– Net loss from continuing operations of $16
million or $0.06 basic loss per share for the quarter –
– Third consecutive quarter of improved
operating results on an adjusted net basis –
– Adjusted EBITDA for the quarter was near
break-even at a loss of $1 million –
Finance of America Companies Inc. (“Finance of America” or
the “Company”) (NYSE: FOA), a modern retirement
solutions platform, reported financial results for the quarter
ended March 31, 2024.
First Quarter 2024 Highlights
- Net loss from continuing operations for the first quarter of
$16 million or $0.06 basic loss per share.
- For the quarter, the Company recognized an adjusted net loss(1)
of $7 million or $0.03 per share.
- 69% improvement on a pre-tax basis in Retirement Solutions in
the first quarter driven by higher revenue margin and reduced
expenses compared to the prior quarter.
- The first quarter 2024 marks the third consecutive quarter of
improved operating performance on an adjusted net basis.
- Adjusted EBITDA for the quarter was near break-even at a loss
of $1 million.
(1) See the sections titled
“Reconciliation to GAAP” and “Non-GAAP Financial Measures” for
reconciliations to the most directly comparable GAAP measures and
other important disclosures.
Graham A. Fleming, Chief Executive Officer commented,
“Throughout the first quarter, Finance of America continued to
execute against its strategic priorities and remains on track to
return to sustained profitability. As the leading provider of home
equity-based financing solutions for a modern retirement, we are
well positioned to benefit from home price appreciation and a
growing senior homeowner population.”
(unaudited)
First Quarter Financial Summary of Continuing
Operations
($ amounts in millions, except per share
data)
Variance (%)
Variance (%)
Q1'24
Q4'23
Q1'24 vs Q4'23
Q1'23
Q1'24 vs Q1'23
Funded volume
$
424
$
446
(5
)%
$
357
19
%
Total revenues
75
276
(73
)%
141
(47
)%
Total expenses and other, net
90
95
(5
)%
83
8
%
Pre-tax income (loss) from continuing
operations
(16
)
172
(109
)%
58
(128
)%
Net income (loss) from continuing
operations
(16
)
171
(109
)%
55
(129
)%
Adjusted net loss(1)
(7
)
(20
)
65
%
(15
)
53
%
Adjusted EBITDA(1)
(1
)
(18
)
94
%
(12
)
92
%
Basic net earnings (loss) per share
$
(0.06
)
$
0.72
(108
)%
$
0.29
(121
)%
Diluted net income (loss) per share(2)
$
(0.06
)
$
0.55
(111
)%
$
0.22
(127
)%
Adjusted loss per share(1)
$
(0.03
)
$
(0.09
)
67
%
$
(0.08
)
63
%
(1)
See the sections titled
“Reconciliation to GAAP” and “Non-GAAP Financial Measures” for
reconciliations to the most directly comparable GAAP measures and
other important disclosures.
(2)
Calculated on an if-converted
basis except when anti-dilutive.
Balance Sheet Highlights
($ amounts in millions)
March 31,
December 31,
Variance (%)
2024
2023
Q1'24 vs Q4'23
Cash and cash equivalents
$
48
$
46
4
%
Securitized loans held for investment
(HMBS & nonrecourse)
26,458
25,821
2
%
Total assets
27,684
27,108
2
%
Total liabilities
27,428
26,835
2
%
Total equity
256
272
(6
)%
- First quarter cash and cash equivalents of $48 million.
- Securitized loans held for investment (HMBS & nonrecourse)
increased 2% as we completed two proprietary securitizations in the
quarter in addition to HMBS securitizations.
- Total assets increased 2% in line with the change in
securitized loans held for investment.
- Total liabilities increased $593 million on a
sequential-quarter basis primarily due to the increase in HMBS
obligations.
(unaudited)
Segment Results
Retirement Solutions
The Retirement Solutions segment primarily generates revenue and
earnings in the form of net origination gains and origination fees
earned on the origination of reverse mortgage loans.
Variance (%)
Variance (%)
($ amounts in millions)
Q1'24
Q4'23
Q1'24 vs Q4'23
Q1'23
Q1'24 vs Q1'23
Funded volume
$
424
$
446
(5
)%
$
357
19
%
Total revenue
46
41
12
%
26
77
%
Pre-tax loss
(4
)
(13
)
69
%
(9
)
56
%
Adjusted net income (loss)(1)
5
(2
)
350
%
2
150
%
(1)
See the sections titled
“Reconciliation to GAAP” and “Non-GAAP Financial Measures” for
reconciliations to the most directly comparable GAAP measures and
other important disclosures.
