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

Quarterly report pursuant to Section 13 or 15(d)

Acquisitions (Tables)

Acquisitions (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Assets Acquired and Liability Assumed in Conjunction with the Business Combination

The following table summarizes the provisional estimated fair value of consideration transferred, noncontrolling interest equity value, assets acquired and liabilities assumed in conjunction with the Business Combination (in thousands):


Consideration transferred:
Total cash consideration	$	342,270
Blocker rollover equity		221,811
Seller earnout contingent consideration (1)		160,272
Tax receivable agreement obligations to the seller		31,950

Total consideration transferred		756,303
Noncontrolling interest		1,658,545

Total equity value	$	2,414,848

Assets acquired:
Cash and cash equivalents	$	336,075
Restricted cash		305,292
Reverse mortgage loans held for investment, subject to HMBS related obligations, at fair value		10,071,192
Mortgage loans held for investment, subject to nonrecourse debt, at fair value		5,291,443
Mortgage loans held for investment, at fair value		1,100,544
Mortgage loans held for sale, at fair value		2,140,361
Debt securities		9,230
Mortgage servicing rights, at fair value		267,364
Derivative assets		116,479
Fixed assets and leasehold improvements, net		26,079
Intangible assets, net (2)		717,700
Other assets, net		279,155

Total assets acquired	$	20,660,914

Liabilities assumed:
HMBS related obligations, at fair value	$	9,926,131
Nonrecourse debt, at fair value		5,227,942
Other financing lines of credit		3,340,345
Payables and other liabilities		669,048
Notes payable, net		353,924

Total liabilities assumed	$	19,517,390

Net identifiable assets acquired		1,143,524

Goodwill (3)	$	1,271,324

(1)	Represents the estimated fair market value of earnout shares issued to Sellers, which will be settled with shares of Class A Common Stock and is accounted for as equity classified contingent consideration. These estimated fair values are preliminary and subject to adjustments in subsequent periods.

(2)

Intangible assets were identified that met either the separability criterion or contractual legal criterion. The evaluations of the facts and circumstances available as of April 1, 2021, to assign provisional fair values to assets acquired and liabilities assumed are ongoing, including the assessments of the economic characteristics of intangible assets. These evaluations may result in changes to the provisional amounts recorded based on third-party valuations performed. The indefinite lived trade names and definite lived trade names intangible assets represent the values of all the Company’s trade names. The broker/customer relationships intangible asset represents the existing broker/customer relationships.

Summary of Intangible Assets Acquired As Part of Business Combination


Identifiable intangible assets	Provisional Fair value (in thousands)		Provisional Useful life (in years)
Indefinite lived trade names	$	178,000		N/A
Definite lived trade names		8,800		10
Broker/customer relationships		530,900		8-15

Total	$	717,700

(3)

Goodwill represents the excess of the gross consideration transferred over the provisional fair value of the underlying net tangible and identifiable intangible assets acquired. Goodwill represents future economic benefits arising from acquiring FoA Equity, primarily due to its strong market position and its assembled workforce that are not individually identified and separately recognized as intangible assets. Approximately

85.2

million of the goodwill recognized is expected to be deductible for income tax purposes.

Summary of Business Acquisition Pro Forma Information


(in thousands)	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Pro forma revenues	$	387,014	$	454,249	$	895,203	$	639,377
Pro forma net income		19,672		100,413		111,055		7,121
Pro forma net income attributable to controlling interest		6,748		27,492		37,734		12,985
Pro forma net income (loss) attributable to noncontrolling interest		12,924		72,921		73,321		(5,864	)