What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-27 compared with 2022-02-23 · 177 added, 150 removed, 959 unchanged (25% of the section changed)

23 unchanged sentences

In our opinion, AGNC Investment Corp.

maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of AGNC Investment Corp.

as of December 31, 2021 and 2020, and the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes, and our report dated February 23, 2022 expressed an unqualified opinion thereon.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes, and our report dated February 24, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

AGNC Investment Corp.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on AGNC Investment Corp.’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to AGNC Investment Corp.

in accordance with the U.S.

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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(the Company) as of December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of AGNC Investment Corp.

at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), AGNC Investment Corp.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 23, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 24, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of AGNC Investment Corp.'s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to AGNC Investment Corp.

in accordance with the U.S.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

1 unchanged sentence

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that our audits provide a reasonable basis for our opinion.

4 unchanged sentences

Agency securities and non-agency securities of high credit quality net premium amortization

of the Matter As of December 31, 2021, the Company’s investment securities had a net unamortized premium balance of $1.8 billion, including interest and principal-only securities, and it recorded $0.4 billion of net premium amortization for the year then ended.

of the Matter As of December 31, 2022, the Company’s investment securities had a net unamortized premium balance of $1.5 billion, including interest and principal-only securities, and it recorded $13 million of net premium amortization for the year then ended.

As explained in Note 2 to the financial statements, premiums or discounts associated with the purchase of Agency residential mortgage-backed securities (“Agency RMBS") and non-Agency mortgage-backed securities of high credit quality are amortized or accreted into interest income, respectively, over the projected lives of the securities, including contractual payments and estimated prepayments using the effective interest method.

1 unchanged sentence

The Company estimates long-term prepayment speeds of such securities using a third-party service provider and market data.

The third-party service provider estimates long-term prepayment speeds using models that incorporate the forward yield curve, current mortgage rates, mortgage rates of the outstanding loans, age and size of the outstanding loans, loan-to-value ratios, interest rate volatility and other factors.

The third-party service provider estimates long-term prepayment speeds using a prepayment model that incorporates the forward yield curve, current mortgage rates, mortgage rates of the outstanding loans, age and size of the outstanding loans, loan-to-value ratios, interest rate volatility and other factors.

Auditing the Company's estimation of long-term prepayment speeds used for the amortization of premiums and accretion of discounts is subjective due to the significant judgments and estimates required by management and the third-party service provider, as inputs into prepayment models are prone to fluctuation based on changing macroeconomic conditions.

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/s/ Ernst & Young LLP

We have served as AGNC Investment Corp.’s auditor since 2008.

We have served as the Company’s auditor since 2008.

Tysons, Virginia

7 unchanged sentences

Credit risk transfer securities, at fair value (including pledged securities of $ 703 and $ 510 , respectively)

Non-Agency securities, at fair value (including pledged securities of $ 571 and $ 458 , respectively)

Non-Agency securities, at fair value, and other mortgage credit investments (including pledged securities of $ 605 and $ 571 , respectively)

Treasury securities, at fair value (including pledged securities of $ 353 and $ 471 , respectively)

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Obligation to return securities borrowed under reverse repurchase agreements, at fair value 6,534 9,697

Accounts payable and other liabilities 400 219

Other liabilities 486 400

Total liabilities 43,878 57,858

Stockholders' equity:

Preferred Stock - aggregate liquidation preference of $ 1,538

Preferred Stock - aggregate liquidation preference of $ 1,688 and $ 1,538

Common stock - $ 0.01 par value;

3 unchanged sentences

Retained deficit ( 7,284 ) ( 5,214 )

Accumulated other comprehensive income 301 719

Accumulated other comprehensive income (loss) ( 672 ) 301

Total stockholders' equity 7,870 10,291

4 unchanged sentences

(in millions, except per share data)

For the year ended December 31,

Year Ended December 31,

2022 2021 2020

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Unrealized gain (loss) on investment securities measured at fair value through net income, net ( 3,795 ) ( 1,502 ) 319

Gain (loss) on derivative instruments and other securities, net 1,110 ( 2,463 ) ( 2,324 )

Total other gain (loss), net:

Gain (loss) on derivative instruments and other investments, net 4,630 1,110 ( 2,463 )

Total other loss, net:

( 2,081 ) ( 449 ) ( 1,018 )

4 unchanged sentences

Dividends on preferred stock 105 100 96

Issuance costs of redeemed preferred stock — — 6

Net income (loss) available (attributable) to common stockholders $ ( 1,295 ) $ 649 $ ( 362 )

1 unchanged sentence

Unrealized gain (loss) on investment securities measured at fair value through other comprehensive income (loss), net ( 973 ) ( 418 ) 622

Comprehensive income 331 356 1,728

Comprehensive income (loss) ( 2,163 ) 331 356

Dividends on preferred stock

Issuance costs of redeemed preferred stock — — 6

Comprehensive income available to common stockholders $ 231 $ 260 $ 1,668

Comprehensive income (loss) available (attributable) to common stockholders $ ( 2,268 ) $ 231 $ 260

Weighted average number of common shares outstanding - basic

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Balance, December 31, 2019 $ 932 540.9 $ 5 $ 13,893 $ ( 3,886 ) $ 97 $ 11,041

Net income — — — — 688 — 688

Net loss — — — — ( 266 ) — ( 266 )

Other comprehensive income:

1 unchanged sentence

Stock-based compensation, net — 0.1 — 18 — — 18

Issuance of preferred stock, net of offering cost 617 — — — — — 617

Redemption of preferred stock ( 169 ) — — — ( 6 ) — ( 175 )

Issuance of common stock, net of offering cost — 11.4 — 190 — — 190

Issuance of preferred stock 557 — — — — — 557

Issuance of common stock — 26.7 1 438 — — 439

Repurchase of common stock — ( 28.2 ) ( 1 ) ( 377 ) — — ( 378 )

