Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — FY2022 Earnings Presentation
23 slides from Apollo Commercial Real Estate Finance's earnings presentation, Feb 9, 2023
Slide 1: Q4 & FY 2022 Financial Results
Exhibit 99.2 Q4 & FY 2022 Financial Results Apollo Commercial Real Estate Finance, Inc. February 2023 Unless otherwise noted, information as of December 31, 2022 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in
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 1,a 1,a 2022 Distributable Earnings Q4’22 Distributable Earnings Well Covered Dividend $1.54 $0.48 1.10x 1 1 b Distributable Earnings per Diluted Share of Distributable Earnings per Diluted Share of Coverage Ratio for Dividend per Share of Common Stock Common Stock Common Stock Durabl
Slide 4: Summary Results
Summary Results Ø Net interest income of $242 million for 2022; $69 million in Q4 Ø Net income available to common stockholders of $253 million, or $1.68 per diluted share of common stock for 2022; $7 million loss, or ($0.06) per diluted share of common stock for Q4 F Fi in na an nc ci ia al l R Re
Slide 5: Q4 Business Update
Q4 Business Update Ø Provided $133 million ($119 million funded at close) of seller financing in the form of a floating-rate first mortgage, with a 60% LTC, in conjunction with the sale of an urban pre-development property in Miami, FL N Ne ew w C Co om mm mi it tm me en nt ts s Ø Committed $110 mil
Slide 6: Portfolio Activity
Portfolio Activity Q4 Portfolio Activity YTD Portfolio Activity ($ in mm) 11% YoY Portfolio Growth a a 8 9 8 Origination Key Highlights Q4’22 $245 million 100% 10.3% 33% 2022 $3.7 billion 100% 8.6% 46% New Commitments to Floating Rate Weighted Average Weighted Average b c Mortgage Loans Mortgages Un
Slide 7: Per Share Overview
Per Share Overview 1,a Distributable Earnings per Share 10 Book Value per Share 1,a 10 Book Value per Share Roll Forward General CECL BVPS excl. General CECL BVPS Allowance & Depreciation Allowance & Depreciation December 31, 2021 $15.19 ($0.28) $15.47 (+) Earnings in excess of dividends $0.15 - $0.
Slide 8: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) E Ei ig gh ht t S Se ec cu ur re ed d D De eb bt t C Co ou un nt te er rp pa ar rt ti ie es s a an nd d O On ne e P Pr ri iv va at te e S Se ec cu ur ri it ti iz za at ti io on n A Ad dd de ed
Slide 9: Loan Portfolio Overview
Loan Portfolio Overview W/A Unlevered All-in Yield Number of Loans Carrying Value 6,a on Loan Portfolio 61 $8.7 billion % 7.6 W/A Remaining Fully-Extended 14 14,b W/A Portfolio Risk Rating W/A Portfolio Loan-to-Value 14,17 Term 3.0 59% 2.8 Years Collateral Diversification Loan Position 15 a) Exclude
Slide 10: Loan Portfolio Overview (cont'd)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other a 9 Property Type Kingdom York City Europe Southeast Midwest West Northeast Other Total Hotel $165 / 2% $146 / 2% $667 / 8% $443 / 5% $62 / 1% $442 / 5% $8 / 0% $183 / 2% $2,117 / 24% Office 474 / 5% 454 / 5% 545 / 6% - 198 / 2% - - - 1,671
Slide 11: European Loan Portfolio Overview
European Loan Portfolio Overview W W/ /A A U Un nl le ev ve er re ed d A Al ll l- -i in n Y Yi ie el ld d o on n Number of Loans Carrying Value 6,14 Loan Portfolio 22 $4.0 Billion 6.9% 14,a Floating Rate First Mortgage W/A Loan-to-Value 100% 100% 62% Caravan Parks Sweden Residential 5% 6% Germany 5%
Slide 12: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk ARI is well-positioned for fluctuating foreign exchange rates due to several risk mitigating steps we have taken to structure and fund our non-US loan portfolio and associated secured financing facilities Foreign Exchange Rate Change (Local/USD) % FX Change YoY GBP:
Slide 13: Loan Maturities and Future Funding Profile
Loan Maturities and Future Funding Profile 17,18,19 Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity ($ in mm) a a 20,b Net Interest Income Sensitivity to Benchmark Rates Benchmark Rates Index 31-Dec 7-Feb USD 1M 4.39% 4.58% SOFR 1M 4.36% 4.57% EURIBOR 2.13% 2.60% SONIA ON 3
Slide 14: Senior Loan Portfolio (1 of 4)
Senior Loan Portfolio (1 of 4) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14,17 Location Hotel Date Cost Commitments Loan Subordinate Debt Maturity Various, Spain Loan 1 10/2019 $334 $28 Y 08/2024 Various, UK/Ireland Loan 2 11/2021 205 17 Y 11/2026 Napa Valley, CA
Slide 15: Senior Loan Portfolio (2 of 4)
Senior Loan Portfolio (2 of 4) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14,17 Location Office Date Cost Commitments Loan Subordinate Debt Maturity Long Island City, NY Loan 19 01/2020 $229 $62 Y 02/2025 Manhattan, NY Loan 20 03/2022 225 40 Y 04/2027 Berlin, Germ
Slide 16: Senior Loan Portfolio (3 of 4)
Senior Loan Portfolio (3 of 4) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14,17 Location Residential Date Cost Commitments Loan Subordinate Debt Maturity 22 Manhattan, NY Loan 34 08/2022 $274 - 09/2024 Various, UK Loan 35 12/2021 211 16 12/2026 a Manhattan, NY Loa
Slide 17: Senior Loan Portfolio (4 of 4)
Senior Loan Portfolio (4 of 4) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14,17 Location Healthcare Date Cost Commitments Loan Subordinate Debt Maturity Various, MA Loan 48 03/2022 $371 - 03/2027 Various, UK Loan 49 10/2019 153 - 10/2024 Subtotal/W.A. - Healthcare
Slide 18: Subordinate Loan Portfolio
Subordinate Loan Portfolio ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 14,17 Location Residential Date Cost Commitments Loan Subordinate Debt Maturity 22 Manhattan, NY Loan 55 05/2020 $255 - Y 09/2024 22 Manhattan, NY Loan 56 06/2015 192 9 Y 09/2024 21,22 Manhattan
Slide 19: Appendix
Appendix - Consolidated Balance Sheets - Consolidated Statement of Operations - Reconciliation of GAAP Net Income to Distributable Earnings Private and Confidential 19
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share data) December 31, 2022 December 31, 2021 Assets: Cash and cash equivalents $222,030 $343,106 a,c Commercial mortgage loans, net 8,121,109 7,012,312 b,c 560,881 844,948 Subordinate loans and other lending assets, net 302,688 151,788 Real estat
Slide 21: 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, 2022 2021 2022 2021 Net interest income: Interest income from commercial mortgage loans $151, 882 $85,595 $456,513 $327,702 Interest income from subordinate l
Slide 22: Reconciliation of GAAP Net Income to Distributable Earnings
1 Reconciliation of GAAP Net Income to Distributable Earnings (in thousands - except share and per share data) Three Months Ended December 31, Year Ended December 31, 1 Distributable Earnings : 2022 2021 2022 2021 Net income (loss) available to common stockholders: $(7,054) $43,029 $252,960 $210,551
Slide 23: 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
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