Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

v3.21.2
Earnings Per Share
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Earnings per share
28.
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 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 for share amounts):
 
    
For the three
months ended
September 30,
2021
     
April 1, 2021 to

September 30,
2021
  
    
Successor
  
Basic net income per share:
                  
Numerator
                  
Net income
   
$
50,110
     
$
35,286
  
Less: income attributable to noncontrolling interests
(1)
   
 
28,726
     
 
11,637
  
    
 
 
     
 
 
  
Net income attributable to holders of Class A Common Stock - basic
   
$
21,384
     
$
23,649
  
    
 
 
     
 
 
  
Denominator
                  
Weighted average shares of Class A Common Stock outstanding -
basic
   
 
59,861,171
     
 
59,871,386
  
    
 
 
     
 
 
  
Basic net income per share
   
$
0.36
     
$
0.39
  
    
 
 
     
 
 
  
 
(1)
The Class A LLC Units of FoA Equity, held by the Continuing Unitholders, which comprise the noncontrolling interest in FoA, represents a participating security. Therefore, the numerator was adjusted to reduce net income by the amount of net income attributable to noncontrolling interests.
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.
Income attributable to noncontrolling interest includes special allocations of recognized expense related to the A&R MLTIP. See Note 22 - Incentive Compensation for additional details.
 
    
For the three
months ended
September 30,
2021
     
April 1, 2021 to

September 30,
2021
  
    
Successor
  
Diluted net income per share:
                  
Numerator
                  
Net income attributable to holders of Class A Common Stock
   
$
21,384
     
$
23,649
  
Reallocation of net income assuming exchange of Class A LLC Units
(2)
   
 
21,475
     
 
9,476
  
    
 
 
     
 
 
  
Net income attributable to holders of Class A Common Stock - diluted
   
$
42,859
     
$
33,125
  
    
 
 
     
 
 
  
Denominator
                  
Weighted average shares of Class A Common Stock outstanding
-
 
basic
   
 
59,861,171
     
 
59,871,386
  
Effect of dilutive securities:
                  
Assumed exchange of Class A LLC Units for shares of Class A Common Stock
(3)
   
 
131,300,259
     
 
131,309,223
  
    
 
 
     
 
 
  
Weighted average shares of Class A Common Stock outstanding - diluted
   
 
191,161,430
     
 
191,180,609
  
    
 
 
     
 
 
  
Diluted net income per share
   
$
0.22
     
$
0.17
  
    
 
 
     
 
 
  
 
(2)
 
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 per share.
Following the terms of the A&R LLC Agreement, the Class A LLC unitholders will initially bear approximately 85% of the cost of any vesting associated with the Replacement RSUs and Earnout Right RSUs prior to any distribution by FoA to such Class A LLC unitholders. The remaining compensation cost associated with the Replacement RSUs and Earnout Right RSUs will be shared by Blocker. As a result of the application of the
if-converted
method, in arriving at diluted net income 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 attributable to holders of the Company’s Class A Common Stock.
 
(3)
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 assume the Class A LLC unitholders of FoA Equity, representing the noncontrolling interest, exchange their units on a one-for-one basis for shares of Class A Common Stock in FoA.
I
n addition to the Class A LLC Units, the Company also had Replacement RSUs outstanding during the Successor three months ended September 30, 2021 and the Successor period from April 1, 2021 to September 30, 2021. The effects of the Replacement RSUs following the treasury stock method have been excluded from the computation of diluted net income per share given that the
if-converted
method was determined to be more dilutive.