Annaly Capital Management, Inc. Announces Recent Corporate Responsibility Initiatives and Enhancements

NEW YORK–(BUSINESS WIRE)–Annaly Capital Management, Inc. (NYSE:NLY) (the “Company” or “Annaly”),
a leading diversified capital manager, continues to demonstrate industry
leadership across Environmental, Social and Governance (“ESG”) practices
with recent initiatives, achievements and enhancements in its ongoing
corporate responsibility efforts.

Annaly has a long-standing commitment to best-in-class management and
governance practices that have positive impacts on shareholders, the
Company, employees and society. We continue to proactively build on our
existing policies across the dimensions of corporate responsibility and
ESG that have been crucial to the success and shared values of our
business,” said Kevin Keyes, Chairman, Chief Executive Officer and
President. “Included in my highest priorities upon becoming CEO in 2015
was to enhance Annaly’s governance, corporate and financial
disclosure and meaningfully increase dialogue with our shareholders. I
am grateful for the thoughtful and supportive feedback we have received,
which has further validated Management’s continuing efforts and Annaly’s
overall leadership around corporate responsibility,” Mr. Keyes
continued. “I take pride in our focus on these critical initiatives and
what they represent for the future of Annaly.”

Corporate Responsibility Highlights

Annaly continually focuses on integrating the following six key areas of
corporate responsibility into the Company’s overall strategy: corporate
governance, human capital, responsible investments, risk management,
ethics and integrity and the environment.

Corporate Governance

  • Today the Board of Directors of the Company (“the Board”) appointed
    Dr. Kathy Hopinkah Hannan, PhD, CPA, as a new Independent Director,
    representing the third female Independent Director added to the Board
    since the beginning of 2018. A former Global Lead Partner, National
    Managing Partner and Vice Chairman of KPMG, Dr. Hannan brings over 30
    years of financial, governance and corporate advisory experience to
    the Board.
  • The Company’s Board now consists of 12 members, of whom 83% are
    Independent, 42% are women and 25% have tenure of less than five years.
  • In the fourth quarter of 2018, Annaly’s Board unanimously approved a
    bylaw amendment to declassify itself and also adopted an enhanced
    Board refreshment policy with both a mandatory retirement age and a
    tenure limit.
  • Annaly expanded the reach of corporate responsibility across the
    Company and the Board with the appointment of Tanya Rakpraja as Head
    of Corporate Responsibility and Government Relations in 2018, and the
    establishment of the Public Responsibility Committee of the Board in
    2017. Ms. Rakpraja has nearly 20 years of experience in roles spanning
    community development, finance and public policy, most recently at
    Capital Impact Partners (“Capital Impact”) where she was Senior
    Director of Strategic Lending Initiatives.

Human Capital

  • In January 2019, Annaly was recognized in the Bloomberg
    Gender-Equality Index for the second consecutive year.
  • Annaly remains committed to advancing women in the workplace,
    evidenced by women representing 40% of Managing Director promotions
    and 50% of additions to Annaly’s Operating Committee since 2015.
  • Annaly’s strong ownership culture is demonstrated by the fact that
    100% of the senior employees subject to the Company’s voluntary Stock
    Ownership Guidelines meet, or are on track to meet, such guidelines,
    and that 53% of employees across the Firm own shares of Annaly common
    stock, an increase of over 50% since 2015.
  • Annaly’s Women’s Interactive Network (“WIN”) continues to expand on
    initiatives that are focused on championing diversity across the
    Company, including: professional development, mentorship and internal
    employee engagement.
  • Results of the annual employee engagement survey showed 85% responded
    favorably across the questionnaire in 2018, representing the third
    consecutive year of score improvement and an increase of over 25% in
    positive support from 2015.1
  • Annaly’s 2018 voluntary turnover rate of 7% compares favorably to the
    financial services sector voluntary turnover rate of 17% in 2018.2

Responsible Investments

  • Across its investment strategies, Annaly has financed approximately
    750,000 homes for Americans and their families across 50 states3
    and invested over $1.5 billion in middle market businesses and
    commercial real estate that support key pillars of the U.S. economy.4
  • In January 2019, Annaly and Capital Impact announced a second social
    impact partnership bringing combined commitments supporting urban and
    rural communities across the country to $50 million.5 The
    second joint venture invests in affordable housing and community
    development projects in Washington, D.C.

