Earnings Per Share

9 Months Ended

Sep. 30, 2022

EARNINGS PER SHARE

As of September 30, 2022, the Company had two classes of economic shares authorized - Class A and Class B common stock. The Company applies the two-class method for calculating earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in such dividends as may be declared by the board of directors. RSUs awarded as part of the Company’s stock compensation plan are included in weighted-average Class A shares outstanding in the calculation of basic earnings per share once the RSUs are vested and shares are issued.

Basic earnings per share of Class A common stock and Class B common stock is computed by dividing net income attributable to UWM Holdings Corporation by the weighted-average number of shares of Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share of Class A common stock and Class B common stock is computed by dividing net income by the weighted-average number of shares of Class A common stock or Class B common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. See Note 10, Non-Controlling Interests for a description of the Stapled Interests. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies - for additional information related to the Company's capital structure.

Earnings per share for the nine months ended September 30, 2021 is based on earnings for the period from January 21, 2021 to September 30, 2021, which represents the period in which the Company had outstanding Class A common stock. There was no Class B common stock outstanding as of September 30, 2022 or September 30, 2021.

The following table sets forth the calculation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2022 and 2021 (in thousands, except shares and per share amounts):


	For the three months ended September 30,				For the nine months ended September 30,
	2022		2021		2022		2021
Net income	$	325,610	$	329,857	$	994,342	$	1,328,574
Net income attributable to non-controlling interests	313,914		304,611		952,350		1,247,079
Net income attributable to UWMC	11,696		25,246		41,992		81,495
Numerator:
Net income attributable to Class A common shareholders	$	11,696	$	25,246	$	41,992	$	81,495
Net income attributable to Class A common shareholders - diluted	$	11,696	$	254,701	$	41,992	$	887,166
Denominator:
Weighted average shares of Class A common stock outstanding - basic	92,571,886		101,106,023		92,441,342		102,247,594
Weighted average shares of Class A common stock outstanding - diluted	92,571,886		1,603,710,511		92,441,342		1,604,567,758
Earnings per share of Class A common stock outstanding - basic	$	0.13	$	0.25	$	0.45	$	0.80
Earnings per share of Class A common stock outstanding - diluted	$	0.13	$	0.16	$	0.45	$	0.55

For purposes of calculating diluted earnings per share, it was assumed that the 1,502,069,787 shares of Class D common stock were exchanged for Class B common stock and converted to Class A common stock under the if-converted method, and it was determined that the conversion would be anti-dilutive for the three and nine months ended September 30, 2022. Under the if-converted method, all of the Company's net income for the applicable periods is attributable to Class A common shareholders. The net income of the Company under the if-converted method is calculated including a tax provision which is determined using a blended statutory effective tax rate.

The Public and Private Warrants were not in the money and the triggering events for the issuance of earn-out shares were not met during the three or nine months ended September 30, 2022 or 2021. Therefore, these potentially dilutive securities were excluded from the computation of diluted earnings per share. Unvested RSUs have been considered in the calculations of diluted earnings per share for the three and nine months ended September 30, 2022 and 2021 using the treasury stock method and the impact was either anti-dilutive or immaterial.