Two Harbors Investment Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Earnings Per Share

Earnings Per Share

3 Months Ended

Mar. 31, 2024

The following table presents a reconciliation of the earnings (loss) and shares used in calculating basic and diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023.


	Three Months Ended
	March 31,
(in thousands, except share data)		2024		2023
Basic Earnings (Loss) Per Share:


Net income (loss)		$	203,588	$	(176,808)


Dividends on preferred stock		(11,784)		(12,365)
Gain on repurchase and retirement of preferred stock		644		—
Dividends and undistributed earnings allocated to participating restricted stock units		(1,441)		(382)
Net income (loss) attributable to common stockholders, basic		$	191,007	$	(189,555)
Basic weighted average common shares		103,401,940		92,575,840
Basic earnings (loss) per weighted average common share		$	1.85	$	(2.05)
Diluted Earnings (Loss) Per Share:
Net income (loss) attributable to common stockholders, basic		$	191,007	$	(189,555)
Reallocation impact of undistributed earnings to participating restricted stock units		61		—

Interest expense attributable to convertible notes		4,619		—
Net income (loss) attributable to common stockholders, diluted		$	195,687	$	(189,555)
Basic weighted average common shares		103,401,940		92,575,840
Effect of dilutive shares issued in an assumed vesting of performance share units		361,286		—
Effect of dilutive shares issued in an assumed conversion		9,210,091		—
Diluted weighted average common shares		112,973,317		92,575,840
Diluted earnings (loss) per weighted average common share		$	1.73	$	(2.05)

For the three months ended March 31, 2024, participating RSUs were included in the calculations of basic and diluted earnings per share under the two-class method, as it was more dilutive than the alternative treasury stock method. For the three months ended March 31, 2023, excluded from the calculation of diluted earnings per share was the effect of adding undistributed earnings reallocated to 655,137 weighted average participating RSUs, respectively, as their inclusion would have been antidilutive.

For the three months ended March 31, 2024, the assumed vesting of outstanding PSUs was included in the calculation of diluted earnings per share under the two-class method, as it was more dilutive than the alternative treasury stock method. For the three months ended March 31, 2023, excluded from the calculation of diluted earnings per share was the effect of adding 304,739 weighted average common share equivalents, related to the assumed vesting of outstanding PSUs, as their inclusion would have been antidilutive.

For the three months ended March 31, 2024, the assumed conversion of the Company’s convertible senior notes was included in the calculation of diluted earnings per share under the if-converted method. For the three months ended March 31, 2023, excluded from the calculation of diluted earnings per share was the effect of adding back $4.8 million of interest expense and 9,739,120 weighted average common share equivalents, respectively, related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would have been antidilutive.