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SEC Filings

10-Q
AGNC INVESTMENT CORP. filed this Form 10-Q on 11/06/2014
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Our total operating expense as a percentage of our average stockholders' equity was 1.47% and 1.66% for the three months ended September 30, 2014 and 2013, respectively, and 1.53% and 1.62% for the nine months ended September 30, 2014 and 2013, respectively.

Dividends and Income Taxes  
For the three months ended September 30, 2014 and 2013, we had estimated taxable income available to common shareholders of $85 million and $113 million (or $0.24 and $0.29 per common share), respectively, and for the nine months ended September 30, 2014 and 2013, we had estimated taxable income available to common shareholders of $352 million and $700 million (or $1.00 and $1.84 per common share), respectively.
As a REIT, we are required to distribute annually 90% of our ordinary taxable income to maintain our status as a REIT and all of our taxable income to avoid Federal and state corporate income taxes. We can treat dividends declared by September 15 and paid by December 31 as having been a distribution of our taxable income for our prior tax year ("spill-back provision"). 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 associated with interest rate swaps and other derivatives and 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 net premiums paid 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 nine months ended September 30, 2014 and 2013 (dollars in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Net income (loss)
$
197

 
$
(701
)
 
$
89

 
$
1,359

Estimated book to tax differences:
 
 
 
 
 
 
 
Premium amortization, net
(7
)
 
(6
)
 
19

 
(115
)
Realized losses (gains), net
136

 
(255
)
 
177

 
(323
)
Capital loss (carryforward) / in excess of capital gain
(246
)
 
849

 
(658
)
 
849

Unrealized losses (gains), net
12

 
229

 
741

 
(1,065
)
Other

 

 

 
5

Total book to tax differences
(105
)
 
817

 
279

 
(649
)
Estimated REIT taxable income
92

 
116

 
368

 
710

Dividend on preferred stock
7

 
3

 
16

 
10

Estimated REIT taxable income available to common shareholders
$
85

 
$
113

 
$
352

 
$
700

Weighted average number of common shares outstanding - basic and diluted
352.8

 
390.6

 
353.5

 
381.2

Estimated REIT taxable income per common share - basic and diluted
$
0.24

 
$
0.29

 
$
1.00

 
$
1.84

 
 
 
 
 
 
 
 
Beginning cumulative non-deductible capital losses
$
1,373

 
$

 
$
1,785

 
$

Non-deductible capital losses in excess of capital gains

 
849

 

 
849

Utilization of capital loss carryforward
(246
)
 

 
(658
)
 

Ending cumulative non-deductible capital losses
$
1,127

 
$
849

 
$
1,127

 
$
849

Ending cumulative non-deductible capital losses per common share
$
3.19

 
$
2.21

 
$
3.19

 
$
2.21

Taxable income for the three and nine months ended September 30, 2013 excludes $849 million of estimated net capital losses, which were not deductible from our ordinary taxable income. Taxable income for the three and nine months ended September 30, 2014 excludes $246 million and $658 million of estimated net capital gains, respectively, which were applied against our prior year net capital loss carryforward. Net capital losses can be carried forward and applied against future net capital gains for up five years.
Our ordinary taxable income determines our minimum dividend distribution requirement to maintain our qualification as a REIT. We have distributed all of our 2013 taxable income within the allowable time frame, including the available spill-back

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