UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
August 2, 2006
Annaly Capital Management, Inc.
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-13447 22-3479661
---------------- --------------- ----------
State or Other Jurisdiction (Commission (I.R.S. Employer
Of Incorporation) File Number) Identification No.)
1211 Avenue of the Americas
Suite 2902
New York, New York 10036
---------------------------- ---------
(Address of Principal Executive (Zip Code)
Offices)
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Registrant's telephone number, including area code: (212) 696-0100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
On August 2, 2006, the registrant issued a press release announcing its financial results for the quarter ended June 30, 2006. A copy of the press release is furnished as Exhibit 99.1 to this report.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On August 2, 2006, the registrant changed its name from Annaly Mortgage Management, Inc. to Annaly Capital Management, Inc. effective the close of business on August 2, 2006. The change was effected by amending the registrant's Articles of Incorporation pursuant to Section 2-605 of the Maryland General Corporation Law, which expressly permits the Board of Directors of a corporation to change the name of the corporation without action by the stockholders of the corporation.
The registrant's common stock will continue to trade under the ticker "NLY" on the New York Stock Exchange, and the registrant's 7.875% Series A Cumulative Redeemable Preferred Stock will continue to trade under the ticker "NLYPrA" on the New York Stock Exchange.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
3.1. Articles of Amendment of Annaly Mortgage Management, Inc.
99.1 Press Release, dated August 2, 2006 issued by Annaly Capital Management, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ANNALY CAPITAL MANAGEMENT, INC.
By: /s/ Kathryn Fagan
-------------------
Name: Kathryn Fagan
Title: Chief Financial Officer
Dated: August 2, 2006
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Exhibit 3.1
ANNALY MORTGAGE MANAGEMENT, INC.
ARTICLES OF AMENDMENT
Annaly Mortgage Management, Inc., a Maryland corporation (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby amended by deleting the existing ARTICLE II in its entirety and adding a new ARTICLE II to read as follows:
ARTICLE II
The name of the corporation (which is hereinafter called the "Corporation") is:
Annaly Capital Management, Inc."
SECOND: The amendment to the charter of the Corporation as set for above has been duly approved by the Board of Directors in the manner and by the vote required by law and is limited to a change expressly authorized by Section 2-605 of the Maryland General Corporation Law to be made without action by the stockholders of the Corporation.
THIRD: The undersigned Chief Executive Officer and President of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chief Executive Officer and President acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.
FOURTH: These Articles of Amendment shall become effective on the close of business of August 2, 2006.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and President and attested to by its Secretary on this 2nd day of August, 2006.
ATTEST: ANNALY MORTGAGE MANAGEMENT, INC.
By: R. Nicholas Singh (SEAL) By: Michael A.J. Farrell
----------------- -----------------------------
Name: R. Nicholas Singh Name: Michael A.J. Farrell
Title: Secretary Title: Chief Executive Officer and President
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Exhibit 99.1
Annaly Capital Management, Inc. Reports 2nd Quarter 2006 Core EPS of $0.16; Successful Deployment of New Capital Aids Performance
NEW YORK--(BUSINESS WIRE)--Aug. 2, 2006--Annaly Capital
Management, Inc. (NYSE:NLY) today reported Core Earnings for the
quarter ended June 30, 2006 of $31.3 million or $0.16 per average
share available to common shareholders, as compared to Core Earnings
of $47.0 million or $0.36 per average share available to common
shareholders for the quarter ended June 30, 2005 and Core Earnings of
$23.9 million or $0.16 per average share available to common
shareholders for the quarter ended March 31, 2006. "Core Earnings" is
defined as net (loss) income excluding impairment losses and gains or
losses on sales of securities. On a GAAP basis, the net income for the
quarter ended June 30, 2006 was $8.6 million or $0.02 basic net income
per average share available to common shareholders, as compared to net
income of $47.0 million or $0.36 basic net income per average share
available to common shareholders for the quarter ended June 30, 2005
and a net loss of $10.9 million or $0.12 basic net loss per average
share related to common shareholders for the quarter ended March 31,
2006.