Risk Management

  • In 2018, the Board and senior management further enhanced the risk
    committee framework, deepening the comprehensive oversight across the
    Firm.
  • Annaly has significantly expanded the capabilities and expertise of
    its Risk function, doubling the number of professionals since 2015,
    while maintaining independent oversight and approval of investment
    guidelines and credit decisions.

Ethics & Integrity

  • In the fourth quarter of 2018, the Company implemented an enhanced
    corporate compliance function responsible for the oversight of the
    Company’s regulatory compliance.
  • A newly appointed Chief Compliance Officer, Miki Kamijyo, has
    reporting lines to the Board Audit Committee and leads the Corporate
    Compliance Group. Ms. Kamijyo has over 10 years of senior management
    experience in legal, regulatory and compliance matters, and was most
    recently the Chief Compliance Officer and Legal Counsel at GreenOak
    Real Estate.

Environment

  • In 2018, Annaly launched an internal Company-wide campaign to raise
    awareness and engagement with employees around sustainability and
    conserving resources at its corporate headquarters.
  • The focus on operating responsibly within Annaly’s headquarters also
    resulted in an extensive energy audit to more thoroughly track and
    monitor the Company’s impact and energy use.
  • Annaly has invested nearly $430 million in environmentally friendly
    buildings and businesses.6

Annaly encourages visitors to view the new Corporate Responsibility
section of its website, which features a detailed narrative providing
transparency and disclosure around Annaly’s leading principles and
efforts, at www.annaly.com/corporate-responsibility.

About Annaly

Annaly is a leading diversified capital manager that invests in and
finances residential and commercial assets. Annaly’s principal business
objective is to generate net income for distribution to its stockholders
and to preserve capital through prudent selection of investments and
continued management of its portfolio. Annaly has elected to be taxed as
a real estate investment trust, or REIT, for federal income tax
purposes. Annaly is externally managed by Annaly Management Company LLC.
Additional information on the Company can be found at www.annaly.com.

Forward-Looking Statements

This news release 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
may be identified by reference to a future period or periods or by the
use of forward-looking terminology, 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 the yield curve; changes in prepayment rates; the
availability of mortgage-backed securities and other securities for
purchase; the availability of financing and, if available, the terms of
any financings; changes in the market value of our assets; changes in
business conditions and the general economy; our ability to grow our
commercial real estate business; our ability to grow our residential
credit business; our ability to grow our middle market lending business;
credit risks related to our investments in credit risk transfer
securities, residential mortgage-backed securities and related
residential mortgage credit assets, commercial real estate assets and
corporate debt; risks related to investments in mortgage servicing
rights; our ability to consummate any contemplated investment
opportunities; changes in government regulations or policy affecting our
business; our ability to maintain our qualification as a REIT for U.S.
federal income tax purposes; and our ability to maintain our exemption
from registration under the Investment Company Act of 1940, as amended.
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 most recent Annual Report on Form
10-K and any subsequent Quarterly Reports on Form 10-Q. We do not
undertake, and specifically disclaim any obligation, to publicly release
the result of any revisions which may be made to any forward-looking
statements to reflect the occurrence of anticipated or unanticipated
events or circumstances after the date of such statements, except as
required by law.

_____________________________

1 Survey results based on 2018 Annaly internal survey
conducted by Perceptyx. Score represents average of underlying questions
for each category / item across the entire 50-question, 12-category
survey.

2 Financial Services Sector data per United States Department
of Labor, Bureau of Labor Statistics, “Job Openings and Labor Turnover
Summary”, using 2018 total.

3 Financial data as of December 31, 2018. Represents the
estimated number of homes financed by Annaly’s holdings of Agency MBS,
residential whole loans and securities, as well as multi-family
commercial real estate loans, securities and equity investments. The
number includes all homes related to securities and loans wholly-owned
by Annaly and a pro-rata share of homes in securities or equity
investments that are partially owned by Annaly.

4 Represents the cumulative commitment value at investment
date of Annaly’s middle market lending and commercial real estate
investments in health care, data and technology, sustainable environment
and economic opportunities across communities, including current and
prior investments, through December 31, 2018.

5 Initial (November 2017) Joint Venture: Annaly’s investment
represents $20 million and Capital Impact’s investment represents $5
million. Second (January 2019) Joint Venture: Annaly’s commitment
represents $20 million and Capital Impact’s commitment represents $5
million.

6 Represents the cumulative commitment value at investment
date of Annaly’s commercial investments, including current and prior
investments.

Contacts

Annaly Capital Management, Inc.
Investor Relations
1-888-8Annaly
www.annaly.com

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