Annaly Capital Management, Inc. Reports Results for the 4th Quarter 2012
Annaly Capital Management, Inc. Reports Results for the 4th Quarter 2012
Business Wire
NEW YORK -- February 6, 2013
Annaly Capital Management, Inc. (NYSE: NLY) today reported GAAP net income for
the quarter ended December 31, 2012 of $700.5 million or $0.70 per average
common share as compared to GAAP net income of $445.6 million or $0.46 per
average common share for the quarter ended December 31, 2011, and GAAP net
income of $224.8 million or $0.22 per average common share for the quarter
ended September 30, 2012.
GAAP net income was $1.7 billion or $1.74 per average common share and $344.5
million or $0.37 per average common share for the years ended December 31,
2012 and 2011, respectively.
Without the effect of the unrealized gains or losses on interest rate swaps
and Agency interest-only mortgage-backed securities and net loss on
extinguishment of 4% Convertible Senior Notes due 2015 (the “4% Convertible
Notes”), net income for the quarter ended December 31, 2012, was $465.1
million or $0.46 per average common share as compared to $525.3 million or
$0.54 per average common share for the quarter ended December 31, 2011, and
$449.8 million or $0.45 per average common share for the quarter ended
September 30, 2012.
Without the effect of the unrealized gains or losses on interest rate swaps
and Agency interest-only mortgage-backed securities and net loss on
extinguishment of 4% Convertible Notes, net income for the years ended
December 31, 2012 and 2011, was $2.0 billion or $2.01 per average common share
and $2.3 billion or $2.57 per average common share, respectively.
Agency mortgage-backed securities, Agency debentures, and corporate debt are
considered Investment Securities. During the quarter ended December 31, 2012,
the Company disposed of $13.2 billion of Investment Securities, resulting in a
realized gain of $122.4 million. During the quarter ended December 31, 2011,
the Company disposed of $10.3 billion of Investment Securities, resulting in a
realized gain of $80.7 million. During the quarter ended September 30, 2012,
the Company disposed of $7.3 billion of Investment Securities, resulting in a
realized gain of $142.2 million.
During the year ended December 31, 2012, the Company disposed of $32.3 billion
of Investment Securities, resulting in a realized gain of $439.7 million.
During the year ended December 31, 2011, the Company disposed of $20.1 billion
of Investment Securities, resulting in a realized gain of $206.8 million.
Common dividends declared for the quarters ended December 31, 2012, December
31, 2011, and September 30, 2012 were $0.45, $0.57, and $0.50 per common
share, respectively. Common dividends declared for the years ended December
31, 2012 and 2011 were $2.05 and $2.44 per common share, respectively. The
Company distributes dividends based on its current estimate of taxable
earnings per common share, not GAAP earnings. Taxable and GAAP earnings will
typically differ due to items such as non-taxable unrealized and realized
gains and losses, differences in premium amortization and discount accretion,
and non-deductible general and administrative expenses.
The annualized dividend yield on the Company’s common stock for the quarter
ended December 31, 2012, based on the December 31, 2012, closing price of
$14.04, was 12.82%, as compared to 14.29% for the quarter ended December 31,
2011, and 11.88% for the quarter ended September 30, 2012. The dividend yield
on the Company’s common stock for the year ended December 31, 2012, based on
the December 31, 2012 closing price of $14.04 was 14.60%, as compared to
15.29% for the year ended December 31, 2011.
During the quarter and year ended December 31, 2012, the Company repurchased
approximately $211.8 million and $492.5 million of the outstanding 4%
Convertible Notes for $260.3 million and $617.5 million, respectively. The 4%
Convertible Notes are convertible into shares of common stock at a conversion
rate that increases as the Company pays dividends. As a result, these
repurchases will reduce future dilution to common shareholders.
During the quarter and year ended December 31, 2012, the Company repurchased
approximately 27.8 million shares of its outstanding common stock for $397.1
million.
On a GAAP basis, the Company produced an annualized return on average equity
for the quarters ended December 31, 2012, December 31, 2011, and September 30,
2012 of 16.97%, 11.23% and 5.39%, respectively. Without the effect of the
unrealized gains or losses on interest rate swaps and Agency interest-only
mortgage-backed securities and net loss on extinguishment of 4% Convertible
Notes, the Company provided an annualized return on average equity for the
quarters ended December 31, 2012, December 31, 2011, and September 30, 2012,
of 11.27%, 13.24% and 10.78%, respectively. On a GAAP basis, the Company
provided a return on average equity for the years ended December 31, 2012 and
2011 of 10.71% and 2.51%, respectively. Without the effect of the unrealized
gains or losses on interest rate swaps and Agency interest-only
mortgage-backed securities and net loss on extinguishment of 4% Convertible
Notes, the Company provided a return on average equity for the years ended
December 31, 2012 and 2011 of 12.28% and 16.54%, respectively.