In a separate release issued today, the Board of Directors of
Annaly announced that the Company's name has been changed to Annaly
Capital Management, Inc.
During the second quarter $852 million face amount of securities
were sold, resulting in a realized loss of $1.2 million, or $0.01 per
share. In addition, the Company had a loss on other-than-temporarily
impaired securities as of June 30, 2006 of $20.1 million, or $0.13 per
share. Of the $20.1 million, $15.7 million resulted from further
declines in the value of securities classified as
other-than-temporarily impaired at March 31, 2006 and $4.4 million
from losses on additional securities that the Company determined to be
other-than-temporarily impaired at June 30, 2006. The non-cash loss on
the securities deemed other-than-temporarily impaired that remain in
the Company's portfolio was reflected in the income statement based on
the fair value of the securities on June 30, 2006, and recognition of
such impairment charges will not reduce the taxable income of the
Company.
Common dividends declared for the quarter ended June 30, 2006 were
$0.13 per share, as compared to $0.36 per share for the quarter ended
June 30, 2005 and $0.11 per share for the quarter ended March 31,
2006. The annualized dividend yield on common stock for the quarter
ended June 30, 2006, based on the June 30, 2006 closing price of
$12.81, was 4.06%. On a Core Earnings basis, the Company provided an
annualized return on average equity of 7.63% for the quarter ended
June 30, 2006, as compared to 8.03% for the quarter ended June 30,
2005 and 6.52% for the quarter ended March 31, 2006. On a GAAP basis,
the Company provided an annualized return on average equity of 2.09%
for the quarter ended June 30, 2006, as compared to 11.36% for the
quarter ended June 30, 2005, and (2.98%) for the quarter ended March
31, 2006.
During the second quarter, the Company completed public offerings
of common stock and 6% Series B Cumulative Convertible Preferred
Stock. The net proceeds of the offerings, including the exercise of
the underwriters' over-allotment option, were approximately $549
million, before offering expenses.
Michael A.J. Farrell, Chairman, Chief Executive Officer and
President of Annaly, commented on the quarter's results. "The two
additional 25 basis point increases to the Fed Funds rate during the
second quarter brought the total to 425 basis points over the 17
meetings since June 30, 2004. Market conditions, therefore, continued
to be a challenge for strategies such as ours as the protracted
sell-off in the front end of the yield curve pressured the value of
our assets and raised our cost of funds relative to the yield on our
assets. Nevertheless, our management team has acted aggressively to
manage through this period, and our returns improved over the first
quarter. The key to raising our dividend this quarter while the Fed
tightens has been our ability to take advantage of the relatively
superior values that have become available in our asset class of short
duration Agency mortgage-backed securities. Through reinvesting
amortized principal, repositioning of portfolio securities and
deploying the new capital raised in April, we have improved our return
profile by raising our weighted average coupon, lowering our weighted
average dollar cost and introducing more floating rate exposure. Our
team remains focused on executing our barbell strategy, avoiding
credit risk and providing transparency as we manage for long-term
performance through challenging markets."
For the quarter ended June 30, 2006, the annualized yield on
average earning assets was 5.17% and the annualized cost of funds on
the average repurchase balance was 4.83%, which equates to an interest
rate spread of 0.34%. This is a 26 basis point decrease over the 0.60%
annualized interest rate spread for the quarter ended June 30, 2005
and a 2 basis point increase over 0.32% annualized interest rate
spread for the quarter ended March 31, 2006. For the quarter ended
June 30, 2005, the annualized yield on average earning assets was
3.63% and the annualized cost of funds on the average repurchase
balance was 3.03%. For the quarter ended March 31, 2006, the
annualized yield on average earning assets was 4.70% and the
annualized cost of funds on the average repurchase balance was 4.38%.
At June 30, 2006, the weighted average yield on assets was 5.42% and
the cost of funds was 5.01%, which equates to an interest rate spread
of 41 basis points. Leverage at June 30, 2006 was 11.5:1, in
comparison to 10.1:1 at June 30, 2005 and 10.2:1 at March 31, 2006.
