted method to include net income attributable to the non-controlling interest calculated as its pre-tax income adjusted for a corporate effective tax rate of 25.5% for the three and nine months ended September 30, 2020 and 24.0% for the nine months ended September 30, 2019.

(2)Diluted earnings per share for the three and nine months ended September 30, 2020 includes 28.1 million and 28.0 million, respectively, of weighted average shares of Class B common stock outstanding assuming conversion and the dilutive effect of restricted stock unit awards. Diluted earnings per share for the three months ended September 30, 2019 excludes 28.0 million weighted average 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 31.1 million shares of Class B common stock outstanding assuming conversion and the dilutive effect of restricted stock unit awards.