Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash Flows From Operating Activities:    
Net income $ 204,102 $ 339,625
Adjustments to reconcile net income to net cash used in operating activities:    
Amortization of premiums and discounts on investment securities, net 7,415 16,511
Other-than-temporary impairment losses 212 1,662
Realized and unrealized (gains) losses on investment securities, net (58,504) 152,458
(Gain) loss on mortgage loans held-for-sale (6,233) 25,262
Gain on mortgage loans held-for-investment and collateralized borrowings in securitization trusts (18,940) (16,621)
Loss (gain) on servicing asset 73,042 (816)
Loss on termination and option expiration of interest rate swaps and swaptions 51,712 21,904
Unrealized loss (gain) on interest rate swaps and swaptions 81,805 (293,783)
Unrealized (gain) loss on other derivative instruments (5,625) 79,553
Equity based compensation 12,256 474
Depreciation of fixed assets 768 424
Amortization of intangible assets 533 0
Purchases of mortgage loans held-for-sale (991,990) (989,665)
Proceeds from sales of mortgage loans held-for-sale 415,889 25,404
Proceeds from repayment of mortgage loans held-for-sale 25,164 24,256
Net change in assets and liabilities:    
Increase in accrued interest receivable (2,302) (6,241)
(Increase)/decrease in deferred income taxes, net (65,496) 75,384
Decrease in income taxes receivable 0 4,323
Increase in prepaid and fixed assets (1,481) (602)
(Increase)/decrease in other receivables (10,885) 29,687
Increase in servicing advances (12,485) (5,368)
Increase in Federal Home Loan Bank stock (60,000) 0
Increase in equity investments (3,000) 0
Decrease in accrued interest payable (5,353) (3,278)
(Decrease)/increase in income taxes payable (430) 2,356
Increase in accrued expenses and other liabilities 13,912 9,274
Net change in assets and liabilities due to purchase of entity 0 (3,306)
Net cash used in operating activities (355,914) (504,511)
Cash Flows From Investing Activities:    
Purchases of available-for-sale securities (4,017,640) (4,288,995)
Proceeds from sales of available-for-sale securities 3,176,234 4,056,691
Principal payments on available-for-sale securities 783,308 860,984
Short sales and purchases of other derivative instruments 590 (72,158)
Proceeds from sales of other derivative instruments, net 49,729 126,347
Purchases of trading securities (2,138,647) (995,625)
Proceeds from sales of trading securities 1,145,410 1,000,946
Purchases of beneficial interests in securitization trusts 0 (30,550)
Proceeds from repayment of mortgage loans held-for-investment in securitization trusts 51,763 28,568
Purchases of mortgage servicing rights, net of purchase price adjustments (57,106) (13,390)
Purchase of entity 0 6,404
Decrease in due to counterparties, net (149,658) (135,162)
Decrease/(increase) in restricted cash 91,226 (376,006)
Net cash (used in) provided by investing activities (1,064,791) 155,246
Cash Flows From Financing Activities:    
Proceeds from repurchase agreements 200,827,955 145,909,686
Principal payments on repurchase agreements (200,803,527) (146,382,131)
Proceeds from issuance of collateralized borrowings in securitization trusts 693,717 307,119
Principal payments on collateralized borrowings in securitization trusts (407,684) (30,574)
Proceeds from Federal Home Loan Bank advances 3,796,411 0
Principal payments on Federal Home Loan Bank advances (2,296,411) 0
Proceeds from issuance of common stock, net of offering costs 399 763,384
Proceeds from exercise of warrants 0 102,276
Repurchase of common stock 0 23,894
Dividends paid on common stock (190,361) (394,549)
Net cash provided by financing activities 1,620,499 251,317
Net increase (decrease) in cash and cash equivalents 199,794 (97,948)
Cash and cash equivalents at beginning of period 1,025,487 821,108
Cash and cash equivalents at end of period 1,225,281 723,160
Supplemental Disclosure of Cash Flow Information:    
Cash paid for interest 81,100 76,762
Cash paid (received) for taxes 3,905 (4,254)
Noncash Investing and Financing Activities:    
Transfers of mortgage loans held-for-sale to mortgage loans held-for-investment in securitization trusts 656,581 413,848
Consolidation of mortgage loans held-for-investment in securitization trusts 0 442,767
Consolidation of collateralized borrowings in securitization trusts 0 412,217
Cashless exercise of warrants 0 75
Distribution of Silver Bay common stock 0 343,481
Cash dividends declared but not paid at end of period 95,205 102,022
Reconciliation of mortgage loans held-for-sale:    
Mortgage loans held-for-sale at beginning of period 544,581 58,607
Purchases of mortgage loans held-for-sale 991,990 989,665
Transfers to mortgage loans held-for-investment in securitization trusts (656,581) (413,848)
Proceeds from sales of mortgage loans held-for-sale (415,889) (25,404)
Proceeds from repayment of mortgage loans held-for-sale (25,164) (24,256)
Realized and unrealized gains (losses) on mortgage loans held-for-sale 6,128 (25,027)
Mortgage loans held-for-sale at end of period $ 445,065 $ 559,737