2 unchanged sentences

Balance, December 31, 2020 $ 1,489 539.5 $ 5 $ 13,972 $ ( 5,106 ) $ 719 $ 11,079

Net loss — — — — ( 266 ) — ( 266 )

Other comprehensive income:

Unrealized gain on available-for-sale securities, net — — — — — 622 622

Net income — — — — 749 — 749

Other comprehensive loss:

Unrealized loss on available-for-sale securities, net — — — — — ( 418 ) ( 418 )

Stock-based compensation, net — 0.4 — 19 — — 19

Issuance of preferred stock, net of offering cost 557 — — — — — 557

Issuance of common stock, net of offering cost — 26.7 1 438 — — 439

Repurchase of common stock — ( 17.7 ) — ( 281 ) — — ( 281 )

2 unchanged sentences

Balance, December 31, 2021 $ 1,489 522.2 $ 5 $ 13,710 $ ( 5,214 ) $ 301 $ 10,291

Net income — — — — 749 — 749

Net loss — — — — ( 1,190 ) — ( 1,190 )

Other comprehensive loss:

1 unchanged sentence

Stock-based compensation, net — 1.1 — 2 — — 2

Issuance of preferred stock 145 — — — — — 145

Issuance of common stock — 56.0 1 525 — — 526

Repurchase of common stock — ( 4.7 ) — ( 51 ) — — ( 51 )

6 unchanged sentences

(in millions)

For the year ended December 31,

Year Ended December 31,

2022 2021 2020

8 unchanged sentences

(Increase) decrease in other assets 38 ( 29 ) 119

Decrease in accounts payable and other accrued liabilities ( 17 ) ( 224 ) ( 9 )

Increase (decrease) in other liabilities 69 ( 17 ) ( 224 )

Net cash provided by operating activities 1,013 1,540 1,747

18 unchanged sentences

Net proceeds from preferred stock issuances 145 — 557

Payments for preferred stock repurchases — — ( 175 )

Net proceeds from common stock issuances 526 — 439

1 unchanged sentence

Cash dividends paid ( 869 ) ( 860 ) ( 970 )

Net cash (used in) provided by financing activities ( 6,175 ) ( 37,230 ) 12,800

Net cash used in financing activities ( 11,392 ) ( 6,175 ) ( 37,230 )

Net change in cash, cash equivalents and restricted cash 809 ( 799 ) 1,042

9 unchanged sentences

Our common stock is traded on The Nasdaq Global Select Market under the symbol "AGNC."

We are a leading provider of private capital to the U.S.

housing market, enhancing liquidity in the residential real estate mortgage markets and, in turn, facilitating home ownership in the U.S.

We invest primarily in Agency residential mortgage-backed securities ("Agency RMBS") for which the principal and interest payments are guaranteed by a U.S.

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It is our intention to distribute 100 % of our taxable income within the time limits prescribed by the Internal Revenue Code, which may extend into the subsequent tax year.

We are internally managed with the principal objective of providing our stockholders with attractive risk-adjusted returns through a combination of monthly dividends and tangible net book value accretion.

We are internally managed with the principal objective of providing our stockholders with favorable long-term returns on a risk-adjusted basis through attractive monthly dividends.

We generate income from the interest earned on our investments, net of associated borrowing and hedging costs, and net realized gains and losses on our investment and hedging activities.

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We review the prepayment speeds estimated by the third-party service for reasonableness with consideration given to both historical prepayment speeds and current market conditions.

If based on our assessment, we believe that the third-party model does not fully reflect our expectations of the current prepayment landscape, such as during periods of elevated market uncertainty or unique market conditions, we may make adjustments to the models.

If based on our assessment, we believe that the third-party model does not fully reflect our expectations of the current prepayment landscape we may make adjustments to the models.

We review our actual and anticipated prepayment experience on at least a quarterly basis and effective yields are recalculated when differences arise between (i) our previous estimate of future prepayments and (ii) actual prepayments to date and our current estimate of future prepayments.

1 unchanged sentence

At the time we purchase CRT securities and non-Agency MBS that are not of high credit quality, we determine an effective yield based on our estimate of the timing and amount of future cash flows and our cost basis.

Our initial cash flow estimates for these investments are based on our observations of current information and events and include assumptions related to interest rates, prepayment rates, including collateral call provisions, and the impact of default and severity rates on the timing and amount of credit losses.

Our initial cash flow estimates for these investments are based on our observations of current information and events and include assumptions related to interest rates, prepayment rates, collateral call provisions, and the impact of default and severity rates on the timing and amount of credit losses.

On at least a quarterly basis, we review the estimated cash flows and make appropriate adjustments based on inputs and analysis received from external sources, internal models, and our judgment regarding such inputs and other factors.

1 unchanged sentence

Repurchase Agreements

We finance the acquisition of securities for our investment portfolio primarily through repurchase agreements with financial institutions.

Repurchase arrangements involve the sale and a simultaneous agreement to repurchase the transferred assets at a future date.

We finance the acquisition of securities for our investment portfolio primarily through repurchase agreements with our lending counterparties.

Repurchase arrangements involve the sale and a simultaneous agreement to repurchase the assets at a future date.

We maintain a beneficial interest in the specific securities pledged during the term of each repurchase arrangement and we receive the related principal and interest payments.

Pursuant to ASC Topic 860, Transfers and Servicing , we account for repurchase agreements as collateralized financing transactions, which are carried at their contractual amounts

(cost), plus accrued interest.

Our repurchase agreements typically have maturities of less than one year but may extend up to five years or more.

Pursuant to ASC Topic 860, Transfers and Servicing , we account for repurchase agreements as collateralized financing transactions, which are carried at their contractual amounts (cost), plus accrued interest.

Our repurchase agreements typically have maturities of less than one year.