Fixed rate securities comprised 67% of the Company's portfolio at
June 30, 2006. The balance of the portfolio was comprised of 24%
adjustable rate mortgages and 9% LIBOR floating rate collateralized
mortgage obligations. The Company has continued to avoid the
introduction of credit risk into its portfolio. As of June 30, 2006,
substantially all of the assets in the Company's portfolio were FNMA,
GNMA and FHLMC mortgage-backed securities, which carry an actual or
implied "AAA" rating. During the second quarter 2006, the Company
entered into additional swap transactions, pursuant to which, the
Company agrees to pay a fixed interest rate and to receive a variable
interest rate. The Company's swaps are designated as cash flow hedges
against the benchmark interest rate risk associated with the Company's
borrowings. The purpose of the swaps is to mitigate the risk of rising
interest rates that affect our cost of funds. Since the Company will
be receiving a floating rate on the notional amount of the swaps, the
effect of the swaps will be to enhance the earnings potential of a
portion of the fixed rate assets in the portfolio in a rising rate
environment.
"Our capital-raising efforts and our portfolio decisions have
helped improve our position," said Wellington Denahan-Norris, Annaly's
Vice Chairman, Chief Investment Officer and Chief Operating Officer.
"While the Fed appears to be close to the end of its tightening cycle,
uncertain and volatile market conditions are still with us. Thus our
portfolio remains defensive in nature as we have emphasized building
up the floating-rate portion. Giving effect to the swaps, at June 30,
2006 our portfolio was effectively comprised of 33% fixed-rate, 24%
adjustable-rate and 43% floating-rate exposure. We continue to find
attractive relative values for new capital, and we will continue to
use all of the tools at our disposal to position the portfolio for
long-term performance. Looking ahead, recently released economic data
have contributed to an adjustment in market expectations for future
rate increases. We believe our portfolio is positioned to perform in a
wide range of potential outcomes, but clearly it would benefit should
the Fed pause in its tightening."
The following table summarizes portfolio information
for the Company:
June 30, June 30, March 31,
2006 2005 2006
Leverage at period-end 11.5:1 10.1:1 10.2:1
Fixed-rate mortgage-backed securities
as % of portfolio 67% 33% 52%
Adjustable-rate mortgage-backed securities
as % of portfolio 24% 63% 42%
Floating-rate mortgage-backed securities
as % of portfolio 9% 4% 6%
Notional amount of interest rate swap
as % of portfolio 34% NA 17%
Annualized yield on average earning
assets during the quarter 5.17% 3.63% 4.70%
Annualized cost of funds on avg.
repurchase balance during the quarter 4.83% 3.03% 4.38%
Weighted average yield on assets
at period-end 5.42% 3.78% 5.03%
Weighted average cost of funds
at period-end 5.01% 3.20% 4.51%
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The Constant Prepayment Rate was 19% during the second quarter of
2006, as compared to 27% during the second quarter of 2005, and 18%
during the first quarter of 2006. The weighted average cost basis,
after the Other-Than-Temporary Impairment Charge, was 100.6 at June
30, 2006. The net amortization of premiums and accretion of discounts
on investment securities for the quarters ended June 30, 2006, June
30, 2005 and March 31, 2006 was $17.9 million, $42.7 million, and
$15.8 million, respectively. The total net premium remaining
unamortized at June 30, 2006, June 30, 2005 and March 31, 2006 was
$161.7 million, $401.4 million, and $173.7 million, respectively.
General and administrative expenses as a percentage of average
assets were 0.18%, 0.14%, and 0.18% for the quarters ended June 30,
2006, June 30, 2005, and March 31, 2006, respectively. At June 30,
2006, June 30, 2005, and March 31, 2006 the Company had a common stock
book value per share of $9.48, $12.42 and $10.16, respectively.
