Investor Relations

Investors

2018 Dividend Tax Information

This information is provided to assist stockholders with tax reporting requirements related to dividend distribution of taxable income by Two Harbors and CYS. Stockholders should review the 2018 tax statements received from their brokerage firms or other institutions to ensure that the statements agree with the information provided below. Additionally, as each stockholder’s tax situation may be different, stockholders are encouraged to consult with their own professional tax advisor with respect to their individual tax consequences.

Tax Treatment of the Common and Preferred Distributions

Two Harbors and CYS are required to report the portion of their 2018 dividends that are treated as excess inclusion income for federal income tax purposes. No portion of either company’s 2018 dividend distributions are expected to consist of excess inclusion income, which may be treated as unrelated business taxable income (UBTI) and subject to special tax reporting for certain tax exempt investors.

Pursuant to the Internal Revenue Code of 1986, as amended, dividends declared by a real estate investment trust (REIT) during the last three months of a calendar year that are payable to stockholders of record on a specified date in such three month period, but which are actually paid during January of the following calendar year, are considered paid on December 31st of the calendar year in which the dividends were declared, to the extent of the REIT’s distributable earnings and profits.

Distributions for Two Harbors Investment Corp.

The Federal income tax classification of the Two Harbors 2018 common and preferred stock distributions as it is expected to be reported on Form 1099-DIV is set forth in the following tables.

2017 FORM 1099 – Common Stock
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
03/20/2018
04/02/2018
04/27/2018
$0.470000
$0.470000
$0.000000
$0.000000
$0.470000
Cash
06/19/2018
06/29/2018
07/27/2018
$0.470000
$0.470000
$0.000000
$0.000000
$0.470000
Cash
07/13/2018
07/25/2018
07/30/2018
$0.158370
$0.158370
$0.000000
$0.000000
$0.158370
Cash
09/20/2018
10/01/2018
10/29/2018
$0.311630
$0.311630
$0.000000
$0.000000
$0.311630
Cash
12/18/2018
12/31/2018
01/28/2019
$0.470000
$0.470000
$0.000000
$0.000000
$0.470000
Totals
 
 
 
$1.880000
$1.880000
$0.000000
$0.000000
$1.880000

 

2018 FORM 1099 – Preferred Series A
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
12/14/2017
01/12/2018
01/29/2018
$0.507810
$0.507810
$0.000000
$0.000000
$0.507810
Cash
03/20/2018
04/12/2018
04/27/2018
$0.507810
$0.507810
$0.000000
$0.000000
$0.507810
Cash
06/19/2018
07/12/2018
07/27/2018
$0.507810
$0.507810
$0.000000
$0.000000
$0.507810
Cash
09/20/2018
10/12/2018
10/29/2018
$0.507810
$0.507810
$0.000000
$0.000000
$0.507810
Totals
 
 
 
$2.031240
$2.031240
$0.000000
$0.000000
$2.031240
2018 FORM 1099 – Preferred Series B
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
12/14/2017
01/12/2018
01/29/2018
$0.476560
$0.476560
$0.000000
$0.000000
$0.476560
Cash
04/12/2018
04/27/2018
07/27/2018
$0.476560
$0.476560
$0.000000
$0.000000
$0.476560
Cash
06/19/2018
07/12/2018
07/27/2018
$0.476560
$0.476560
$0.000000
$0.000000
$0.476560
Cash
09/20/2018
10/12/2018
10/29/2018
$0.476560
$0.476560
$0.000000
$0.000000
$0.476560
Totals
 
 
 
$1.906240
$1.906240
$0.000000
$0.000000
$1.906240
2018 FORM 1099 – Preferred Series C
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
12/14/2017
01/12/2018
01/29/2018
$0.302080
$0.302080
$0.000000
$0.000000
$0.302080
Cash
03/20/2018
04/12/2018
04/27/2018
$0.453130
$0.453130
$0.000000
$0.000000
$0.453130
Cash
06/19/2018
07/12/2018
07/27/2018
$0.453130
$0.453130
$0.000000
$0.000000
$0.453130
Cash
09/20/2018
10/12/2018
10/29/2018
$0.453130
$0.453130
$0.000000
$0.000000
$0.453130
Totals
 
 
 
$1.661470
$1.661470
$0.000000
$0.000000
$1.661470
2018 FORM 1099 – Preferred Series D
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
09/20/2018
10/01/2018
10/15/2018
$0.484375
$0.484375
$0.000000
$0.000000
$0.484375
Totals
 
 
 
$0.484375
$0.484375
$0.000000
$0.000000
$0.484375
 
 
2018 FORM 1099 – Preferred Series E
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
09/20/2018
10/01/2018
10/15/2018
$0.468750
$0.468750
$0.000000
$0.000000
$0.468750
Totals
 
 
 
$0.468750
$0.468750
$0.000000
$0.000000
$0.468750

In addition, Two Harbors declared dividends with respect to its Series A, Series B, Series C, Series D and Series E preferred shares on December 18, 2018. The record date for Series A, Series B and Series C preferred dividends was January 11, 2019. The record date for Series D and Series E preferred dividends was January 1, 2019. Accordingly, these preferred dividends will be taxable to stockholders in the 2019 year.