Wellington J. Denahan, Chairman and Chief Executive Officer of Annaly,
commented on the Company’s results. “In our market, indeed every market,
decisions made by policymakers continue to have exceptional influence on
pricing and behavior. Nevertheless, as our results demonstrate, we continue to
navigate through these uncertain waters to identify attractive relative value
opportunities on both sides of our balance sheet. These market conditions are
likely to persist, however, as structural imbalances here and abroad continue
to affect economic activity. In this environment, we believe that remaining
conservative in our management approach is in the best long-term interests of
shareholders.”
For the quarter ended December 31, 2012, the annualized yield on average
interest-earning assets was 2.45% and the annualized cost of funds on average
interest-bearing liabilities, including the net interest payments on interest
rate swaps, was 1.50%, which resulted in an average interest rate spread of
0.95%. This was a 76 basis point decrease from the 1.71% annualized interest
rate spread for the quarter ended December 31, 2011, and a 7 basis point
decrease from the 1.02% average interest rate spread for the quarter ended
September 30, 2012. At December 31, 2012, the weighted average yield on
investment securities was 2.75% and the weighted average cost of funds on
borrowings, including the net interest payments on interest rate swaps, was
1.55%, which resulted in an interest rate spread of 1.20%. Leverage at
December 31, 2012, December 31, 2011, and September 30, 2012 was 6.5:1, 5.4:1
and 6.0:1, respectively.
Fixed-rate Agency mortgage-backed securities and debentures comprised 93% of
the Company’s portfolio at December 31, 2012. Adjustable-rate Agency
mortgage-backed securities and debentures comprised 7% of the Company’s
portfolio. At December 31, 2012, the Company had entered into interest rate
swaps with a notional amount of $46.9 billion, or 40% of the Company’s Agency
mortgage-backed securities and debentures. Changes in the unrealized gains or
losses on the interest rate swaps are reflected in the Company’s consolidated
statements of comprehensive income. The purpose of the interest rate swaps is
to mitigate the risk of rising interest rates that affect the Company’s cost
of funds. Since the Company receives a floating rate on the notional amount of
the swaps, the intended effect of the swaps is to lock in a spread relative to
the cost of financing. As of December 31, 2012, the swap portfolio had a
weighted average pay rate of 2.21%, a weighted average receive rate of 0.24%
and weighted average years to maturity of 4.77 years. As of December 31, 2012,
substantially all of the Company’s Investment Securities were Fannie Mae,
Freddie Mac and Ginnie Mae mortgage-backed securities and debentures.
The following table summarizes portfolio information for the Company:
December 31, December 31, September 30,
2012 2011 2012
Leverage at period-end 6.5:1 5.4:1 6.0:1
Fixed-rate Agency mortgage-backed
securities and
93% 90% 93%
debentures as a percentage of
portfolio
Adjustable-rate Agency
mortgage-backed securities and
7% 9% 7%
debentures as a percentage of
portfolio
Floating-rate Agency
mortgage-backed securities and
- 1% -
debentures as a percentage of
portfolio
Notional amount of interest rate
swaps as a percentage of 40% 41% 38%
Investment Securities
Annualized yield on average
interest-earning assets during 2.45% 3.31% 2.54%
the quarter
Annualized cost of funds on
average interest-bearing 1.50% 1.60% 1.52%
liabilities during the quarter
Annualized interest rate spread 0.95% 1.71% 1.02%
during the quarter
Weighted average yield on
investment securities at 2.75% 3.22% 2.79%
period-end
Weighted average cost of funds on
interest-bearing liabilities at 1.55% 1.60% 1.55%
period-end
Interest rate spread at period-end 1.20% 1.62% 1.24%
Weighted average days to maturity
on interest-bearing liabilities at 197 110 220
period-end
Weighted average receive rate on 0.24% 0.33% 0.27%
interest rate swaps at period-end
Weighted average pay rate on 2.21% 2.55% 2.23%
interest rate swaps at period-end
The following table summarizes certain characteristics of the Company’s
interest rate swaps at December 31, 2012:
Weighted
Weighted Average Weighted Average
Average Receive Years to
Maturity Current Pay Rate Rate Maturity
Notional
(dollars in thousands)
0 - 3 years $18,165,800 2.23% 0.24% 1.80
3 - 6 years 19,609,500 1.84% 0.23% 3.74
6 - 10 years 5,300,000 2.66% 0.25% 7.76
Greater than 3,836,500 3.45% 0.24% 19.90
10 years
Total /
Weighted $46,911,800 2.21% 0.24% 4.77
Average
The following table presents the maturities of repurchase agreements at
December 31, 2012:
Weighted Average
Maturity Principal Balance Rate
(dollars in thousands)
Within 30 days $33,191,448 0.50%
30 to 59 days 28,383,851 0.45%
60 to 89 days 8,602,680 0.42%
90 to 119 days 4,804,671 0.57%
Over 120 days^(1) 27,803,047 1.03%
Total $102,785,697 0.63%
(1) Of the total repurchase agreements, approximately 11% have a remaining
maturity over 1 year.
