Two Harbors Investment Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Earnings Per Share

Earnings Per Share

12 Months Ended

Dec. 31, 2023

The following table presents a reconciliation of the (loss) earnings and shares used in calculating basic and diluted (loss) earnings per share for the years ended December 31, 2023, 2022 and 2021. All per share amounts, common shares outstanding and common equity-based awards for all periods presented have been adjusted on a retroactive basis to reflect the reverse stock split.


	Year Ended
	December 31,
(in thousands, except share data)		2023		2022		2021
Basic (Loss) Earnings Per Share:


Net (loss) income		$	(106,371)	$	220,239	$	187,227


Dividends on preferred stock		(48,607)		(53,607)		(58,458)
Gain on repurchase and retirement of preferred stock		2,973		20,149		—
Dividends and undistributed earnings allocated to participating restricted stock units		(1,220)		(1,203)		(731)
Net (loss) income attributable to common stockholders, basic		$	(153,225)	$	185,578	$	128,038
Basic weighted average common shares		95,672,143		86,179,418		74,443,000
Basic (loss) earnings per weighted average common share		$	(1.60)	$	2.15	$	1.72
Diluted (Loss) Earnings Per Share:
Net (loss) income attributable to common stockholders, basic		$	(153,225)	$	185,578	$	128,038
Reallocation impact of undistributed earnings to participating restricted stock units		—		—		—

Interest expense attributable to convertible notes		—		19,382		—
Net (loss) income attributable to common stockholders, diluted		$	(153,225)	$	204,960	$	128,038
Basic weighted average common shares		95,672,143		86,179,418		74,443,000
Effect of dilutive shares issued in an assumed vesting of performance share units		—		157,591		67,884
Effect of dilutive shares issued in an assumed conversion		—		9,739,166		—
Diluted weighted average common shares		95,672,143		96,076,175		74,510,884
Diluted (loss) earnings per weighted average common share		$	(1.60)	$	2.13	$	1.72

For the years ended December 31, 2023, 2022 and 2021, 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 year ended December 31, 2023, excluded from the calculation of diluted earnings per share was the effect of adding 331,051 weighted average common share equivalents related to the assumed vesting of outstanding PSUs, as their inclusion would have been antidilutive. For the years ended December 31, 2022 and 2021, 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 years ended December 31, 2023, 2022 and 2021, excluded from the calculation of diluted earnings per share was the effect of adding back $18.8 million, $0.2 million and $28.0 million of interest expense and 9,406,519, 87,137 and 12,555,567 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. For the year ended December 31, 2022, only the Company’s convertible senior notes due 2022, which matured in January 2022, were excluded from the calculation of diluted earnings per share, and the assumed conversion of the Company’s 2026 notes was included in the calculation of diluted earnings per share under the if-converted method.