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Annaly Capital Management, Inc. Message Board

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  • justsliding2 justsliding2 Dec 22, 2004 10:06 PM Flag

    NFI dividend.... $2.65 for Q4!!!

    NFI dividend.... $2.65 for Q4!!!
    by: jakk_key 12/22/04 09:34 pm
    Msg: 22507 of 22507

    Ka frigggin ching.... Its not to late to get this in the AM because it is for holders of record as of Dec. 31.

    Just be careful. This stock has had a big run up since late Nov. on this bad news (read the company anouncement) it could fall badley after the div

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    • This is not bad news if you understand MREITs. The bad news that Justsliding is referring to is the fact that NFI guided down on GAAP earnings. GAAP earnings are irreleavent for MREITs like NFI and NLY because they must pay dividends based on taxable income. GAAP rules require that impairments on the portfolio are recognized... however GAAP rules do not allow for gains from offsetting hedges to be recognized. This is the case with NFI. The GAAP earnings will be in the range of $4.20 for 2004.... however, Taxable Income per share will be in the range of $9.50. And, REITS must pay dividends at the rate of 90% of the taxable income by the time they file their annual tax return. GAAP plays no role in the computation of the dividend. NFI guided down for GAAP, because of the compression of the yield curve. However, this was fully hedged in the money markets and that is why TI will not go down. Read the NFI announcement carefully and you'll unerstand.

      • 2 Replies to cyberwhorm32
      • Cyberworm32 concluded on NFI

        "However, this was fully hedged in the money markets and that is why TI will not go down. Read the NFI announcement carefully and you'll unerstand."

        Markets don't care about fundumentals in the short term ... only momentum and this announcement cut the momentum out of NFI and the rest of the reits ... . and NFI down $5.00 in the morning now.

      • so, cyberwhorm32, explain to me how GAAP and TI are related?

        You have to pay the piper at some point.

        I am not long or short NFI - it had a nice run and it was cheap. I think it stays in a trading range for a while.

        If originations don't grow don't expect a nice dividend in 2006.

        Re: NFI dividend.... $2.65 for Q4!!!
        by: cyberwhorm32 12/23/04 01:22 am
        Msg: 22512 of 22518

        This is not bad news if you understand MREITs. The bad news that Justsliding is referring to is the fact that NFI guided down on GAAP earnings. GAAP earnings are irreleavent for MREITs like NFI and NLY because they must pay dividends based on taxable income. GAAP rules require that impairments on the portfolio are recognized... however GAAP rules do not allow for gains from offsetting hedges to be recognized. This is the case with NFI. The GAAP earnings will be in the range of $4.20 for 2004.... however, Taxable Income per share will be in the range of $9.50. And, REITS must pay dividends at the rate of 90% of the taxable income by the time they file their annual tax return. GAAP plays no role in the computation of the dividend. NFI guided down for GAAP, because of the compression of the yield curve. However, this was fully hedged in the money markets and that is why TI will not go down. Read the NFI announcement carefully and you'll unerstand.

 
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