Business Context and Reporting Period
This Form 8-K, dated August 18, 2023, is filed by Finance of America Companies Inc. to recast financial information and disclosures from its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The filing addresses the discontinuation of specific operations and a realignment of reportable segments effective in the first quarter of 2023.
Key Financial Metrics and Segment Realignment
The filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity within the text of this report. Instead, it directs readers to attached exhibits for recast financial statements and pro forma information.
- Discontinued Operations: Historical results for the Mortgage Originations (excluding Home Improvement), Commercial Originations, and Lender Services segments (excluding Incenter Solutions LLC) are now classified as discontinued operations.
- New Reportable Segments:
- Retirement Solutions: Includes reverse mortgage and home improvement loan origination. Notably, the Company acquired American Advisors Group (AAG) on March 31, 2023, to become the leading U.S. reverse mortgage originator.
- Portfolio Management: Handles securitization, loan sales, risk management, and asset management.
- Corporate & Other: Includes corporate services and the offshore fulfillment services division previously in Lender Services.
Material Changes Versus Prior Period
Material changes involve the structural reclassification of the Company's business rather than operational performance metrics in this specific filing:
- Asset Sales: Completed sales of Commercial Originations assets (March 14, 2023) and Lender Services subsidiaries (June 30 and July 3, 2023).
- Acquisition: Completed the acquisition of AAG assets and operations on March 31, 2023.
- Restatement: The 2022 Form 10-K has been revised to reflect these segment changes and discontinued operations classifications for all periods presented.
Guidance, Outlook, and Risks
Outlook: Management expects the combined operations following the AAG acquisition to position the Company as the leading U.S. reverse mortgage originator. The business strategy is streamlining to focus on reverse mortgage lending and retirement solutions.
Pro Forma Information: Unaudited pro forma condensed consolidated financial information for the six months ended June 30, 2023, and the year ended December 31, 2022, giving effect to the AAG Transaction, is provided in Exhibit 99.2. The filing explicitly states this information is not indicative of future results.
Risks: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ materially due to risks described in the 2022 Form 10-K.
Investor Verification Checklist
- Review Exhibit 99.1 for the recast 2022 Form 10-K financial statements reflecting discontinued operations and new segment definitions.
- Examine Exhibit 99.2 for unaudited pro forma financial data regarding the American Advisors Group acquisition.
- Verify the specific financial impact of the discontinued operations (Mortgage, Commercial, and Lender Services) by comparing the recast 2022 data against the original filing.
- Confirm the integration status and performance of the newly acquired AAG assets in subsequent quarterly reports (10-Q).