Apollo Commercial Real Estate Finance, Inc · NYSE:ARI
Apollo Commercial Real Estate Finance — Q2 2023 Earnings Presentation
21 slides from Apollo Commercial Real Estate Finance's earnings presentation, Aug 1, 2023
Slide 1: Q2 2023 Financial Results
Q2 2023 Financial Results Apollo Commercial Real Estate Finance, Inc. July 2023 Unless otherwise noted, information as of June 30, 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 document.
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 Strong Distributable Earnings1,a Significant Dividend Coverage $0.46 1.31x Distributable Earnings1 per Diluted Share of Common Stock Coverage Ratio2 for Dividend per Share of Common Stock Quarter-End Liquidity Well-Positioned for Continued Tailwinds from Rising Interest Rates $407 Mil
Slide 4: Summary Results
Summary Results Net loss attributable to common stockholders of ($86) million, or ($0.62) per diluted share of common stock Distributable Earnings1,a of $66 million, or $0.46 per diluted share of common stock Q2 Financial Results Declared common stock dividends of $0.35 per share for Q2 2023,
Slide 5: Per Share Overview
Per Share Overview Distributable Earnings per Share1,a $0.35 Book Value per Share9 1,a Book Value per Share9 Roll Forward General CECL BVPS excl. General CECL BVPS Allowance & Depreciation Allowance & Depreciation December 31, 2022 $15.54 ($0.24) $15.78 (+) Earnings in excess of dividends $0.27 - $0
Slide 6: Portfolio Activity & REO Overview
Portfolio Activity & REO Overview Q2 Loan Portfolio Activity ($ in mm) Fundings $131 million in add-on fundings $243 million in loan proceeds from loan repayments, Repayments including a $60 million full repayment related to a loan secured by a hotel property in Tucson, AZ Net increase of $60
Slide 7: Capital Structure Overview
Capital Structure Overview Capital Structure Composition Conservative Capital Management Strategy ($ in mm) $857 Million of Unencumbered ~71% Weighted Average Available Real Estate Assets3 Advance Ratee Secured Debt Obligationsa,b,c 2.9x Debt to Equity Ratio10 1.5x Fixed Charge Coverage11 $5,379 (58
Slide 8: Loan Portfolio Overview
Loan Portfolio Overview W/A Unlevered All-in Yield Number of Loans Carrying Value on Loan Portfolio6,12,a 53 $8.3 billion 8.6% W/A Remaining Fully-Extended W/A Portfolio Risk Rating12 W/A Portfolio Loan-to-Value12,b Term12,15 3.1 57% 2.6 Years Collateral Diversification12 Origination Vintage12 Loan
Slide 9: Loan Portfolio Overview (cont’d)
Loan Portfolio Overview (cont’d) ($ in mm) United New Other a 8 Property Type Kingdom York City Europe West Southeast Midwest Northeast Other Total Hotel $182 / 2% $146 / 2% $613 / 7% $437 / 5% $365 / 4% $57 / 1% $9 / 0% $129 / 2% $1,938 / 23% Office 404 / 5% 433 / 5% 498 / 6% - - 190 / 2% - - 1,524
Slide 10: Office Loan Portfolio Overview
Office Loan Portfolio Overview Number of Loans a Carrying Value c W/A Risk Rating12 9 Loans $1.4 Billion 3.1 First Mortgage Loans with 3rd Party Subordinate Debt W/A Loan-to-Value12,b 99% 3 Loans 50% Origination Vintage12 Location Fully Extended Maturities12,15 a) Excludes one loan which consists of
Slide 11: Mitigating Foreign Exchange Risk
Mitigating Foreign Exchange Risk ARI proactively mitigates foreign exchange risk in our non-US loan portfolio and facilities Foreign Exchange Rate Change (Local/USD) % FX Change YoY GBP: 4% EUR: 4% SEK: (5%) Mitigating Foreign Exchange Risk Secured debt arrangements are structured in local currenc
Slide 12: Loan Maturities and Future Funding Profile
Loan Maturities and Future Funding Profile Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity15,16,17 ($ in mm) a a Net Interest Income Sensitivity to Benchmark Rates18,b Benchmark Rates Index Jun-30 Jul-28 SOFR 1M 5.14% 5.32% EURIBOR 3.58% 3.73% SONIA ON 4.93% 4.93% Note: Ass
Slide 13: Senior Loan Portfolio (1 of 3)
Senior Loan Portfolio (1 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 15 Hotel Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 1 10/2019 $345 $26 Y 08/2024 Various, Spain Loan 2 11/2021 223 15 Y 11/2026 Various, UK/Ireland Loan 3 05/2022 179
Slide 14: Senior Loan Portfolio (2 of 3)
Senior Loan Portfolio (2 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 15 Retail Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 23 04/2022 $476 $38 04/2027 Various, UK Loan 24 10/2021 412 - 10/2026 Various, UK Loan 25 08/2019 250 - Y 09/2025
Slide 15: Senior Loan Portfolio (3 of 3)
Senior Loan Portfolio (3 of 3) ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 15 Healthcare Date Cost Commitments Loan Subordinate Debt Maturity Location Loan 41 03/2022 $368 - 03/2027 Various, MA Loan 42 10/2019 161 - Y 10/2024 Various, UK Subtotal - Healthcare $529
Slide 16: Subordinate Loan Portfolio
Subordinate Loan Portfolio ($ in mm) Origination Amortized Unfunded Construction 3rd Party Fully-extended 15 Location Residential Date Cost Commitments Loan Subordinate Debt Maturity 20 Loan 48 - Residential 06/2015 $203 - 09/2024 Manhattan, NY 19,20 Manhattan, NY Loan 49 - Residential 05/2020 170 -
Slide 17: Appendix
Appendix - Consolidated Balance Sheets - Consolidated Statement of Operations - Reconciliation of GAAP Net Income to Distributable Earnings Private and Confidential 17
Slide 18: Consolidated Balance Sheets
Consolidated Balance Sheets (in thousands - except share data) June 30, 2023 December 31, 2022 Assets: Cash and cash equivalents $308,052 $222,030 Commercial mortgage loans, net a,c 7,831,859 8,121,109 Subordinate loans and other lending assets, net b,c 463,569 560,881 Real estate owned, held for in
Slide 19: Consolidated Statement of Operations
Consolidated Statement of Operations (in thousands - except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net interest income: Interest income from commercial mortgage loans $174,124 $99,386 $340,271 $183,810 Interest income from subordinate loan
Slide 20: 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 June 30, Six Months Ended June 30, Distributable Earnings1: 2023 2022 2023 2022 Net income available to common stockholders: ($86,468) $67,883 ($40,620) $80,053 Adjustment
Slide 21: 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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