As of the first quarter of 2023, the Company owned 100% of Shoals Parent LLC. The following table summarizes the effects of the changes in ownership in Shoals Parent LLC on equity for the years ended December 31, 2023, 2022, and 2021:


	Year Ended December 31, 2023		Year Ended December 31, 2022		Period from January 27, 2021 to December 31, 2021
Net income attributable to non-controlling interests	$	2,687	$	15,402	$	1,596
Transfers to non-controlling interests:
Decrease as a result of the Organizational Transactions	—		—		(88,644)
Increase as a result of newly issued LLC Interests in IPO	—		—		70,976
Increase as a result of activity under equity-based compensation plan	687		5,422		3,618
Decrease from tax distributions to non-controlling interests	(2,628)		(7,762)		(4,837)
Reallocation of non-controlling interests	(10,361)		6,604		7,240
Change from net income attributable to non-controlling interests and transfers to non-controlling interests	$	(9,615)	$	19,666	$	(10,051)

Under the LLC Agreement, the Company was required to cause Shoals Parent LLC to issue additional LLC Interests to the Company when the Company issued additional shares of Class A common stock. Other than as it relates to the issuance of Class A common stock in connection with an equity incentive program, the Company contributed to Shoals Parent LLC net proceeds and property, if any, received by the Company with

respect to the issuance of such additional shares of Class A common stock. The Company caused Shoals Parent LLC to issue a number of LLC Interests equal to the number of shares of Class A common stock issued such that, at all times, the number of LLC Interests held by the Company was equal to the number of outstanding shares of Class A common stock. During the years ended December 31, 2023, 2022 and 2021, the Company caused Shoals Parent LLC to issue to the Company a total of 601,518, 480,116 and 40,665 LLC Interests, respectively, for the vesting of awards granted under the 2021 Long-Term Incentive Plan. On July 1, 2023, the Company contributed 100% of its LLC Interests in Shoals Parent LLC to its wholly-owned subsidiary, Shoals Intermediate. Following the contribution, Shoals Parent LLC became a disregarded single member limited liability company, eliminating the Up-C structure. Effective December 31, 2023, Shoals Parent LLC merged with and into Shoals Intermediate Parent with Shoals Intermediate Parent as the surviving corporation. See “Entity Simplification” in Note 1.

As a limited liability company (treated as a partnership for income tax purposes), Shoals Parent LLC did not incur significant federal, state or local income taxes, as these taxes were primarily the obligations of its members. As authorized by the LLC Agreement, Shoals Parent LLC was required to distribute cash, to the extent that Shoals Parent LLC had cash available, on a pro rata basis, to its members to the extent necessary to cover the members’ tax liabilities, if any, with respect to each member’s share of Shoals Parent LLC taxable earnings. Shoals Parent LLC made such tax distributions to its members quarterly, based on the single highest marginal tax rate applicable to its members applied to projected year-to-date taxable income. During the years ended December 31, 2023, 2022 and 2021, tax distributions to non-controlling LLC Interests holders were $2.6 million, $7.8 million and $4.8 million, respectively.

Pursuant to the LLC Agreement, the Company had the right to determine when distributions would be made to LLC members and the amount of any such distributions. If the Company authorized a distribution, such distribution was made to the members of the LLC (including the Company) pro rata in accordance with the percentages of their respective LLC units.