DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 31, 2016

1.	DESCRIPTION OF BUSINESS

Annaly Capital Management, Inc. (the “Company” or “Annaly”) is a Maryland corporation that commenced operations on February 18, 1997. The Company owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, Agency debentures, credit risk transfer (“CRT”) securities, other securities representing interests in or obligations backed by pools of mortgage loans, residential mortgage loans, mortgage servicing rights, commercial real estate assets and corporate debt. The Company’s principal business objectives are (1) to generate net income for distribution to its stockholders from its investments and (2) capital preservation. The Company is externally managed by Annaly Management Company LLC (the “Manager”).

The Company’s investment groups are primarily comprised of the following:

·	Agency invests primarily in various types of Agency mortgage-backed securities and related derivatives to hedge these investments.

·	Residential credit invests primarily in non-Agency mortgage-backed assets within securitized products and residential mortgage loan markets.

·	Commercial real estate originates and invests in commercial mortgage loans, securities, and other commercial real estate investments.

·	Middle market lending provides customized debt financing to middle-market businesses.

The Company has elected to be taxed as a Real Estate Investment Trust (“REIT”) as defined under the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the “Code”).