Reverse Repurchase Agreements and Obligation to Return Securities Borrowed under Reverse Repurchase Agreements

24 unchanged sentences

Under our interest rate swap agreements, we typically pay a fixed rate and receive a floating rate ("payer swaps") based on a short-term benchmark rate, such as the Secured Overnight Financing Rate ("SOFR") and Overnight Index Swap Rate ("OIS").

Our interest rate swaps typically have terms from one to 10 years but may extend up to 20 years or more.

Our interest rate swaps typically have terms from one to 10 years.

Our interest rate swaps are centrally cleared through a registered commodities exchange.

The clearing exchange requires that we post an "initial margin" amount determined by the exchange, which is generally intended to be set at a level sufficient to protect the exchange from the interest rate swap's maximum estimated single-day price movement.

The clearing exchange requires that we post an "initial margin" amount determined by the exchange.

The initial margin amount is intended to be set at a level sufficient to protect the exchange from the interest rate swap's maximum estimated single-day price movement and is subject to adjustment based on changes in market volatility and other factors.

We also exchange daily settlements of "variation margin" based upon changes in fair value, as measured by the exchange.

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We account for TBA dollar roll transactions as a series of derivative transactions.

Treasury securities

Treasury securities and US Treasury futures contracts

Treasury securities and U.S.

Treasury futures contracts to mitigate the potential impact of changes in interest rates on the performance of our portfolio.

We borrow U.S.

Treasury securities under reverse repurchase agreements to cover short sales of U.S.

Treasury securities.

We enter into short-sales of U.S.

Treasury securities by borrowing the securities under reverse repurchase agreements and selling them into the market.

We account for these as securities borrowing transactions and recognize an obligation to return the borrowed securities at fair value on our accompanying consolidated balance sheets based on the value of the underlying U.S.

Treasury security as of the reporting date.

Treasury futures contracts are standardized contracts that obligate us to sell or buy U.S.

Treasury securities for future delivery.

Gains and losses associated with U.S.

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The availability of observable inputs can be affected by a wide variety of factors, including the type of instrument, whether the instrument is new and not yet established in the marketplace and other characteristics particular to the instrument.

We typically obtain price estimates from multiple third-party pricing sources, such as pricing services and dealers, or, if applicable, the registered clearing exchange.

We typically obtain price estimates from multiple third-party pricing sources, such as pricing services and dealers, or, if applicable, from the registered clearing exchange.

We make inquiries of third-party pricing sources to understand the significant inputs and assumptions they used to determine their prices and that they are derived from orderly transactions, particularly during periods of elevated market turbulence and reduced market liquidity.

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would indicate and we cannot obtain an understanding from the third-party source as to the significant inputs used to determine the price.

The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis classified as Level 2 inputs.

The following is a description of the valuation methodologies used for financial instruments measured at fair value on a recurring basis classified as Level 2 inputs.

These instruments trade in active markets such that participants transact with sufficient frequency and volume to provide transparent pricing information on an ongoing basis.

The liquidity of these markets and the similarity of our securities and derivative instruments to those actively traded enable our pricing sources and us to observe quoted prices in the market and utilize those prices as a basis for formulating fair value measurements.

The liquidity of these markets and the similarity of our instruments to those actively traded enable our pricing sources and us to utilize the observed quoted prices as a basis for formulating fair value measurements.

Investment securities - are valued based on prices obtained from multiple third-party pricing sources.

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Compensation expense is recognized over each award’s respective service period.

In the case of PSU awards, we estimate the probability that the performance criteria will be achieved and recognize expense only for those awards expected to vest.

For PSU awards, we estimate the probability that the performance criteria will be achieved and recognize expense only for those awards expected to vest.

We reevaluate our estimates each reporting period and recognize a cumulative effect adjustment to expense if our estimates change from the prior period.

1 unchanged sentence

rather, we adjust for forfeitures in the periods in which they occur.

Shares underlying RSU and PSU awards are issued on the vesting dates, or later if distribution of such shares has been deferred beyond the vesting date, net of shares withheld for minimum statutory tax withholdings to be paid by us on behalf of our employees.

As a result, the actual number of shares issued will be fewer than the actual number of awards outstanding.

When shares are withheld for statutory tax withholdings, we record a liability for tax withholding amounts to be paid by us as a reduction to additional paid-in capital.

Shares underlying RSU and PSU awards are issued when the awards vest, or later if distribution of such shares has been deferred beyond the vest date.

Shares issued are net of shares withheld to cover minimum statutory tax withholding obligations.

The fair value of shares withheld for tax withholdings is recorded as a reduction to additional paid-in capital.

Recent Accounting Pronouncements

5 unchanged sentences

$ 18.6 billion and $ 27.1 billion net TBA securities, at fair value, respectively;

and $ 0.4 billion and zero forward settling non-Agency securities, at fair value, respectively.

Our net TBA position and forward settling non-Agency securities are reported at their net carrying value totaling $( 44 ) million and $ 275 million as of December 31, 2021 and 2020, respectively, in derivative assets / (liabilities) on our accompanying consolidated balance sheets.

and, as of 2021, $ 0.4 billion forward settling non-Agency securities, at fair value.

Our net TBA position and forward settling non-Agency securities are reported at their net carrying value totaling $ 0.2 billion and $( 44 ) million as of December 31, 2022 and 2021, respectively, in derivative assets / (liabilities) on our accompanying consolidated balance sheets.

The net carrying value of our TBA position and forward settling non-Agency securities represents the difference between the fair value of the underlying security and the cost basis or the forward price to be paid or received for the underlying security.

As of December 31, 2022 and 2021, our investment securities had a net unamortized premium balance of $ 1.5 billion and $ 1.8 billion, respectively.

The following tables summarize our investment securities as of December 31, 2021 and 2020, excluding TBA and forward settling securities, (dollars in millions).

Details of our TBA and forward settling securities as of each of the respective dates are included in Note 5.