At June 30, 2006, FIDAC, Annaly's wholly-owned registered
investment advisor, had under management approximately $2.6 billion in
net assets and $14.1 billion in gross assets, as compared to $3.1
billion in net assets and $27.8 billion in gross assets at June 30,
2005 and $2.0 billion in net assets and $16.9 billion in gross assets
at March 31, 2006. For the quarter ended June 30, 2006, FIDAC earned
investment advisory and service fees, net of fees paid to
distributors, of $4.5 million, as compared to $7.5 million for the
quarter ended June 30, 2005 and $5.8 million for the quarter ended
March 31, 2006. FIDAC, organized as a taxable REIT subsidiary of
Annaly, generally receives net investment advisory fees of
approximately 10 to 20 basis points of the gross assets it manages,
assists in managing or supervises.
"Our name change, I believe, reflects our ambition as a company,"
said Mr. Farrell. "As I said when we acquired FIDAC, I have always
considered Annaly to be an asset management company. Our expansion
into new products and asset classes is another step towards fulfilling
that vision, and we look forward to growing the revenue streams from
our asset management business for the benefit of our shareholders."
Annaly manages assets on behalf of institutional and individual
investors worldwide through Annaly and through the funds managed by
its wholly-owned registered investment advisor, FIDAC. The Company's
principal business objective is to generate net income for
distribution to investors from the spread between the interest income
on its mortgage-backed securities and the cost of borrowing to finance
their acquisition and from dividends Annaly receives from FIDAC, which
earns investment advisory fee income. The Company, a Maryland
corporation that has elected to be taxed as a real estate investment
trust ("REIT"), currently has 164,015,156 shares of common stock
outstanding.
The Company will hold the second quarter 2006 earnings conference call on August 3, 2006 at 10:00 a.m. ET. The number to call is 1-866-831-6162 for domestic calls and 617-213-8852 for international calls and the pass code is 95158217. The re-play number is 1-888-286-8010 for domestic calls and 617-801-6888 for international calls and the pass code is 60984349. 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 E-Mail alerts, enter your e-mail address where indicated and click the Subscribe button.
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 and
Section 21E of the Securities Exchange Act of 1934. 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 yield curve,
changes in prepayment rates, the availability of mortgage-backed
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,
FIDAC's clients' removal of assets FIDAC manages, FIDAC's regulatory
requirements, and competition in the investment management business
changes in government regulations affecting our business, and our
ability to maintain our qualification as a REIT for federal income tax
purposes. 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 Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 and all
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
STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
June 30, March 31, December 31,
2006 2006 2005
(Unaudited) (Unaudited)
------------------------------------
ASSETS
Cash and cash equivalents $ 53,849 $ 2,403 $ 4,808
Mortgage-Backed Securities,
at fair value 23,474,006 16,176,348 15,929,864
Agency Debentures, at fair value - - -
Receivable for Mortgage-Backed
Securities sold - 139,491 13,449
Accrued interest receivable 110,647 75,092 71,340
Receivable for advisory and
service fees 3,114 3,805 3,497
Intangible for customer relationships 12,206 13,851 15,183
Goodwill 22,966 22,966 23,122
Interest rate swaps, at fair value 105,435 36,470 -
Other assets 1,567 2,281 2,159
--------------------------------------
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $21,256,703 $14,629,883 $13,576,301
Payable for Mortgage-Backed
Securities purchased 607,789 354,312 933,051
Accrued interest payable 42,100 37,738 27,994
Dividends payable 21,322 13,607 12,368
Other liabilities - - 305
Accounts payable and other
liabilities 6,979 3,238 8,837
Interest rate swaps, at fair value - - 543
--------------------------------------
Total liabilities 21,934,893 15,038,778 14,559,399
--------------------------------------
Minority interest in equity of
consolidated affiliate 5,000 - -
--------------------------------------
6.00% Series B Cumulative Convertible
Preferred Stock:
4,600,000 and 0 shares authorized,
issued and outstanding,
respectively 111,471 - -
--------------------------------------
