Finance of America Companies Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2024

29. 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 year ended December 31, 2024		For the year ended December 31, 2023
Basic earnings (loss) per share:
Numerator
Net income (loss) from continuing operations	$	40,418	$	(166,249)
Less: Income (loss) from continuing operations attributable to noncontrolling interest(1)	22,922		(104,962)
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	17,496	$	(61,287)

Net loss from discontinued operations	$	(4,727)	$	(51,909)
Less: Loss from discontinued operations attributable to noncontrolling interest(1)	(2,719)		(33,108)
Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	(2,008)	$	(18,801)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	9,850,903		8,197,753

Basic earnings (loss) per share
Continuing operations	$	1.78	$	(7.48)
Discontinued operations	(0.21)		(2.29)
Basic earnings (loss) per share	$	1.57	$	(9.77)

(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 A&R MLTIP subject to special allocation terms per the Amended and Restated Limited Liability Company Agreement (“A&R LLC Agreement”). Refer to Note 20 - Equity-Based Compensation for additional information.


	For the year ended December 31, 2024		For the year ended December 31, 2023
Diluted earnings (loss) per share:
Numerator
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - basic	$	17,496	$	(61,287)
Reallocation of net income (loss) from continuing operations assuming exchange of Class A LLC Units(1)	14,260		—
Exchangeable Secured Notes interest expense, net(2)	—		—
Net income (loss) from continuing operations attributable to holders of Class A Common Stock - diluted	$	31,756	$	(61,287)

Net loss from discontinued operations attributable to holders of Class A Common Stock - basic	$	(2,008)	$	(18,801)
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	$	(4,041)	$	(18,801)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	9,850,903		8,197,753
Effect of dilutive securities:
Assumed exchange of weighted average Class A LLC Units for shares of Class A Common Stock(3)	13,336,437		—
Assumed exchange of Exchangeable Secured Notes for shares of Class A Common Stock(2)	—		—
Additional dilutive shares under the treasury stock method(4)	218,893		—
Weighted average shares of Class A Common Stock outstanding - diluted(5)	23,406,233		8,197,753

Diluted earnings (loss) per share
Continuing operations	$	1.36	$	(7.48)
Discontinued operations	(0.18)		(2.29)
Diluted earnings (loss) per share	$	1.18	$	(9.77)

(1) For the year ended December 31, 2024, this adjustment assumes the reallocation of noncontrolling interest income (loss), 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 year ended December 31, 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) As the Exchangeable Secured Notes are considered participating securities, the Company calculates diluted earnings per share for the assumed exchange of Exchangeable Secured Notes for shares of Class A Common Stock in FOA using the more dilutive of either the if-converted method or the two-class method.

Interest expense for the Exchangeable Secured Notes, including amortization of debt discount and issuance costs, and net of income tax effects, is added back to the continuing operations numerator in calculating diluted earnings per share, if dilutive.

The Company in its discretion may elect to settle any exchange of the Exchangeable Secured Notes in part or in whole by delivering the cash value of the shares of Class A Common Stock otherwise deliverable upon such exchange. If dilutive, the denominator in the diluted earnings per share calculation assumes that all of the Exchangeable Secured Notes were converted into Class A Common Stock in FOA on the date of issuance of the Exchangeable Secured Notes.

The Company had 904,239 potentially dilutive shares from the Exchangeable Secured Notes for the year ended December 31, 2024. The potentially dilutive shares from the Exchangeable Secured Notes were determined to be anti-dilutive for the year ended December 31, 2024 and have been excluded from the computation of diluted earnings per share. As such, the $2.1 million of interest expense for the Exchangeable Secured Notes, including amortization of debt discount and issuance costs, and net of income tax effects, was not added back to the numerator in calculating diluted earnings per share. Refer to Note 17 - Notes Payable, Net, for additional information.

(3) 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 year ended December 31, 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 13,707,372 weighted average Class A LLC Units outstanding for the year ended December 31, 2023 were determined to be anti-dilutive under the if-converted method and have been excluded from the computation of diluted loss per share.

(4) The Company had 218,893 potentially dilutive shares, under the treasury stock method, from RSUs for the year ended December 31, 2024, and 108,841 potentially dilutive shares, under the treasury stock method, from RSUs for the year ended December 31, 2023. The potentially dilutive shares from RSUs were determined to be anti-dilutive for the year ended December 31, 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 year ended December 31, 2024, and 52,377 potentially dilutive shares, under the treasury stock method, from forward sale share contracts for the year ended December 31, 2023. The potentially dilutive shares from forward sale share contracts were determined to be anti-dilutive for the year ended December 31, 2023 and have been excluded from the computation of diluted loss per share.

(5) 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. Refer to Note 3 - Acquisitions for additional information.

On October 29, 2024, FOA Equity issued 705,841 Class A LLC Units to AAG/Bloom in accordance with the terms of the asset purchase agreement relating to the AAG Transaction. The diluted weighted average shares outstanding of Class A Common Stock includes the effects of the if-converted method and assumes the Class A LLC Units held by AAG/Bloom exchanged their units on a one-for-one basis for shares of Class A Common Stock in FOA at the beginning of the reporting period.

In accordance with ASC 260, Earnings Per Share, the indemnity holdback units are not included in the diluted weighted average shares outstanding of Class A Common Stock for the years ended December 31, 2024 and 2023.