The following tables summarize our investment securities as of December 31, 2022 and 2021, excluding TBA and forward settling securities and other mortgage credit investments (dollars in millions).

Details of our TBA and forward settling securities are included in Note 5.

As of December 31, 2022, we had other mortgage credit investments of $ 25 million, which we account for under the equity method of accounting.

December 31, 2022 December 31, 2021

6 unchanged sentences

Interest-only and principal-only strips 77 70 70 80

Multifamily — — 17 19

Total Agency RMBS 43,385 39,490 51,843 52,604

Non-Agency RMBS 1

111 90 325 329

CMBS 605 567 505 514

37 unchanged sentences

________________________________

Amount excludes other mortgage credit investments of $ 25 million as of December 31, 2022.

Incorporates a weighted average future constant prepayment rate assumption of 7.4 % based on forward rates as of December 31, 2022.

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CRT and Non-Agency Security Credit Ratings 1

CRT RMBS CMBS CRT RMBS CMBS

CMBS CRT RMBS CMBS

AAA $ — $ 9 $ 184 $ — $ 164 $ 10

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Represents the lowest of Standard and Poor's ("S&P"), Moody's, Fitch, DBRS, Kroll Bond Rating Agency ("KBRA") and Morningstar credit ratings, stated in terms of the S&P equivalent rating as of each date.

RMBS excludes other mortgage credit investments of $ 25 million as of December 31, 2022.

Our CRT securities reference the performance of loans underlying Agency RMBS issued by Fannie Mae or Freddie Mac, which were subject to their underwriting standards.

6 unchanged sentences

December 31, 2022 December 31, 2021

Estimated Weighted Average Life of Investment Securities Fair Value Amortized

Estimated Weighted Average Life of Investment Securities 1

Fair Value Amortized

Cost Weighted

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$ 40,904 $ 44,880 3.94 % 3.37 % $ 54,421 $ 53,628 3.08 % 2.43 %

________________________________

Table excludes other mortgage credit investments of $ 25 million as of December 31, 2022.

The following table presents the gross unrealized loss and fair values of securities classified as available-for-sale by length of time that such securities have been in a continuous unrealized loss position as of December 31, 2022 and 2021 (in millions):

Unrealized Loss Position For

Less than 12 Months 12 Months or More Total

Securities Classified as Available-for-Sale Fair

Value Unrealized

Fair Value Unrealized

Value Unrealized

December 31, 2022

$ 5,846 $ ( 665 ) $ 52 $ ( 7 ) $ 5,898 $ ( 672 )

December 31, 2021

$ — $ — $ — $ — $ — $ —

Gains and Losses on Sale of Investment Securities

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Treasury securities.

The terms and conditions of our repurchase agreements are typically negotiated on a transaction-by-transaction basis.

The terms and conditions

of our repurchase agreements are typically negotiated on a transaction-by-transaction basis or subject to a tri-party repo agreement.

Our repurchase agreements with original maturities greater than one year may have floating interest rates based on an index plus or minus a fixed spread.

12 unchanged sentences

Treasury repo:

> 1 day to ≤ 1 month 470 ( 0.05 ) % 4 — — % —

≤ 1 month 355 4.37 % 3 470 ( 0.05 ) % 4

Total $ 36,262 4.31 % 22 $ 47,381 0.15 % 63

As of December 31, 2021 and 2020, $ 0.8 billion and $ 11.2 billion, respectively, of our repurchase agreements had an overnight maturity of one business day and none of our repurchase agreements were due on demand.

As of December 31, 2021, we had $ 9.8 billion of forward commitments to enter into repurchase agreements with a weighted average forward start date of 3 days and a weighted average interest rate of 0.08 %.

As of December 31, 2022 and 2021, $ 9.6 billion and $ 0.8 billion, respectively, of our Agency repurchase agreements had an overnight maturity of one business day and none of our repurchase agreements were due on demand.

As of December 31, 2022, we had $ 6.4 billion of forward commitments to enter into repurchase agreements with a weighted average forward start date of 4 days and a weighted average interest rate of 4.38 %.

As of 2021, we had $ 9.8 billion of forward commitments to enter into repurchase agreements, with a weighted average forward start date of 3 days and a weighted average interest rate of 0.08 %.

As of December 31, 2022 and 2021, 50 % and 43 %, respectively, of our repurchase agreement funding was sourced through our wholly-owned captive broker-dealer subsidiary, Bethesda Securities, LLC ("BES").

Amounts sourced through BES include funding from the General Collateral Finance Repo service ("GCF Repo") offered by the Fixed Income Clearing Corporation ("FICC"), which totaled 48 % and 42 % of our repurchase agreement funding outstanding as of December 31, 2022 and 2021, respectively.

During fiscal year 2020, we terminated $ 3.7 billion of repurchase agreements with a weighted average interest rate of 2.11 % and a weighted average remaining maturity of 2.2 years.

The terminated agreements were replaced with shorter duration repurchase agreements at lower prevailing market rates.

We recognized losses on debt extinguishment of $ 146 million in other gain (loss), net for fiscal year 2020 associated with the terminated repurchase agreements.

We did not terminate any repurchase agreements during fiscal years 2021 and 2019.

Reverse Repurchase Agreements

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Derivative and Other Hedging Instruments

We hedge a portion of our interest rate risk primarily utilizing interest rate swaps, interest rate swaptions, U.S.

For the periods presented, our interest rate based hedges primarily consisted of interest rate swaps, interest rate swaptions, U.S.

Treasury securities and U.S.

Treasury futures contracts.

We utilize TBA securities primarily as a means of investing in the Agency securities market.

We also utilized forward contracts, primarily consisting of TBA securities, for the purchase and sale of investment securities.

For additional information regarding our derivative instruments and our overall risk management strategy, please refer to the discussion of derivative and other hedging instruments in Note 2.

