Non-controlling Interest

9 Months Ended

Sep. 30, 2021

3. Non-controlling Interest

Holdings is the sole managing member of RMCO and operates and controls all the business affairs of RMCO. The ownership of the common units in RMCO is summarized as follows:


	September 30, 2021			December 31, 2020
	Shares	Ownership %		Shares	Ownership %
Non-controlling interest ownership of common units in RMCO	12,559,600	40.0	%	12,559,600	40.6	%
Holdings outstanding Class A common stock (equal to Holdings common units in RMCO)	18,806,194	60.0	%	18,390,691	59.4	%
Total common units in RMCO	31,365,794	100.0	%	30,950,291	100.0	%

The weighted average ownership percentages for the applicable reporting periods are used to calculate the “Net income (loss) attributable to RE/MAX Holdings, Inc.” A reconciliation of “Income (loss) before provision for income taxes” to “Net income (loss) attributable to RE/MAX Holdings, Inc.” and “Net Income (loss) attributable to non-controlling interest” in the accompanying Condensed Consolidated Statements of Income (Loss) for the periods indicated is detailed as follows (in thousands, except percentages):


	Three Months Ended September 30,
	2021									2020 ^(d)
	RE/MAX Holdings, Inc.			Non-controlling interest			Total			RE/MAX Holdings, Inc.			Non-controlling interest			Total
Weighted average ownership percentage of RMCO^(a)		59.8	%		40.2	%		100.0	%		59.2	%		40.8	%		100.0
Income (loss) before provision for income taxes^(a)	$	(24,836)		$	(16,735)		$	(41,571)		$	5,212		$	3,683		$	8,895
(Provision) / benefit for income taxes^(b)(c)		(313)			(479)			(792)			(1,595)			(462)			(2,057)
Net income (loss)	$	(25,149)		$	(17,214)		$	(42,363)		$	3,617		$	3,221		$	6,838

	Nine Months Ended September 30,
	2021									2020 ^(d)
	RE/MAX Holdings, Inc.			Non-controlling interest			Total			RE/MAX Holdings, Inc.			Non-controlling interest			Total
Weighted average ownership percentage of RMCO^(a)		59.8	%		40.2	%		100.0	%		59.0	%		41.0	%		100.0
Income (loss) before provision for income taxes^(a)	$	(17,208)		$	(11,578)		$	(28,786)		$	14,836		$	10,067		$	24,903
(Provision) / benefit for income taxes^(b)(c)		(1,517)			63			(1,454)			(4,953)			(1,631)			(6,584)
Net income (loss)	$	(18,725)		$	(11,515)		$	(30,240)		$	9,883		$	8,436		$	18,319

(a)	The weighted average ownership percentage of RMCO differs from the allocation of income (loss) before provision for income taxes between Holdings and the non-controlling interest due to certain relatively insignificant items recorded at Holdings.

(b)

The provision for income taxes attributable to Holdings is primarily comprised of U.S. federal and state income taxes on its proportionate share of the flow-through income (loss) from RMCO. It also includes Holdings’ share of taxes directly incurred by RMCO and its subsidiaries, including taxes in certain foreign jurisdictions.

(c)

The provision for income taxes attributable to the non-controlling interest represents its share of taxes incurred by RMCO and its subsidiaries (both foreign taxes and taxes from non-flow through subsidiaries). Otherwise, because RMCO is a flow-through entity, there is no U.S. federal and state income tax provision recorded on the non-controlling interest. Amounts shown for the nine months ended September 30, 2021 include a reversal of an uncertain tax position, the majority of which was allocated to the non-controlling interest (see Note 10, Income Taxes for additional information).

(d)	Prior year amounts have been adjusted to reflect the immaterial correction of amortization for certain acquired Independent Regions. See Note 13, Immaterial Corrections to Prior Period Financial Statements for additional information.

Distributions and Other Payments to Non-controlling Unitholders

Under the terms of RMCO’s limited liability company operating agreement, RMCO makes cash distributions to non-controlling unitholders on a pro-rata basis. The distributions paid or payable to non-controlling unitholders are summarized as follows (in thousands):


	Nine Months Ended
	September 30,
	2021		2020
Tax and other distributions	$	2,113	$	2,277
Dividend distributions		8,667		8,289
Total distributions to non-controlling unitholders	$	10,780	$	10,566