- For the quarter, the segment recognized adjusted net income of
$5 million as a result of improved revenue margins and reduced
expenses.
- Within our Reverse business, funded volume decreased to $423
million, or down 3% from the prior quarter due to seasonality and
the consolidation to one loan origination system during the
quarter.
- First quarter revenue increased 12% from the fourth quarter to
$46 million as margins improved as a result of spread tightening
throughout the first quarter. Revenue margin in the first quarter
was 10.8% compared to 9.2% in the prior quarter.
Portfolio Management
The Portfolio Management segment primarily generates revenue and
earnings in the form of fair value gains or losses on portfolio
assets and the sale or securitization of loans.
Variance (%)
Variance (%)
($ amounts in millions)
Q1'24
Q4'23
Q1'24 vs Q4'23
Q1'23
Q1'24 vs Q1'23
Assets under management
$
27,357
$
26,773
2
%
$
26,327
4
%
Assets excluding HMBS and nonrecourse
obligations
1,632
1,515
8
%
1,887
(14
)%
Total revenue
37
240
(85
)%
124
(70
)%
Pre-tax income
14
217
(94
)%
99
(86
)%
Adjusted net income(1)
6
—
N/A
4
50
%
(1)
See the sections titled
“Reconciliation to GAAP” and “Non-GAAP Financial Measures” for
reconciliations to the most directly comparable GAAP measures and
other important disclosures.
- For the quarter, the segment recognized adjusted net income of
$6 million, an improvement against break-even for the prior quarter
primarily due to increased yield on the Company’s retained
interests in securitized loans held for investment.
- Net fair value adjustments during the first quarter totaled $7
million as changes in market interest rates were more than offset
by credit spread and home price appreciation adjustments.
Finance of America Companies
Inc.
Selected Financial
Information
Condensed Consolidated
Statements of Financial Condition
(In thousands, except share
data)
(Unaudited)
March 31, 2024
December 31, 2023
ASSETS
Cash and cash equivalents
$
48,229
$
46,482
Restricted cash
195,349
178,319
Loans held for investment, subject to HMBS
related obligations, at fair value
18,050,772
17,548,763
Loans held for investment, subject to
nonrecourse debt, at fair value
8,407,602
8,272,393
Loans held for investment, at fair
value
535,910
575,228
Intangible assets, net
244,233
253,531
Other assets, net
194,183
226,153
Assets of discontinued operations
7,290
6,721
TOTAL ASSETS
$
27,683,568
$
27,107,590
LIABILITIES AND EQUITY
HMBS related obligations, at fair
value
$
17,827,060
$
17,353,720
Nonrecourse debt, at fair value
7,897,896
7,904,200
Other financing lines of credit
1,071,191
928,479
Notes payable, net (includes amounts due
to related parties of $84,630 and $59,130, respectively)
436,193
410,911
Payables and other liabilities
174,858
219,569
Liabilities of discontinued operations
20,647
18,304
TOTAL LIABILITIES
27,427,845
26,835,183
EQUITY
Class A Common Stock, $0.0001 par value;
6,000,000,000 shares authorized; 100,820,259 and 100,599,241 shares
issued, respectively, and 96,561,759 and 96,340,741 shares
outstanding, respectively
10
10
Class B Common Stock, $0.0001 par value;
1,000,000 shares authorized; 15 shares issued and outstanding,
respectively
—
—
Additional paid-in capital
950,588
946,929
Accumulated deficit
(721,921
)
(714,383
)
Accumulated other comprehensive loss
(266
)
(249
)
Noncontrolling interest
27,312
40,100
TOTAL EQUITY
255,723
272,407
TOTAL LIABILITIES AND EQUITY
$
27,683,568
$
27,107,590
Finance of America Companies
Inc.
