Finance of America Companies Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

Earnings Per Share

3 Months Ended

Mar. 31, 2023

25. Earnings Per Share

Basic net income (loss) per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the period. Diluted net income (loss) per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share based compensation awards outstanding during the period.

The following tables reconcile the numerators and denominators used in the computations of both basic and diluted net income (loss) per share for the periods (in thousands, except share data and per share amounts):


	For the three months ended March 31, 2023		For the three months ended March 31, 2022
Basic net income (loss) per share:
Numerator
Net income (loss) from continuing operations	$	55,482	$	(50,639)
Less: Income (loss) from continuing operations attributable to noncontrolling interest(1)	36,755		(41,203)
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	18,727	$	(9,436)

Net loss from discontinued operations	$	(40,890)	$	(13,356)
Less: Loss from discontinued operations attributable to noncontrolling interest(1)	(25,217)		(14,299)
Net income (loss) from discontinued operations attributable to holders of Class A Common Stock - basic	$	(15,673)	$	943

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	64,016,845		60,773,891

Basic net income (loss) per share
Continuing operations	$	0.29	$	(0.16)
Discontinued operations	(0.24)		0.02
Basic net income (loss) per share	$	0.05	$	(0.14)

(1) The Class A LLC Units of FoA Equity, held by the Continuing Unitholders and Bloom (collectively "Equity Capital Unitholders"), which comprise the noncontrolling interest in the Company, represents a participating security. Therefore, the numerator was adjusted to reduce net income (loss) by the amount of net income (loss) attributable to noncontrolling interest.

Additionally, the Class B Common Stock does not participate in earnings or losses of the Company and, therefore, is not a participating security. The Class B Common Stock has not been included in either the basic or diluted net income (loss) per share calculations.

Net income (loss) attributable to noncontrolling interest includes an allocation of expense related to the Amended and Restated Long-Term Incentive Plan ("A&R MLTIP").


	For the three months ended March 31, 2023		For the three months ended March 31, 2022

Diluted net income (loss) per share:
Numerator
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	18,727	$	(9,436)
Reallocation of net income (loss) from continuing operations assuming exchange of Class A LLC Units (1)	23,328		(33,925)
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted	$	42,055	$	(43,361)

Net income (loss) from discontinued operations attributable to holders of Class A Common Stock - basic	$	(15,673)	$	943
Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units (1)	(12,470)		(14,308)
Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted	$	(28,143)	$	(13,365)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	64,016,845		60,773,891
Effect of dilutive securities:
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock (2)	124,159,953		128,675,045
Forward sale contract - dilutive shares	2,124,214		—
Weighted average shares of Class A Common Stock outstanding - diluted (3)	190,301,012		189,448,936

Diluted net income (loss) per share
Continuing operations	$	0.22	$	(0.23)
Discontinued operations	(0.15)		(0.07)
Diluted net income (loss) per share	$	0.07	$	(0.30)

(1) This adjustment assumes the reallocation of noncontrolling interest earnings, on an after-tax basis, due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA as of the beginning of the period following the if-converted method for calculating diluted net income (loss) per share.

Following the terms of the A&R LLC Agreement, the Class A LLC unitholders will bear approximately 85% of the cost of any vesting associated with the Replacement RSUs and Earnout Right RSUs prior to any distribution by the Company to such Class A LLC unitholders. The remaining compensation cost associated with the Replacement RSUs and Earnout Right RSUs will be born by FoA for the share attributable to Blocker. As a result of the application of the if-converted method in arriving at diluted net income (loss) per share, the entirety of the compensation cost associated with vesting of the Replacement RSUs and Earnout Right RSUs is assumed to be included in the net income (loss) attributable to holders of the Company’s Class A Common Stock.

(2) The diluted weighted average shares outstanding of Class A Common Stock includes the effects of the if-converted method to reflect the provisions of the Exchange Agreement and assumes the Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, exchange their units on a one-for-one basis for shares of Class A Common Stock in FoA.

In addition to the Class A LLC Units, the Company also had RSUs outstanding during the three months ended March 31, 2023 and 2022. The effects of the RSUs following the treasury stock method have been excluded from the computation of diluted net income (loss) per share as it did not yield dilutive shares.

(3) As part of the AAG Transaction, there are two forms of contingently issuable Class A LLC Units: 7,058,416 Units that are equity classified and indemnity holdback units totaling up to 7,142,260 Units that are liability classified. In accordance with ASC 260, Earnings Per Share, these units are not included in the diluted weighted average shares outstanding of Class A Common Stock for the three months ended March 31, 2023.