Stockholders' Equity:
7.875% Series A Cumulative Redeemable
Preferred Stock:
7,637,500 authorized, 7,412,500
shares issued and
outstanding 177,088 177,088 177,088
Common stock: par value $.01 per
share; 500,000,000 authorized,
164,015,156, 123,701,656,
123,684,931, 123,648,931 and
122,554,831 outstanding,
respectively 1,640 1,237 1,237
Additional paid-in capital 2,131,358 1,679,904 1,679,452
Accumulated other comprehensive
loss (384,912) (249,459) (207,117)
(Accumulated deficit)
retained earnings (192,748) (174,841) (146,637)
--------------------------------------
Total stockholders' equity 1,732,426 1,433,929 1,504,023
--------------------------------------
Total liabilities, minority
interest and stockholders'
equity $23,783,790 $16,472,707 $16,063,422
======================================
September 30, June 30,
2005 2005
(Unaudited) (Unaudited)
----------------------------
ASSETS
Cash and cash equivalents $ 1,684 $ 3,669
Mortgage-Backed Securities, at fair value 18,697,385 19,165,744
Agency Debentures, at fair value 258,616 391,092
Receivable for Mortgage-Backed
Securities sold 788 -
Accrued interest receivable 83,806 87,960
Receivable for advisory and service fees 4,579 4,334
Intangible for customer relationships 15,367 15,552
Goodwill 23,122 23,122
Interest rate swaps, at fair value - -
Other assets 1,218 1,472
------------------------
Total assets $19,086,565 $19,692,945
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $17,038,226 $17,251,594
Payable for Mortgage-Backed Securities
purchased 429,502 659,325
Accrued interest payable 34,171 29,654
Dividends payable 16,079 44,120
Other liabilities 625 1,241
Accounts payable and other liabilities 8,602 6,523
Interest rate swaps, at fair value - -
------------------------
Total liabilities 17,527,205 17,992,457
------------------------
Minority interest in equity of
consolidated affiliate - -
------------------------
6.00% Series B Cumulative Convertible
Preferred Stock:
4,600,000 and 0 shares authorized,
issued and outstanding, respectively - -
------------------------
Stockholders' Equity:
7.875% Series A Cumulative Redeemable
Preferred Stock:
7,637,500 authorized, 7,412,500 shares
issued and outstanding 177,088 177,088
Common stock: par value $.01 per share;
500,000,000 authorized, 164,015,156,
123,701,656, 123,684,931, 123,648,931
and 122,554,831 outstanding, respectively 1,237 1,226
Additional paid-in capital 1,679,452 1,662,347
Accumulated other comprehensive loss (304,555) (144,853)
(Accumulated deficit) retained earnings 6,138 4,680
------------------------
Total stockholders' equity 1,559,360 1,700,488
------------------------
Total liabilities, minority interest and
stockholders' equity $19,086,565 $19,692,945
========================
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ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(dollars in thousands)
For the quarters ended
June 30, March 31, December 31,
2006 2006 2005
------------------------------------
Interest income $280,171 $194,882 $179,688
Interest expense 242,473 167,512 165,766
------------------------------------
Net interest income 37,698 27,370 13,922
------------------------------------
Other income
Investment advisory and service
fees 5,210 6,997 8,702
(Loss) gain on sale of
Mortgage-Backed Securities (1,239) (7,006) (65,285)
------------------------------------
Total other (loss) income 3,971 (9) (56,583)
------------------------------------
Expenses
Distribution fees 755 1,170 1,850
General and administrative
expenses 8,985 7,177 6,359
------------------------------------
Total expenses 9,740 8,347 8,209
------------------------------------
Impairment of intangible for
customer relationships 1,345 1,148 -
------------------------------------
Loss on other-than-temporarily
impaired securities 20,114 26,730 83,098
------------------------------------
Income (loss) before income taxes 10,470 (8,864) (133,968)
Income taxes 1,892 2,085 2,791
------------------------------------
Net income (loss) 8,578 (10,949) (136,759)
Dividend on preferred stock 5,163 3,648 3,649
------------------------------------
Net income (loss) available
(related) to common shareholders $3,415 ($14,597) ($140,408)
====================================
Net income (loss) per share
available (related) to common
shareholders:
Basic $0.02 ($0.12) ($1.14)
====================================
Diluted $0.02 ($0.12) ($1.14)
====================================
Weighted average number of shares
outstanding:
Basic 158,632,865 123,693,851 123,684,931
====================================
Diluted 158,703,614 123,693,851 123,684,931
====================================