Selected Financial
Information
Condensed Consolidated
Statements of Operations
(In thousands, except share
data)
(Unaudited)
Q1'24
Q4'23
Q1'23
REVENUES
Net fair value gains on loans and related
obligations
$
92,635
$
292,203
$
176,394
Fee income
6,236
10,073
6,352
Gain (loss) on sale and other income from
loans held for sale, net
86
(1,530
)
(12,426
)
Net interest expense:
Interest income
4,266
2,459
2,091
Interest expense
(28,541
)
(27,473
)
(31,556
)
Net interest expense
(24,275
)
(25,014
)
(29,465
)
TOTAL REVENUES
74,682
275,732
140,855
EXPENSES
Salaries, benefits, and related
expenses
39,023
37,850
40,814
Loan production and portfolio related
expenses
8,613
5,194
7,992
Loan servicing expenses
8,218
7,455
6,636
Marketing and advertising expenses
8,512
9,729
1,956
Depreciation and amortization
9,678
9,939
10,105
General and administrative expenses
17,271
22,632
16,274
TOTAL EXPENSES
91,315
92,799
83,777
IMPAIRMENT OF INTANGIBLES AND OTHER
ASSETS
(600
)
(8,738
)
—
OTHER, NET
1,453
(2,641
)
936
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
(15,780
)
171,554
58,014
Provision for income taxes from continuing
operations
—
193
2,532
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS
(15,780
)
171,361
55,482
NET LOSS FROM DISCONTINUED
OPERATIONS
(4,524
)
(6,698
)
(40,890
)
NET INCOME (LOSS)
(20,304
)
164,663
14,592
Noncontrolling interest
(12,766
)
103,302
11,538
NET INCOME (LOSS) ATTRIBUTABLE TO
CONTROLLING INTEREST
$
(7,538
)
$
61,361
$
3,054
EARNINGS PER SHARE
Basic weighted average shares
outstanding
96,485,585
88,425,793
64,016,845
Basic net income (loss) per share from
continuing operations
$
(0.06
)
$
0.72
$
0.29
Basic net income (loss) per share
$
(0.08
)
$
0.69
$
0.05
Diluted weighted average shares
outstanding
96,485,585
229,300,885
190,301,012
Diluted net income (loss) per share from
continuing operations
$
(0.06
)
$
0.55
$
0.22
Diluted net income (loss) per share
$
(0.08
)
$
0.53
$
0.07
(unaudited)
Reconciliation to GAAP
($ amounts in millions)(1)
Q1'24
Q4'23
Q1'23
Reconciliation of net income (loss)
from continuing operations to adjusted net loss and adjusted
EBITDA
Net income (loss) from continuing
operations
$
(16
)
$
171
$
55
Add back: Provision for income taxes
—
(1
)
(3
)
Net income (loss) from continuing
operations before taxes
(16
)
172
58
Adjustments for:
Changes in fair value(2)
(9
)
(221
)
(94
)
Amortization and impairment of intangibles
and other assets(3)
10
17
9
Share-based compensation(4)
3
3
4
Certain non-recurring costs(5)
2
2
2
Adjusted net loss before taxes
(10
)
(27
)
(21
)
Benefit for income taxes(6)
2
7
6
Adjusted net loss
(7
)
(20
)
(15
)
Benefit for income taxes(6)
(2
)
(7
)
(6
)
Depreciation
—
1
1
Interest expense on non-funding debt
8
8
8
Adjusted EBITDA
$
(1
)
$
(18
)
$
(12
)
($ amounts in millions except shares and $
per share)
Q1'24
Q4'23
Q1'23
GAAP PER SHARE MEASURES
Net income (loss) from continuing
operations attributable to controlling interest
$
(6
)
$
64
$
19
Weighted average outstanding share
count
96,485,585
88,425,793
64,016,845
Basic net income (loss) per share from
continuing operations
$
(0.06
)
$
0.72
$
0.29
If-converted method net income (loss) from
continuing operations
$
(6
)
$
128
$
42
Weighted average diluted share count
96,485,585
229,300,885
190,301,012
Diluted net income (loss) per share
from continuing operations(7)
$
(0.06
)
$
0.55
$
0.22
NON-GAAP PER SHARE MEASURES
Adjusted net loss
$
(7
)
$
(20
)
$
(15
)
Weighted average share count
229,432,953
229,300,885
190,301,012
Adjusted loss per share
$
(0.03
)
$
(0.09
)
$
(0.08
)
(1)
Totals may not foot due to
rounding.
(2)
Changes in fair value include
changes in fair value of loans and securities held for investment
and related obligations, deferred purchase price obligations,
contingent earnout, warrant liability, and minority
investments.
(3)
Includes amortization and
impairment of intangibles and impairment of certain other
long-lived assets during the periods presented.
(4)
Includes equity-based
compensation for Replacement Restricted Stock Units and Earnout
Right Restricted Stock Units, which are funded 100% by existing
non-controlling shareholders or outstanding Class A Common
Stock.
(5)
Reflects certain non-recurring
costs and adjustments that management believes should be excluded
as these do not relate to a recurring part of the core business
operations. These items include amounts recognized for settlement
of legal and regulatory matters, acquisition or divestiture-related
expenses, and other one-time charges.
