16%

Operating expenses as a percentage of core earnings, which is significantly lower than the average of mREIT peers1,2

 

61%

Lower operating expense as a percentage of assets than mREIT peers3

 

48%

Lower operating expense as a percentage of equity than mREIT peers4

Annaly’s investment groups have continued to grow while operating significantly more efficiently than industry peers

Operating Expenses to Core Earnings (%)5

Source: Financial data per Company filings as of December 31, 2017. Market data per Bloomberg as of December 31, 2017. “mREIT peers” refers to companies in the BBREMTG Index as of December 31, 2017 unless otherwise noted. Operating expense is defined as: (i) for internally-managed peers, the sum of compensation and benefits, general and administrative expenses (“G&A”) and other operating expenses, and (ii) for externally-managed peers, the sum of net management fees, compensation and benefits (if any), G&A and other operating expenses.

  1. Represents Annaly’s average operating expense as a percentage of Core Earnings compared to the BBREMTG Index for the year ended December 31, 2017. Analysis includes companies in the BBREMTG Index as of December 31, 2017.

  2. Core Earnings (excluding Premium Amortization Adjustment) is a non-GAAP financial measure; see Non-GAAP Reconciliation following these Endnotes for additional detail. Annaly and other mREITs generally utilize “Core” or similarly adjusted EPS. Annaly CRE excludes depreciation and amortization from Core Earnings, consistent with CRE Peers.

  3. Represents Annaly’s average operating expense as a percentage of average assets compared to the BBREMTG Index for the year ended December 31, 2017. Analysis includes companies in the BBREMTG Index as of December 31, 2017.

  4. Represents Annaly’s average operating expense as a percentage of average equity compared to the BBREMTG Index for the year ended December 31, 2017. Analysis includes companies in the BBREMTG Index as of December 31, 2017.

  5. “Agency Peers”, “Hybrid Peers” and “CRE Peers” include all companies in the respective Agency, Hybrid, and Commercial Real Estate sectors of the BBREMTG Index as of December 31, 2017. BDC Peers represent the S&P BDC Index. Annaly CRE excludes depreciation and amortization from Core Earnings, consistent with CRE Peers.