The Constant Prepayment Rate for the quarters ended December 31, 2012,
December 31, 2011, and September 30, 2012 was 19%, 22% and 20%, respectively.
The weighted average purchase price of the Company’s Agency mortgage-backed
securities and debentures at December 31, 2012, December 31, 2011 and
September 30, 2012 was 103.8%, 102.7% and 103.7%, respectively. The net
amortization of premiums and accretion of discounts on Agency mortgage-backed
securities and debentures for the quarters ended December 31, 2012, December
31, 2011 and September 30, 2012 was $433.3 million, $292.1 million, and $455.8
million, respectively. The total net premium and discount balance at December
31, 2012, December 31, 2011, and September 30, 2012, was $5.8 billion, $3.3
billion, and $5.4 billion, respectively.
General and administrative expenses as a percentage of average assets was
0.12%, 0.23% and 0.19% for the quarters ended December 31, 2012, December 31,
2011, and September 30, 2012, respectively. General and administrative
expenses declined in the fourth quarter of 2012 due to Management’s
recommendation and our compensation committee’s determination to award total
compensation levels for 2012 below the target amounts for certain of our
executive officers. In addition, for the quarter ended December 31, 2012, the
Company had an income tax benefit relating to the change in reporting officers
under IRC section 162(m). At December 31, 2012, December 31, 2011, and
September 30, 2012, the Company had a common stock book value per share of
$15.85, $16.06 and $16.60, respectively.
At December 31, 2012, December 31, 2011, and September 30, 2012, the Company’s
wholly-owned registered investment advisors had under management approximately
$11.9 billion, $12.2 billion and $12.8 billion in net assets, respectively,
and $18.8 billion, $19.9 billion and $20.0 billion in gross assets,
respectively. For the quarters ended December 31, 2012, December 31, 2011, and
September 30, 2012, investment advisory and other fee income was $18.9
million, $20.5 million and $21.0 million, respectively.
Annaly’s principal business objective is to generate net income for
distribution to its shareholders from its Investment Securities and from
dividends it receives from its subsidiaries.
The Company prepares a supplement to provide additional quarterly information
for the benefit of its shareholders. The supplement can be found at the
Company’s website in the Investor Relations section under “Quarterly
Supplemental Information”.
The Company will hold the 2012 fourth quarter earnings conference call on
February 7, 2013 at 9:00 a.m. EST. The number to call is 888-317-6003 for
domestic calls and 412-317-6061 for international calls. The conference
passcode is 4628173. The replay number is 877-344-7529 for domestic calls and
412-317-0088 for international calls and the conference passcode is 10024273.
The replay is available for 48 hours after the earnings call. There will be a
web cast of the call on www.annaly.com. If you would like to be added to the
e-mail distribution list, please visit www.annaly.com, click on Investor
Relations, then select Email Alerts and complete the email notification form.