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TBA and forward settling non-Agency securities Derivative assets, at fair value 266 27

Treasury futures - short Derivative assets, at fair value 56 —

Total derivative assets, at fair value

Interest rate swaps 1

Derivative liabilities, at fair value $ — $ —

TBA and forward settling non-Agency securities Derivative liabilities, at fair value ( 99 ) ( 71 )

Treasury futures - short Derivative liabilities, at fair value — ( 15 )

Credit default swaps 1

Derivative liabilities, at fair value — —

Total derivative liabilities, at fair value

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As of December 31, 2022 and 2021, the net fair value of our interest rate swaps excluding the recognition of variation margin settlements as a direct reduction of carrying value (see Note 2) was a net asset (liability) of $ 4.5 billion and $ 1.6 billion, respectively.

As of December 31, 2022, the net fair value of our credit default swaps excluding the recognition of variation margin settlements was $( 2 ) million.

We did not have credit default swaps outstanding as of December 31, 2021.

The following tables summarize certain characteristics of our derivative and other hedging instruments outstanding as of December 31, 2022 and 2021 (dollars in millions):

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Total $ 47,825 0.37 % 4.31 % 3.2 $ 51,225 0.20 % 0.05 % 4.0

Pay Fixed / Receive Variable Interest Rate Swaps by Receive Index (% of Notional Amount) December 31,

December 31, 2020

Pay Fixed / Receive Variable Interest Rate Swaps by Receive Index (% of Notional Amount)

SOFR 81 % 75 %

1 unchanged sentence

Total 100 % 100 %

Swaptions Option Underlying Payer Swap

Payer Swaptions Option Underlying Payer Swap

Current Option Expiration Date Cost Basis Fair Value Average

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> 1 year ≤ 2 years 39 148 18 1,750 2.52 % 10.0

> 2 year ≤ 3 years 99 79 28 4,050 2.35 % 10.0

Total $ 65 $ 293 13 $ 3,050 2.32 % 9.8

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> 2 year ≤ 3 years 99 79 28 4,050 2.35 % 10.0

> 3 year ≤ 4 years 8 8 40 250 1.43 % 10.0

Total $ 328 $ 290 18 $ 13,000 1.93 % 9.6

________________________________

As of December 31, 2021 and 2020, ≤ 1 year notional amount includes $ 700 million of Bermudan swaptions where the options may be exercised on predetermined dates up to their final exercise date, which is six months prior to the underlying swaps' maturity date.

As of December 31, 2021, 95% and 5% of the underlying swap receive rates were tied to SOFR and 3-Month LIBOR, respectively.

As of December 31, 2021, ≤ 1 year notional amount includes $ 700 million of Bermudan swaptions where the options may be exercised on predetermined dates up to their final exercise date, which is six months prior to the underlying swaps' maturity date.

As of December 31, 2022, 100% of the underlying swap receive rates were tied to SOFR.

As of December 31, 2021, 95% and 5% of the underlying swap receive rates were tied to SOFR and 3-Month LIBOR, respectively.

Treasury Securities December 31, 2021 December 31, 2020

Maturity Face Amount Long/(Short) Cost Basis 1

Fair Value Face Amount Long/(Short) Cost Basis 1

Treasury Securities 1

December 31, 2022 December 31, 2021

Maturity Face Amount Long/(Short) Cost Basis Fair Value Face Amount Long/(Short) Cost Basis Fair Value

5 years $ 356 $ 354 $ 353 $ ( 310 ) $ ( 306 ) $ ( 293 )

1 unchanged sentence

10 years ( 5,732 ) ( 5,427 ) ( 5,008 ) ( 7,590 ) ( 7,593 ) ( 7,727 )

20 years ( 1,095 ) ( 1,048 ) ( 1,053 ) — — —

Treasury securities $ ( 7,016 ) $ ( 6,666 ) $ ( 6,181 ) $ ( 9,118 ) $ ( 9,117 ) $ ( 9,226 )

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As of December 31, 2022 and 2021, short U.S.

Treasury securities totaling $(9.7) billion and $(11.7) billion, at fair value, respectively, had a weighted average yield of 1.56 % and 1.20 %, respectively, and, as of December 31, 2021, long U.S.

Treasury securities totaling $ 0.5 billion, at fair value, had a weighted average yield of 1.18 % as of December 31, 2021.

Treasury securities totaling $(6.5) billion and $(9.7) billion, at fair value, respectively, had a weighted average yield of 2.80 % and 1.56 %, respectively.

As of December 31, 2022 and 2021, long U.S.

Treasury securities totaling $ 0.4 billion and $ 0.5 billion, at fair value, respectively, had a weighted average yield of 3.86 % and 1.18 %, respectively.

Treasury Futures December 31, 2022 December 31, 2021

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10 years $ ( 8,399 ) $ ( 9,533 ) $ ( 9,485 ) $ 48 $ ( 1,500 ) $ ( 1,942 ) $ ( 1,957 ) $ ( 15 )

20 years ( 814 ) ( 1,028 ) ( 1,020 ) 8 — — — —

Treasury futures $ ( 9,213 ) $ ( 10,561 ) $ ( 10,505 ) $ 56 $ ( 1,500 ) $ ( 1,942 ) $ ( 1,957 ) $ ( 15 )

________________________________

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≤ 2.5% $ — $ — $ — $ — $ 2,039 $ 2,056 $ 2,059 $ 3

— — — — 200 208 209 1

Total 15-Year TBA securities — — — — 2,039 2,056 2,059 3

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16,457 16,100 16,276 176 — — — —

581 611 611 — 124 131 131 —

Total 30-Year TBA securities, net 19,050 18,407 18,574 167 24,634 25,128 25,081 ( 47 )

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Net carrying value represents the difference between the fair market value and the cost basis (or the forward price to be paid/(received) for the underlying Agency security) of the TBA contract as of period-end and is reported in derivative assets/(liabilities), at fair value in our consolidated balance sheets.

