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 March 31,
	2015		2014
Numerator
Net income attributable to RE/MAX Holdings, Inc.	$	2,751	$	2,408
Denominator for basic net income per share of Class A common stock
Weighted average shares of Class A common stock outstanding		11,817,605		11,607,971
Denominator for diluted net income per share of Class A common stock
Weighted average shares of Class A common stock outstanding		11,817,605		11,607,971
Add dilutive effect of the following:
Stock options		458,992		602,217
Restricted stock units		16,908		44,286
Weighted average shares of Class A common stock outstanding, diluted		12,293,505		12,254,474
Earnings per share of Class A common stock
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, basic	$	0.23	$	0.21
Net income attributable to RE/MAX Holdings, Inc. per share of Class A common stock, diluted	$	0.22	$	0.20

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 three months ended March 31, 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, or $1,500,000 in total dividends, which along with a corresponding distribution to non-controlling unitholders of $2,217,000, was paid on April 8, 2015. Additionally, during the three months ended March 31, 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. During the three months ended March 31, 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, or $725,000, which was paid on April 18, 2014. On May 7, 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 June 4, 2015 to shareholders of record at the close of business on May 21, 2015.