designer491 Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) is a well-managed commercial real estate investment trust with a large portfolio of commercial mortgages. The trust's portfolio value grew in the fourth quarter as its originations exceeded its repayments for the first time in 2023. Though the commercial trust covered its dividend with distributable earnings in the last quarter, I think that dividend risks have slightly increased, primarily because of a lower margin of dividend safety reflec ...

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 document. 2 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 2 ...

Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) Q4 2023 Earnings Conference Call February 7, 2024 10:00 AM ET Company Participants Stuart Rothstein - Chief Executive Officer Scott Weiner - Chief Investment Officer Anastasia Mironova - Chief Financial Officer Conference Call Participants Doug Harter - UBS Stephen Laws - Raymond James Jade Rahmani - KBW Rick Shane - JPMorgan Steve Delaney - Citizens JMP Operator I’d like to remind everyone that today’s call and webcast are being recorded. Please note t ...

For the quarter ended December 2023, Apollo Commerical Finance (ARI) reported revenue of $58.01 million, down 16.1% over the same period last year. EPS came in at $0.36, compared to $0.31 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $60.07 million, representing a surprise of -3.43%. The company has not delivered EPS surprise, with the consensus EPS estimate being $0.36.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

Apollo Commerical Finance (ARI) came out with quarterly earnings of $0.36 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this real estate investment trust would post earnings of $0.38 per share when it actually produced earnings of $0.37, delivering a surprise of -2.63%.Over the last four quarters, the company has surpassed consensus EPS estimates just once.A ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) ARI is an externally managed REIT focused on originating and managing commercial real estate debt, with an $8.3 billion portfolio as of December 2023 - The company is a **REIT** focused on commercial real estate debt, externally managed by **ACREFI Management, LLC**, an indirect subsidiary of **Apollo Global Management, Inc**[21](index=21&type=chunk) - Portfolio and Financing Summary (as of December 31, 2023) | Category | Amount (in billions) | | :--- | :--- | | **Assets** | | | Commercial Mortgage Loans | $7.9 | | Subordinate Loans & Other | $0.4 | | **Financing** | | | Secured Debt Arrangements | $5.6 | | Senior Secured Term Loans | $0.77 | | 4.625% Senior Secured Notes | $0.50 | | Construction Financing (REO) | $0.16 | - The company's **investment strategy** targets performing **commercial first mortgage loans** and **subordinate financings** on institutional-quality real estate in the U.S. and Europe, with a value-driven underwriting approach that includes **ESG considerations**[25](index=25&type=chunk)[26](index=26&type=chunk) - ARI's financing strategy utilizes **leverage**, targeting **2.0 to 3.0 turns** for mortgage loans, through sources like secured credit facilities, private securitizations, and corporate debt As of year-end 2023, total borrowings under these arrangements were substantial, including **$3.2 billion** under secured debt, **$147.0 million** under a revolving facility, and **$2.2 billion** under a private securitization[29](index=29&type=chunk) - The company has **no employees** and is **entirely managed by the Manager**, with all officers being employees of the Manager or its affiliates[38](index=38&type=chunk) [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks across business, financing, assets, manager relationship, and REIT taxation, including competition, leverage, credit losses, and compliance challenges - **Business & Structure Risks:** The company faces **significant competition**, **cybersecurity threats**, and risks related to maintaining its exclusion from the **1940 Act**, which could be jeopardized by the composition of its assets[43](index=43&type=chunk)[45](index=45&type=chunk)[67](index=67&type=chunk) - **Financing & Hedging Risks:** The company's use of **leverage** (secured debt, credit facilities) exposes it to risks of **increased borrowing costs**, **collateral calls**, and **potential defaults** if covenants are breached Hedging strategies may not be fully effective and could expose the company to contingent liabilities[86](index=86&type=chunk)[90](index=90&type=chunk)[105](index=105&type=chunk) - **Asset Risks:** The commercial mortgage loans are subject to **delinquency and foreclosure** The company faces risks from **asset concentration**, the **illiquidity** of its loans, and the difficulty in estimating credit losses under the **CECL standard** Macroeconomic trends like **inflation and higher interest rates** can impair asset values and borrower repayment