NEW YORK, October 25, 2021 (GLOBE NEWSWIRE) – Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE: ARI), today announced its results for the quarter and period of nine months ended September 30, 2021.
For the third quarter of 2021, net income available to common shareholders per diluted common share was $ 0.38 and distributable income (a non-GAAP financial measure defined below) and distributable income before realized losses and impairments on real estate held and investments were $ 0.35 per common share.
Commenting on the financial results, Stuart Rothstein, CEO and President of the Company, said, “ARI had another strong quarter of operations and continues to build an active pipeline for new transactions. We expect origination levels in 2021 to reach pre-pandemic levels as transaction volume remains robust and commercial real estate market fundamentals continue to improve. “
ARI has published a detailed presentation of the Company’s results for the three-month and nine-month period ended September 30, 2021, which can be viewed at www.apolloreit.com.
Conference call and webcast:
Members of the public wishing to participate in the Company’s third quarter 2021 earnings conference call should dial from within the United States, (877) 331-6553, or from outside the United States, (760) 666 -3769, shortly before 10:00 a.m. on Tuesday October 26, 2021 and reference the Apollo Commercial Real Estate Finance, Inc. conference call (number 4160899). Please note that the teleconference will be available for replay starting at 1:00 p.m. on Tuesday, October 26, 2021 and ending at midnight on Tuesday, November 2, 2021. To access the replay, callers from the United States should dial (855) 859 -2056 and callers from outside the United States should dial (404) 537-3406 and enter the conference ID number 4160899.
“Distributable Income”, a non-GAAP financial measure is defined as the net income available to common shareholders, calculated in accordance with GAAP, adjusted for (i) share-based compensation expense (part of which may become cash upon final vesting and settlement of awards if the holder elects net settlement of shares to satisfy withholding income tax), (ii) any unrealized gains or losses or other non-monetary items (including depreciation and amortization of real estate held) included in net income available to common shareholders, (iii) unrealized income of unconsolidated joint ventures, (iv) foreign exchange gains (losses), other than (a) realized gains / (losses) related to interest income, and (b) forward gains / (losses) on the Company’s foreign exchange hedges, (v) the non-cash amortization charge related to the reclassification of a senior convertible bonds of the Company (the “Bonds”) in equity in accordance with GAAP, and (vi) the provision for loan losses.
The weighted average diluted shares outstanding used for distributable income per weighted average diluted share have been adjusted from the weighted average diluted shares under GAAP to exclude the issued shares from a potential conversion of the Notes. In accordance with the treatment of other unrealized adjustments to distributable earnings, these issuable shares are excluded until a conversion occurs, which the Company considers to be a useful presentation for investors. The Company believes that the exclusion of shares issued in connection with a potential conversion of the Notes from its calculation of distributable income per weighted average diluted share is useful to investors for various reasons, including the following: (i) the conversion of the Notes into shares requires both the holder of a note chooses to convert the note and the company chooses to settle the conversion in the form of shares; (ii) future conversion decisions by Noteholders will be based on the price of the shares of the Company in the future, which is not currently determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Notes from the calculation of distributable income per weighted average diluted share is consistent with the way the Company treats other unrealized items in its calculation of distributable income. per weighted average diluted share share; and (iv) the Company believes that when evaluating its operational performance, investors and potential investors consider the distributable profits of the Company in relation to its actual distributions, which are based on the outstanding shares and not on the shares. that may be issued in the future.
As a REIT, US federal income tax law generally requires the Company to distribute annually at least 90% of its taxable REIT income, without taking into account the deduction for dividends paid and excluding taxes. net capital gains, and that the Company pay tax at customary corporate rates. insofar as 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 primary reasons shareholders invest in a REIT, the Company generally intends, over time, to pay dividends to its shareholders in an amount equal to its net taxable income, if and to the extent authorized by the board of directors of the Company. Distributable profit is a key factor taken into account by the Board of Directors of the Company in setting the dividend and, as such, the Company believes that distributable profit is useful to investors.
During the nine-month period ended September 30, 2021, the Company recorded realized losses in the condensed consolidated statement of income related to the change in the expected timing of the sale of the Company’s real estate held, held for sale. sale and seizure of collateral related to a hotel loan.
The Company believes that it is useful for its investors to also present distributable profits before realized losses and impairments on property held, investments and interest rate swaps in order to reflect its operating results because ( i) the operating results of the Company mainly consist of interest earned on its investments net of borrowing and administration costs, which include the current activities of the Company and (ii) it is a useful factor related to the dividend per share of the Company, as this is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Profits and Distributable Profits before realized losses and impairments on real estate held, investments and interest rate swaps, or a comparable additional performance measure, to assess and compare performance. performance of the Company and its peers.
An important limitation associated with distributable income as a measure of the financial performance of the Company over any period is that it excludes unrealized gains (losses) on investments. In addition, the presentation of the distributable profits of the company may not be comparable to measures with the same name of other companies, which use different calculations. Therefore, distributable earnings should not be viewed 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 Profits are reduced for realized losses on loans which include losses that management believes are almost certain to be realized.
A reconciliation of distributable income and distributable income before losses and write-downs realized on real estate held, investments and interest rate swaps, with GAAP net income (loss) available to common shareholders is included in a detailed presentation of the Company’s three-month balance sheet. and the results for the nine-month period ended September 30, 2021, which can be viewed at www.apolloreit.com.
About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily creates, acquires, invests and manages senior commercial mortgages, subordinated financings and other debt investments related to the commercial real estate. The Company is managed and externally 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 $ 472 billion. assets under management as of June 30. , 2021.
Additional information is available on the Company’s website at www.apolloreit.com.
Certain statements contained in this press release constitute forward-looking statements as that 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 these 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 generally beyond the control of the Company. These forward-looking statements include information about the possible or expected future results of the Company’s business, its financial condition, liquidity, results of operations, plans and objectives. When used in this press 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 topics, among others, may be forward-looking: macro- and micro-economic impact of the COVID-19 pandemic; the severity and duration of the COVID-19 pandemic; measures taken by government authorities to contain the COVID-19 pandemic or address its impact; the effectiveness of vaccines or other remedies and the speed of their distribution and administration; the impact of the COVID-19 pandemic on the Company’s financial condition, results of operations, liquidity and capital resources; market trends in the Company’s industry, interest rates, real estate values, debt securities markets or the economy in general; the timing and amounts of future funding expected from unfunded commitments; return on equity; return on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raising or to acquire its target assets; and the risks associated with investing in real estate assets, including changes in business conditions and the economy in general. For a further list and description of these risks and uncertainties, see the Company’s reports with the Securities and Exchange Commission. Forward-looking statements and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations regarding 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 statement, whether as a result of new information, future events or otherwise, except as required by law.