Stockholders' Equity

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Preferred Stock

Pursuant to our amended and restated certificate of incorporation, we are authorized to designate and issue up to 10.0 million shares of preferred stock in one or more classes or series. Our Board of Directors has designated 6.9 million shares as 8.000% Series A Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") and 8,050 shares as 7.750% Series B Cumulative Redeemable Preferred Stock ("Series B Preferred Stock"). As of September 30, 2015, we had 3.1 million shares of authorized but unissued shares of preferred stock. Our Board of Directors may designate additional series of authorized preferred stock ranking junior to or in parity with the Series A or Series B Preferred Stock or designate additional shares of the Series A or Series B Preferred Stock and authorize the issuance of such shares.

In April 2012, we completed a public offering in which 6.9 million shares of our Series A Preferred Stock were sold to the underwriters at a price of $24.2125 per share for proceeds, net of offering expenses, of $167 million. In May 2014, we completed a public offering in which 7.0 million depositary shares were sold to the underwriters at a price of $24.2125 per depositary share for proceeds, net of offering expenses, of $169 million. Each depositary share represents a 1/1,000th interest in a share of our Series B Preferred Stock.

Our Series A and Series B Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and rank on parity with each other. Under certain circumstances upon a change of control, our Series A and Series B Preferred Stock are convertible to shares of our common stock. Holders of our Series A Preferred Stock and depository shares underlying our Series B Preferred Stock have no voting rights, except under limited conditions, and are entitled to receive cumulative cash dividends at a rate of 8.000% and 7.750% per annum, respectively, of their $25.00 per share and $25.00 per depositary share liquidation preference, respectively, before holders of our common stock are entitled to receive any dividends. Shares of our Series A Preferred Stock and depository shares underlying our Series B Preferred Stock are each redeemable at $25.00 per share, plus accumulated and unpaid dividends (whether or not declared) exclusively at our option commencing on April 5, 2017 and May 8, 2019, respectively, or earlier under certain circumstances intended to preserve our qualification as a REIT for federal income tax purposes. Dividends are payable quarterly in arrears on the 15th day of each January, April, July and October. As of September 30, 2015, we had declared all required quarterly dividends on our Series A and Series B Preferred Stock.

Common Stock Repurchase Program

Our Board of Directors adopted a program that authorizes repurchases of our common stock up to a specified amount. In October 2015, our Board of Directors extended its authorization through December 31, 2016. Shares of our common stock may be purchased in the open market, including through block purchases, or through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.  The timing, manner, price and amount of any repurchases will be determined at our discretion and the program may be suspended, terminated or modified at any time for any reason.  Among other factors, we intend to only consider repurchasing shares of our common stock when the purchase price is less than our estimate of our current net asset value per common share. Generally, when we repurchase our common stock at a discount to our net asset value, the net asset value of our remaining shares of common stock outstanding increases. In addition, we do not intend to repurchase any shares from directors, officers or other affiliates. The program does not obligate us to acquire any specific number of shares, and all repurchases will be made in accordance with Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of stock repurchases.

During the three and nine months endedSeptember 30, 2015, we repurchased approximately 2.4 million and 6.3 million shares, respectively, of our common stock at an average repurchase price of $19.08 and $19.57 per share, respectively, including expenses, totaling $45 million and $124 million, respectively. During the nine months endedSeptember 30, 2014, we repurchased approximately 3.4 million shares of our common stock at an average repurchase price of $22.10 per share, including expenses, totaling $74 million. We did not repurchase any shares of our common stock during the three months ended September 30, 2014. As of September 30, 2015, the total remaining amount authorized for repurchases of our common stock was $868 million.

Accumulated Other Comprehensive Income (Loss)

The following table summarizes changes to accumulated OCI for the three and nine months endedSeptember 30, 2015 and 2014 (in millions):

Accumulated Other Comprehensive Income (Loss)	Net Unrealized Gain (Loss) on Available-for-Sale MBS			Net Unrealized Gain (Loss) on Swaps			Total Accumulated OCI Balance
Three Months Ended September 30, 2015
Balance as of June 30, 2015	$	89		$	(85	)	$	4
OCI before reclassifications	428			—			428
Amounts reclassified from accumulated OCI	39			24			63
Balance as of September 30, 2015	$	556		$	(61	)	$	495
Three Months Ended September 30, 2014
Balance as of June 30, 2014	$	225		$	(213	)	$	12
OCI before reclassifications	(239		)	—			(239		)
Amounts reclassified from accumulated OCI	(14		)	38			24
Balance as of September 30, 2014	$	(28	)	$	(175	)	$	(203	)
Nine Months Ended September 30, 2015
Balance as of December 31, 2014	$	570		$	(140	)	$	430
OCI before reclassifications	(39		)	—			(39		)
Amounts reclassified from accumulated OCI	25			79			104
Balance as of September 30, 2015	$	556		$	(61	)	$	495
Nine Months Ended September 30, 2014
Balance as of December 31, 2013	$	(1,087	)	$	(296	)	$	(1,383	)
OCI before reclassifications	1,076			—			1,076
Amounts reclassified from accumulated OCI	(17		)	121			104
Balance as of September 30, 2014	$	(28	)	$	(175	)	$	(203	)

The following table summarizes reclassifications out of accumulated OCI for the three and nine months endedSeptember 30, 2015 and 2014 (in millions):

	Three Months Ended September 30,					Nine Months Ended September 30,					Line Item in the Consolidated Statements of Comprehensive Income Where Net Income is Presented
Amounts Reclassified from Accumulated OCI	2015		2014			2015		2014
(Gain) loss amounts reclassified from accumulated OCI for available-for-sale MBS upon realization	$	39	$	(14	)	$	25	$	(17	)	Gain (loss) on sale of agency securities, net
Periodic interest costs of interest rate swaps previously designated as hedges under GAAP, net	24		38			79		121			Interest expense
Total reclassifications	$	63	$	24		$	104	$	104