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

6 Months Ended

Jun. 30, 2022

21.	Earnings Per Share

Basic net income per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the Successor period. Diluted net income 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 Successor period.

For the Predecessor periods, FoA Equity’s capital structure consisted of a single class of outstanding membership units which are held by one member, UFG. Therefore, the Company has omitted earnings per unit for the Predecessor periods presented due to the limited number of LLC unit holders.

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


	For the three months ended June 30, 2022			For the six months ended June 30, 2022			For the three months ended June 30, 2021			For the three months ended March 31, 2021
	Successor									Predecessor
Basic net earnings (loss) per share:
Numerator
Net loss	$	(167,823	)	$	(231,818	)	$	(14,824	)		N/A
Less: loss attributable to noncontrolling interest (1)		(127,143	)		(182,645	)		(17,089	)		N/A

Net income (loss) attributable to holders of Class A Common Stock—basic	$	(40,680	)	$	(49,173	)	$	2,265			N/A

Denominator
Weighted average shares of Class A Common Stock outstanding—basic		62,379,041			61,580,900			59,881,714			N/A

Basic net earnings (loss) per share	$	(0.65	)	$	(0.80	)	$	0.04			N/A

(1)	The Class A LLC Units of FoA Equity, held by the Continuing Unitholders, which comprise the noncontrolling interest in the Company, represents a participating security. Therefore, the numerator was adjusted to reduce net income by the amount of net income 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 per share calculations.

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 June 30, 2022			For the six months ended June 30, 2022			For the three months ended June 30, 2021			For the three months ended March 31, 2021
	Successor									Predecessor
Diluted net loss per share:
Numerator
Net income (loss) attributable to holders of Class A Common Stock	$	(40,680	)	$	(49,173	)	$	2,265			N/A
Reallocation of net income (loss) assuming exchange of Class A LLC Units (1)		(90,293	)		(139,756	)		(12,001	)		N/A

Net loss attributable to holders of Class A Common Stock—diluted	$	(130,973	)	$	(188,929	)	$	(9,736	)		N/A

Denominator
Weighted average shares of Class A Common Stock outstanding—basic		62,379,041			61,580,900			59,881,714			N/A
Effect of dilutive securities:
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock (2)		125,439,184			127,048,176			131,318,286			N/A

Weighted average shares of Class A Common Stock outstanding—diluted		187,818,225			188,629,076			191,200,000			N/A

Diluted net loss per share	$	(0.70	)	$	(1.00	)	$	(0.05	)		N/A

(1)

This adjustment assumes the after-tax elimination of noncontrolling interest 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 Blackstone Tactical Opportunities Fund (Urban Feeder) – NQ L.P., a Delaware limited partnership (“Blocker”). As a result of the application of the if-converted method in arriving at diluted net 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 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 Continuing 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 Successor three and six months ended June 30, 2022. The effects of the RSUs following the treasury stock method have been excluded from the computation of diluted net loss per share given that the if-converted method was determined to be more dilutive.