(6)
We applied an effective combined
corporate tax rate to adjusted consolidated pre-tax loss for the
respective period to determine the tax effect of adjusted
consolidated net loss.
(7)
Calculated on an if-converted
basis except when anti-dilutive.
(unaudited)
Adjusted Net Income by Segment
(Continuing Operations)
For the three months ended March 31,
2024
($ amounts in millions except shares and $
per share)(1)
Retirement
Solutions
Portfolio
Management
Corporate
& Other
FOA
Pre-tax income (loss)
$
(4
)
$
14
$
(26
)
$
(16
)
Adjustments for:
Changes in fair value(2)
—
(7
)
(2
)
(9
)
Amortization of intangibles and impairment
of other assets(3)
9
—
1
10
Share-based compensation(4)
1
—
2
3
Certain non-recurring costs(5)
—
—
2
2
Adjusted net income (loss) before
taxes
$
6
$
8
$
(24
)
$
(10
)
Provision (benefit) for income
taxes(6)
2
2
(6
)
(2
)
Adjusted net income (loss)
$
5
$
6
$
(18
)
$
(7
)
Weighted average share count
229,432,953
229,432,953
229,432,953
229,432,953
Adjusted earnings (loss) per
share
$
0.02
$
0.03
$
(0.08
)
$
(0.03
)
For the three months ended December 31,
2023
($ amounts in millions except shares and $
per share)(1)
Retirement
Solutions
Portfolio
Management
Corporate
& Other
FOA
Pre-tax income (loss)
$
(13
)
$
217
$
(33
)
$
172
Adjustments for:
Changes in fair value(2)
—
(224
)
3
(221
)
Amortization and impairment of intangibles
and other assets(3)
9
6
1
17
Share-based compensation(4)
1
—
2
3
Certain non-recurring costs(5)
—
—
2
2
Adjusted net loss before taxes
$
(3
)
$
—
$
(24
)
$
(27
)
Benefit for income taxes(6)
(1
)
—
(6
)
(7
)
Adjusted net loss
$
(2
)
$
—
$
(18
)
$
(20
)
Weighted average share count
229,300,885
229,300,885
229,300,885
229,300,885
Adjusted loss per share
$
(0.01
)
$
—
$
(0.08
)
$
(0.09
)
For the three months ended March 31,
2023
($ amounts in millions except shares and $
per share)(1)
Retirement
Solutions
Portfolio
Management
Corporate
& Other
FOA
Pre-tax income (loss)
$
(9
)
$
99
$
(32
)
$
58
Adjustments for:
Changes in fair value(2)
—
(93
)
(1
)
(94
)
Amortization of intangible assets(3)
9
—
—
9
Share-based compensation(4)
2
—
2
4
Certain non-recurring costs(5)
1
—
1
2
Adjusted net income (loss) before
taxes
$
3
$
6
$
(30
)
$
(21
)
Provision (benefit) for income
taxes(6)
1
2
(8
)
(6
)
Adjusted net income (loss)
$
2
$
4
$
(22
)
$
(15
)
Weighted average share count
190,301,012
190,301,012
190,301,012
190,301,012
Adjusted earnings (loss) per
share
$
0.01
$
0.02
$
(0.12
)
$
(0.08
)
(1)
Totals may not foot due to
rounding.
(2)
Changes in fair value include
changes in fair value of loans and securities held for investment
and related obligations, deferred purchase price obligations,
contingent earnout, warrant liability, and minority
investments.
(3)
Includes amortization and
impairment of intangibles and impairment of certain long-lived
assets recognized during the periods presented.
(4)
Includes equity-based
compensation for Replacement Restricted Stock Units and Earnout
Right Restricted Stock Units, which are funded 100% by existing
non-controlling shareholders or outstanding Class A Common
Stock.
(5)
Reflects certain non-recurring
costs and adjustments that management believes should be excluded
as these do not relate to a recurring part of the core business
operations. These items include amounts recognized for settlement
of legal and regulatory matters, acquisition or divestiture-related
expenses, and other one-time charges.
(6)
We applied an effective combined
corporate tax rate to adjusted consolidated pre-tax income (loss)
for the respective period to determine the tax effect of adjusted
consolidated net income (loss).
Webcast and Conference Call
Management will host a webcast and conference call on Monday,
May 6th at 5:00 pm Eastern Time to discuss the Company’s results
for the first quarter ended March 31, 2024. A copy of this press
release will be posted prior to the call under the “Investors”
section on Finance of America’s website at
https://www.financeofamerica.com/investors.
