| 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 period due to the limited number of LLC unit holders for the Predecessor periods presented. The following table reconciles the numerators and denominators used in the computations of both basic and diluted earnings per share for the Successor period (in thousands, except for share amounts):
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Basic net income (loss) per share: |
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Less: loss attributable to noncontrolling interests (1)
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Net income attributable to holders of Class A Common Stock—basic |
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Weighted average shares of Class A Common Stock outstanding—basic |
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Basic net income per share |
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(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. |
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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. |
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Loss attributable to noncontrolling interest includes special allocations of recognized expense related to the A&R MLTIP. See Note 24 - Incentive Compensation for additional details. |
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(in thousands, except for share amounts) |
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Diluted net loss per share: |
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Net income attributable to holders of Class A Common Stock |
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Reallocation of net loss assuming exchange of Class A LLC Units (2)
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Net loss attributable to holders of Class A Common Stock—diluted |
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Weighted average shares of Class A Common Stock outstanding—basic |
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Effect of dilutive securities: |
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Assumed exchange of Class A LLC Units for shares of Class A Common Stock (3)
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Weighted average shares of Class A Common Stock outstanding—diluted |
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Diluted net loss per share |
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(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 basis for shares of Class A Common Stock in FoA. In addition to the Class A LLC Units, the Company also had Replacement RSUs outstanding during the period from April 1, 2021 to June 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. |
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