Annaly Mortgage Management, Inc. Announces 4th Quarter and Annual 2004 Earnings.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Annaly Annaly (Irish Angaile) was a medieval lordship in central Ireland. Its territory roughly coincided with modern County Longford. It was associated with the O'Farrell family[1]. Mortgage Management, Inc. (NYSE NYSE See: New York Stock Exchange : NLY) today reported net income for the quarter ended December December: see month. 31, 2004 of $59.3 million or $0.46 basic net income per share available to common shareholders, as compared to $42.7 million or $0.44 basic net income per share available to common shareholders for the quarter ended December 31, 2003 and $66.6 million or $0.53 basic net income per share available to common shareholders for the quarter ended September September: see month. 30, 2004. Net income for the year ended December 31, 2004 was $248.6 million or $2.04 basic net income per share available to common shareholders, as compared to $180.1 million or $1.95 basic net income per share available to common shareholders for the year ended December 31, 2003. The Company was able to provide an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average equity of 14.12% for the quarter ended December 31, 2004, as compared to 14.88% for the quarter ended December 31, 2003 and 16.59% for the quarter ended September 30, 2004. The return on average equity was 16.04% for the year ended December 31, 2004 and 16.04% for the year ended December 31, 2003. Dividends declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. for the quarter ended December 31, 2004 were $0.50 per share, as compared to $0.47 per share for the quarter ended December 31, 2003 and $0.50 for the quarter ended September 30, 2004. Dividends declared for the year ended December 31, 2004 were $1.98 per share, as compared to $1.95 per share for the year ended December 31, 2003. The dividend yield on common stock for the quarter, based on the December 31, 2004 closing price of $19.62, was 10.19%. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A.J. Farrell Farrell, city (1990 pop. 6,841), Mercer co., W central Pa., on the Shenango River at the Ohio line and adjoining Sharon, Pa.; inc. 1901. It is a railroad center, and its steel- and ironworks industries have declined. , Chairman, Chief Executive Officer and President of Annaly, commented on the Company's results. "Our portfolio management team navigated successfully through a volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. bond market in 2004. The Federal Reserve directly affected our cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. by raising the Federal Funds rate Federal Funds Rate The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. five times since June June: see month. 30, and the 10-year Treasury, which is the principal driver of prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. rates, ranged in yield from 3.68% to 4.87%. In our low interest rate environment, these are sizeable moves on a percentage basis. Nevertheless, our return on average equity for the year was consistent with our historical track record. We are also proud of the contribution made by our wholly-owned asset manager, FIDAC FIDAC Fixed Income Discount Advisory Company FIDAC Fireball Data Center FIDAC Federazione Italiana Dipendenti Aziende di Credito (Italian labor union) , which increased fee income by 27.7% from the third quarter to the fourth quarter. Looking ahead to 2005, we expect nominal interest rates Nominal Interest Rate The interest rate unadjusted for inflation. Notes: Not taking into account inflation gives a less realistic number. See also: Inflation, Interest Rate, Real Interest Rate Nominal interest rate to remain at historically low levels, and in this environment the returns that we generate--both in Annaly and in our FIDAC-managed funds--should be very competitive with those of other investment asset classes." For the quarter ended December 31, 2004, the annualized yield on average earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin was 3.50% and the annualized cost of funds on the average repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. balance was 2.23%, which equates to an interest rate spread of 1.27%. This is a 25 basis point decrease over the 1.52% annualized interest rate spread for the quarter ended December 31, 2003 and a 29 basis point decrease over the 1.56% annualized interest rate spread for the quarter ended September 30, 2004. For the year ended December 31, 2004, the yield on average earning assets was 3.25% and the cost of funds on the average repurchase balance was 1.74%. For the year ended