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SEC Filings

10-Q
AGNC INVESTMENT CORP. filed this Form 10-Q on 08/03/2017
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Operating Expenses
Prior to our acquisition of AMM and related management internalization on July 1, 2016, we paid our Manager a management fee payable monthly in arrears in an amount equal to one-twelfth of 1.25% of our month-end stockholders' equity, as defined in our management agreement. Following our management internalization, we no longer incur a management fee, but we incur expenses associated with an internally managed organization, including compensation expense previously borne by our Manager. For the three and six months ended June 30, 2016, we incurred management fees of $25 million and $52 million, respectively. For three and six months ended June 30, 2017, we incurred compensation and benefits expense of $10 million and $20 million, respectively, consisting of base salary, annual incentive and employee retention bonus accruals, benefits expense and long-term incentive compensation costs.
For the three and six months ended June 30, 2017, we incurred other operating expenses of $6 million and $13 million, respectively, compared to $15 million and $21 million, respectively, for the prior year period. Excluding non-recurring acquisition costs, we incurred other operating expenses of $6 million and $12 million, respectively, for the prior year period. Other operating expenses primarily consist of prime broker fees; clearing, settlement and regulatory fees incurred by BES; information technology costs; accounting, legal and Board of Director fees; amortization of intangible assets associated with our acquisition of AMM; and other general overhead expenses.
Our total annualized operating expense as a percentage of our average stockholders' equity was 0.85% and 0.89% for the three and six months ended June 30, 2017, compared to 2.08% and 1.89%, respectively, for the prior year period. Excluding non-recurring acquisition costs, our total operating expense as a percentage of our stockholders' equity was 1.61% and 1.65%, respectively, for the prior year period.
Dividends and Income Taxes  
For the three months ended June 30, 2017 and 2016, we had estimated taxable income available to common stockholders of $46 million and $73 million (or $0.13 and $0.22 per common share), respectively. For the six months ended June 30, 2017 and 2016, we had estimated taxable income available to common stockholders of $76 million and $147 million (or $0.22 and $0.44 per common share), respectively. Income as determined under GAAP differs from income as determined under tax rules because of both temporary and permanent differences in income and expense recognition. The primary differences are (i) unrealized gains and losses on derivative instruments and other securities marked-to-market in current income for GAAP purposes, but excluded from taxable income until realized or settled, (ii) timing differences, both temporary and potentially permanent, in the recognition of certain realized gains and losses and (iii) temporary differences related to the amortization of premiums and discounts on investments. Furthermore, our estimated taxable income is subject to potential adjustments up to the time of filing our appropriate tax returns, which occurs after the end of our fiscal year. The following is a reconciliation of our GAAP net income to our estimated taxable income for the three and six months ended June 30, 2017 and 2016 (dollars in millions, except per share amounts):

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