KKR Real Estate Finance Trust Inc.KREF

KKR Real Estate Finance Trust Inc. Earnings Per Share Disclosure

10-KFiled Feb 3, 20262 min read
Earnings (Loss) per Share
Earnings (Loss) per Share — KREF calculates its basic EPS using the two-class method, which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. Under the two-class method earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights. Basic EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average common stock outstanding for the period.

KREF presents diluted EPS under the more dilutive of the treasury stock and if-converted methods or the two-class method. Under the treasury stock and if-converted methods, the denominator includes weighted average common stock outstanding plus the incremental dilutive shares issuable from restricted stock units and an assumed conversion of the Convertible Notes (for the periods in which such notes were outstanding). The numerator includes any changes in income (loss) that would result from the assumed conversion of these potential shares of common stock.

For the years ended December 31, 2025, 2024 and 2023, 41,687, 44,589, and 18,209 weighted average unvested RSUs, respectively, were excluded from the calculation of diluted EPS because the effect was anti-dilutive.

The following table illustrates the computation of basic and diluted EPS for the years ended December 31, 2025 and 2024:

Year Ended December 31,
202520242023
Earnings
Net income (loss) $(47,051)$35,591 $(30,851)
Less: Preferred stock dividends21,304 21,304 21,304 
Less: Participating securities' share in earnings1,530 1,216 1,764 
Net income (loss) attributable to common stockholders, basic and diluted$(69,885)$13,071 $(53,919)
Shares
Weighted average common shares outstanding66,538,387 69,277,882 69,154,447 
Add: Weighted average deferred stock units269,045 119,008 25,592 
Diluted weighted average common shares outstanding66,807,432 69,396,890 69,180,039 
Net income (loss) attributable to common stockholders, per:
Basic and diluted common share$(1.05)$0.19 $(0.78)

About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

Income TaxesRevenueFair ValueDebtCommitmentsStock CompensationNew StandardsPay vs Performance