December 31, 2003, the yield on average earning assets was 2.81% and the cost of funds on the average repurchase balance was 1.58%. The interest rate spread for the year ended December 31, 2004 increased by 28 basis points, when compared to the previous year. For the quarter ended December 31, 2004, the Company's gain on sale of Mortgage-Backed Securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. was $1.1 million . There were no gains or losses for the quarter ended December 31, 2003 and $1.4 million in gains for the quarter ended September 30, 2004. For the year ended December 31, 2004, the Company's gain on sale of Mortgage-Backed Securities was $5.2 million, as compared to $40.9 million for the year ended December 31, 2003. General and administrative expenses as a percentage of average assets were 0.14%, 0.13%, and 0.14% for the quarters ended December 31, 2004, December 31, 2003, and September 30, 2004, respectively. General and administrative expenses, as a percent of average assets were 0.14% and 0.13% for the years ended December 31, 2004 and 2003, respectively. In addition, the Company's Dividend Efficiency Ratio, calculated as general and administrative expenses divided by dividends paid, was 9.8%, and 9.1% for the years ended December 31, 2004 and December 31, 2003, respectively. "We continue to keep expenses low," said Mr. Farrell, "even as we consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: the operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. of FIDAC. We keep expenses low for the benefit of our investors. Our industry-low G&A expense ratio and Dividend Efficiency Ratio means that on a comparative basis, shareholders receive in dividends more of each dollar we make." The Constant Prepayment Rate was 27% during the fourth quarter of 2004, as compared to 37% during the fourth quarter of 2003, and 25% during the third quarter of 2004. The weighted average purchase price of the portfolio was 102.3 at December 31, 2004, 102.5 at December 31, 2003 and 102.4 at September 30, 2004. The net amortization of premiums and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of discounts on investment securities for the quarters ended December 31, 2004, December 31, 2003, and September 30, 2004 was $42.3 million, $38.4 million, and $39.7 million, respectively. The total net amortization for the year ended December 31, 2004 was $179.6 million and for the year ended December 31, 2003 was $216.6 million. Leverage at December 31, 2004 was 9.8:1, in comparison to 9.6:1 at December 31, 2003 and 9.4:1 at September 30, 2004. "Our interest-rate spread narrowed in the fourth quarter," said Wellington Wellington, city (1996 pop. 157,647; urban agglomeration 334,051), capital of New Zealand, extreme S North Island, on Port Nicholson, an inlet of Cook Strait. Denahan-Norris, Vice Chairman and Chief Investment Officer for Annaly. "As expected, the rally in rates in the third quarter led to prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. increasing modestly in the fourth quarter. Even as the premium amortization related to the faster prepayments and the rise in our cost of funding more than offset the upward resetting of coupons COUPONS. Those parts of a commercial instrument which are. to be cut, and which are evidence of something connected with the contract mentioned in the instrument. They are generally attached to certificates of loan, where the interest is payable at particular periods, and, when the on our CMO CMO See: Collateralized mortgage obligation CMO See collateralized mortgage obligation (CMO). floaters floaters /float·ers/ (flo´ters) “spots before the eyes”; deposits in the vitreous of the eye, usually moving about and probably representing fine aggregates of vitreous protein occurring as a benign degenerative change. and ARMs during the quarter, we are satisfied with portfolio performance. We take a longer-term view than just one quarter because our Barbell Barbell A bond investment strategy that concentrates holdings in both very short-term and extremely long-term maturities. This is also known as the "dumbbell" or "barbelling. Strategy--in which we utilize a blend “Blending” redirects here. For alpha blending, see Alpha compositing. In linguistics, a blend is a word formed from parts of two other words. These parts are sometimes, but not always, morphemes. of floating-rate, adjustable-rate and fixed-rate assets to manage through different interest rate environments--is meant to respond and adjust to changes in rates over time." At December 31, 2004, December 31, 2003, and September 30, 2004, the Company had a common stock book value per share of $12.56, $11.96, and $12.84, respectively. The Company classifies all investment securities as "available for sale," thus requiring the Company to record the entire portfolio at market value. Fixed rate securities comprised approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 29% of the Company's portfolio at December 31, 2004. The balance of the portfolio was comprised of 62% adjustable rate mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. and 9% LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). floating rate collateralized mortgage obligations Collateralized mortgage obligation (CMO) A security backed by a pool of pass-through rates , structured so that there are several classes of bondholders with varying maturities, called tranches. . The Company has continued to avoid the introduction of credit risk into its portfolio. As of December 31, 2004, all of the assets in the Company's portfolio were FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association , GNMA GNMA abbr. Government National Mortgage Association , FHLMC See Federal Home Loan Mortgage Corporation. mortgage-backed securities, and agency debentures, which carry an actual or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. "AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. " rating. FIDAC operates as Annaly's wholly-owned taxable REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). subsidiary. FIDAC is a registered investment advisor Registered Investment Advisor (RIA) is a designation obtainable in the United States by an individual who has registered with the U.S. Securities and Exchange Commission or state regulatory agency (where the primary business is situated or multiple States in some cases) in which generally receives annual net investment advisory fees of approximately 10 to 15 basis points of the gross assets it manages, assists in managing or supervises. At December 31, 2004, FIDAC had under management approximately $1.9 billion in net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. and $15.9 billion in gross assets, compared to $1.7 billion in net assets and $13.9 billion in gross assets at September 30, 2004 and $1.5 billion in net assets and $13.6 billion in gross assets at December 31, 2003. Annaly manages assets on behalf of institutional and individual investors worldwide through Annaly and through the funds managed by its wholly-owned registered investment advisor, FIDAC. The Company's principal business objective is to generate net income for distribution to investors from the spread between the interest income on its mortgage-backed securities and the cost of borrowing to finance their acquisition and from fee income earned by FIDAC. The Company, a Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). Corporation that has elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to be taxed as a real estate investment trust ("REIT"), currently has 121,272,198 shares of common stock outstanding. The Company will hold the Annual 2004 earnings conference call on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant February February: see month. 4, 2004 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The number to call is 1-800-510-0146 for domestic calls and 617-614-3449 for international calls and the pass code is 93615017. The re-play number is 1-888-286-8010 for domestic calls and 617-801-6888 for international calls and the pass code is 24564798. There will be a web cast of the call on www.annaly.com. If you would like to be added to the e-mail distribution list, please visit www.annaly.com, click on E-Mail alerts, enter your e-mail address See Internet address. e-mail address - electronic mail address where indicated and click the Subscribe To sign up for a service. Contrast with unsubscribe. See opt-in and syndication format. (messaging) subscribe - To request to receive messages posted to a mailing list or newsgroup. In contrast to the mundane use of the word this is often free of charge. button. This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or , such as "may," "will," "believe," "expect," "anticipate," "continue," or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates, changes in yield curve, changes in prepayment rates, the availability of mortgage-backed securities for purchase, the availability of financing and, if available, the terms of any financing, FIDAC's clients' removal of assets FIDAC manages, FIDAC's regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. , and competition in the investment management business. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see "Risk factors" in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2003. We do not undertake, and specifically disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation, to publicly release the result of any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statements.
