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, 2022

The following table presents a reconciliation of the earnings and shares used in calculating basic and diluted earnings per share for the three months ended March 31, 2022 and 2021:


	Three Months Ended
	March 31,
(in thousands, except share data)	2022		2021
Basic Earnings Per Share:


Net income	$	285,270	$	240,157


Dividends on preferred stock	13,747		17,216
Dividends and undistributed earnings allocated to participating restricted stock units	1,293		257
Net income attributable to common stockholders, basic	$	270,230	$	222,684
Basic weighted average common shares	343,998,511		273,710,765
Basic earnings per weighted average common share	$	0.79	$	0.81
Diluted Earnings Per Share:
Net income attributable to common stockholders, basic	$	270,230	$	222,684
Reallocation impact of undistributed earnings to participating restricted stock units	83		14

Interest expense attributable to convertible notes (1)	5,042		6,350
Net income attributable to common stockholders, diluted	$	275,355	$	229,048
Basic weighted average common shares	343,998,511		273,710,765
Effect of dilutive shares issued in an assumed vesting of performance share units	453,490		—
Effect of dilutive shares issued in an assumed conversion	40,370,201		37,754,295
Diluted weighted average common shares	384,822,202		311,465,060
Diluted earnings per weighted average common share	$	0.72	$	0.74

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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, 2022 and 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 months ended March 31, 2022, the assumed vesting of outstanding PSUs was included in the calculation of diluted earnings per share under the two-class method since it was more dilutive than the alternative treasury stock method. The Company did not have any PSUs outstanding during the three months ended March 31, 2021.

For the three months ended March 31, 2022 and 2021, 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.