Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — Q4 2023 Earnings Presentation
22 slides from Apollo Commercial Real Estate Finance's earnings presentation, Feb 7, 2024
Slide 1: Q4 & FY 2023 Financial Results
Q4 & FY 2023 Financial Results Apollo Commercial Real Estate Finance, Inc. February 6, 2024 Unless otherwise noted, information as of December 31, 2023 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this docum
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures This presentation may contain forward-looking statements that are within the meaning of 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 c
Slide 3: ARI Highlights
ARI Highlights 2023 Distributable Earnings1,a Q4’23 Distributable Earnings1,a Strong Dividend Coverage $1.69 $0.36 1.21x Distributable Earnings1 per Diluted Distributable Earnings1 per Diluted Coverage Ratio2,b for Dividend per Share of Common Stock Share of Common Stock Share of Common Stock Quarte
Slide 4: Summary Results
Summary Results Net income available to common stockholders of $46 million, or $0.29 per diluted share of common stock for 2023; Net income available to common stockholders of $43 million, or $0.30 per diluted share of common stock for Q4 Financial Results Distributable Earnings1,a of $244 milli
Slide 5: Summary Results (cont'd)
Summary Results (cont’d) Total loan portfolio of $8.4 billion with w/a unlevered all-in yield6,a of 8.7% – 95% first mortgages Loan Portfolio – 99% floating rate Weighted-average risk rating of 3.0 No Specific CECL Allowance recorded in Q4; General CECL Allowance remained generally consistent
Slide 6: Per Share Overview
Per Share Overview Distributable Earnings per Share1,a Book Value per Share9 . 2023 Distributable earnings per share1,a $1.69 $14.74 $14.73 Dividends declared per share $1.40 $0.29 $0.30 $0.35 $14.45 $14.43 3Q'23 4Q'23 BVPS Post-General CECL Allowance & Depreciation Distributable Earnings per Sh
Slide 7: Portfolio Activity & REO Overview
Portfolio Activity & REO Overview Q4 Loan Portfolio Activity YTD Loan Portfolio Activity ($ in mm) ($ in mm) New Funding 7 8 7,a 8 REO Overview $275 million committed and fully funded to a first Q4 Loan ($ in mm) Net Net mortgage secured by a pan-European portfolio of hostels b Portfolio As of Dec
Slide 8: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) No Corporate Debt ~70% Weighted Average Available Maturities until 2026 Advance Ratee Secured Debt Arragementsa,b,c 3.0x Debt to Equity Ratio10 1.4x Fixed Charge Coverage11 $5,552 (60%) Corpor
Slide 9: Loan Portfolio Overview
Loan Portfolio Overview W/A Unlevered All-in Yield Number of Loans Carrying Value on Loan Portfolio6,12,a 50 $8.4 billion 8.7% W/A Remaining Fully-Extended W/A Portfolio Risk Rating12 W/A Portfolio Loan-to-Value12,b Term12,14 3.0 57% 2.3 Years Collateral Diversification12 Origination Vintage12 Loan
Slide 10: Loan Portfolio Overview (cont'd)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other a 8 Property Type Kingdom York City Europe Southeast Midwest West Northeast Other Total Hotel $192 / 2% $146 / 2% $863 / 10% $368 / 4% $57 / 1% $334 / 4% $9 / 0% $160 / 2% $2,129 / 25% Office 456 / 5% 455 / 5% 494 / 6% - 188 / 2% - - - 1,59
Slide 11: Office Loan Portfolio Overview
Office Loan Portfolio Overview Number of Loans a Carrying Value c First Mortgage W/A Loan-to-Value12,b 9 Loans $1.5 Billion 99% 50% Loans with 3rd Party Fully Leased W/A Risk Rating12 Subordinate Debt to Credit Tenantd 2.9 2 Loans 19% Origination Vintage12 Location Fully Extended Maturities12,14 $78
Slide 12: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk Foreign Exchange Rate Change (Local/USD) % FX Change YoY GBP: 5% EUR: 3% SEK: 4% Mitigating Foreign Exchange Risk As of December 31, 2023 the percentage of net equity to total foreign denominated carrying value was 29%, or $1.3 billion 71% weighted average advanc
Slide 13: Loan Maturities and Future Funding Profile
Loan Maturities and Future Funding Profile Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity14,15,16 ($ in mm) $899 $701 $662 $482 $181 $177 $68 $4 2024 2025 2026 2027 2028 & Beyond a a Fully-Extended Maturities (Net Equity) Expected Net Future Fundings Net Interest Income Se
Slide 14: Senior Loan Portfolio (1 of 3)
Senior Loan Portfolio (1 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended Hotel Date Cost Commitments Loan Subordinate Debt Maturity14 Location Loan 1 10/2019 $348 $24 Y 08/2024 Various, Spain Loan 2 12/2023 273 - 12/2028 Various, Europe Loan 3 11/2021 227 13 Y 11
Slide 15: Senior Loan Portfolio (2 of 3)
Senior Loan Portfolio (2 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended Retail Date Cost Commitments Loan Subordinate Debt Maturity 14 Location Loan 23 04/2022 $478 $37 04/2027 Various, UK Loan 24 10/2021 414 - 10/2026 Various, UK Loan 25 08/2019 250 - Y 09/2025
Slide 16: Senior Loan Portfolio (3 of 3)
Senior Loan Portfolio (3 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14 Healthcare Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 39 03/2022 $352 - 03/2027 Various, MA Loan 40 10/2019 160 - 10/2024 Various, UK Subtotal - Healthcare $512 -
Slide 17: Subordinate Loan Portfolio
Subordinate Loan Portfolio ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended Date Cost Commitments Loan Subordinate Debt Maturity 14 Location 19 Manhattan, NY Loan 47 - Residential 06/2015 $233 - 09/2024 18,19 Loan 48 - Residential 05/2020 170 - 09/2024 Manhattan, NY Loa
Slide 18: Appendix
Appendix - Consolidated Balance Sheets - Consolidated Statement of Operations - Reconciliation of GAAP Net Income to Distributable Earnings 18
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets ($ in thousands - except share data) December 31, 2023 December 31, 2022 Assets: Cash and cash equivalents $225,438 $222,030 Commercial mortgage loans, net a,d 7,925,359 8,121,109 Subordinate loans and other lending assets, net b,d 432,734 560,881 c Real estate owned, hel
Slide 20: Consolidated Statement of Operations
Consolidated Statement of Operations ($ in thousands - except share and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net interest income: Interest income from commercial mortgage loans $180,290 $151,882 $701,002 $456,513 Interest income from subordinate
Slide 21: Reconciliation of GAAP Net Income to Distributable Earnings
Reconciliation of GAAP Net Income to Distributable Earnings1 ($ in thousands - except share and per share data) Three Months Ended December 31, Year Ended December 31, Distributable Earnings1: 2023 2022 2023 2022 Net income available to common stockholders: $43,472 ($7,054) $45,855 $252,960 Adjustme
Slide 22: Footnotes
Footnotes 1. Distributable Earnings is a non-GAAP financial measure that we define 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 award
Apollo Commercial Real Estate Finance — Q4 2023 Earnings Presentation on 6ix