Earnings per Share

9 Months Ended

Sep. 30, 2023

The following table provides a reconciliation of net income and the number of shares of common stock used in the computation of basic EPS and diluted EPS (amounts in thousands, except per share amounts):


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Basic Earnings
Income attributable to STWD common stockholders	$	47,435	$	194,562	$	268,252	$	731,448
Less: Income attributable to participating shares not already deducted as non-controlling interests	(1,510)		(2,929)		(4,962)		(15,673)
Basic earnings	$	45,925	$	191,633	$	263,290	$	715,775

Diluted Earnings
Income attributable to STWD common stockholders	$	47,435	$	194,562	$	268,252	$	731,448
Less: Income attributable to participating shares not already deducted as non-controlling interests	(1,510)		(2,929)		(4,962)		(15,673)
Add: Interest expense on Convertible Notes	*		2,906		*		8,724
Add: Undistributed earnings to participating shares	—		1,818		—		11,629
Less: Undistributed earnings reallocated to participating shares	—		(1,763)		—		(11,280)
Diluted earnings	$	45,925	$	194,594	$	263,290	$	724,848

Number of Shares:
Basic — Average shares outstanding	310,268		306,704		309,471		304,908
Effect of dilutive securities — Convertible Notes	*		9,649		*		9,649
Effect of dilutive securities — Contingently issuable shares	—		23		—		23
Effect of dilutive securities — Unvested non-participating shares	298		199		267		161
Diluted — Average shares outstanding	310,566		316,575		309,738		314,741

Earnings Per Share Attributable to STWD Common Stockholders:
Basic	$	0.15	$	0.62	$	0.85	$	2.35
Diluted	$	0.15	$	0.61	$	0.85	$	2.30

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* Our Convertible Notes were not dilutive for the three and nine months ended September 30, 2023.

As of September 30, 2023 and 2022, participating shares of 12.9 million and 12.4 million, respectively, were excluded from the computation of diluted shares as their effect was already considered under the more dilutive two-class method used above. Such participating shares at both September 30, 2023 and 2022 included 9.8 million potential shares of our common stock issuable upon redemption of the Class A Units in SPT Dolphin, as discussed in Note 17.