Table excludes forward settling non-Agency securities totaling $ 0.4 billion market value and $ 0.2 million net carrying value as of December 31, 2021.

Table excludes forward settling non-Agency securities totaling $ 0.4 billion (fair value) and $ 0.2 million (net carrying value) as of December 31, 2021.

As of December 31, 2022, we had $ 215 million notional value of centrally cleared credit default swaps ("CDS") outstanding that reference the Markit CDX Investment Grade Index, maturing in June 2027.

Under the terms of our CDS, we pay fixed periodic payments equal to 1% per annum of the notional value and we are entitled to receive payments for qualified credit events.

As of December 31, 2022, the CDS had a market value of $( 2 ) million, and a carrying value of zero dollars, net of variation margin settlements.

Pursuant to rules governing central clearing activities, we recognize variation margin settlements as a direct reduction of the carrying value of the CDS asset or liability.

Gain (Loss) From Derivative Instruments and Other Securities, Net

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Interest rate swaps - payer $ 51,225 5,895 ( 9,295 ) $ 47,825 4,400

Credit default swaps - CDX IG - buy protection $ — ( 5,835 ) 5,620 $ ( 215 ) 21

Payer swaptions $ 13,000 1,750 ( 11,700 ) $ 3,050 857

Receiver swaptions $ — ( 150 ) 150 $ — —

Treasury securities - short position $ ( 9,590 ) ( 15,548 ) 17,765 $ ( 7,373 ) 1,482

3 unchanged sentences

TBA securities, net $ 30,364 352,658 ( 356,349 ) $ 26,673 $ ( 552 )

Forward settling non-Agency securities $ — 1,800 ( 1,350 ) $ 450 5

Interest rate swaps - payer $ 43,225 9,000 ( 1,000 ) $ 51,225 1,117

6 unchanged sentences

Interest rate swaps - payer $ 79,075 101,950 ( 137,800 ) $ 43,225 ( 2,766 )

Interest rate swaps - receiver $ — ( 175 ) 175 $ — —

Payer swaptions $ 8,850 7,000 ( 5,450 ) $ 10,400 ( 156 )

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Amounts exclude other miscellaneous gains and losses recognized in gain (loss) on derivative instruments and other securities, net in our consolidated statements of comprehensive income.

Amounts for fiscal year 2020 exclude $146 million of losses on debt extinguishment (see Note 4).

Pledged Assets

26 unchanged sentences

Treasury securities - fair value

1,084 — 208 1,292

Accrued interest on pledged securities

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Non-Agency - fair value

Treasury securities - fair value

1,084 — 208 1,292

Accrued interest on pledged securities

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Includes $ 49 million and $ 81 million of retained interests in our consolidated VIEs pledged as collateral under repurchase agreements as of December 31, 2022 and 2021, respectively.

Excludes $ 0.6 billion of repledged U.S.

Treasury securities received as collateral from counterparties as of December 31, 2021.

Excludes zero and $ 0.6 billion of repledged U.S.

Treasury securities received as collateral from counterparties as of December 31, 2022 and 2021, respectively.

Assets Pledged from Counterparties

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TBA and forward settling non-Agency securities, at fair value 1

266 — 266 ( 99 ) (167) —

Receivable under reverse repurchase agreements 6,622 — 6,622 ( 4,007 ) ( 2,610 ) 5

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TBA securities, at fair value 1

27 — 27 ( 27 ) — —

Receivable under reverse repurchase agreements 10,475 — 10,475 ( 6,087 ) ( 4,381 ) 7

5 unchanged sentences

December 31, 2022

TBA and forward settling non-Agency securities, at fair value $ 71 $ — $ 71 $ ( 27 ) $ ( 44 ) $ —

TBA securities, at fair value 1

$ 99 $ — $ 99 $ ( 99 ) $ — $ —

Repurchase agreements 36,262 — 36,262 ( 4,007 ) ( 32,255 ) —

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TBA and forward settling securities — 266 — — 27 —

Treasury futures

Total $ 409 $ 41,465 $ — $ 471 $ 54,738 $ —

2 unchanged sentences

Treasury securities borrowed under reverse repurchase agreements 6,534 — — 9,697 — —

Interest rate swaps 1

Credit default swaps 1

TBA and forward settling securities — 99 — — 71 —

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As of December 31, 2022 and 2021, the net fair value of our interest rate swaps excluding the recognition of variation margin settlements as a direct reduction of carrying value was a net asset (liability) of $ 4.5 billion and $ 1.6 billion, respectively, based on "Level 2" inputs.

See Note 2 for additional details.

Excluded from the table above are financial instruments presented in our consolidated financial statements at cost.

The fair value of our repurchase agreements approximated cost as of December 31, 2021 and 2020, as the rates on our outstanding repurchase agreements largely corresponded to prevailing rates observed in the repo market.

As of December 31, 2022, the net fair value of our credit default swaps excluding the recognition of variation margin settlements was $( 2 ) million based on "Level 2" inputs.

We did not have credit default swaps outstanding as of December 31, 2021.

See Notes 2 and 5 for additional details.

Excluded from the table above are financial instruments reported at cost and other mortgage credit investments reported under the equity method of accounting in our consolidated financial statements.

As of December 31, 2022 and 2021, the fair value of our repurchase agreements approximated cost, as the rates on our outstanding repurchase agreements largely corresponded to prevailing rates observed in the repo market.

The fair value of cash and cash equivalents, restricted cash, receivables and other payables were determined to approximate cost as of such dates due to their short duration.

We estimate the fair value of these instruments carried at cost using "Level 1" or "Level 2" inputs.

As of December 31, 2022, the carrying value of other mortgage credit investments reported under the equity method of accounting was $ 25 million.

