Non-controlling Interests

3 Months Ended

Mar. 31, 2023

Operating Partnership

Non-controlling interests include the Convertible Non-controlling Interests in the Operating Partnership owned by an affiliate of our Manager, our directors, and certain current and former Ellington employees and their related parties in the form

of OP LTIP Units. Income allocated to Convertible Non-controlling Interests is based on the non-controlling interest owners' ownership percentage of the Operating Partnership during the period, calculated using a daily weighted average of all shares of common stock of the Company and Convertible Non-controlling Interests outstanding during the period. Holders of Convertible Non-controlling Interests are entitled to receive the same distributions that holders of shares of common stock of the Company receive. Convertible Non-controlling Interests are non-voting with respect to matters as to which holders of common stock of the Company are entitled to vote.

As of March 31, 2023, the Convertible Non-controlling Interests consisted of the outstanding 769,573 OP LTIP Units and 46,360 OP Units, and represented an interest of approximately 0.9% in the Operating Partnership. As of December 31, 2022, the Convertible Non-controlling Interests consisted of the outstanding 769,573 OP LTIP Units and 46,360 OP Units, and represented an interest of approximately 1.0% in the Operating Partnership. As of March 31, 2023 and December 31, 2022, non-controlling interests related to all outstanding Convertible Non-controlling Interests was $12.5 million and $12.4 million, respectively.

Joint Venture Interests

Non-controlling interests also include the interests of joint venture partners in various consolidated subsidiaries of the Company. These subsidiaries hold the Company's investments in certain commercial mortgage loans and REO. The joint venture partners participate in the income, expense, gains and losses of such subsidiaries as set forth in the related operating agreements of the subsidiaries. The joint venture partners make capital contributions to the subsidiaries as new approved investments are purchased by the subsidiaries, and are generally entitled to distributions when investments are sold or otherwise disposed of. As of March 31, 2023 and December 31, 2022, the joint venture partners' interests in subsidiaries of the Company were $9.9 million and $10.0 million, respectively.

The joint venture partners' interests are not convertible into shares of common stock of the Company or OP Units, nor are the joint venture partners entitled to receive distributions that holders of shares of common stock of the Company receive.

Non-Controlling Interests in Longbridge

As of March 31, 2023 and December 31, 2022, the Company owned 99.6% and 99.5%, respectively, of Longbridge; the remainder relates to units held by various executives at Longbridge (the "Longbridge Executive Unit Holders") and stock options issued to various Longbridge employees (collectively, the "Longbridge Minority Holders"). Units held by the Longbridge Executive Unit Holders and exercised stock options participate in the income, expense, gains and losses of Longbridge but do not participate in the income, expense, gains and losses of the Operating Partnership. The Longbridge Minority Holders' interests are not convertible into shares of common stock of the Company or OP Units, nor are the Longbridge Minority Holders' entitled to receive distributions that holders of shares of common stock of the Company receive. As of both March 31, 2023 and December 31, 2022, the Longbridge Minority Holders' interests in Longbridge were $2.4 million.

Share-based Payment Arrangement

Long-Term Incentive Plan Units

OP LTIP Units subject to the Company's incentive plans are generally exercisable by the holder at any time after vesting. Each OP LTIP Unit is convertible into an OP Unit on a one-for-one basis. Subject to certain conditions, the OP Units are redeemable by the holder for an equivalent number of shares of common stock of the Company or for the cash value of such shares of common stock, at the Company's election. Costs associated with the OP LTIP Units issued under the Company's incentive plans are measured as of the grant date and expensed ratably over the vesting period. Total expense associated with OP LTIP Units issued under the Company's incentive plans for each of the three-month periods ended March 31, 2023 and 2022 was $0.3 million.

The below table details unvested OP LTIP Units as of March 31, 2023:

Grant Recipient

Number of OP LTIP Units Granted

Grant Date

Vesting Date(1)

Directors:

24,796

September 13, 2022

September 12, 2023

Dedicated or partially dedicated personnel:

15,789

December 16, 2021

December 16, 2023

40,254

March 7, 2022

December 31, 2023

18,068

December 15, 2022

December 15, 2023

14,708

December 15, 2022

December 15, 2024

Total unvested OP LTIP Units at March 31, 2023

113,615

(1)Date at which such OP LTIP Units will vest and become non-forfeitable.

The following tables summarize issuance and exercise activity of OP LTIP Units for the three-month periods ended March 31, 2023 and 2022:


	Three-Month Period Ended March 31,
	2023			2022
	Manager	Director/ Employee	Total	Manager	Director/ Employee	Total
OP LTIP Units Outstanding (12/31/2022 and 2021, respectively)	365,518	404,055	769,573	365,518	310,295	675,813
Granted	—	—	—	—	40,254	40,254
OP LTIP Units Outstanding (3/31/2023 and 2022, respectively)	365,518	404,055	769,573	365,518	350,549	716,067
OP LTIP Units Unvested and Outstanding (3/31/2023 and 2022, respectively)	—	113,615	113,615	—	120,140	120,140
OP LTIP Units Vested and Outstanding (3/31/2023 and 2022, respectively)	365,518	290,440	655,958	365,518	230,409	595,927

There were an aggregate of 1,509,481 shares of common stock of the Company underlying awards, including OP LTIP Units, available for future issuance under the Company's 2017 Equity Incentive Plan as of both March 31, 2023 and December 31, 2022, respectively.