4. Earnings Per Share and Dividends

Earnings Per Share

Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted EPS measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The treasury stock method is used to determine the dilutive potential of stock options and restricted stock units.

The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations (in thousands, except share and per share information):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Numerator
Net income attributable to RE/MAX Holdings, Inc.	$	4,970	$	4,377	$	7,688	$	6,788
Denominator for basic net income per share of Class A common stock
Weighted average shares of Class A common stock outstanding		12,225,678		11,593,885		12,022,769		11,600,889
Denominator for diluted net income per share of Class A common stock
Weighted average shares of Class A common stock outstanding		12,225,678		11,593,885		12,022,769		11,600,889
Add dilutive effect of the following:
Stock options		146,638		587,906		301,928		590,953
Restricted stock units		27,211		48,223		22,137		46,347
Weighted average shares of Class A common stock outstanding, diluted		12,399,527		12,230,014		12,346,834		12,238,189
Earnings per share of Class A common stock
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic	$	0.41	$	0.38	$	0.64	$	0.59
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted	$	0.40	$	0.36	$	0.62	$	0.55

The one share of Class B common stock outstanding does not share in the earnings of RE/MAX Holdings and is therefore not a participating security. Accordingly, basic and diluted net income per share of Class B common stock has not been presented.

Dividends

The Company’s Board of Directors declared quarterly dividends of $0.125 per share on all outstanding shares of Class A common stock in both the first and second quarters of 2015, or $3,029,000 in total dividends. Of this amount, $1,500,000 was paid on April 8, 2015 and $1,529,000 was paid on June 4, 2015. The Company made corresponding distributions to non-controlling unitholders of $2,217,000 on both April 8, 2015 and June 4, 2015. Additionally, during the six months ended June 30, 2015, the Company’s Board of Directors declared a special dividend of $1.50 per share on all outstanding shares of Class A common stock, or $17,883,000 in total dividends, which along with a corresponding distribution to non-controlling unitholders of $26,602,000, was paid on April 8, 2015. The Company’s Board of Directors declared quarterly dividends of $0.0625 per share on all outstanding shares of Class A common stock in both the first and second quarters of 2014, or $1,449,000 in total dividends. Of this amount, $725,000 was paid on April 18, 2014 and $724,000 was paid on June 5, 2014. The Company made corresponding distributions to non-controlling unitholders of $1,108,000 on both April 18, 2014 and June 5, 2014.

On August 6, 2015, the Company’s Board of Directors declared a quarterly dividend of $0.125 per share on all outstanding shares of Class A common stock, which is payable on September 3, 2015 to shareholders of record at the close of business on August 20, 2015.