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TheStreet Open House

CORRECTING And REPLACING -- ARMOUR Residential REIT, Inc. Reports 13.8% Annualized ROE From Taxable REIT Income For Q1 2013

Regulation G Reconciliation

Taxable REIT income is calculated according to the requirements of the Internal Revenue Code rather than GAAP. ARMOUR plans to distribute at least 90% of its taxable REIT income in order to maintain its tax qualification as a REIT. ARMOUR believes that taxable REIT income is useful to investors because taxable REIT income is directly related to the amount of dividends the Company is required to distribute in order to maintain its REIT tax qualification status. Core income also excludes gains and losses on security sales. However, because taxable REIT income and Core income are incomplete measures of the Company's financial performance and involve differences from net income computed in accordance with GAAP, taxable REIT income and Core income should be considered as supplementary to, and not as a substitute for, ARMOUR's net income computed in accordance with GAAP as a measure of the Company's financial performance.

The following table reconciles ARMOUR's consolidated results from operations to taxable REIT income and Core income for the quarter ended March 31, 2013:

  Quarter Ended
  March 31, 2013
  (in millions)
GAAP net income  $102.3
Unrealized gain on derivatives  (16.3)
Estimated taxable REIT income $86.0
Gain on sale of Agency Securities (18.5)
Core Income $67.5

Common Stock

On February 20, 2013, the Company completed the sale of 65,000,000 shares of common stock in a follow-on public offering at a price of $6.75 per share during the first quarter 2013. The Company also issued 10,110 shares of common stock during the first quarter of 2013 under its dividend reinvestment plan at a weighted average price of $6.64 per share. As of March 31, 2013, there were 374,053,198 common shares outstanding, an increase of 21.0% from December 31, 2012.

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