13. 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:


	Year Ended December 31,
	2019		2018
Numerator:
Net income attributable to Cactus Inc.—basic	$	85,612	$	51,683
Net income attributable to non-controlling interest (1)		56,012		—
Net income attributable to Cactus Inc.—diluted (1)	$	141,624	$	51,683
Denominator:
Weighted average Class A shares outstanding—basic		44,983		32,329
Effect of dilutive shares (2)		30,370		366
Weighted average Class A shares outstanding—diluted (2)		75,353		32,695

Earnings per Class A share—basic	$	1.90	$	1.60
Earnings per Class A share—diluted (1) (2)	$	1.88	$	1.58

(1)

Under the if-converted method for the twelve months ended December 31, 2019, the numerator is adjusted in the calculation of diluted earnings per share to include $73.7 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 year ended December 31, 2018 excludes 37.2 million shares of Class B common stock as the effect would be anti-dilutive.