ARMOUR is a Maryland corporation incorporated in 2008.

On July 29, 2009, ARMOUR and ARMOUR Merger Sub Corp., a Delaware corporation and a wholly-owned subsidiary of ARMOUR, entered into an Agreement and Plan of Merger with Enterprise. The Merger Agreement provided for two primary transactions: (i) the Merger of Merger Sub Corp. with and into Enterprise with Enterprise surviving the Merger and becoming a wholly-owned subsidiary of ARMOUR, and (ii) ARMOUR becoming a new publicly-traded corporation of which the holders of Enterprise securities would be security holders. The merger was consummated on November 6, 2009.

ARMOUR’s common stock and warrants are traded on the NYSE and Amex respectively under the ticker symbols “ARR” and “ARR.W”.

As an Agency-only REIT, ARMOUR invests in mortgage-backed securities issued or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae, as well as short term instruments and deposits for cash awaiting reinvestment.

ARMOUR leverages its Agency mortgage investment portfolio with borrowings, which are generally short term and are secured by ARMOUR’s investment securities. The broad target leverage ratio is six to ten times debt to equity based on ARMOUR’s permanent capital equity base (additional paid-in-capital), though ARMOUR is not constrained by that range.

ARMOUR reports its earnings according to Generally Accepted Accounting Principles, (“GAAP”). Earnings disclosure is supplemented with a measure called “Core Earnings,” which typically represents the majority of taxable REIT income. ARMOUR pays dividends out of taxable REIT income. Core earnings represents a non-GAAP measure and is defined as net income (loss) excluding impairment losses, gains or losses on sales of securities and early termination of interest rate hedges, unrealized gains or losses on interest rate hedges, and certain non-recurring expenses. Core Earnings may differ from GAAP earnings primarily because GAAP earnings includes the unrealized change in the value of ARMOUR’s interest rate hedging program and certain non-recurring expenses.

As a REIT, ARMOUR is required to pay out at least 90% of its taxable earnings in dividends. Any retained earnings are subject to corporate level taxation. Taxable income is generally the net interest income less current period realized expense deductions plus capital gains or losses. Taxable income excludes the unrealized change in the value of the interest rate hedging program. Capital gains or losses in taxable income would typically arise from the sale of securities or termination of an interest rate hedge.

ARMOUR has 32.5 million warrants outstanding with a strike price of $11.00. The warrants expire on November 6, 2013. ARMOUR has no plans to change the strike price or other terms of the warrants. ARMOUR is obligated to maintain the effectiveness of the SEC registration statement covering the issuance of common stock underlying the outstanding warrants. ARMOUR is also contractually obligated to register the resale of the warrants and underlying common stock held by the founders of Enterprise.

Auditor: Delloitte and Touche
Legal counsel: Akerman Senterfitt
Securities Custodian: JP Morgan
Prime Broker: AVM L.P.

ARMOUR pays dividends on a monthly basis. The monthly dividend for the quarter is typically declared at or prior to the beginning of each quarter. The dividend amount is generally calculated to equal ARMOUR’s estimated taxable REIT income for the quarter. However, as the dividend estimates are made substantially in advance of each quarter’s operations, actual taxable REIT income results can differ from dividend declarations. As a REIT, ARMOUR is required to distribute 90% of its taxable income on a yearly basis.

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