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
DEC. 31, 2004 SEPT. 30, 2004 JUNE 30, 2004
(Consolidated (Consolidated (Consolidated
and Unaudited) and Unaudited) and Unaudited)
-------------------------------------------
ASSETS
Cash and cash equivalents $ 5,853 $ 6,772 $ 4,499
Mortgage-Backed Securities,
at fair value 19,038,386 17,571,593 16,142,801
Agency Debentures, at fair
value 390,509 639,437 978,994
Receivable for preferred
stock proceeds - - -
Receivable for Mortgage-
Backed Securities sold 1,025 - -
Accrued interest receivable 81,557 74,291 74,874
Receivable for advisory and
service fees 2,359 1,637 1,644
Intangible for customer
relationships 15,613 15,613 15,613
Goodwill 23,122 23,122 22,905
Other assets 1,875 1,371 1,427
----------- ------------ -----------
Total assets $19,560,299 $ 18,333,836 $17,242,757
=========== ============ ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $16,707,879 $ 15,579,196 $15,342,123
Payable for Mortgage-
Backed Securities
purchased 1,044,683 999,380 263,207
Accrued interest payable 35,721 24,483 19,959
Dividends payable 60,632 60,618 57,674
Other liabilities 2,819 4,061 3,294
Accounts payable 8,095 6,508 3,989
----------- ------------ -----------
Total liabilities 17,859,829 16,674,246 15,690,246
----------- ------------ -----------
Stockholders' Equity:
7.875% Series A Cumulative
Redeemable Preferred Stock:
8,000,000 authorized, 7,412,500,
4,250,000, 4,250,000, and
4,250,000 shares issued and
outstanding, respectively 177,077 102,708 102,708
Common stock: par value $.01
per share; 500,000,000
authorized, 121,263,000,
121,235,702, 120,148,709,
117,866,932, and 96,074,096
shares issued and outstanding,
respectively 1,213 1,212 1,201
Additional paid-in
capital 1,638,635 1,638,309 1,620,666
Accumulated other
comprehensive income
(loss) (120,800) (91,987) (177,489)
Retained earnings 4,345 9,348 5,425
----------- ------------ -----------
Total stockholders' equity 1,700,470 1,659,590 1,552,511
----------- ------------ -----------
Total liabilities and
stockholders' equity $19,560,299 $ 18,333,836 $17,242,757
=========== ============ ===========
MARCH 31, 2004
(Unaudited) DEC. 31, 2003
----------------------------
ASSETS
Cash and cash equivalents $ 738 $ 247
Mortgage-Backed Securities, at fair value 17,046,117 11,956,512
Agency Debentures, at fair value 1,033,481 978,167
Receivable for preferred stock proceeds 102,903 -
Receivable for Mortgage-Backed Securities
sold 81,200 -
Accrued interest receivable 71,446 53,743
Receivable for advisory and service fees - -
Intangible for customer relationships - -
Goodwill - -
Other assets 2,808 1,617
----------- -----------
Total assets $18,338,693 $12,990,286
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Repurchase agreements $14,689,300 $11,012,903
Payable for Mortgage-Backed Securities
purchased 1,873,813 761,115
Accrued interest payable 21,299 14,989
Dividends payable 58,942 45,155
Other liabilities 4,664 4,017
Accounts payable 2,087 2,887
----------- -----------
Total liabilities 16,650,105 11,841,066
----------- -----------
Stockholders' Equity:
7.875% Series A Cumulative Redeemable
Preferred Stock: 8,000,000 authorized,
7,412,500, 4,250,000, 4,250,000, and
4,250,000 shares issued and outstanding,
respectively 102,870 -
Common stock: par value $.01 per share;
500,000,000 authorized, 121,263,000,
121,235,702, 120,148,709, 117,866,932,
and 96,074,096 shares issued and
outstanding, respectively 1,179 961
Additional paid-in capital 1,578,778 1,194,159
Accumulated other comprehensive income
(loss) 4,500 (47,261)
Retained earnings 1,261 1,361
----------- -----------
Total stockholders' equity 1,688,588 1,149,220
----------- -----------
Total liabilities and stockholders' equity $18,338,693 $12,990,286
=========== ===========
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(dollars in thousands)
For the Quarter Ended
December 31, September 30, June 30,
2004 2004 2004
(Consolidated)(Consolidated)(Consolidated)
------------------------------------------
Interest income $ 156,783 $ 138,970 $ 122,234
Interest expense 93,992 70,173 55,648
------------ ------------ ------------
Net interest income 62,791 68,797 66,586
------------ ------------ ------------
Other income
Investment advisory and
service fees 6,143 4,811 1,558
Gain on sale of Mortgage-
Backed Securities 1,144 1,350 2,126
------------ ------------ ------------
Total other income 7,287 6,161 3,684
------------ ------------ ------------
Expenses
Distribution fees 1,538 1,024 298
