Management Agreement and Related Party Transactions (Notes)

12 Months Ended

Dec. 31, 2018

Narrative [Abstract]

Related Party Transactions Disclosure [Text Block]

Management Agreement and Related Party Transactions

Prior to our acquisition of AMM on July 1, 2016, and our associated management internalization, we were externally managed. Under our management agreement we incurred a monthly management fee equal to one-twelfth of 1.25% of our month-end stockholders' equity, adjusted to exclude the effect of any unrealized gains or losses included in either retained earnings or accumulated OCI. For fiscal year 2016, prior to our internalization, our management fee expense totaled $52 million.

Through our acquisition of AMM we also became the external manager of MTGE. During fiscal years 2018, 2017 and 2016, we earned monthly management fee income totaling $12 million, $16 million and $8 million, respectively. During September 2018, MTGE completed a sale of the company to a third party. Coincident with the sale, we were paid a one-time termination fee under the management agreement of $42 million, which is reported in management fee income in our consolidated statements of comprehensive income for fiscal year 2018. Concurrent with the termination of the management agreement, we wrote-off our remaining unamortized intangible asset balance associated with the management agreement of $23 million, which is reported in other operating expense for fiscal year 2018.