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, 2021

The following table presents a reconciliation of the (loss) earnings and shares used in calculating basic and diluted (loss) earnings per share for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except share data)	2021		2020		2021		2020
Basic (Loss) Earnings Per Share:


Net (loss) income	$	(117,960)	$	(173,564)	$	122,197	$	(2,043,220)


Dividends on preferred stock	13,747		18,951		30,963		37,901
Dividends and undistributed earnings allocated to participating restricted stock units	227		—		484		—
Net (loss) income attributable to common stockholders, basic	$	(131,934)	$	(192,515)	$	90,750	$	(2,081,121)
Basic weighted average common shares	273,718,561		273,604,079		273,714,684		273,498,347
Basic (loss) earnings per weighted average common share	$	(0.48)	$	(0.70)	$	0.33	$	(7.61)
Diluted (Loss) Earnings Per Share:
Net (loss) income attributable to common stockholders, basic	$	(131,934)	$	(192,515)	$	90,750	$	(2,081,121)
Reallocation impact of undistributed earnings to participating restricted stock units	—		—		(11)		—
Interest expense attributable to convertible notes (1)	—		—		7,908		—
Net (loss) income attributable to common stockholders - diluted	$	(131,934)	$	(192,515)	$	98,647	$	(2,081,121)
Basic weighted average common shares	273,718,561		273,604,079		273,714,684		273,498,347
Effect of dilutive shares issued in an assumed conversion	—		—		32,284,519		—
Diluted weighted average common shares	273,718,561		273,604,079		305,999,203		273,498,347
Diluted (loss) earnings per weighted average common share	$	(0.48)	$	(0.70)	$	0.32	$	(7.61)

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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 June 30, 2021, excluded from the calculation of diluted earnings per share is the effect of adding undistributed earnings reallocated to 954,763 weighted average participating RSUs, as their inclusion would be antidilutive. For the six months ended June 30, 2021, participating RSUs were included in the calculations of basic and diluted earnings per share under the two-class method since it was more dilutive than the alternative treasury stock method.

For the three and six months ended June 30, 2021, excluded from the calculation of diluted earnings per share is the effect of adding back $7.1 million and $5.6 million of interest expense and 48,043,744 and 13,789,691 weighted average common share equivalents, respectively, related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would be antidilutive.

For the three and six months ended June 30, 2020, excluded from the calculation of diluted earnings per share is the effect of adding back $4.8 million and $9.5 million of interest expense, net of a nondiscretionary adjustment for the assumed change in the management fee calculation, and 18,171,150 and 18,171,150 weighted average common share equivalents, respectively, related to the assumed conversion of the Company’s convertible senior notes, as their inclusion would be antidilutive.