18. NET INCOME (LOSS) PER COMMON SHARE The following table presents a reconciliation of net income (loss) and shares used in calculating basic and diluted net income (loss) per share for the years ended December 31, 2023, 2022 and 2021. For the Years Ended December 31, 2023 December 31, 2022 December 31, 2021 (dollars in thousands, except per share data) Net income (loss) $ (1,638,457) $ 1,726,420 $ 2,396,280 Net income (loss) attributable to noncontrolling interests 4,714 1,095 6,384 Net income (loss) attributable to Annaly (1,643,171) 1,725,325 2,389,896 Dividends on preferred stock 141,676 110,623 107,532 Net income (loss) available (related) to common stockholders $ (1,784,847) $ 1,614,702 $ 2,282,364 Weighted average shares of common stock outstanding-basic 494,541,323 411,348,484 356,856,520 Add: Effect of stock awards, if dilutive — 273,274 285,731 Weighted average shares of common stock outstanding-diluted 494,541,323 411,621,758 357,142,251 Net income (loss) per share available (related) to common share Basic $ (3.61) $ 3.93 $ 6.40 Diluted $ (3.61) $ 3.92 $ 6.39 The computations of diluted net income (loss) per share available (related) to common share for the years ended December 31, 2023 and 2022 exclude 1.9 million and 0.7 million, respectively, of potentially dilutive restricted stock units and performance stock units because their effect would have been anti-dilutive. 19. INCOME TAXES For the year ended December 31, 2023 the Company was qualified to be taxed as a REIT under Code Sections 856 through 860. As a REIT, the Company will not incur federal income tax to the extent that it distributes its taxable income to its stockholders. To maintain qualification as a REIT, the Company must distribute at least 90% of its annual REIT taxable income to its stockholders and meet certain other requirements that relate to, among other things, assets it may hold, income it may generate and its stockholder composition. It is generally the Company’s policy to distribute 100% of its REIT taxable income. To the extent there is any undistributed REIT taxable income at the end of a year, the Company distributes such shortfall within the next year as permitted by the Code. The Company and certain of its direct and indirect subsidiaries, including Annaly TRS, Inc. and certain subsidiaries of joint ventures, have made separate joint elections to treat these subsidiaries as TRSs. As such, each of these TRSs is taxable as a domestic C corporation and subject to federal, state and local income taxes based upon their taxable income. The provisions of ASC 740, Income Taxes (“ASC 740”), clarify the accounting for uncertainty in income taxes recognized in financial statements and prescribe a recognition threshold and measurement attribute for uncertain tax positions taken or expected to be taken on a tax return. ASC 740 also requires that interest and penalties related to unrecognized tax benefits be recognized in the financial statements. The Company does not have any unrecognized tax benefits that would affect its financial position. Thus, no accruals for penalties and interest were deemed necessary at December 31, 2023 and 2022. The state and local tax jurisdictions for which the Company is subject to tax-filing obligations recognize the Company’s status as a REIT and, therefore, the Company generally does not pay income tax in such jurisdictions. The Company may, however, be subject to certain minimum state and local tax filing fees as well as certain excise, franchise or business taxes. The Company’s TRSs are subject to federal, state and local taxes. During the years ended December 31, 2023, 2022 and 2021 the Company recorded $39.4 million, $45.6 million and $4.7 million, respectively, of income tax expense (benefit) attributable to its TRSs. The Company’s federal, state and local tax returns from 2020 and forward remain open for examination. ANNALY CAPITAL MANAGEMENT, INC. AND SUBSIDIARIES Financial Statements F-33
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