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

6 Months Ended

Jun. 30, 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 six months ended June 30, 2024 and 2023.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except share data)	2024		2023		2024		2023
Basic Earnings (Loss) Per Share:


Net income	$	56,336	$	197,445	$	259,924	$	20,637


Dividends on preferred stock	(11,784)		(12,115)		(23,568)		(24,480)
Gain on repurchase and retirement of preferred stock	—		2,454		644		2,454
Dividends and undistributed earnings allocated to participating restricted stock units	(330)		(1,233)		(1,704)		(668)
Net income (loss) attributable to common stockholders, basic	$	44,222	$	186,551	$	235,296	$	(2,057)
Basic weighted average common shares	103,555,755		96,387,877		103,478,847		94,492,389
Basic earnings (loss) per weighted average common share	$	0.43	$	1.94	$	2.27	$	(0.02)
Diluted Earnings (Loss) Per Share:
Net income (loss) attributable to common stockholders, basic	$	44,222	$	186,551	$	235,296	$	(2,057)
Reallocation impact of undistributed earnings to participating restricted stock units	—		120		27		—

Interest expense attributable to convertible notes	—		4,692		9,198		—
Net income (loss) attributable to common stockholders, diluted	$	44,222	$	191,363	$	244,521	$	(2,057)
Basic weighted average common shares	103,555,755		96,387,877		103,478,847		94,492,389
Effect of dilutive shares issued in an assumed vesting of performance share units	355,057		199,753		428,728		—
Effect of dilutive shares issued in an assumed conversion	—		9,474,748		9,229,054		—
Diluted weighted average common shares	103,910,812		106,062,378		113,136,629		94,492,389
Diluted earnings (loss) per weighted average common share	$	0.43	$	1.80	$	2.16	$	(0.02)

For the three months ended June 30, 2024, excluded from the calculation of diluted earnings per share was the effect of adding undistributed earnings reallocated to 718,748 weighted average participating RSUs as their inclusion would have been antidilutive. For the six months ended June 30, 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 June 30, 2023, 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 six months ended June 30, 2023, excluded from the calculation of diluted earnings per share was the effect of adding undistributed earnings reallocated to 650,604 weighted average participating RSUs as their inclusion would have been antidilutive.

For the three and six months ended June 30, 2024 and the three months ended June 30, 2023, 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 six months ended June 30, 2023, excluded from the calculation of diluted earnings per share was the effect of adding 304,789 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 June 30, 2024, excluded from the calculation of diluted earnings per share was the effect of adding back $4.6 million of interest expense and 9,146,808 weighted average common share equivalents related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would have been antidilutive. For the six months ended June 30, 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 June 30, 2023, 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 six months ended June 30, 2023, excluded from the calculation of diluted earnings per share was the effect of adding back $9.5 million of interest expense and 9,606,204 weighted average common share equivalents related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would have been antidilutive.