General and administrative
expenses 6,862 6,159 5,643
------------ ------------ ------------
Total expenses 8,400 7,183 5,841
------------ ------------ ------------
Income before income taxes 61,678 67,775 64,329
Income taxes 2,384 1,155 494
------------ ------------ ------------
Net income 59,294 66,620 63,835
Dividend on preferred stock 3,665 2,082 1,998
------------ ------------ ------------
Net income available to
common shareholders $ 55,629 $ 64,538 $ 61,837
============ ============ ============
Net income per share
available to common
shareholders:
Basic $ 0.46 $ 0.53 $ 0.52
============ ============ ============
Diluted $ 0.46 $ 0.53 $ 0.52
============ ============ ============
Weighted average number of
shares outstanding:
Basic 121,246,246 120,802,814 118,276,509
============ ============ ============
Diluted 121,514,941 120,994,191 118,489,470
============ ============ ============
Net income $ 59,294 $ 66,620 $ 63,835
------------ ------------ ------------
Comprehensive income (loss):
Unrealized gain (loss) on
available-for-sale
securities (27,669) 86,852 (179,863)
Less: reclassification
adjustment for net gains
included in net income (1,144) (1,350) (2,126)
------------ ------------ ------------
Other comprehensive
income (loss) (28,813) 85,502 (181,989)
------------ ------------ ------------
Comprehensive income (loss) $ 30,481 $ 152,122 ($118,154)
============ ============ ============
For the Quarter Ended
March 31, December 31,
2004 2003
-------------- ------------
Interest income $ 114,341 $ 89,186
Interest expense 50,303 42,264
------------ -----------
Net interest income 64,038 46,922
------------ -----------
Other income
Investment advisory and service fees - -
Gain on sale of Mortgage-Backed
Securities 595 -
------------ ------------
Total other income 595 -
------------ ------------
Expenses
Distribution fees
General and administrative expenses 5,365 4,225
------------ -----------
Total expenses 5,365 4,225
------------ -----------
Income before income taxes 59,268 42,697
Income taxes 425 -
------------ ------------
Net income 58,843 42,697
Dividend on preferred stock - -
-------------- ------------
Net income available to common
shareholders $ 58,843 $ 42,697
============ ===========
Net income per share available to common
shareholders:
Basic $ 0.52 $ 0.44
============ ===========
Diluted $ 0.52 $ 0.44
============ ===========
Weighted average number of shares
outstanding:
Basic 112,506,206 96,027,468
============ ===========
Diluted 112,804,001 96,232,899
============ ===========
Net income $ 58,843 $ 42,697
------------ -----------
Comprehensive income (loss):
Unrealized gain (loss) on available-for-
sale securities 52,356 4,609
Less: reclassification adjustment for
net gains included in net income (595) -
------------ ------------
Other comprehensive income (loss) 51,761 4,609
------------ -----------
Comprehensive income (loss) $ 110,604 $ 47,306
============ ===========
ANNALY MORTGAGE MANAGEMENT, INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(dollars in thousands)
For the Year Ended
December 31, December 31,
2004 2003
(Consolidated
and Unaudited)
-------------------------
Interest income $ 532,328 $ 337,433
Interest expense 270,116 182,004
------------ -----------
Net interest income 262,212 155,429
------------ -----------
Other income
Investment advisory and service fees 12,512 -
Gain on sale of Mortgage-Backed Securities 5,215 40,907
------------ -----------
Total other income 17,727 40,907
------------ -----------
Expenses
Distribution fees 2,860 -
General and administrative expenses 24,029 16,233
------------ -----------
Total expenses 26,889 16,233
------------ -----------
Income before income taxes 253,050 180,103
Income taxes 4,458 -
------------ -----------
Net income 248,592 180,103
Dividend on preferred stock 7,745 -
------------ -----------
Net income available to common shareholders $ 240,847 $ 180,103
============ ===========
Net income per share available to common
shareholders:
Basic $ 2.04 $ 1.95
============ ===========
Diluted $ 2.03 $ 1.94
============ ===========
Weighted average number of shares
outstanding:
Basic 118,223,330 92,215,352
============ ===========
Diluted 118,459,145 93,031,253
============ -----------
Net income $ 248,592 $ 180,103
------------ -----------
Comprehensive loss:
Unrealized loss on available-for-sale
securities (68,324) (81,865)
Less: reclassification adjustment for net
gains included in net income (5,215) (40,907)
------------ -----------
Other comprehensive loss (73,539) (122,772)
------------ -----------
Comprehensive income $ 175,053 $ 57,331
============ ===========
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