Earnings Per Share and Dividends

6 Months Ended

Jun. 30, 2014

Earnings Per Share and Dividends

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 shares and per share information):

	Three months ended June30, 2014		Six months ended June30, 2014
Numerator
Net income attributable to RE/MAX Holdings, Inc.	$	4,377	$	6,788
Denominator for basic net income per share of Class A    common stock
Weighted average shares of Class A common stock    outstanding		11,593,885		11,600,889
Denominator for diluted net income per share of Class A    common stock
Weighted average shares of Class A common stock    outstanding		11,593,885		11,600,889
Add dilutive effect of the following:
Stock options		587,906		590,953
Restricted stock units		48,223		46,347
Weighted average shares of Class A common stock    outstanding, diluted		12,230,014		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	$	0.38	$	0.59
Net income attributable to RE/MAX Holdings, Inc.    per share of Class A common stock, diluted	$	0.36	$	0.55

EPS information is not applicable for reporting periods prior to the completion of the IPO which became effective on October 7, 2013. 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

During the six months ended June 30, 2014, the Company’s Board of Directors declared quarterly dividends of $0.0625 per share on outstanding shares of Class A common stock in both the first and second quarters of 2014, representing $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.  No dividends were declared or paid during the six months ended June 30, 2013.  On August 6, 2014, the Company’s Board of Directors declared a quarterly dividend of $0.0625 per share on all outstanding shares of Class A common stock, which is payable on September 3, 2014 to shareholders of record at the close of business on August 20, 2014.