Annaly Capital Management Inc. · NYSE:NLY
Annaly Capital Management — Shareholder Meeting (May 2017)
20 slides from Annaly Capital Management's shareholder meeting presentation, May 25, 2017
Slide 1: 2017 Annual Meeting
2017 Annual Meeting May 25, 2017
Slide 2: Safe Harbor Notice
This presentation, other written or oral communications, and our public documents to which we refer contain or incorporate by reference certain forward-looking statements which are based on various assumptions (some of which are beyond our control) and may be identified by reference to a future peri
Slide 3: Overview
Overview BANNALY
Slide 4: 2016 Review: Outperformance, Size, Diversification, Efficiency, Ownership and Culture
Source: Bloomberg and Company filings. Market data as of April 27, 2017. Financial data as of March 31, 2017. Note: mREIT peers represented by Bloomberg mREIT Index (“BBREMTG”) unless otherwise noted. Agency peers include AGNC, CYS, CMO, ANH and ARR. Represents Annaly’s average operating expense as
Slide 5: Market Environment and Annaly's Opportunity and Differentiation
Market Environment 5 Our Views on Annaly’s Opportunity and Differentiation Annaly mREIT Industry Trends 1 1 2 2 3 3 4 4 5 5 6 6 Slow Growth/Less Central Bank Influence/Benign Inflation Fed $ Policy:Price = Interest RatesSupply = Balance Sheet GSE Risk Sharing Banks Outsourcing Credit Valuations at o
Slide 6: Annaly is a Leading Diversified Capital Manager
Source: Bloomberg, Company filings. Financial data as of March 31, 2017. Market data as of April 27, 2017.Agency assets include to be announced (“TBA”) purchase contracts (market value) and mortgage servicing rights (“MSRs”). Commercial Real Estate (“CRE”) assets are exclusive of consolidated variab
Slide 7: Efficiency of Annaly's Operating Model
Annaly outperforms internally and externally managed mREITs From 2012 through Q1 2017, Annaly significantly outperformed its mREIT peers with respect to operating expenditures as a percentage of assets and as a percentage of equity (1)Annaly’s average expense levels over the period were 65% lower as
Slide 8: Major Questions Have Been Answered
3 Major Questions Have Been Answered
Slide 9: Annaly has outperformed as market paranoia eases over Fed policy
Source: Bloomberg. Market data as of April 27, 2017. Annaly has outperformed as market “paranoia” eases over Fed policy Increased Visibility of Fed Policy Dates 1st Hike12/16/15 - 12/13/16 2nd Hike12/14/16 - 3/14/17 3rd Hike3/15/17 – 4/27/17 Total Hiking Cycle12/16/15 - 4/27/17 Fed Funds Rate 0.25 -
Slide 10: Fed Taper = Return to Normalcy = Growth Opportunity
Fed Taper = Return to Normalcy = Growth Opportunity A Fed balance sheet taper creates some uncertainties, but ultimately could be beneficial for Annaly Annaly may serve as a permanent capital solution to the reduction of support of the U.S. housing market created by a potential Fed balance sheet run
Slide 11: Demonstrated Resiliency – Scaled Diversification Enhances Stability
Source: Bloomberg and Company filings. Includes all companies in the respective Agency, Hybrid, and Commercial sectors of the BBREMTG with market caps above $200mm as of April 27, 2017.Dividend Stability measures the change in dividend from Q4 2013 to Q1 2017.Book Value Stability measures the change
Slide 12: Shifting Industry Landscape since Annaly's Acquisition of Hatteras
Shifting Industry Landscape since Annaly’s Acquisition of Hatteras ~20% fewer mortgage REITs with ~$13 billion higher industry market capitalization Source: Market data per Bloomberg as of April 27, 2017. Note: Hatteras represents Hatteras Financial Corp. Analysis compares companies in the BBREMTG I
Slide 13: Annaly's Performance and Market Differentiation
Annaly’s Performance and Market Differentiation
Slide 14: Annaly vs. Other Yield Sectors – Total Return
Annaly vs. Other Yield Sectors – Total Return On a short-term and long-term basis, Annaly has continued to outperform the mREIT industry as well as the broader market and other yield oriented investment options Source: Bloomberg. Market data as of April 27, 2017.Note: mREITs represent BBREMTG. Asset
Slide 15: Annaly vs. Other Yield Sectors – Relative Valuation
Annaly vs. Other Yield Sectors – Relative Valuation Source: Bloomberg. mREITs represents BBREMTG Index. Banks represents the KBW Bank Index. Utilities represents the Russell 3000 Utilities Index. S&P represents the SPX Index. Asset Managers represents the S&P 500 Asset Management and Custody Bank In
Slide 16: Annaly is a Market Leading Yield Manufacturer
Source: Bloomberg and Company Filings.Note: Dividend data as of quarter ended December 31, 2016. Analysis of top 15 dividend payers based on dividends paid from 2012 to 2016 by the largest 15 companies in each of the S&P Financials Index, BBREMTG Index, and US REIT list per Bloomberg (each by market
Slide 17: Annaly Stability and Management Ownership vs. mREIT Industry
17 In addition to producing superior book value and dividend stability, Annaly’s management team has significantly increased ownership in the Company, tying decisions to performance and shareholder value Annaly Stability and Management Ownership vs. mREIT Industry Hybrid Commercial Agency Source: SN
Slide 18: Annaly's Outperformance Supported by Growth in Institutional Sponsorship
Source: FactSet data as of March 31, 2017 filings. ‘Top 30 Shareholders’ denotes Top 30 NLY shareholders as of March 31, 2017. 27 of the Top 30 NLY shareholders initiated positions prior to or during Q4’13, while the remaining 3 have initiated positions in NLY since that time.Institutional ownership
Slide 19: Optimal Risk Management and Shareholder Alignment
Optimal Risk Management and Shareholder Alignment Shared Capital Model Compensation Pay for Performance; Robust Talent Assessment Process Culture 88% Favorable Rating in Firm Pride and Engagement – Precursor to Organizational Success(2) Employee Stock Ownership Guidelines Maximizing Shareholder Valu
Slide 20: Annaly's Outperformance vs. Other Equity Yield Investments
Annaly’s Outperformance vs. Other Equity Yield Investments Source: Bloomberg. mREITs represent BBREMTG. Utilities represent the Russell 3000 Utilities Index. MLPs represent the Alerian MLP Index. Asset Managers represent the S&P 500 Asset Management and Custody Bank Index. Banks represent the KBW Ba
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