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Related Party Transactions | 9 Months Ended
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Sep. 30, 2018
Related Party Transactions |
Related Party Transactions | 6. Related Party Transactions Prior to our IPO, we were party to a management services agreement with two Cactus LLC members, whereby Cactus paid an annual management fee totaling approximately $0.3 million, payable in four installments, each to be paid quarterly in advance, prorated for any partial year. In conjunction with our IPO, the management services agreement terminated pursuant to its terms. Management fee expenses for the nine months ended September 30, 2018 and 2017 were $0.1 million and $0.2 million, respectively. There were no outstanding balances due as of September 30, 2018 or December 31, 2017 under the management services agreement. 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 September 30, 2018 and 2017, expense recognized in connection with these rentals totaled $0.1 million for the respective periods. For the nine months ended September 30, 2018 and 2017, expense recognized in connection with these rentals totaled $0.3 million and $0.2 million, respectively. As of September 30, 2018 and December 31, 2017, we owed less than $0.1 million, respectively, to the related party which are 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. The total liability from the TRA as of September 30, 2018 was $161.8 million. Distributions made by Cactus LLC generally require pro-rata distribution among all its members. For the three and nine months ended September 30, 2018, Cactus LLC made $1.6 million and $3.8 million, respectively, in distributions to Cactus Inc. to cover its quarterly estimated tax payment to the IRS. Cactus LLC also made an aggregate $1.6 million and $5.8 million in pro-rata distributions to its other members over the same periods. Prior to our IPO, on January 25, 2018, Cactus LLC paid a cash distribution of $26.0 million to pre-IPO owners. This distribution was funded by borrowing under a revolving credit facility. The purpose of the distribution was 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 this revolving credit facility were repaid during the first quarter of 2018.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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