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 (Tables)

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2023

The following tables reconcile the numerators and denominators used in the computations of both basic and diluted net loss per share for the three and six months ended June 30, 2023 and 2022 (in thousands, except share data and per share amounts):


	For the three months ended June 30, 2023		For the six months ended June 30, 2023		For the three months ended June 30, 2022		For the six months ended June 30, 2022
Basic net loss per share:
Numerator
Net loss from continuing operations	$	(220,624)	$	(165,142)	$	(117,638)	$	(172,084)
Less: Loss from continuing operations attributable to noncontrolling interest(1)	(141,005)		(104,250)		(96,421)		(137,624)
Net loss from continuing operations attributable to holders of Class A Common Stock - basic	$	(79,619)	$	(60,892)	$	(21,217)	$	(34,460)

Net loss from discontinued operations	$	(1,857)	$	(42,747)	$	(50,185)	$	(59,734)
Less: Loss from discontinued operations attributable to noncontrolling interest(1)	(2,336)		(27,553)		(30,722)		(45,021)
Net income (loss) from discontinued operations attributable to holders of Class A Common Stock - basic	$	479	$	(15,194)	$	(19,463)	$	(14,713)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	87,409,861		75,777,975		62,379,041		61,580,900

Basic net loss per share
Continuing operations	$	(0.91)	$	(0.80)	$	(0.34)	$	(0.56)
Discontinued operations	—		(0.20)		(0.31)		(0.24)
Basic net loss per share	$	(0.91)	$	(1.00)	$	(0.65)	$	(0.80)

(1) The Class A LLC Units of FoA Equity, held by the Continuing Unitholders and 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 loss by the amount of net 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 net loss per share calculations.

Net 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 per share


	For the three months ended June 30, 2023		For the six months ended June 30, 2023		For the three months ended June 30, 2022		For the six months ended June 30, 2022
Diluted net loss per share:
Numerator
Net loss from continuing operations attributable to holders of Class A Common Stock - basic	$	(79,619)	$	(60,892)	$	(21,217)	$	(34,460)
Reallocation of net loss from continuing operations assuming exchange of Class A LLC Units (1)	—		—		(70,488)		(103,379)
Net loss from continuing operations attributable to holders of Class A Common Stock - diluted	$	(79,619)	$	(60,892)	$	(91,705)	$	(137,839)

Net income (loss) from discontinued operations attributable to holders of Class A Common Stock - basic	$	479	$	(15,194)	$	(19,463)	$	(14,713)
Reallocation of net loss from discontinued operations assuming exchange of Class A LLC Units (1)	—		—		(19,805)		(36,377)
Net income (loss) from discontinued operations attributable to holders of Class A Common Stock - diluted	$	479	$	(15,194)	$	(39,268)	$	(51,090)

Denominator
Weighted average shares of Class A Common Stock outstanding - basic	87,409,861		75,777,975		62,379,041		61,580,900
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
Additional shares under the treasury stock method (3)	—		—		—		—
Weighted average shares of Class A Common Stock outstanding - diluted (4)	87,409,861		75,777,975		187,818,225		188,629,076

Diluted net loss per share
Continuing operations	$	(0.91)	$	(0.80)	$	(0.49)	$	(0.73)
Discontinued operations	—		(0.20)		(0.21)		(0.27)
Diluted net loss per share	$	(0.91)	$	(1.00)	$	(0.70)	$	(1.00)

(1) For the three and six months ended June 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 net loss per share. For the three and six months ended June 30, 2022, this adjustment assumes the reallocation of noncontrolling interest earnings, 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 net 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 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 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. The 141,588,134 and 132,922,187 weighted average Class A LLC Units outstanding for the three and six months ended June 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 for each respective period. For the three and six months ended June 30, 2022, 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.

(3) The Company had 1,815,994 and 913,013 potentially dilutive shares, under the treasury stock method, from RSUs for the three and six months ended June 30, 2023, and none for both the three and six months ended June 30, 2022. The potentially dilutive shares from RSUs were determined to be anti-dilutive for both the three and six months ended June 30, 2023, and have been excluded from the computation of diluted loss per share.

The Company had 0 and 1,056,239 potentially dilutive shares, under the treasury stock method, from forward sale share contracts for the three and six months ended June 30, 2023, and none for both the three and six months ended June 30, 2022. The potentially dilutive shares from forward sale share contracts were determined to be anti-dilutive for the six months ended June 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: 7,058,416 Units that are equity classified and indemnity holdback units totaling up to 7,142,260 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 six months ended June 30, 2023.