Arlington Asset Investment Corp. Reports Second Quarter 2009 Financial Results

Share Name	Share Symbol	Market	Type
Air Liquide SA	BIT:AI	Italy	Ordinary Share

Air Liquide (BIT:AI)
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ARLINGTON, Va., Aug. 10 /PRNewswire-FirstCall/ -- Arlington Asset Investment Corp. (NYSE:AI) (the Company) today reported a net after-tax loss of $32.2 million for the quarter ended June 30, 2009, or $0.21 per share (diluted), compared to a net after-tax loss of $25.1 million, or $0.17 per share (diluted) for the second quarter of 2008. For the six months ending June 30, 2009, the Company reported net income of $69.4 million, or $0.45 per share (diluted), compared to net income of $20.1 million, or $0.13 per share (diluted) for the six months ending June 30, 2008. As of June 30, 2009, book value per share was $0.59. During the quarter ended June 30, 2009, the Company sold 18.2 million shares of its holding in FBR Capital Markets Corporation (FBR Capital Markets) generating a loss of $13.8 million, including a mark-to-market adjustment of $4.0 million on the remaining holdings. The Company is accounting for its remaining investment in FBR Capital Markets under the fair value method of accounting using quoted market prices. As of June 30, 2009, the Company's remaining 15.1 million shares of FBR Capital Markets stock were valued at $4.70 per share and represent approximately a 24% interest. As a result of the sales of FBR Capital Markets stock, the Company no longer had majority control of FBR Capital Markets and therefore, the Company's consolidated financial statements for the periods subsequent to May 20, 2009 will not include the results of FBR Capital Markets' operations. The Company's consolidated financial statements will reflect the fair value of the FBR Capital Markets stock on the balance sheet and the changes in the market value of FBR Capital Markets stock in earnings as a component of investment income or loss for the respective period. Subsequent to June 30, 2009, the Company extinguished an additional $25.0 million of trust preferred securities for $5.0 million, resulting in a $20.0 million gain. In addition, the Company also sold an additional 411,032 shares of FBR Capital Markets stock at a price of $4.42 per share in connection with the over-allotment option that was granted to the underwriters under the underwriting agreement entered into on June 15, 2009. As of August 10, 2009, excluding the Agency mortgage-backed securities (MBS) portfolio, the Company's unlevered non-agency residential MBS portfolio equaled $115.8 million face value with an average cost of 42.6%, was valued at $49.3 million and had a weighted average coupon of 5.6% of face value. At that date, the Company also had $9.4 million of unrestricted cash, 14.7 million shares of FBR Capital Markets stock and $25.0 million of remaining trust preferred securities outstanding. Second Quarter Highlights Net loss of $32.2 million for the second quarter of 2009, reflecting both cash and non-cash items, includes the following: -- $2.3 million of operating cash loss, excluding $1.2 million of non-cash compensation charges; -- $13.8 million in net losses from the sale and mark-to-market of shares of FBR Capital Markets; -- $5.6 million of losses, net of minority interest, relating to FBR Capital Markets operations for April and May, 2009; and -- $9.3 million of net expenses related to non-recurring activities including the 2010 FBR Open and fees and expenses related to the sale of FBR Capital Markets stock in the second quarter. New Corporate Direction The sale of FBR Capital Markets stock is in furtherance of the strategic shift the Company has initiated to focus on a principal investing strategy by monetizing the Company's investment in FBR Capital Markets. Given current dislocations in the capital markets, the Company seeks to benefit from potential high current cash returns available on mortgage investments. The Company plans to deploy the net cash proceeds for investments that offer current income as well as capital appreciation potential, and which may utilize the Company's net operating loss carry-forwards ("NOLs") and net capital loss carry-forwards ("NCLs"). The Company expects future investments to include non-agency residential mortgage-backed securities and residential mortgage-backed securities guaranteed by a U.S. Government agency or U.S. Government-sponsored entity, among others. The Company may also consider opportunities for financial service operating businesses potentially in the form of a bank charter, and will seek to continue strengthening its balance sheet by converting long-term debt to equity through the extinguishment of the remaining $25 million of trust preferred securities at a discount to face value. Consistent with its new direction, the Company expects to deploy proceeds from potential future dispositions of FBR Capital Markets stock to fund the extinguishment of the remaining trust preferred securities and expand the investment portfolio, net interest income, and earnings. About the Company Arlington Asset Investment Corp. (NYSE:AI) invests in mortgage-related assets and merchant banking opportunities. The Company is headquartered in the Washington, D.C. metropolitan area. For more information, please visit http://www.arlingtonasset.com/. Complete second quarter 2009 financial results and tables for FBR Capital Markets can be found at http://www.fbrcapitalmarkets.com/. Statements concerning future performance, plans and steps to position the Company to realize value, and any other guidance on present or future periods, constitute forward-looking statements that are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include, but are not limited to, changes in interest rates, increased costs of borrowing, decreased interest spreads, changes in mortgage pre-payment speeds, risks associated with merchant banking investments, the realization of gains and losses on principal investments, available technologies, competition