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

Quarterly report pursuant to Section 13 or 15(d)

Earnings (Loss) Per Share (Tables)

Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2024

Summary of basic earnings (loss) per share

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


	For the three months ended September 30, 2024		For the three months ended September 30, 2023		For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
Basic earnings (loss) per share:
Numerator
Net income (loss) from continuing operations	$	203,748	$	(172,468)	$	183,047	$	(337,610)
Less: Income (loss) from continuing operations attributable to noncontrolling interest(1)	119,545		(107,940)		106,463		(212,190)
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	84,203	$	(64,528)	$	76,584	$	(125,420)

Net loss from discontinued operations	$	—	$	(2,464)	$	(4,727)	$	(45,211)
Less: Loss from discontinued operations attributable to noncontrolling interest(1)	—		(1,629)		(2,719)		(29,182)
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	—	$	(835)	$	(2,008)	$	(16,029)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	9,924,671		8,772,623		9,824,171		7,980,449

Basic earnings (loss) per share
Continuing operations	$	8.48	$	(7.36)	$	7.80	$	(15.72)
Discontinued operations	—		(0.09)		(0.21)		(2.00)
Basic earnings (loss) per share	$	8.48	$	(7.45)	$	7.59	$	(17.72)

(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 earnings (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”).

Summary of diluted earnings (loss) per share


	For the three months ended September 30, 2024		For the three months ended September 30, 2023		For the nine months ended September 30, 2024		For the nine months ended September 30, 2023
Diluted earnings (loss) per share:
Numerator
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	84,203	$	(64,528)	$	76,584	$	(125,420)
Reallocation of net income (loss) from continuing operations assuming exchange of Class A LLC Units(1)	89,397		—		76,749		—
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted	$	173,600	$	(64,528)	$	153,333	$	(125,420)

Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	—	$	(835)	$	(2,008)	$	(16,029)
Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units(1)	—		—		(2,033)		—
Net loss from discontinued operations attributable to holders of Class A Common Stock - diluted	$	—	$	(835)	$	(4,041)	$	(16,029)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	9,924,671		8,772,623		9,824,171		7,980,449
Effect of dilutive securities:
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock(2)	13,185,957		—		13,222,101		—
Additional dilutive shares under the treasury stock method(3)	48,676		—		16,344		—
Weighted average shares of Class A Common Stock outstanding - diluted(4)	23,159,304		8,772,623		23,062,616		7,980,449

Diluted earnings (loss) per share
Continuing operations	$	7.50	$	(7.36)	$	6.65	$	(15.72)
Discontinued operations	—		(0.09)		(0.18)		(2.00)
Diluted earnings (loss) per share	$	7.50	$	(7.45)	$	6.47	$	(17.72)

(1) For the three and nine months ended September 30, 2024, this adjustment assumes the reallocation of noncontrolling interest income (losses), 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 earnings (loss) per share. For the three and nine months ended September 30, 2023, 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 loss per share.

Following the terms of the A&R LLC Agreement, the Class A LLC unitholders 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 was borne by FoA. As a result of the application of the if-converted method in arriving at diluted earnings (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. As of April 1, 2024, there is no further compensation cost associated with the Replacement RSUs and Earnout Right RSUs.

(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. For the three and nine months ended September 30, 2024, 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. The 14,144,005 and 13,579,267 weighted average Class A LLC Units outstanding for the three and nine months ended September 30, 2023 were determined to be anti-dilutive under the if-converted method and have been excluded from the computation of diluted loss per share.

(3) The Company had 48,676 and 16,344 potentially dilutive shares, under the treasury stock method, from RSUs for the three and nine months ended September 30, 2024, and 252,190 and 145,520 potentially dilutive shares, under the treasury stock method, from RSUs for the three and nine months ended September 30, 2023. The potentially dilutive shares from RSUs were determined to be anti-dilutive for the three and nine months ended September 30, 2023 and have been excluded from the computation of diluted loss per share.

The Company had no potentially dilutive shares, under the treasury stock method, from forward sale share contracts for the three and nine months ended September 30, 2024, and 0 and 70,029 potentially dilutive shares, under the treasury stock method, from forward sale share contracts for the three and nine months ended September 30, 2023. The potentially dilutive shares from forward sale share contracts were determined to be anti-dilutive for the nine months ended September 30, 2023, and have been excluded from the computation of diluted loss per share.

(4) As part of the AAG Transaction, there are two forms of contingently issuable Class A LLC Units: 705,841 Units that are equity classified and indemnity holdback units totaling up to 714,226 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 and nine months ended September 30, 2024 and 2023.