This news release and our public documents to which we refer contain or
incorporate by reference certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Forward-looking statements
which are based on various assumptions (some of which are beyond our control)
may be identified by reference to a future period or periods or by the use of
forward-looking terminology, such as “may,” “will,” “believe,” “expect,”
“anticipate,” “continue,” or similar terms or variations on those terms or the
negative of those terms. Actual results could differ materially from those set
forth in forward-looking statements due to a variety of factors, including,
but not limited to, changes in interest rates, changes in the yield curve,
changes in prepayment rates, the availability of mortgage-backed securities
and other securities for purchase, the availability of financing and, if
available, the terms of any financing, changes in the market value of our
assets, changes in business conditions and the general economy, our ability to
consummate any contemplated investment opportunities, our ability to integrate
the commercial mortgage business, changes in government regulations affecting
our business, our ability to maintain our qualification as a REIT for federal
income tax purposes, our ability to maintain our exemption from registration
under the Investment Company Act of 1940, as amended, and risks associated
with the broker-dealer business of our subsidiary, and risks associated with
the investment advisory business of our subsidiaries, including the removal by
clients of assets they manage, their regulatory requirements and competition
in the investment advisory business. For a discussion of the risks and
uncertainties which could cause actual results to differ from those contained
in the forward-looking statements, see “Risk Factors” in our most recent
Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q.
We do not undertake, and specifically disclaim any obligation, to publicly
release the result of any revisions which may be made to any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except share and per share data)
December 31, September 30, June 30, March 31,
2012 2012 2012 2012 December 31,
(Unaudited) (Unaudited) (Unaudited) (Unaudited) 2011^(1)
ASSETS
Cash and cash $ 615,789 $ 2,264,854 $ 924,374 $ 932,761 $ 994,198
equivalents
Reverse
repurchase 1,811,095 1,612,384 2,025,471 2,540,601 860,866
agreements
Investments, at
fair value:
U.S. Treasury 752,076 2,242,039 1,998,363 2,622,714 928,547
Securities
Securities 2,160,942 1,602,692 1,465,327 1,122,453 928,732
borrowed
Agency
mortgage-backed 123,963,207 129,597,714 118,500,649 110,291,712 104,251,055
securities
Agency 3,009,568 2,935,538 1,250,506 1,499,127 889,580
debentures
Investments in 234,120 224,899 203,057 225,818 211,970
affiliates
Equity - - - 4,470 3,891
securities
Corporate debt,
held for 63,944 64,928 60,638 50,806 52,073
investment
Receivable for
investments 290,722 470,266 1,320,996 454,278 -
sold
Accrued
interest and 419,259 434,026 420,390 418,489 409,023
dividends
receivable
Receivable from - 3,272 3,272 3,272 3,272
Prime Broker
Receivable for
advisory and 17,730 20,271 20,743 19,608 19,550
service fees
Intangible for
customer 6,989 9,146 9,714 10,281 10,807
relationships
Goodwill 55,417 55,417 55,417 55,417 42,030
Other
derivative 9,830 559 3,717 321 113
contracts, at
fair value
Other assets 41,607 38,595 41,937 29,412 24,295
Total assets $ 133,452,295 $ 141,576,600 $ 128,304,571 $ 120,281,540 $ 109,630,002
LIABILITIES AND
STOCKHOLDERS’
EQUITY
Liabilities:
U.S. Treasury
Securities
sold, not yet $ 495,437 $ 1,418,750 $ 1,884,922 $ 2,577,905 $ 826,912
purchased, at
fair value
Repurchase 102,785,697 101,033,146 96,760,797 91,720,865 84,097,885
agreements
Securities
loaned, at fair 1,808,315 1,248,968 1,113,107 876,849 804,901
value
Payable for
investments 8,256,957 16,107,038 7,387,410 5,708,412 4,315,796
purchased
Payable for
share buyback 141,149 - - - -
program
Convertible 825,541 999,749 1,245,915 524,420 539,913
Senior Notes
Accrued
interest 186,896 181,502 174,819 129,108 138,965
payable
