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
9 Months Ended 12 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Cash Flows From Operating Activities:        
Net income from continuing operations $ 510,245 $ 146,212    
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:        
Amortization of premiums and discounts on investment securities, net 73,441 45,500    
Amortization of deferred debt issuance costs on convertible senior notes 728 429    
Other-than-temporary impairment losses 363 429    
Realized and unrealized losses on investment securities 96,842 15,485    
(Gain) loss on servicing asset (102,251) 90,440    
Gain on residential mortgage loans held-for-sale (851) (2,149)    
Gain on residential mortgage loans held-for-investment and collateralized borrowings in securitization trusts 0 (14,884)    
Realized and unrealized (gain) loss on interest rate swaps, caps and swaptions (221,649) 56,123    
Unrealized loss on other derivative instruments 27,457 37,586    
Equity based compensation 9,785 11,703    
Depreciation of fixed assets 504 776    
Excess consideration in the acquisition of CYS Investments, Inc. 77,602 0    
Purchases of residential mortgage loans held-for-sale 0 (567)    
Proceeds from sales of residential mortgage loans held-for-sale 0 3,708    
Proceeds from repayment of residential mortgage loans held-for-sale 3,325 5,019    
Net change in assets and liabilities:        
Decrease (increase) in accrued interest receivable 13,698 (20,653)    
Decrease (increase) in deferred income taxes, net 35,094 (21,505)    
(Increase) decrease in income taxes receivable (460) 1,411    
Decrease (increase) in prepaid and fixed assets 7,367 (251)    
(Increase) decrease in other receivables (9,136) 10,244    
Decrease in servicing advances 4,916 5,489    
Increase in accrued interest payable 1,823 31,551    
Increase in income taxes payable 4 142    
Decrease in accrued expenses and other liabilities (7,481) (11,753)    
Net cash provided by operating activities of discontinued operations 0 28,280    
Net cash provided by operating activities 521,366 418,765    
Cash Flows From Investing Activities:        
Purchases of available-for-sale securities (6,319,252) (13,677,423)    
Proceeds from sales of available-for-sale securities 9,156,686 5,726,616    
Principal payments on available-for-sale securities 1,792,168 1,075,961    
Purchases of mortgage servicing rights, net of purchase price adjustments (475,451) (327,341)    
Proceeds from sales of mortgage servicing rights 395 132    
(Purchases) short sales of derivative instruments, net (82,971) (93,812)    
Proceeds from sales and settlement (payments for termination and settlement) of derivative instruments, net 498,425 84,791    
Proceeds from reverse repurchase agreements 1,442,798 0    
Repayments of reverse repurchase agreements (1,440,713) 0    
Proceeds from repayment of residential mortgage loans held-for-investment in securitization trusts 0 285,695    
Net cash paid for the acquisition of CYS Investments, Inc. (13,552) 0    
Purchases of equity securities 0 5,445    
Proceeds from sales of equity securities 31,276 0    
Redemptions of Federal Home Loan Bank stock 12,981 82,681    
Decrease in due to counterparties, net (187,146) (32,881)    
Net cash used in investing activities of discontinued operations 0 (753,021)    
Net cash provided by (used in) investing activities 4,415,644 (7,634,047)    
Cash Flows From Financing Activities:        
Proceeds from repurchase agreements 103,348,835 113,602,702    
Principal payments on repurchase agreements (107,736,938) (105,645,758)    
Principal payments on collateralized borrowings in securitization trusts 0 (282,468)    
Principal payments on Federal Home Loan Bank advances (350,000) (2,001,238)    
Proceeds from revolving credit facilities 377,400 123,000    
Principal payments on revolving credit facilities (87,400) (153,000)    
Proceeds from convertible senior notes 0 282,469    
Proceeds from issuance of preferred stock, net of offering costs 13 416,966    
Proceeds from issuance of common stock, net of offering costs 329 332    
Dividends paid on preferred stock (39,443) (4,285)    
Dividends paid on common stock (193,318) (261,400)    
Net cash provided by financing activities of discontinued operations 0 1,205,947    
Net cash (used in) provided by financing activities (4,680,522) 7,283,267    
Net increase in cash, cash equivalents and restricted cash 256,488 67,985    
Cash, cash equivalents and restricted cash of continuing operations at beginning of period 1,054,995 758,916 $ 758,916  
Cash, cash equivalents and restricted cash of discontinued operations at beginning of period     0 $ 56,279
Cash, cash equivalents and restricted cash at beginning of period 1,054,995 815,195 815,195  
Cash, cash equivalents and restricted cash at end of period 1,311,483 883,180 1,054,995  
Supplemental Disclosure of Cash Flow Information:        
Cash paid for interest 300,573 169,464    
Cash paid (received) for taxes 502 (1,152)    
Acquisition of the assets and liabilities of CYS Investments, Inc.        
Available-for-sale securities 10,034,557 0    
Cash and cash equivalents 386 0    
Restricted cash 1,062 0    
Accrued interest receivable 30,646 0    
Reverse repurchase agreements 761,460 0    
Other assets 11,977 0    
Repurchase agreements (8,743,527) 0    
Derivative liabilities, net (451,026) 0    
Due to counterparties, net (279,715) 0    
Accrued interest payable (27,487) 0    
Other liabilities (821) 0    
Transfers of residential mortgage loans held-for-sale to other receivables for foreclosed government-guaranteed loans (403) (2,909)    
Transfer of fair value of mortgage servicing rights to fair value of Ginnie Mae residential mortgage loans held-for-sale upon buyout 0 (9)    
Additions to mortgage servicing rights due to sale of residential mortgage loans held-for-sale 0 20    
Cumulative-effect adjustment for adoption of new accounting principle 9,918 0    
Dividends declared but not paid at end of period 96,259 102,799 12,552  
Reconciliation of residential mortgage loans held-for-sale:        
Residential mortgage loans held-for-sale at beginning of period 30,414 40,146 40,146  
Purchases of residential mortgage loans held-for-sale 0 567    
Transfers to other receivables for foreclosed government-guaranteed loans (403) (2,909)    
Transfer of fair value of mortgage servicing rights to fair value of Ginnie Mae residential mortgage loans held-for-sale upon buyout 0 (9)    
Proceeds from sales of residential mortgage loans held-for-sale 0 (3,708)    
Proceeds from repayment of residential mortgage loans held-for-sale (3,325) (5,019)    
Realized and unrealized gains on residential mortgage loans held-for-sale 851 2,129    
Residential mortgage loans held-for-sale at end of period 27,537 31,197 $ 30,414  
Preferred Stock        
Acquisition of the assets and liabilities of CYS Investments, Inc.        
Issuance of stock in connection with the acquisition of CYS Investments, Inc. 275,000 0    
Common Stock Including Additional Paid in Capital        
Acquisition of the assets and liabilities of CYS Investments, Inc.        
Issuance of stock in connection with the acquisition of CYS Investments, Inc. $ 1,125,114 $ 0