for business and personnel, and general economic, political, regulatory and market conditions. These and other risks are described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that are available from the Company and from the SEC. Financial data follows. ARLINGTON ASSET INVESTMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) Quarter Ended (Unaudited) June 30, ----------------------- 2009 2008 ---------- ---------- REVENUES: Capital markets $31,171 $52,993 Principal investment: Interest 1,282 22,842 Net investment loss (3,989) (5,542) Dividends 108 133 Other - 902 ---------- ---------- Total revenues 28,572 71,328 Interest expense 582 21,858 ---------- ---------- Revenues, net of interest expense 27,990 49,470 ---------- ---------- NON-INTEREST EXPENSES: Compensation and benefits 25,594 53,970 Professional services 7,224 10,492 Business development 7,142 6,812 Clearing and brokerage fees 2,653 3,393 Occupancy and equipment 5,374 8,580 Communications 3,637 6,255 Other operating expenses 3,611 7,055 ---------- ---------- Total non-interest expenses 55,235 96,557 ---------- ---------- Operating loss (27,245) (47,087) ---------- ---------- OTHER INCOME (LOSS): Loss on subsidiary share transactions (9,776) (189) Other loss (4) (3) ---------- ---------- Loss before income taxes (37,025) (47,279) Income tax benefit (310) (9,974) ---------- ---------- Net loss (36,715) (37,305) Less: Net loss attributable to the noncontrolling interest of consolidated subsidiary (4,558) (12,254) ---------- ---------- Net loss attributable to Arlington Asset shareholders $(32,157) $(25,051) ========== ========== Basic loss per share attributable to Arlington Asset $(0.21) $(0.17) ========== ========== Diluted loss per share attributable to Arlington Asset $(0.21) $(0.17) ========== ========== Weighted average shares outstanding - basic (in thousands) 153,912 150,948 ========== ========== Weighted average shares outstanding - diluted (in thousands) 153,912 150,948 ========== ========== ARLINGTON ASSET INVESTMENT CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) Six Months Ended (Unaudited) June 30, ----------------------- 2009 2008 ---------- ---------- REVENUES: Capital markets $81,075 $157,072 Principal investment: Interest 3,881 47,694 Net investment loss (3,983) (20,201) Dividends 108 339 Other - 2,356 ---------- ---------- Total revenues 81,081 187,260 Interest expense 3,346 45,508 ---------- ---------- Revenues, net of interest expense 77,735 141,752 ---------- ---------- NON-INTEREST EXPENSES: Compensation and benefits 70,731 130,924 Professional services 11,993 22,959 Business development 13,123 19,106 Clearing and brokerage fees 5,950 7,023 Occupancy and equipment 13,479 17,769 Communications 8,864 12,273 Other operating expenses 8,936 12,439 ---------- ---------- Total non-interest expenses 133,076 222,493 ---------- ---------- Operating loss (55,341) (80,741) ---------- ---------- OTHER INCOME (LOSS): Loss on subsidiary share transactions (9,912) (189) Gain on extinguishment of long-term debt 132,453 - Other (loss) income (7) 73,034 ---------- ---------- Income (loss) before income taxes 67,193 (7,896) Income tax provision (benefit) 9,245 (10,780) ---------- ---------- Net income 57,948 2,884 Less: Net loss attributable to the noncontrolling interest of consolidated subsidiary (11,459) (17,167) ---------- ---------- Net income attributable to Arlington Asset shareholders $69,407 $20,051 ========== ========== Basic earnings per share attributable to Arlington Asset $0.45 $0.13 ========== ========== Diluted earnings per share attributable to Arlington Asset $0.45 $0.13 ========== ========== Weighted average shares outstanding - basic (in thousands) 153,135 150,869 ========== ========== Weighted average shares outstanding - diluted (in thousands) 153,551 151,345 ========== ========== ARLINGTON ASSET INVESTMENT CORP. CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands, except per share amounts) (Unaudited) ASSETS 30-Jun-09 31-Dec-08 ---------- ---------- Cash and cash equivalents $36,831 $254,653 Receivables: Interest 802 1,378 Other 199 32,571 Investments: Mortgage-backed securities, at fair value 149,298 594,294 U.S. Treasury bonds, at fair value - 550,000 Equity investments, at fair value 71,280 - Trading securities, at fair value - 17,954 Long-term and other investments 4,148 54,976 Derivative assets, at fair value - 264 Intangible assets, net - 8,943 Furniture, equipment, software and leasehold improvements, net 34 24,442 Prepaid expenses and other assets 6,995 20,816 ---------- ---------- Total assets $269,587 $1,560,291 ========== ========== LIABILITIES AND EQUITY Liabilities: Repurchase agreements $94,738 $1,063,040 Trading account securities sold, but not yet purchased, at fair value - 8,325 Derivative liabilities, at fair value - 56 Interest payable 483 2,064 Accrued compensation and benefits 7,175 47,259 Due to clearing broker - 3,009 Accounts payable, accrued expenses and other liabilities 23,740 38,925 Long-term debt 51,775 254,357 ---------- ---------- Total liabilities 177,911 1,417,035 ---------- ---------- Equity: Common stock, 158,984 and 159,217 shares 1,590 1,592 Additional paid-in capital 1,502,911 1,493,130 Accumulated other comprehensive loss, net of taxes (1,211) (118) Accumulated deficit (1,411,614) (1,481,021) ---------- ---------- Total Arlington Asset shareholders' equity 91,676 13,583 Noncontrolling interest - 129,673 ---------- ---------- Total equity 91,676 143,256 ---------- ---------- Total liabilities and equity $269,587 $1,560,291 ========== ========== Book value per share - Arlington Asset shareholders' equity $0.59 $0.09 ========== ========== Book value per share - total equity $0.59 $0.95 ========== ========== Shares outstanding (in thousands) 154,116 151,221 ========== ========== DATASOURCE: Arlington Asset Investment Corp. CONTACT: Media or Investors, Kurt Harrington, +1-877-370-4413, Web Site: http://www.arlingtonasset.com/

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AI Air Liquide SA