Dividends 432,154 487,237 535,898 534,401 552,806
payable
Interest rate
swaps, at fair 2,584,907 2,926,461 2,822,264 2,211,048 2,552,687
value
Accounts
payable and 10,798 83,086 94,853 57,927 7,223
other
liabilities
Total 117,527,851 124,485,937 112,019,985 104,340,935 93,837,088
liabilities
6.00% Series B
Cumulative
Convertible
Preferred
Stock:
4,600,000
shares
authorized, 0, - - - - 32,272
0, 0, 0, and
1,331,849,
shares issued
and
outstanding,
respectively
Stockholders’
Equity:
7.875% Series A
Cumulative
Redeemable
Preferred
Stock: 177,088 177,088 177,088 177,088 177,088
7,412,500
authorized,
issued and
outstanding
7.625% Series C
Cumulative
Redeemable
Preferred
Stock:
12,650,000,
12,650,000,
12,650,000, 0,
and 0 290,514 290,514 290,514 - -
authorized,
respectively,
12,000,000,
12,000,000,
12,000,000, 0,
and 0 issued
and
outstanding,
respectively
7.50% Series D
Cumulative
Redeemable
Preferred
Stock:
18,400,000, 445,457 445,457 - - -
18,400,000, 0,
0, and 0
authorized,
issued and
outstanding,
respectively
Common stock,
par value $0.01
per share,
1,956,937,500,
1,956,937,500,
1,975,337,500,
1,956,937,500,
and
1,987,987,500
authorized, 9,472 9,748 9,747 9,743 9,702
respectively,
947,213,204,
974,799,779,
974,684,401,
974,325,338,
and 970,161,647
issued and
outstanding,
respectively
Additional 14,740,774 15,144,200 15,168,020 15,127,882 15,068,870
paid-in capital
Accumulated
other 3,053,242 4,069,607 3,413,320 2,766,430 3,008,988
comprehensive
income
Accumulated (2,792,103 ) (3,045,951 ) (2,774,103 ) (2,140,538 ) (2,504,006 )
deficit
Total
stockholders’ 15,924,444 17,090,663 16,284,586 15,940,605 15,760,642
equity
Total
liabilities,
Series B
Cumulative
Convertible $ 133,452,295 $ 141,576,600 $ 128,304,571 $ 120,281,540 $ 109,630,002
Preferred Stock
and
stockholders’
equity
(1) Derived from the audited consolidated financial statements at December
31, 2011.
ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(dollars in thousands, except share and per share data)
For the quarters ended
December 31, September 30, June 30, March 31, December 31,
2012 2012 2012 2012 2011
Interest income:
Investments $ 750,736 $ 754,096 $ 876,229 $ 850,959 $ 844,874
U.S. Treasury 3,819 4,588 7,397 1,418 1,082
Securities
Securities loaned 2,106 2,581 2,698 2,518 1,744
Total interest 756,661 761,265 886,324 854,895 847,700
income
Interest expense:
Repurchase 165,600 158,150 139,579 113,914 114,989
agreements
Convertible Senior 15,503 18,026 18,965 14,727 12,552
Notes
U.S. Treasury
Securities sold, 2,930 3,739 5,801 2,644 1,214
not yet purchased
Securities 1,458 1,978 2,098 2,060 1,378
borrowed
Total interest 185,491 181,893 166,443 133,345 130,133
expense
Net interest 571,170 579,372 719,881 721,550 717,567
income
Other income
(loss):
Investment
advisory and other 18,934 21,034 21,929 20,766 20,460
fee income
Net gains (losses)
on disposal of 114,831 142,172 94,837 80,299 80,657
investments
Net loss on
extinguishment of (75,012 ) (87,328 ) - - -
4% Convertible
Senior Notes
Dividend income 7,097 7,097 6,621 7,521 8,283
from affiliates
Net gains (losses) 15,181 1,368 1,105 5,256 6,356
on trading assets
Net unrealized
gains (losses) on
interest-only (31,148 ) (33,563 ) (26,103 ) 30,877 (67,612 )
Agency
mortgage-backed
securities
Income from - - - - 19
underwriting
Subtotal 49,883 50,780 98,389 144,719 48,163
Realized gains
(losses) on (228,155 ) (224,272 ) (222,002 ) (219,340 ) (227,638 )
interest rate
swaps^(1)
Realized gains
(losses) on
termination of - - - (2,385 ) -
interest rate
swaps
Unrealized gains
(losses) on 341,554 (104,197 ) (611,215 ) 341,639 (12,139 )
interest rate
swaps
Subtotal 113,399 (328,469 ) (833,217 ) 119,914 (239,777 )
Total other income 163,282 (277,689 ) (734,828 ) 264,633 (191,614 )
(loss)
Expenses:
Compensation 25,842 52,310 53,536 59,014 54,340
expense
Other general and
administrative 14,242 10,694 11,020 8,901 8,754
expenses
Total general and
administrative 40,084 63,004 64,556 67,915 63,094
expenses
Income before 694,368 238,679 (79,503 ) 918,268 462,859
income taxes
Income taxes 6,127 (13,921 ) (11,656 ) (16,462 ) (17,297 )
Net income (loss) 700,495 224,758 (91,159 ) 901,806 445,562