Distributions for CYS Investments, Inc.

The Federal income tax classification of the CYS 2018 common and preferred stock distributions as it is expected to be reported on Form 1099-DIV is set forth in the following tables.

2018 FORM 1099 – Common Stock
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
03/08/2018
06/08/2018
07/13/2018
$0.220000
$0.220000
$0.000000
$0.000000
$0.220000
Cash
06/08/2018
06/22/2018
07/11/2018
$0.220000
$0.220000
$0.000000
$0.000000
$0.220000
Cash
07/13/2018
07/25/2018
07/30/2018
$0.090870
$0.090870
$0.000000
$0.000000
$0.090870
Totals
 
 
 
$0.530870
$0.530870
$0.000000
$0.000000
$0.530870

 

2018 FORM 1099 – Preferred Series A
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
12/08/2017
01/01/2018
01/15/2018
$0.484375
$0.484375
$0.000000
$0.000000
$0.484375
Cash
03/08/2018
04/01/2018
04/16/2018
$0.484375
$0.484375
$0.000000
$0.000000
$0.484375
Cash
06/08/2018
07/01/2018
07/16/2018
$0.484375
$0.484375
$0.000000
$0.000000
$0.484375
Totals
 
 
 
$1.453125
$1.453125
$0.000000
$0.000000
$1.453125
2018 FORM 1099 – Preferred Series B
Box 1a Total
Box 2a Total
Box 3 Total
Box 5 Total
 
 
Distribution Type
Declaration Date
Record Date
Payable Date
2018 Total Distribution Per Share
2018 Ordinary Dividends
2018 Capital Gain Distributions
2018 Nondividend Distributions
Section 199A Dividends
Cash
12/08/2017
01/01/2018
01/15/2018
$0.468750
$0.468750
$0.000000
$0.000000
$0.468750
Cash
03/08/2018
04/01/2018
04/16/2018
$0.468750
$0.468750
$0.000000
$0.000000
$0.468750
Cash
06/08/2018
07/01/2018
07/16/2018
$0.468750
$0.468750
$0.000000
$0.000000
$0.468750
Totals
 
 
 
$1.406250
$1.406250
$0.000000
$0.000000
$1.406250

Merger of Two Harbors Investment Corp. and CYS Investments, Inc.

On July 31, 2018, Two Harbors and CYS announced the closing of the previously announced merger between Two Harbors and CYS. Trading in shares of CYS common stock ceased after market close on July 31, 2018 and shares of CYS common stock were converted into the right to receive 0.4680 newly issued Two Harbors common stock as well as cash consideration of $0.0965 per share prior to market open on August 1, 2018. Upon closing of the merger, each share of CYS 7.75% Series A Cumulative Redeemable Preferred Stock was converted into the right to receive one share of newly classified Two Harbors 7.75% Series D Cumulative Redeemable Preferred Stock, and each share of CYS 7.50% Series B Cumulative Redeemable Preferred Stock was converted into the right to receive one share of newly classified Two Harbors 7.50% Series E Cumulative Redeemable Preferred Stock. The newly issued shares of Two Harbors common stock, Series D and Series E preferred stock began trading on the NYSE on August 1, 2018.

Issuers of corporate securities are required to complete Internal Revenue Service Form 8937 to report organizational actions, including a merger that affects the basis of the securities involved in the organizational action. Stockholders are encouraged to review Form 8937 for the federal income tax treatment of the merger. The 2018 IRS Form 8937, Report of Organization Actions Affecting Basis of Securities, is provided under the “Investors” and “Dividend History” section of the Two Harbors website.

Consult Your Tax Advisor

Stockholders may have additional reporting obligations to the Internal Revenue Service and/or other tax authorities.

The U.S. federal income tax treatment of holding Two Harbors and CYS common and preferred stock to any particular stockholder will depend on the stockholder’s particular tax circumstances. You are urged to consult your tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences to you, in light of your particular investment or tax circumstances, of acquiring, holding and disposing of Two Harbors and CYS common and preferred stock.

 __ 

Two Harbors and CYS do not provide tax, accounting or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S., federal, state or local tax penalties. Please consult your advisor as to any tax, accounting or legal statements made herein.

Annual Dividend Information by Year

2018 | 2017 | 2016 |  2015 |  2014 |  2013 |  2012 |  2011 |  2010