Net Income (Loss) Per Common Share

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Net income (loss) per common share - diluted $ ( 2.41 ) $ 1.22 $ ( 0.66 )

For fiscal year 2020 1.1 million of potentially dilutive unvested time and performance based RSUs outstanding were excluded from the computation of diluted net income (loss) per common share because to do so would have been anti-dilutive for the period.

For fiscal years 2022 and 2020, 1.1 million and 1.1 million, respectively, of potentially dilutive unvested time and performance based RSUs outstanding were excluded from the computation of diluted net income (loss) per common share because to do so would have been anti-dilutive for the period.

Stockholders' Equity

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As of December 31, 2022 and 2021, 13,800 , 10,350 , 16,100 and 23,000 shares of preferred stock were designated as 7.00 % Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, 6.875 % Series D Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, 6.50 % Series E Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock and 6.125 % Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock, respectively, (referred to as "Series C, D, E and F Preferred Stock", respectively).

As of December 31, 2022, an additional 6,900 shares were designated as 7.75 % Series G Fixed-Rate Reset Cumulative Redeemable Preferred Stock (referred to as "Series G Preferred Stock").

As of December 31, 2022 and 2021, 13,000 , 9,400 , 16,100 and 23,000 shares of Series C, D, E and F Preferred Stock, respectively, were issued and outstanding.

As of December 31, 2022, an additional 6,000 shares of Series G Preferred Stock were issued and outstanding.

Each share of preferred stock is represented by 1,000 depositary shares.

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The following table includes a summary of preferred stock depositary shares issued and outstanding as of December 31, 2022 (dollars and shares in millions):

Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock 1

Date Depositary

Cumulative Redeemable Preferred Stock 1

Issue Date Depositary

Outstanding Carrying

Value Aggregate

Liquidation Preference Fixed

Rate Optional

Fixed-to-Floating

Date Floating

Series C August 22, 2017 13.0 315 325 7.000 % October 15, 2022 October 15, 2022 3M LIBOR + 5.111%

Series D March 6, 2019 9.4 227 235 6.875 % April 15, 2024 April 15, 2024 3M LIBOR + 4.332%

Series E October 3, 2019 16.1 390 403 6.500 % October 15, 2024 October 15, 2024 3M LIBOR + 4.993%

Series F February 11, 2020 23.0 557 575 6.125 % April 15, 2025 April 15, 2025 3M LIBOR + 4.697%

Liquidation Preference Per Annum Dividend

First Optional

Redemption Date / Conversion Date 3

Fixed-to-Floating Rate:

Series C August 22, 2017 13.0 $ 315 $ 325 9.190 % October 15, 2022 3M LIBOR + 5.111 %

Series D March 6, 2019 9.4 227 235 6.875 % April 15, 2024 3M LIBOR + 4.332 %

Series E October 3, 2019 16.1 390 403 6.500 % October 15, 2024 3M LIBOR + 4.993 %

Series F February 11, 2020 23.0 557 575 6.125 % April 15, 2025 3M LIBOR + 4.697 %

Fixed-Rate Reset:

Series G September 14, 2022 6.0 145 150 7.750 % October 15, 2027 5 YR US Treasury Rate + 4.39 %

Total 67.5 $ 1,634 $ 1,688

________________________________

Fixed-to-floating rate redeemable preferred stock accrue dividends at an annual fixed rate of the $25.00 liquidation preference per depositary share from the issuance date up to, but not including, the fixed-to-floating rate conversion date;

thereafter, dividends will accrue on a floating rate basis equal to 3-month LIBOR plus a fixed spread.

Preferred stock accrue dividends at an initial annual fixed rate of the $25.00 liquidation preference per depositary share from the issuance date up to, but not including, the fixed-to-floating rate or fixed-rate-reset conversion date;

thereafter, dividends will accrue on a floating rate or fixed-rate-reset basis equal to the conversion rate plus a fixed spread.

The series C per annum dividend rate represents the dividend rate in effect as of December 31, 2022.

This rate resets quarterly in accordance with the certificate of designations for such series.

Shares may be redeemed prior to our optional redemption date under certain circumstances intended to preserve our qualification as a REIT for U.S federal income tax purposes.

At-the-Market Offering Program

We are authorized by our Board of Directors to enter into agreements with sales agents to publicly offer and sell shares of

our common stock in privately negotiated and/or at-the-market transactions from time-to-time up to a maximum aggregate offering price of our common stock.

The following table includes a summary of shares of our common stock sold under such sales agreements during fiscal years 2020 and 2019 (in millions, except for per share data).

We are authorized by our Board of Directors to enter into agreements with sales agents to publicly offer and sell shares of our common stock in privately negotiated and/or at-the-market transactions from time-to-time up to a maximum aggregate offering price of our common stock.

The following table includes a summary of shares of our common stock sold under the sales agreements during fiscal years 2022 and 2020 (in millions, except for per share data).

During fiscal year 2021 we did not issue shares under this program.

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The following table includes a summary of shares of our common stock repurchased during fiscal years 2022, 2021 and 2020 (in millions, except for per share data).

As of December 31, 2021, shares of our common stock with an aggregate repurchase price of $ 958 million remained authorized for repurchase through December 31, 2022.

As of December 31, 2022, shares of our common stock with an aggregate repurchase price of $ 1 billion remained authorized for repurchase through December 31, 2024.