To listen to the audio webcast of the conference call, please
visit the “Investors” section of the Company's website at
https://www.financeofamerica.com/investors. The conference call can
also be accessed by dialing the following:
- 1-800-715-9871 (Domestic)
- 1-646-307-1963 (International)
- Conference ID: 5706924
Replay
A replay of the call will also be available on the Company's
website approximately two hours after the conclusion of the
conference call until May 20, 2024. To access the replay, dial
1-800-770-2030 (United States) or 1-646-307-1963 (International).
The replay pin number is 5706924. The replay can also be accessed
on the “Investors” section of the Company's website at
https://www.financeofamerica.com/investors.
About Finance of America
Finance of America (NYSE: FOA) is a modern retirement solutions
platform that provides customers with access to an innovative range
of retirement offerings centered on the home. In addition, FOA
offers capital markets and portfolio management capabilities
primarily to optimize the distribution of its originated loans to
investors. FOA is headquartered in Plano, Texas. For more
information, please visit www.financeofamerica.com.
Forward-Looking Statements
This release includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are not historical facts or statements of current
conditions, but instead represent only management’s beliefs
regarding future events, many of which, by their nature, are
inherently uncertain and outside of the Company’s control. It is
possible that our actual results, financial condition and liquidity
may differ, possibly materially, from the anticipated results,
financial condition and liquidity in these forward-looking
statements. The Company’s actual results may differ from its
expectations, estimates, and projections and, consequently, you
should not rely on these forward-looking statements as predictions
of future events. Words such as “expect,” “estimate,” “project,”
“budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,”
“will,” “could,” “should,” “believes,” “predicts,” “potential,”
“continue,” and similar expressions (or the negative versions of
such words or expressions) are intended to identify such
forward-looking statements. The Company cautions readers not to
place undue reliance upon any forward-looking statements, which are
current only as of the date of this release. Results for any
specified quarter are not necessarily indicative of the results
that may be expected for the full year or any future period. The
Company does not undertake or accept any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions, or circumstances on which any such statement
is based, except as required by law. All subsequent written and
oral forward-looking statements concerning the Company or other
matters and attributable to the Company or any person acting on its
behalf are expressly qualified in their entirety by the cautionary
statements above. Readers are cautioned not to place undue reliance
upon any forward-looking statements, which speak only as of the
date made. A number of important factors exist that could cause
future results to differ materially from historical performance and
these forward-looking statements. Factors that might cause such a
difference include, but are not limited to: our ability to manage
the unique challenges presented by operating as a modern retirement
solutions platform rather than a vertically-integrated, diversified
lending and complementary services platform due to the
transformation of our business; our ability to successfully operate
the recently integrated lending platform that we acquired from
American Advisors Group in March 2023 and generally, our ability to
operate our business profitably; our ability to respond to
significant changes in prevailing interest rates and to resume
profitable business operations; our geographic market concentration
if the economic conditions in our current markets should decline or
if our current markets are impacted by natural disasters; our use
of estimates in measuring or determining the fair value of the
majority of our financial assets and liabilities, which may require
us to write down the value of these assets or write up the value of
these liabilities if the estimates prove to be incorrect; our
ability to prevent cyber intrusions and mitigate cyber risks; the
possibility that the Company may be adversely affected by other
economic, business and/or competitive factors in our business
markets and worldwide financial markets, including a sustained
period of higher interest rates; our ability to manage changes in
our licensing status, business relationships or servicing
guidelines with the Government National Mortgage Association, the
United States Department of Housing and Urban Development or other
governmental entities; our ability to obtain sufficient capital and
liquidity to meet the financing and operational requirements of our
business and our ability to comply with our debt agreements,
including warehouse lending facilities, and pay down our
substantial debt; our ability to refinance our debt on reasonable
terms as it becomes due; our ability to manage disruptions in the
secondary home loan market, including the mortgage-backed
securities market; our ability to finance and recover costs of our
reverse mortgage servicing operations; our ability to maintain
compliance with the extensive regulations we are subject to,
including consumer protection laws applicable to reverse mortgage
lenders, which may be highly complex; our ability to compete with
national banks, which are not subject to state licensing and
operational requirements; our ability to manage various legal
proceedings, federal or state governmental examinations and
enforcement investigations we are subject to from time to time, the
results of which are difficult to predict or estimate; our
continued ability to remain in compliance with the terms of the
consent orders issued by the Consumer Financial Protection Bureau,
which we assumed in connection with our acquisition of operational
assets from American Advisors Group; our holding company status and
dependency on distributions from Finance of America Equity Capital
LLC; our ability to comply with the continued listing standards of
the New York Stock Exchange (“NYSE”) and avoid the delisting of our
common stock from trading on its exchange; our common stock trading
history has been characterized by low trading volume, which may
result in an inability to sell your shares at a desired price, if
at all; and our “controlled company” status under NYSE rules, which
exempts us from certain corporate governance requirements and
affords stockholders fewer protections.