Dividends on 19,717 9,367 6,508 3,938 4,148
preferred stock
Net income (loss)
available
(related) to $ 680,778 $ 215,391 ($97,667 ) $ 897,868 $ 441,414
common
shareholders
Net income (loss)
per share
available
(related) to
common
shareholders:
Basic $ 0.70 $ 0.22 ($0.10 ) $ 0.92 $ 0.46
Diluted $ 0.68 $ 0.22 ($0.10 ) $ 0.89 $ 0.44
Weighted average
number of common
shares
outstanding:
Basic 970,602,863 974,729,078 974,555,392 971,727,701 970,056,491
Diluted 1,017,925,849 997,007,829 974,555,392 1,010,588,609 1,011,495,682
Net income (loss) $ 700,495 $ 224,758 ($91,159 ) $ 901,806 $ 445,562
Other
comprehensive
income (loss):
Unrealized gains
(losses) on (894,972 ) 798,269 741,727 (162,259 ) 16,157
available-for-sale
securities
Reclassification
adjustment for net
(gains) losses (121,393 ) (141,982 ) (94,837 ) (80,299 ) (80,657 )
included in net
income (loss)
Other
comprehensive (1,016,365 ) 656,287 646,890 (242,558 ) (64,500 )
income (loss)
Comprehensive ($315,870 ) $ 881,045 $ 555,731 $ 659,248 $ 381,062
income (loss)
Interest expense related to the Company’s interest rate swaps is
(1) recorded in Realized gains (losses) on interest rate swaps on the
Consolidated Statements of Comprehensive Income.
ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(dollars in thousands, except share and per share data)
For the years ended
December 31, 2012 December 31, 2011 (1)
Interest income:
Investments $ 3,232,020 $ 3,558,015
U.S. Treasury Securities 17,222 14,706
Securities loaned 9,903 6,897
Total interest income 3,259,145 3,579,618
Interest expense:
Repurchase agreements 577,243 426,769
Convertible Senior Notes 67,221 35,017
U.S. Treasury Securities sold, not 15,114 13,081
yet purchased
Securities borrowed 7,594 5,459
Total interest expense 667,172 480,326
Net interest income 2,591,973 3,099,292
Other income (loss):
Investment advisory and other fee 82,663 79,205
income
Net gains (losses) on disposal of 432,139 206,846
investments
Net loss on extinguishment of 4% (162,340 ) -
Convertible Senior Notes
Dividend income from affiliates 28,336 31,516
Net gains (losses) on trading assets 22,910 21,398
Net unrealized gains (losses) on
interest-only Agency mortgage-backed (59,937 ) (106,657 )
securities
Income from underwriting - 5,618
Subtotal 343,771 237,926
Realized gains (losses) on interest (893,769 ) (882,395 )
rate swaps^(2)
Realized gain (loss) on termination (2,385 ) -
of interest rate swaps
Unrealized gains (losses) on (32,219 ) (1,815,107 )
interest rate swaps
Subtotal (928,373 ) (2,697,502 )
Total other income (loss) (584,602 ) (2,459,576 )
Expenses:
Compensation expense 190,702 206,251
Other general and administrative 44,857 31,093
expenses
Total general and administrative 235,559 237,344
expenses
Income before income taxes and
income from equity 1,771,812 402,372
method investment in affiliate
Income taxes (35,912 ) (59,051 )
Income (loss) from equity method - 1,140
investment in affiliate
Net income (loss) 1,735,900 344,461
Dividends on preferred stock 39,530 16,854
Net income (loss) available $ 1,696,370 $ 327,607
(related) to common shareholders
Net income (loss) per share
available (related) to common
shareholders:
Basic $ 1.74 $ 0.37
Diluted $ 1.71 $ 0.37
Weighted average number of common
shares outstanding:
Basic 972,902,459 874,212,039
Diluted 1,005,755,057 874,518,938
Net income (loss) $ 1,735,900 $ 344,461
Other comprehensive income (loss):
Unrealized gains (losses) on $ 482,765 $ 2,036,894
available-for-sale securities
Unrealized losses on interest rate - 14,298
swaps
Reclassification adjustment for net
(gains) losses included in net (438,511 ) (206,846 )
income (loss)
Other comprehensive income (loss) 44,254 1,844,346
Comprehensive income (loss) $ 1,780,154 $ 2,188,807
(1) Derived from the audited consolidated financial statements at December
31, 2011.
Interest expense related to the Company’s interest rate swaps is
(2) recorded in Realized gains (losses) on interest rate swaps on the
Consolidated Statements of Comprehensive Income.
Contact:
Annaly Capital Management, Inc.
Investor Relations
1-888-8Annaly
www.annaly.com
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