Annaly Capital Management Inc. · NYSE:NLY
Annaly Capital Management — Investor Presentation (May 2016)
19 slides from Annaly Capital Management's investor presentation, May 2016
Slide 1: Investor Presentation May 2016
Investor Presentation May 2016
Slide 2: Safe Harbor
Safe Harbor 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, statements herein that des
Slide 3: Annaly Capital Management, Inc.
Annaly Capital Management, Inc. – PF Market Capitalization: $10.5 Billion Largest mREIT in the Size – PF Total Assets: $91 Billion World Fixed Floating – Agency − Agency ARMs Strategy – Non-Agency − Non-Agency Most Diversified – Commercial RE − Commercial RE − Middle Market Lending Historicall
Slide 4: Mortgage REIT Industry Landscape
Mortgage REIT Industry Landscape Annaly’s pro forma market capitalization is 17x the median mREIT market cap $12,000 $11,000 Current mREIT Total Market Cap: $52.5bn $10,000 Pro Forma NLY as % of Total Market Cap: 20.0% $9,000 Market Cap Range # of Companies % of Total Market Cap $8,000 Market Cap ($
Slide 5: $3 Trillion Market Opportunity
$3 Trillion Market Opportunity Annaly is positioned as a permanent capital solution for the redistribution of MBS, residential credit, commercial real estate assets and institutional loans GSE (1) / Federal Reserve (2) CRE Maturities & New Originations(3) Institutional Loan Maturities $2,500 $450 $2
Slide 6: Annaly Acquisition of Hatteras Financial Corp
Annaly Acquisition of Hatteras Financial Corp Largest Mortgage REIT to Mortgage REIT Transaction Ever, by Deal Value and Target Asset Value Announced $1.5 Billion Second Largest Transaction in the Entire REIT Sector Acquisition of Since the Financial Crisis, by Target Asset Value Second Larges
Slide 7: Pro Forma Portfolio – Accretive to Earnings and Book Value
Pro Forma Portfolio – Accretive to Earnings and Book Value Hatteras’ floating rate investment portfolio complements Annaly’s predominantly fixed rate Agency portfolio Annaly Hatteras Pro Forma 1% 2% 0% 1% 2% 0% 17% 17% 17% 4% 16% Asset Type 8% 6% 7% Asset Type 67% 77% 57% 15-Year Fixed 20-Year Fixed
Slide 8: Annaly's Evolution
Annaly’s Evolution Annaly’s diversified platform is now built to manage various rate environments 1998 2004 / 2005 2016 Pro Forma (1) Key Takeaways Market Largest mREIT $104mm $1.4bn $10.5bn Cap(2) globally Agency MBS More durable Asset Resi Credit Agency MBS Agency MBS earnings and book Classes
Slide 9: Sum-of-the-Parts Capital Diversification
Annaly Sum-of-the-Parts Capital Diversification Balancing the liquidity of the Agency strategies with the durability of multiple credit strategies Commercial Real Residential Middle Market Agency Estate Credit Lending Dedicated $8.7bn $1.6bn $0.7bn $0.6bn Capital Industry Rank #1 #11 #23 #18 % of To
Slide 10: Poised for Future Fed Policy
Annaly Poised for Future Fed Policy Lower interest rate sensitivity due to diversification Absolute Tightening Benign Relative to 2004 - 2006 Portfolio Better Positioned for Rate Hike Markets price flat curve at low levels similar to the 2004 - 2006 Significant diversification of portfolio compo
Slide 11: Significant Financing Advantage
Significant Financing Advantage Annaly has a variety of potential financing sources for each asset class in which the Company invests Commercial Real Middle Market Agency Agency Residential Credit Resi Credit MML Estate Lending Securitization Potential Repo Warehouse Lines Repo Credit Faci
Slide 12: Efficiency of Operating Model
Efficiency of Operating Model Annaly outperforms internally and externally managed mREITs From 2012 through the end of 2015, Annaly significantly outperformed its mREIT peers with respect to operating expenditures as a percentage of assets and as a percentage of equity Annaly’s average expense l
Slide 13: Annaly is the Industry Leader
Annaly is the Industry Leader Industry Largest, longest tenured residential mREIT with over $13 billion pro forma equity base and significant Leader shareholder transparency Diversified By acquiring Hatteras, Annaly further diversifies its Business Model unrivaled array of investment and financi
Slide 14: Comparative Performance and Valuation
Comparative Performance and Valuation 13 13
Slide 15: vs. Other Yield Investments - Performance
Annaly vs. Other Yield Investments - Performance Despite recent volatility, Annaly has outperformed peers, as well as other yield focused investments 40.0% 34.5% 30.0% 28.9% 20.0% 13.3% 10.0% 5.5% 1.1% – Total Return (10.0%) (20.0%) (25.8%) (30.0%) (40.0%) (50.0%) (60.0%) Annaly mREITs Utilities MLP
Slide 16: vs. Other Yield Investments – Risk vs. Reward
Annaly vs. Other Yield Investments – Risk vs. Reward Annaly’s performance, leverage and yield profiles are superior to other yield asset classes, yet valuation still lags the other yield sectors Total Return: 34.5% (25.8)% 28.9% 5.5% 1.1% 12.0x 11.6% 12.0% 10.0x 10.0x 10.0% 8.7x 8.0x 8.0% Leverage &
Slide 17: NLY Stability of Return – Market Sharpe Ratios
NLY Stability of Return – Market Sharpe Ratios Over the past two years, Annaly’s shareholders have earned a more attractive risk-adjusted return than the mortgage REIT universe and numerous other yield sectors 3.50x Asset Managers 3.00x 2.50x Utilities P/B Valuation 2.00x MLPs 1.50x Commercial mREIT
Slide 18: Total Return vs. the VIX
Annaly vs. the VIX During periods of heightened volatility Annaly has outperformed industry peers 40.0% 60 35.0% 50 30.0% 25.0% 40 Total Return 20.0% Vix Index 30 15.0% 10.0% 20 5.0% 10 – (5.0%) 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 VIX Annaly mREIT Index Source: Bl
Slide 19: The Annaly Track Record
The Annaly Track Record Annaly has paid out $14.0 billion in dividends since inception 700% Price Total Dividends Appreciation Return 600% Annaly (20%) 616% 596% Berkshire Hathaway 376% 0% 376% S&P 500 116% 89% 206% 500% MSCI US REIT Index 37% 80% 116% Bloomberg mREIT Index (83%) 189% 106% 400% S&P
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