Apollo Commercial Real Estate Finance, Inc. (the “Company” or
“ARI”) (NYSE:ARI) today reported results for the quarter and year
ended December 31, 2023.
Net income available to common stockholders per
diluted share of common stock was $0.30 and $0.29 for the quarter
and year ended December 31, 2023, respectively. Distributable
Earnings (a non-GAAP financial measure defined below) and
Distributable Earnings prior to net realized loss on investments
and gain on extinguishment of debt per share of common stock were
$0.36 and $0.36 and $1.09 and $1.69 for the quarter and year ended
December 31, 2023, respectively.
Commenting on 2023 performance, Stuart
Rothstein, Chief Executive Officer and President of the Company,
said: “Despite the challenging macro environment over the past
year, ARI delivered strong performance for our stockholders in
2023, consistently providing a stable and well covered dividend. We
took proactive steps in managing our loan portfolio and optimizing
our balance sheet, which positioned us well to pivot towards
offense as the year progressed. We committed to two new loan
origination transactions in the fourth quarter and will continue to
opportunistically deploy capital alongside Apollo’s broader
commercial real estate credit platform.”
ARI issued a detailed presentation of the
Company’s quarter and year ended December 31, 2023 results, which
can be viewed at www.apollocref.com.
Conference Call and WebcastThe Company will
hold a conference call to review fourth quarter and year end
results on February 7, 2024, at 10am ET. To register for the call,
please use the following link:
https://register.vevent.com/register/BI71d3df57eff14851afda964c885d4e57
After you register, you will receive a dial-in
number and unique pin. The Company will also post a link in the
Stockholders’ section on ARI’s website for a live webcast. For
those unable to listen to the live call or webcast, there will be a
webcast replay link posted in the Stockholders’ section on ARI’s
website approximately two hours after the call.
Distributable
Earnings“Distributable Earnings”, a non-GAAP financial
measure, is defined as net income available to common stockholders,
computed in accordance with GAAP, adjusted for
(i) equity-based compensation expense (a portion of which may
become cash-based upon final vesting and settlement of awards
should the holder elect net share settlement to satisfy income tax
withholding), (ii) any unrealized gains or losses or other
non-cash items (including depreciation and amortization related to
real estate owned) included in net income available to common
stockholders, (iii) unrealized income from unconsolidated joint
ventures, (iv) foreign currency gains (losses), other than (a)
realized gains/(losses) related to interest income, and (b) forward
point gains/(losses) realized on the Company’s foreign currency
hedges, and (v) provision for loan losses.
As a REIT, U.S. federal income tax law
generally requires the Company to distribute annually at least 90%
of its REIT taxable income, without regard to the deduction for
dividends paid and excluding net capital gains, and that the
Company pay tax at regular corporate rates to the extent that it
annually distributes less than 100% of its net taxable income.
Given these requirements and the Company’s belief that dividends
are generally one of the principal reasons shareholders invest in a
REIT, the Company generally intends over time to pay dividends to
its stockholders in an amount equal to its net taxable income, if
and to the extent authorized by the Company’s board of directors.
Distributable Earnings is a key factor considered by the Company’s
board of directors in setting the dividend and as such the Company
believes Distributable Earnings is useful to investors.
During the year ended December 31, 2023, the
Company recorded in the consolidated statement of operations a
realized loss on a subordinate loan secured by an ultra-luxury
residential property and a realized loss related to the acquisition
of a hotel property through a deed-in-lieu of foreclosure. The
realized losses were partially offset by realized gains on
extinguishment of debt related to our convertible notes.
The Company believes it is useful to its
investors to also present Distributable Earnings prior to net
realized loss on investments and realized gain on extinguishment of
debt to reflect its operating results because (i) the Company’s
operating results are primarily comprised of earning interest
income on its investments net of borrowing and administrative
costs, which comprise the Company’s ongoing operations and (ii) it
has been a useful factor related to the Company’s dividend per
share because it is one of the considerations when a dividend is
determined. The Company believes that its investors use
Distributable Earnings and Distributable Earnings prior to net
realized loss on investments and realized gain on extinguishment of
debt, or a comparable supplemental performance measure, to evaluate
and compare the performance of the Company and its peers.
A significant limitation associated with
Distributable Earnings as a measure of the Company’s financial
performance over any period is that it excludes unrealized gains
(losses) from investments. In addition, the Company’s presentation
of Distributable Earnings may not be comparable to similarly titled
measures of other companies, that use different calculations. As a
result, Distributable Earnings should not be considered as a
substitute for the Company’s GAAP net income as a measure of its
financial performance or any measure of its liquidity under GAAP.
Distributable Earnings are reduced for realized losses on loans
which include losses that management believes are near certain to
be realized.
A reconciliation of Distributable Earnings, and
Distributable Earnings prior to net realized loss on investments
and realized gain on extinguishment of debt, to GAAP net income
(loss) available to common stockholders is included in the detailed
presentation of the Company’s quarter and year ended December 31,
2023 results, which can be viewed at www.apollocref.com.
About Apollo Commercial Real Estate
Finance, Inc. Apollo Commercial Real Estate Finance, Inc.
(NYSE: ARI) is a real estate investment trust that primarily
originates, acquires, invests in and manages performing commercial
first mortgage loans, subordinate financings and other commercial
real estate-related debt investments. The Company is externally
managed and advised by ACREFI Management, LLC, a Delaware limited
liability company and an indirect subsidiary of Apollo Global
Management, Inc., a high-growth, global alternative asset manager
with approximately $631 billion of assets under management at
September 30, 2023.
Additional information can be found on the
Company’s website at www.apollocref.com.
Forward-Looking
StatementsCertain statements contained in this press
release constitute forward-looking statements as such term is
defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and such statements are intended to be covered by the safe harbor
provided by the same. Forward-looking statements are subject to
substantial risks and uncertainties, many of which are difficult to
predict and are generally beyond the Company’s control. These
forward-looking statements include information about possible or
assumed future results of the Company’s business, financial
condition, liquidity, results of operations, plans and objectives.
When used in this release, the words believe, expect, anticipate,
estimate, plan, continue, intend, should, may or similar
expressions, are intended to identify forward-looking statements.
Statements regarding the following subjects, among others, may be
forward-looking: higher interest rates and inflation; market trends
in the Company’s industry, real estate values, the debt securities
markets or the general economy; the timing and amounts of expected
future fundings of unfunded commitments; the return on equity; the
yield on investments; the ability to borrow to finance assets; the
Company’s ability to deploy the proceeds of its capital raises or
acquire its target assets; and risks associated with investing in
real estate assets, including changes in business conditions and
the general economy. For a further list and description of such
risks and uncertainties, see the reports filed by the Company with
the Securities and Exchange Commission. The forward-looking
statements, and other risks, uncertainties and factors are based on
the Company’s beliefs, assumptions and expectations of its future
performance, taking into account all information currently
available to the Company. Forward-looking statements are not
predictions of future events. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
CONTACT: |
Hilary
Ginsberg |
|
Investor Relations |
|
(212) 822-0767 |
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