Annaly Capital Management Inc. · NYSE:NLY
Annaly Capital Management — Shareholder Meeting (May 2019)
24 slides from Annaly Capital Management's shareholder meeting presentation, May 22, 2019
Slide 1: 2019 Annual Meeting
2019 Annual Meeting May 22, 2019
Slide 2: Important Notices: Forward-Looking Statements
Important Notices Forward-Looking Statements 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 ma
Slide 3: Annaly is a Leading Diversified Capital Manager
Annaly is a Leading Diversified Capital Manager The Annaly Agency Group invests in Agency MBS The Annaly Residential Credit Group (“ARC”) invests collateralized by residential mortgages which are in Non-Agency residential mortgage assets within the guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae
Slide 4: Annaly Investment Thesis: Top Reasons to Invest in Annaly
Annaly Investment Thesis | Top 10 Reasons to Invest in Annaly Annaly’s track-record, combined with overall diversification, operating efficiency and market leading corporate responsibility and governance practices set us apart in today’s broader market Growth Strategies Corporate Responsibility Oper
Slide 5: Diversified Shared Capital Model
1 Diversified Shared Capital Model Our four diversified strategies allow us to take advantage of opportunities in the market unique to Annaly Our diversification strategy consists of 37 investment options 2013 2014 2015 2016 2017 2018 Commercial Completed Securitized Residential Agency and Healthcar
Slide 6: Size, Financing & Liquidity
2 Size, Financing & Liquidity Since Annaly announced the acquisition of Hatteras Financial Corp. in April 2016, the number of mREITs has decreased by 15% while the sector market capitalization has grown ~$26 billion(1) $15,000 Growth Consolidation Size $12,000 During the same time Annaly’s mar
Slide 7: Size, Financing & Liquidity (cont'd)
2 Size, Financing & Liquidity (cont’d) Annaly’s diversified financing sources and liquidity provide the Company with unique competitive advantages Financing Options Economic Leverage(2)(3) Middle Residential Commercial Economic leverage nearly 19% lower than Agency mREIT peers; Agency Market Availab
Slide 8: Operational Efficiency
3 Operational Efficiency Annaly continues to further scale its diversified platform while operating more efficiently than Yield Sectors and mREIT peers OpEx as % of Average Equity(1) 88.6% Efficiency: More efficient than the S&P 500, Yield Sectors and mREIT peers by 30x, 20x and 2x, respectively 5
Slide 9: Growth & Income
4 Growth & Income Annaly continues to grow through strategic acquisitions, partnerships and expanded origination capabilities Since January 2016, Annaly has grown its market cap by $5.0bn, or 56%, and declared Recent External and Organic Growth over $4.7bn in dividends to shareholders while the 2s-1
Slide 10: Risk-Adjusted Returns
5 Risk-Adjusted Returns Annaly’s high LTM pre-tax margin and low beta demonstrate the stability and efficiency of its model LTM Pre-Tax Margin(1) 61.2% 47.2% 30.2% 28.2% 21.1% 21.1% Yield Sectors(2): 22.5% 17.7% 15.0% NLY mREIT Peers Equity REITs Select Financials MLPs Consumer Staples Utilities S&P
Slide 11: Value of Our Scalable Platform
6 Value of Our Scalable Platform Annaly’s market cap per employee is 13.5x higher than the average of ten leading companies(1) across the S&P 500 and Yield Sectors, while trading at a significantly lower multiple Market Cap Per Employee ($mm/Employee) Represents P/E Ratio $81.7 48.5x 25.2x 20.9x 19.
Slide 12: Corporate Governance
7 Corporate Governance Annaly’s key Board composition metrics compare favorably to the average of peers as well as the broader market Board Independence Percent of Board with Tenure of 5 Years or Less 84% 82% 45% 48% 33% 73% Proxy Peer Group S&P 500 Average(2) Proxy Peer Group S&P 500 Average (2) Av
Slide 13: Human Capital
8 Human Capital Our people are our greatest asset and we are committed to a culture of ownership, inclusion and excellence Development & Retention Ownership Culture Diversity & Inclusion 100% 0 2x of employees are eligible to participate in Shares of Annaly stock have Selected as a member of the Blo
Slide 14: Responsible Investments
9 Responsible Investments Through our investment strategies, we finance housing across the country, support the vitality of local communities and contribute to strengthening the long-term growth of the economy in a number of different ways Dedicated Social Impact JVs & & $25 Million Joint Venture(1)
Slide 15: Ownership Culture
10 Ownership Culture Since the beginning of 2014, all Annaly management stock purchase activity has been in the open market and none of our current executives have sold a share of Annaly stock since that time The sector has sold over $181mm and been granted $413mm in stock, while only having purchas
Slide 16: Annaly vs. Other Yield Sectors | Relative Valuation
Annaly vs. Other Yield Sectors | Relative Valuation Annaly’s strong risk-adjusted performance compares favorably to other yield sectors, yet valuation still lags Total Shareholder Return(1) Treynor Ratio(2): Performance vs. Beta Price to Book 72% 70% 70% 5.5x 67% 61% 15.9 53% 11.9 10.7 10.3 38% (3)
Slide 17: Growth in Institutional Sponsorship
Annaly’s Performance Supported by Growth in Institutional Sponsorship Management’s global engagement efforts, with over 325 one-on-one meetings since 2015, have resulted in expanded sponsorship by top institutions globally Shareholder Sponsorship Global Sponsorship Non-Traditional Sponsorship SWF, P
Slide 18: Best-in-Class Corporate Responsibility & Governance Practices
Annaly Strives for Best-in-Class Corporate Responsibility & Governance Practices While ESG disclosure is emergent, the benchmarking below demonstrates Annaly’s industry leading disclosures and metrics % of Proxy Peer Metric Disclosure Group Disclosing(1) Board Refreshment Policy Director age and/or
Slide 19: Annaly's Opportunity
Annaly’s Opportunity Annaly is positioned to capitalize on industry and macro trends Industry / Macro Factors Trend Overview Annaly Positioning . Economic growth is expected to slow(1) 40% lower beta than Yield Sectors and 50% State of the Market/ lower than the S&P 500 . Investor appetite for def
Slide 20: Annaly Investment Thesis: Top Reasons to Invest in Annaly
Annaly Investment Thesis | Top 10 Reasons to Invest in Annaly Annaly’s track-record, combined with overall diversification, operating efficiency and market leading corporate responsibility and governance practices set us apart in today’s broader market Growth Strategies Corporate Responsibility Oper
Slide 21: Appendix
Appendix ANNALY
Slide 22: Glossary
Glossary ACREG: Refers to Annaly Commercial Real Estate Group FHLB: Refers to the Federal Home Loan Bank Agency Peers: Represents companies comprising the Agency sector GSE: Refers to government sponsored enterprise within the BBREMTG Index* Hybrid Peers: Represents companies comprising the hybrid s
Slide 23: Endnotes
Endnotes Page 3 Page 9 1. Agency assets include to be announced (“TBA”) purchase contracts (market value) and mortgage 1. Total return shown since December 31, 2015. servicing rights (“MSRs”). Residential Credit assets exclude securitized debt of consolidated 2. The third quarter 2018 common stock d
Slide 24: Endnotes (cont'd)
Endnotes (cont’d) Page 15 1. Values based on market price on the filing date. 2. Values based on market price on the filing date. For the purposes of the chart, the “Sell” column includes both open market sales and shares sold or withheld to cover taxes. 3. Includes top 5 companies by market cap as
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