Common Stock Repurchases Average Price Paid Per Share 1

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Fiscal Year 2022 $ 10.78 4.7 $ 51

$ 15.96 17.7 $ 281

Fiscal Year 2021 2

$ 15.96 17.7 $ 281

Fiscal Year 2020 $ 13.33 28.2 $ 378

5 unchanged sentences

Dividends Declared Dividends Declared Per Share 1

Series B Preferred Stock

Fiscal year 2019

$ 12 $ 1.673785

Series C Preferred Stock

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Fiscal year 2020 $ 23 $ 1.750000

$ 23 $ 1.750000

Series D Preferred Stock

2 unchanged sentences

Fiscal year 2020 $ 16 $ 1.718750

$ 14 $ 1.475263

Series E Preferred Stock

2 unchanged sentences

Fiscal year 2020 $ 26 $ 1.625000

$ 7 $ 0.460420

Series F Preferred Stock

2 unchanged sentences

Fiscal year 2020 $ 33 $ 1.420658

Series G Preferred Stock

Fiscal year 2022 $ 4 $ 0.651220

Fiscal year 2022 $ 775 $ 1.440000

$ 1,081 $ 2.000000

Fiscal year 2021 $ 757 $ 1.440000

Fiscal year 2020 $ 858 $ 1.560000

________________________________

5 unchanged sentences

Ordinary Dividend Per Share Qualified Dividends Capital Gain Dividend Per Share Non-Dividend Distributions Section 199A Dividend

Series B Preferred Stock

Fiscal year 2019

$ 2.158160 $ 2.158160 $ — $ — $ — $ 2.158160

Series C Preferred Stock

2 unchanged sentences

Fiscal year 2020 $ 1.750000 $ 0.570268 $ — $ 1.179732 $ — $ 0.570268

$ 1.750000 $ 1.750000 $ — $ — $ — $ 1.750000

Series D Preferred Stock

2 unchanged sentences

Fiscal year 2020 $ 1.718750 $ 0.560086 $ — $ 1.158664 $ — $ 0.560086

$ 1.045575 $ 1.045575 $ — $ — $ — $ 1.045575

Series E Preferred Stock

1 unchanged sentence

Fiscal year 2021 $ 1.625000 $ 0.317310 $ — $ 0.088940 $ 1.218750 $ 0.317310

Fiscal year 2020 $ 1.679170 $ 0.547188 $ — $ 1.131982 $ — $ 0.547188

Series F Preferred Stock

4 unchanged sentences

Fiscal year 2021 $ 1.320000 $ 0.095930 $ — $ 0.026889 $ 1.197181 $ 0.095930

$ 2.020000 $ 1.159504 $ — $ — $ 0.860496 $ 1.159504

Fiscal year 2020 $ 1.720000 $ 0.560492 $ — $ 1.159508 $ — $ 0.560492

________________________________

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As of December 31, 2022, 1.4 million of deferred awards, including accrued dividend equivalents, were outstanding.

During fiscal years 2021, 2020 and 2019, we recognized compensation expense of $ 21.4 million, $ 20.6 million and $ 13.7 million, respectively, for stock-based awards to employees and we recognized other operating expense of $ 0.8 million, $ 0.7 million and $ 0.5 million, respectively, for stock-based awards to independent directors.

As of December 31, 2021, we had unrecognized expense related to stock-based awards of approximately $ 13 million, which is expected to be recognized over a weighted average period of 1.8 years.

During fiscal years 2022, 2021 and 2020, we recognized total compensation expense of $ 11.6 million, $ 21.4 million and $ 20.6 million, respectively, for stock-based awards to employees, and we recognized other operating expense of $ 1.0 million, $ 0.8 million and $ 0.7 million, respectively, for stock-based awards to independent directors.

Compensation expense for PSU awards is based on our estimate of the probability that the performance criteria for PSU awards will be achieved and, if applicable, includes a cumulative effect adjustment for changes in our estimate from the prior year period.

As of December 31, 2022, we had $ 12 million of unrecognized expense related to stock-based awards that we expect to recognize over a weighted average period of 1.8 years.

The following tables summarizes awards under our 2016 Equity Plan for fiscal years 2022, 2021 and 2020:

18 unchanged sentences

( 4,312 ) $ 13.43

( 27,758 ) $ 15.98 $ —

Unvested balance as of December 31, 2022 1,333,691 $ 12.36 $ —

8 unchanged sentences

160,442 $ — $ —

Performance adjustment - Granted 95,427 $ 19.39 $ —

Performance adjustment - base grant 3

62,796 $ 17.98 $ —

Performance adjustment - accrued PSU dividend equivalents 3

26,183 $ — $ —

( 482,806 ) $ 13.84 $ 11.81

Unvested balance as of December 31, 2020 1,626,785 $ 15.15 $ —

2 unchanged sentences

157,539 $ — $ —

Performance adjustment - Granted 62,796 $ 17.98 $ —

Performance adjustment - base grant 3

206,547 $ 17.56 $ —

Performance adjustment - accrued PSU dividend equivalents 3

70,953 $ — $ —

( 466,224 ) $ 12.86 $ 16.52

( 13,826 ) $ 15.54 $ —

Unvested balance as of December 31, 2021 2,212,660 $ 14.52 $ —

2 unchanged sentences

279,484 $ — $ —

Performance adjustment - Granted 206,547 $ 17.56 $ —

Performance adjustment - Accrued PSU dividend equivalents 70,953 $ — $ —

( 938,540 ) $ 13.02 $ 13.85

( 13,826 ) $ 15.54 $ —

Unvested balance as of December 31, 2022 2

2,380,575 $ 12.87 $ —

_______________________

Accrued PSU award dividend equivalents have a weighted average grant date fair value of $0.

We did not incur a tax liability for fiscal years ended 2020 and 2019 and we do not expect to incur an income tax liability for fiscal year 2021.

Based on our analysis of any potential uncertain income tax positions, we concluded that we do not have any uncertain tax positions that meet the recognition or measurement criteria of ASC 740 as of December 31, 2021 or prior periods.

This amount assumes target levels of performance are achieved for outstanding unvested PSU awards.

The actual number of PSUs that vest will vary within a range of 0% to 200% of the target based on the actual performance achieved relative to the targets.

Performance adjustments reflect adjustments for actual performance achieved relative to target.

We did not incur an income tax liability for the years ended December 31, 2021 and 2020 and we do not expect to incur an income tax liability for the year ended December 31, 2022.

Our tax returns for tax years 2019 and forward are open to examination by the IRS.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data