Net income (loss) $8,578 ($10,949) ($136,759)
------------------------------------
Comprehensive (loss) income
Unrealized (loss) gain on
available-for-sale securities (225,771) (113,091) (50,402)
Unrealized gain (loss) on
interest rate swaps 68,965 37,013 (543)
Reclassification adjustment for
net losses (gains)
included in net loss or income 21,353 33,736 148,383
------------------------------------
Other comprehensive (loss)
income (135,453) (42,342) 97,438
------------------------------------
Comprehensive (loss) income ($126,875) ($53,291) ($39,321)
====================================
For the quarters ended
September 30, June 30,
2005 2005
-------------------------
Interest income $177,474 $171,595
Interest expense 155,043 133,758
------------------------
Net interest income 22,431 37,837
------------------------
Other income
Investment advisory and service fees 10,945 9,669
(Loss) gain on sale of Mortgage-Backed
Securities 32 11,435
------------------------
Total other (loss) income 10,977 21,104
------------------------
Expenses
Distribution fees 2,414 2,126
General and administrative expenses 6,455 6,800
------------------------
Total expenses 8,869 8,926
------------------------
Impairment of intangible for customer
relationships - -
------------------------
Loss on other-than-temporarily impaired
securities - -
------------------------
Income (loss) before income taxes 24,539 50,015
Income taxes 3,353 3,022
------------------------
Net income (loss) 21,186 46,993
Dividend on preferred stock 3,648 3,648
------------------------
Net income (loss) available (related) to
common shareholders $17,538 $43,345
========================
Net income (loss) per share available
(related) to common shareholders:
Basic $0.14 $0.36
========================
Diluted $0.14 $0.36
========================
Weighted average number of shares outstanding:
Basic 123,169,910 121,740,256
========================
Diluted 123,330,645 122,013,050
========================
Net income (loss) $21,186 $46,993
------------------------
Comprehensive (loss) income
Unrealized (loss) gain on available-for-sale
securities (159,670) 79,862
Unrealized gain (loss) on interest rate swaps - -
Reclassification adjustment for net losses
(gains) included in net loss or income (32) (11,435)
------------------------
Other comprehensive (loss) income (159,702) 68,427
------------------------
Comprehensive (loss) income ($138,516) $115,420
========================
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ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(dollars in thousands)
For the six months ended
June 30, June 30,
2006 2005
------------------------
Interest income $475,053 $347,884
Interest expense 409,985 247,751
------------------------
Net interest income 65,068 100,133
------------------------
Other income
Investment advisory and service fees 12,206 15,978
(Loss) gain on sale of Mortgage-Backed
Securities (8,245) 12,016
------------------------
Total other income 3,961 27,994
------------------------
Expenses
Distribution fees 1,925 3,737
General and administrative expenses 16,162 13,464
------------------------
Total expenses 18,087 17,201
------------------------
Impairment of intangible for customer
relationships 2,493 -
------------------------
Loss on other-than-temporarily impaired
securities 46,843 -
------------------------
Income before income taxes 1,606 110,926
Income taxes 3,977 4,600
------------------------
Net (loss) income (2,371) 106,326
Dividend on preferred stock 8,811 7,297
------------------------
Net (loss) income available (related) to
common shareholders ($11,182) $99,029
========================
Net (loss) income per share available
(related) to common shareholders:
Basic ($0.08) $0.82
========================
Diluted ($0.08) $0.81
========================
Weighted average number of shares outstanding:
Basic 141,476,532 121,506,858
========================
Diluted 141,476,532 121,785,918
========================
Net (loss) income ($2,371) $106,326
------------------------
Comprehensive income (loss):
Unrealized (loss) gain on available-for-sale
securities (338,861) (12,037)
Unrealized gain (loss) on interest rate swap 105,978 -
Reclassification adjustment for net (losses)
included in net income 55,088 (12,016)
------------------------
Other comprehensive income (loss) (177,795) (24,053)
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Comprehensive (loss) income ($180,166) $82,273
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CONTACT: Annaly Capital Management, Inc.
Investor Relations:
1-888-8Annaly
www.annaly.com
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