NEW YORK, July 26. 11, 2022 (GLOBE NEWSWIRE) — Apollo Commercial Real Estate Finance, Inc. (the “&CloseCurlyDoubleQuote Company; or “ARI”) (NYSE: ARI) today reported results for the three and six months ended June 30, 2022.
For the second quarter of 2022, net income available to common shareholders per diluted common share was $0.44 and distributable income (a non-GAAP financial measure defined below) was $0.35 per share ordinary.
Commenting on the financial results, Stuart Rothstein, CEO and President of the company, said: “The rapidly changing economic climate had a significant effect on real estate capital markets during the second quarter. Despite the environment, ARI’s results demonstrated that we continued to effectively deploy capital and earn our common stock dividend. I am encouraged that our resilient and diversified loan portfolio can generate strong returns in uncertain markets.”
ARI has published a detailed presentation of the company’s results for the three and six months ended June 30, 2022, which can be viewed at www.apollocref.com.
Conference Call and Webcast:
The Company will hold a conference call to review second quarter results on July 27, 2022 at 9:00 a.m. ET. To register for the call, please use the following link: https://register.vevent.com/register/BIbd7322c8f03543fdbafacdf99acc0e14
After registering, you will receive a call number and a unique PIN code. The Company will also post a link in the “Shareholders” section on ARI’s website for a live webcast. For those unable to listen to the live call or webcast, a replay link of the webcast will be posted in the “Shareholders” on ARI’s website about two hours after the call.
“Distributable income”, a non-GAAP financial measure, is defined as net income available to common shareholders, calculated in accordance with GAAP, adjusted for (i) stock-based compensation expense (a portion of which may become cash upon of the final decision vesting and settlement of the awards if the holder elects net settlement of the shares to satisfy income tax withholding), (ii) any unrealized gain or loss or other non-cash item ( including depreciation and amortization of real estate held) included in net income available to ordinary shareholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign exchange gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) realized forward gains/(losses) on the Company’s foreign exchange hedges, (v) non-cash amortization expense related to reclassification of a portion of the Company’s convertible senior notes (the “Notes&CloseCurlQuote” yDoubleQuote;) to shareholders’ equity in accordance with GAAP, and (vi) the provision for loan losses.
The weighted average number of diluted shares outstanding used for distributable earnings per diluted weighted average share has been adjusted from the weighted average number of diluted shares under GAAP to exclude shares issued from a potential conversion tickets. Consistent with the treatment of other unrealized adjustments to distributable income, these issuable shares are excluded until a conversion occurs, which the Company believes is a useful presentation for investors. The Company believes that the exclusion of shares issued in connection with a possible conversion of the Bonds from its calculation of the weighted average diluted distributable earnings per share is useful to investors for various reasons, including the following: (i) the conversion of the Bonds into shares requires both the holder of a Bond to elect to convert the Bond and for the Company to elect to settle the conversion in the form of shares; (ii) future conversion decisions by Noteholders will be based on the Company’s share price in the future, which is currently not determinable; (iii) the exclusion of the shares issued in connection with a possible conversion of the Bonds from the calculation of the weighted average diluted Distributable Profit per share is consistent with the way the Company treats the other unrealized elements in its calculation of the Distributable Profit per weighted average diluted share. to share; and (iv) the Company believes that when evaluating its operating performance, investors and potential investors consider the Company’s distributable income against its actual distributions, which are based on outstanding shares and not on shares that may be issued in the future.
As a REIT, US federal income tax law generally requires the Company to distribute at least 90% of its taxable REIT income annually, exclusive of the deduction for dividends paid and excluding net capital gains, and the Company pays tax at regular corporate rates to the extent that it distributes less than 100% of its net taxable income annually. 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 to pay dividends to its shareholders over time. 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 considered by the Company’s Board of Directors when setting the dividend and as such the Company believes that Distributable Profit is useful to investors.
The Company believes that it is useful for its investors to also present distributable income before realized losses and impairments on owned properties and investments, in order to reflect its results of operations, because (i) the results of operations of the Company consist primarily of interest income on its investments net of borrowings and administrative expenses, which comprise the day-to-day operations of the Company and (ii) it has been a useful factor relating to the Company’s dividend per share as it is one of the factors to consider when determining a dividend. The Company believes that its investors use distributable profits and distributable profits before realized losses and impairments on owned property and investments, or a comparable supplemental performance measure, to assess 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, which use different calculations. Accordingly, distributable earnings should not be considered 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 income is reduced for realized loan losses which include losses that management believes are virtually certain to occur.
A reconciliation of distributable earnings and distributable earnings before realized losses and impairments on owned real estate and investments, to GAAP net income (loss) available to common shareholders is included in the detailed presentation of the three and six months of the Company. Results as of June 30, 2022, available on www.apolloref.com.
About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that originates, acquires, invests in and primarily manages commercial first mortgage loans, subordinate financings and other commercial debt investments. commercial real estate. The company is externally managed and advised by AREFI 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 $513 billion. of assets under management as of March 31. , 2022.
Additional information can be found on the company’s website at www.apolloref.com.
Certain statements contained in this press release constitute forward-looking statements as 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 generally beyond the company’s control. These forward-looking statements include information about possible or expected 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 matters, 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, including the emergence and spread of variants of COVID-19; measures taken by governmental authorities to contain the COVID-19 pandemic or address its impact; the effectiveness of vaccines or other remedies and the timeliness 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 generally; 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 fundraising or acquire its target assets; and the risks associated with investing in real estate assets, including changes in trading conditions and the general economy. For a more detailed listing and description of such risks and uncertainties, see the Company’s filings 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.