Company: NLY-PF
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0001043219-25-000012
Chunk: 35

Company: ANNALY CAPITAL MANAGEMENT INC
Filing Date: 2025-10-30
Form: 10-Q
Item: Part I, Item 2
Chunk 35
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 same period in 2024. The change in the period was primarily due to an increase in compensation expenses and higher expenses related to rent, professional fees and technology.

Return on Average Equity

The following table shows the components of our annualized return on average equity for the periods presented.

Components of Annualized Return on Average Equity

 Economic Net Interest Income/ Average Equity (1)Net Servicing Income/Average EquityOther Income (Loss)/Average Equity (2)G&A Expenses/ Average EquityIncomeTaxes/ Average EquityReturn onAverage EquityFor the three months ended      September 30, 202513.14%3.55%8.19%(1.41%)0.22%23.69%September 30, 202411.12%3.68%(10.76%)(1.48%)0.21%2.77%For the nine months ended      September 30, 202513.15%3.73%(5.25%)(1.46%)(0.01%)10.16%September 30, 202411.51%3.66%(7.49%)(1.46%)(0.06%)6.16%(1) Economic net interest income includes the net interest component of interest rate swaps and net interest on initial margin related to interest rate swaps, which is reported in Other, net in the Company’s Consolidated Statements of Comprehensive Income (Loss). Net interest on variation margin related to interest rate swaps is included in the Net interest component of interest rate swaps in the Company's Consolidated Statements of Comprehensive Income (Loss).(2) Other income (loss) excludes the net interest component of interest rate swaps.

Unrealized Gains and Losses - Available-for-Sale Investments

The unrealized fluctuations in market values of our available-for-sale Agency MBS, for which the fair value option is not elected, do not impact our GAAP net income (loss) but rather are reflected on our balance sheet by changing the carrying value of the asset and stockholders’ equity under accumulated other comprehensive income (loss). As a result of this fair value accounting treatment, our book value and book value per share are likely to fluctuate far more than if we used amortized cost accounting. As a result, comparisons with companies that use amortized cost accounting for some or all of their balance sheet may not be meaningful.

The following table shows cumulative unrealized gains and losses on our available-for-sale investments reflected in the Consolidated