ARMOUR Residential REIT, Inc. (ARR) Cash Flow Statement

The latest reported quarters show dividends paid of $83.8M to $108.7M against FFO that turned negative in 2026Q1 and 2025Q2, with the only clearly positive AFFO print at $214.2M in 2025Q4 appearing isolated rather than recurring. The reported Div/AFFO ratio of 0.38 and 0.36 in the two most recent quarters with AFFO data suggests coverage was adequate in those periods, but the volatility in FFO makes it unclear whether that coverage is durable. Investors should monitor whether AFFO stabilizes above the dividend run-rate before treating the distribution as sustainable.

The gap between net income and operating cash flow across the ten quarters, including $210.2M of OCF against a $114.8M net income in 2026Q2, indicates that the income statement is shaped by fair-value and hedge accounting rather than cash interest spread. FFO/NI ratios swing from -2.03 to 3.71, which reflects the instability of GAAP earnings as a conversion anchor. This pattern suggests the cash flow base is more informative than net income, but operating cash flow itself is volatile and does not yet establish a consistent earnings base.

Given dividends paid consistently in the $38M to $109M range while FFO was negative in multiple quarters, the distribution appears to be partly funded by balance sheet capacity and financing rather than recurring spread income. Secondary offerings in the company's history, noted in prior analysis, would further suggest dependence on external equity to sustain distributions. Investors should monitor whether leverage is reduced or dividends are re-based if repo access tightens.