Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Cash Flows From Operating Activities:      
Net income attributable to common stockholders $ 291,906 $ 127,432 $ 35,755
Adjustments to reconcile net income to net cash provided by operating activities:      
Amortization of premiums and discounts on RMBS, net 1,003 (235) 2,455
Other-than-temporary impairment losses 10,952 5,102 0
Gain on investment securities, net (122,466) (36,520) (6,127)
Gain on mortgage loans (2,270) 0 0
Loss on termination of interest rate swaps and swaptions 29,579 16,970 4,446
Unrealized loss (gain) on interest rate swaps and swaptions 91,748 44,916 (1,425)
Unrealized loss (gain) on other derivative instruments 542 7,424 (784)
Gain on contribution of entity (10,641) 0 0
Equity based compensation expense 488 279 214
Depreciation of fixed assets 212 39 0
Depreciation of real estate 1,520 0 0
Purchases of mortgage loans held-for-sale (57,954) (5,782) 0
Proceeds from repayment of mortgage loans held-for-sale 5,521 0 0
Net change in assets and liabilities:      
Increase in accrued interest receivable (19,176) (18,054) (2,803)
Increase in deferred income taxes, net (37,793) (5,837) (678)
(Increase)/decrease in current income tax receivable (4,166) (157) 490
Increase in prepaid and fixed assets (1,401) (351) (134)
Increase in other receivables (31,872) 0 0
Increase in accrued interest payable, net 12,604 5,671 671
(Decrease)/increase in income taxes payable (3,898) 3,897 1
Increase in accrued expenses 4,383 6,849 1,033
Net change in assets and liabilities of discontinued operations 4,313 0 0
Net cash provided by operating activities 163,134 151,643 33,114
Cash Flows From Investing Activities:      
Purchases of available-for-sale securities (10,800,018) (6,321,303) (1,363,078)
Proceeds from sales of available-for-sale securities 3,411,580 1,046,628 415,824
Principal payments on available-for-sale securities 825,889 323,294 114,704
Purchases of other derivative instruments (388,171) (285,350) (56,461)
Proceeds from sales of other derivative instruments 138,171 51,214 16,638
Purchases of trading securities (996,016) (2,019,884) (258,189)
Proceeds from sales of trading securities 1,001,904 1,222,959 58,516
Purchases of investments in real estate (293,745) 0 0
Increase (decrease) in due to counterparties, net 359,909 (206,442) 224,297
Increase in restricted cash (135,735) (144,039) (13,635)
Increase in escrow deposits of discontinued operations (30,208) 0 0
Contribution of cash to Silver Bay (995) 0 0
Net cash used in investing activities (6,907,435) (6,332,923) (861,384)
Cash Flows From Financing Activities:      
Proceeds from repurchase agreements 70,643,808 29,792,780 4,893,467
Principal payments on repurchase agreements (64,679,446) (24,302,435) (4,135,557)
Proceeds from issuance of common stock, net of offering costs 1,362,747 1,006,847 235,275
Proceeds from exercise of warrants 213,593 0 0
Dividends paid on common stock (335,309) (119,796) (27,120)
Net cash provided by financing activities 7,205,393 6,377,396 966,065
Net increase in cash and cash equivalents 461,092 196,116 137,795
Cash and cash equivalents at beginning of period 360,016 163,900 26,105
Cash and cash equivalents at end of period 821,108 360,016 163,900
Supplemental Disclosure of Cash Flow Information:      
Cash paid for interest 11,766 17,039 3,750
Cash paid (received) for taxes 3,637 991 (497)
Noncash Investing Activities:      
Contribution of investment in real estate to Silver Bay (319,040) 0 0
Equity securities received from Silver Bay 330,676 0 0
Noncash Financing Activities:      
Cashless exercise of warrants 268 0 0
Dividends declared but not paid at end of period 164,347 56,239 10,450
Reconciliation of mortgage loans held-for-sale:      
Mortgage loans held-for-sale at beginning of period 5,782 0 0
Purchases of mortgage loans held-for-sale 57,954 5,782 0
Proceeds from repayment of mortgage loans held-for-sale (5,521) 0 0
Gain on mortgage loans held-for-sale 392 0 0
Mortgage loans held-for-sale at end of period $ 58,607 $ 5,782 $ 0