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, 2021

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, 2021 and 2020:


	Three Months Ended
	March 31,
(in thousands, except share data)	2021		2020
Basic Earnings (Loss) Per Share:


Net income (loss)	$	240,157	$	(1,869,656)


Dividends on preferred stock	17,216		18,950
Dividends and undistributed earnings allocated to participating restricted stock units	257		—
Net income (loss) attributable to common stockholders, basic	$	222,684	$	(1,888,606)
Basic weighted average common shares	273,710,765		273,392,615
Basic earnings (loss) per weighted average common share	$	0.81	$	(6.91)
Diluted Earnings (Loss) Per Share:
Net income (loss) attributable to common stockholders, basic	$	222,684	$	(1,888,606)
Reallocation impact of undistributed earnings to participating restricted stock units	14		—
Interest expense attributable to convertible notes (1)	6,350		—
Net income (loss) attributable to common stockholders - diluted	$	229,048	$	(1,888,606)
Basic weighted average common shares	273,710,765		273,392,615
Effect of dilutive shares issued in an assumed conversion	37,754,295		—
Diluted weighted average common shares	311,465,060		273,392,615
Diluted earnings (loss) per weighted average common share	$	0.74	$	(6.91)

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(1)If applicable, includes a nondiscretionary adjustment for the assumed change in the management fee calculation.

For the three months ended March 31, 2021, participating RSUs were included in the calculations of basic and diluted earnings per share as the two-class method was more dilutive than the alternative treasury stock method.

For the three months ended March 31, 2020, excluded from the calculation of diluted earnings per share is the effect of adding back $4.8 million of interest expense, net of a nondiscretionary adjustment for the assumed change in the management fee calculation, and 18,171,150 weighted average common share equivalents, related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would be antidilutive.