OLD GREENWICH, Conn., Feb. 12, 2013 /PRNewswire/ -- Ellington Financial LLC (NYSE: EFC) (the "Company") today announced that its Board of Directors has declared a dividend for the fourth quarter of 2012 of $0.77 per share and a special dividend for the fiscal year ended December 31, 2012 of $0.75 per share, both payable on March 15, 2013 to shareholders of record as of March 1, 2013. (1) Subject to the ultimate discretion of the Board of Directors, the Company's management expects to continue to recommend quarterly dividends of $0.77 per share until conditions warrant otherwise. In addition, at the end of any year, the Board of Directors will take into account the Company's earnings and other factors and will consider whether to declare a special dividend. Periodically, management may adjust its quarterly dividend recommendation based on the Company's actual earnings, management's assessment of the Company's long-term earnings prospects, and other factors. The declaration and amount of future dividends remain in the discretion of the Board of Directors.
(1) For U.S. federal income tax purposes, the fourth quarter 2012 dividend and the special dividend will be treated as partnership distributions. Based on information currently available, the Company estimates that, when calculating U.S. federal withholding taxes, the entire amount of these dividends will be treated as portfolio interest income (as described in Section 871(h) of the Internal Revenue Code). As a result, no portion of these dividends should be considered attributable to income that is subject to U.S. federal withholding tax, including U.S. source dividend income or income effectively connected with a U.S. trade or business. Notwithstanding the foregoing, some portion of future dividends may be considered attributable to U.S. source dividend income, interest income that is not "portfolio interest," or income effectively connected with a U.S. trade or business, and therefore may be subject to U.S. federal withholding taxes.
The Company does not provide advice on tax matters to its shareholders or to broker/nominees who hold the Company's shares on behalf of their customers. The information above is provided for informational purposes only, is subject to change as more definitive information is obtained by the Company, and does not constitute tax advice. Non-U.S. holders of the Company's common shares and broker/nominees who hold shares on behalf of such holders are strongly urged to consult with their own tax advisors with regard to the U.S. federal income tax consequences of the dividends paid by the Company. This information is not intended to, and cannot, be used by any taxpayer to avoid penalties that may be imposed under U.S. federal income tax law.
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