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, 2024

18. Earnings Per Share

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


	For the three months ended March 31, 2024		For the three months ended March 31, 2023
Basic net income (loss) per share:
Numerator
Net income (loss) from continuing operations	$	(15,780)	$	55,482
Less: Income (loss) from continuing operations attributable to noncontrolling interest(1)	(10,145)		36,755
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	(5,635)	$	18,727

Net loss from discontinued operations	$	(4,524)	$	(40,890)
Less: Loss from discontinued operations attributable to noncontrolling interest(1)	(2,621)		(25,217)
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	(1,903)	$	(15,673)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	96,485,585		64,016,845

Basic net income (loss) per share
Continuing operations	$	(0.06)	$	0.29
Discontinued operations	(0.02)		(0.24)
Basic net income (loss) per share	$	(0.08)	$	0.05

(1) The Class A LLC Units of FoA Equity, held by the Continuing Unitholders and AAG/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”) subject to special allocation terms per the Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”).


	For the three months ended March 31, 2024		For the three months ended March 31, 2023
Diluted net income (loss) per share:
Numerator
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	(5,635)	$	18,727
Reallocation of net income from continuing operations assuming exchange of Class A LLC Units(1)	—		23,328
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted	$	(5,635)	$	42,055

Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	(1,903)	$	(15,673)
Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units(1)	—		(12,470)
Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted	$	(1,903)	$	(28,143)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	96,485,585		64,016,845
Effect of dilutive securities:
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock(2)	—		124,159,953
Forward sale share contracts - dilutive shares under the treasury stock method	—		2,124,214
Weighted average shares of Class A Common Stock outstanding - diluted(3)	96,485,585		190,301,012

Diluted net income (loss) per share
Continuing operations	$	(0.06)	$	0.22
Discontinued operations	(0.02)		(0.15)
Diluted net income (loss) per share	$	(0.08)	$	0.07

(1) For the three months ended March 31, 2024, the effect of the elimination of the noncontrolling interest due to the assumed exchange of all Class A LLC Units outstanding for shares of Class A Common Stock in FoA was determined to be anti-dilutive under the if-converted method. As such, the effect has been excluded from the calculation of diluted net income (loss) per share. For the three months ended March 31, 2023, 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. 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 Exchange Agreement allows for the exchange of Class A LLC Units held by Equity Capital Unitholders, representing the noncontrolling interest, on a one-for-one basis for shares of Class A Common Stock in FoA. The 132,947,368 weighted average Class A LLC Units outstanding for the three months ended March 31, 2024 were determined to be anti-dilutive under the if-converted method and have been excluded from the computation of diluted net income (loss) per share. For the three months ended March 31, 2023, 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.

(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, 2024 and 2023.