All of these factors are difficult to predict, contain
uncertainties that may materially affect actual results and may be
beyond our control. New factors emerge from time to time, and it is
not possible for our management to predict all such factors or to
assess the effect of each such new factor on our business. Although
we believe that the assumptions underlying the forward-looking
statements contained herein are reasonable, any of the assumptions
could be inaccurate, and any of these statements included herein
may prove to be inaccurate. Given the significant uncertainties
inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a
representation by us or any other person that the results or
conditions described in such statements, or our objectives and
plans will be achieved. Please refer to “Risk Factors” included in
our Annual Report on Form 10-K for the year ended December 31,
2023, filed with the Securities and Exchange Commission (the “SEC”)
on March 15, 2024, for further information on these and other risk
factors affecting us, as such factors may be amended and updated
from time to time in the Company’s subsequent periodic filings with
the SEC, which are accessible on the SEC’s website at
www.sec.gov.
Non-GAAP Financial Measures
The Company’s management evaluates performance of the Company
through the use of certain measures that are not prepared in
accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), including Adjusted Net Loss, Adjusted EBITDA, and
Adjusted Loss per Share.
We define Adjusted Net Loss as net income (loss) from continuing
operations adjusted for changes in fair value of loans and
securities held for investment and related obligations due to
assumption changes, deferred purchase price obligations (including
earnouts and Tax Receivable Agreement (“TRA”) obligations),
contingent earnout, warrant liability, and minority investments,
amortization and impairment of intangibles and other assets,
equity-based compensation, certain non-recurring costs, and
pro-forma income tax provision adjustments to apply an effective
combined corporate tax rate to adjusted consolidated pre-tax loss
from continuing operations.
We define Adjusted EBITDA as Adjusted Net Loss (defined above)
adjusted for taxes, interest on non-funding debt, and
depreciation.
We define Adjusted Loss Per Share as Adjusted Net Loss (defined
above) divided by our weighted average outstanding shares, which
includes our outstanding Class A Common Stock plus Finance of
America Equity Capital LLC’s Class A LLC units owned by our
noncontrolling interests on an if-converted basis.
The presentation of non-GAAP measures is used to enhance
investors’ understanding of certain aspects of our financial
performance. This discussion is not meant to be considered in
isolation, superior to, or as a substitute for the directly
comparable financial measures prepared in accordance with U.S.
GAAP. Management believes these key financial measures provide an
additional view of our performance over the long-term and provide
useful information that we use in order to maintain and grow our
business.
These non-GAAP financial measures should not be considered as an
alternative to net income (loss), operating cash flows, or any
other performance measures determined in accordance with U.S. GAAP.
Adjusted Net Loss, Adjusted EBITDA, and Adjusted Loss per Share
have important limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of our
results as reported under U.S. GAAP. Some of the limitations of
these metrics are: (i) cash expenditures for future contractual
commitments; (ii) cash requirements for working capital needs;
(iii) cash requirements for certain tax payments; and (iv) all
non-cash income/expense items.
Because of these limitations, Adjusted Net Loss, Adjusted
EBITDA, and Adjusted Loss per Share should not be considered as
measures of discretionary cash available to us to invest in the
growth of our business or distribute to shareholders. We compensate
for these limitations by relying primarily on our U.S. GAAP results
and using our non-GAAP financial measures only as a supplement.
Users of our consolidated financial statements are cautioned not to
place undue reliance on our non-GAAP financial measures.
A reconciliation of our forward-looking Adjusted Earnings per
Share outlook to U.S. GAAP Earnings per Share and Net Income cannot
be provided without unreasonable effort because of the inherent
difficulty of accurately forecasting the occurrence and financial
impact of the various adjusted items necessary for such
reconciliation that have not yet occurred, are out of our control,
or cannot be reasonably predicted. For the same reasons, the
Company is unable to assess the probable significance of the
unavailable information, which could have a material impact on its
future U.S. GAAP financial results.
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Finance of America Investor Relations: ir@financeofamerica.com
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