Annaly Capital Management Inc. · NYSE:NLY

Annaly Capital Management — Merger or Acquisition (May 2018)

12 slides from Annaly Capital Management's merger presentation, May 2, 2018

  1. Slide 1: Annaly Capital Management, Inc. to Acquire MTGE Investment Corp.

    Annaly Capital Management, Inc. to Acquire MTGE Investment Corp. May 2, 2018

  2. Slide 2: Safe Harbor

    Safe Harbor Forward-Looking Statements This presentation includes forward-looking statements. These forward-looking statements generally can be identified by phrases such as “will,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly,

  3. Slide 3: Transaction Summary

    Transaction Summary Annaly / MTGE Acquisition Terms Summary Company to be Acquired:  MTGE Investment Corp. (“MTGE”) Offer Price per Share:  $19.65 Book Value Multiple per Share  1.00x (4/30/18)  20.3% premium to three-year average price-to-book multiple based on the closing price of Premium: MTG

  4. Slide 4: Annaly + MTGE = Industry Leading Combination

    Annaly + MTGE = Industry Leading Combination Annaly Pro Forma Size, Scale &  Market Cap: ~$12.5bn  Pro forma market cap will be ~25x(1) the median mREIT Accretion  Total Portfolio: ~$114bn  Accretively acquire a $6.4bn diversified portfolio  Investment Options: 37  Further enhances Annaly’s av

  5. Slide 5: Transaction Highlights for Annaly Shareholders

    Transaction Highlights for Annaly Shareholders Transaction creates significant value for Annaly shareholders 1  Further enhances the scale and diversification of Annaly’s unrivaled investment platform  Opportunity to add Agency assets at a more attractive market entry point after selling assets an

  6. Slide 6: Transaction Highlights for MTGE Shareholders

    Transaction Highlights for MTGE Shareholders Transaction creates significant value for MTGE shareholders 1  20.3% premium to three-year average price-to-book multiple based on the closing price of MTGE common Meaningful stock ending April 30, 2018 Premium with Potential Upside  Meaningful stock co

  7. Slide 7: Strategic Combination: Annaly Pro Forma Portfolio

    Strategic Combination: Annaly Pro Forma Portfolio This transaction aligns with Annaly’s diversification strategy through the addition of attractive residential credit and commercial real estate assets  MTGE’s $5.2bn Agency portfolio would be largely complementary to Annaly’s given similar Agency st

  8. Slide 8: Diversification Further Expands Investment Alternatives

    Diversification Further Expands Investment Alternatives Combination with MTGE’s portfolio provides further optionality to Annaly’s diversified investment capabilities Market Cap Agency Non- Resi Whole MSR / Corporate CRE Debt CRE Equity ($mm) MBS Agency Loans Servicing Credit Pro Forma(1) $12,476 

  9. Slide 9: The mREIT Industry Continues to Benefit from Consolidation

    The mREIT Industry Continues to Benefit from Consolidation Since Annaly announced the acquisition of Hatteras Financial Corp. in April 2016, the number of mREITs decreased by 20% while sector market capitalization grew ~$11bn, or ~23%(1) $14,000 $12,000 $10,000  Growth  Size With the acquisition o

  10. Slide 10: Annaly's Proven Track Record as a Disciplined Acquirer

    Annaly’s Proven Track Record as a Disciplined Acquirer Annaly is an industry leading consolidator Acquires Announcement Date 1/31/2013 4/11/2016 5/2/2018 Size(1) $872mm $1,498mm $900mm Highlights Increased Diversification    Accretive to Earnings(2)    Improved Operating Efficiency and Scale 

  11. Slide 11: NLY Total Shareholder Return vs. Other Yield Sectors

    NLY Total Shareholder Return vs. Other Yield Sectors Annaly has outperformed all other yield options since 2014 90.0% Cumulative Total Return 75.0% Annaly 66.5% S&P 56.6% 66.5% 60.0% mREITs 52.8% 56.6% Asset Managers 43.4% 52.8% Utilities 41.5% 45.0% MLPs (24.9%) 43.4% 41.5% Total Return (%) 30.0% 1

  12. Slide 12: Annaly is the Industry Leader

    Annaly is the Industry Leader Industry  Largest mREIT with a pro forma equity base of over $14 billion(1) Leader Diversified Shared Capital  The acquisition of MTGE further diversifies Annaly’s unrivaled array of Model investment and financing options  Annaly is 51% and 65% more efficient as a pe

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