ability[116](index=116&type=chunk)[118](index=118&type=chunk)[135](index=135&type=chunk) - **Manager Relationship Risks:** **Conflicts of interest** exist with the Manager (Apollo), as it manages other vehicles with similar strategies The company is **dependent on the Manager's personnel**, and the management agreement is **costly and difficult to terminate**[142](index=142&type=chunk)[150](index=150&type=chunk)[159](index=159&type=chunk) - **REIT Taxation Risks:** Failure to comply with complex REIT qualification rules (e.g., income, asset, and distribution tests) could result in the **loss of REIT status** and subject the company to **corporate income tax**, **significantly reducing cash available for distributions**[165](index=165&type=chunk)[167](index=167&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None [Cybersecurity](index=31&type=section&id=Item%201C.%20Cybersecurity) ARI's cybersecurity risk management is governed by its external Manager, Apollo, integrated into its ERM framework with board oversight, and has not materially impacted the company - The company's cybersecurity risk management is handled by its **external Manager, Apollo**, and is integrated into Apollo's overall **Enterprise Risk Management (ERM) framework**[193](index=193&type=chunk)[194](index=194&type=chunk) - Apollo's cybersecurity program focuses on **governance, technical safeguards, incident response, third-party risk management, and employee education**[194](index=194&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - Oversight is provided by the **AGM board of directors**, its **audit committee**, and various risk committees, with the **CISO** responsible for strategy and reporting The company's audit committee receives **at least annual presentations** on cybersecurity risks[200](index=200&type=chunk)[203](index=203&type=chunk) - The company states that cybersecurity threat risks have **not materially affected** its business strategy, results of operations, or financial condition[199](index=199&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties) The company's principal executive office is located at 9 West 57th Street, New York, New York 10019 - The principal executive office is located at **9 West 57th Street, New York, New York 10019**[205](index=205&type=chunk) [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in legal proceedings concerning a Manhattan mezzanine loan, with claims against it and Apollo Global Management, Inc. largely dismissed, though an appeal is pending - The company was involved in legal proceedings concerning a **mezzanine loan** for a **Manhattan development project** A key action, the April 2021 Action, saw **claims against the Company and Apollo Global Management, Inc. dismissed** An **appeal by co-lenders was also granted in Apollo's favor**, dismissing the remaining claim against the subsidiary[545](index=545&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) ARI common stock trades on the NYSE under "ARI", with 445 holders as of February 2024, and no equity repurchases in 2023 - Common stock is listed on the **NYSE** under the symbol **"ARI"**[209](index=209&type=chunk) - As of **February 5, 2024**, there were **445 registered holders** of common stock[210](index=210&type=chunk) - The company **did not repurchase any** of its equity securities during the three months or year ended **December 31, 2023**[214](index=214&type=chunk) - Cumulative Total Stockholder Return (2018-2023) | Period Ending | Apollo Commercial Real Estate Finance, Inc. | S&P 500 | BBREMTG Index | | :--- | :--- | :--- | :--- | | 12/31/2018 | 100.00 | 100.00 | 100.00 | | 12/31/2019 | 121.05 | 125.24 | 120.03 | | 12/31/2020 | 86.53 | 148.27 | 93.38 | | 12/31/2021 | 112.19 | 190.79 | 109.82 | | 12/31/2022 | 104.59 | 156.21 | 83.05 | | 12/31/2023 | 130.04 | 197.23 | 95.08 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net income significantly decreased in 2023 to $45.9 million due to investment losses and increased CECL allowance, while the loan portfolio remained stable at $8.4 billion with a 3.0 debt-to-equity ratio - Key Operating Results (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income Available to Common Stockholders | $45.9 million | $253.0 million | | Diluted EPS (GAAP) | $0.29 | $1.68 | | Net Interest Income | $252.2 million | $241.6 million | | Net Realized Loss (Gain) on Investments | ($86.6 million) | $18.7 million | | Increase in Specific CECL Allowance, net | $59.5 million | ($11.5 million) | - Non-GAAP Performance Measures (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Distributable Earnings | $157.5 million | $239.3 million | | Diluted Distributable EPS | $1.09 | $1.67 | | Book Value Per Share (Year-End) | $14.43 | $15.54 | - The significant net realized loss in 2023 was primarily driven by an **$82.0 million write-off** of a previously recorded **Specific CECL Allowance** on a **subordinate loan** secured by an ultra-luxury residential property in **Manhattan**[227](index=227&type=chunk) - The loan portfolio's carrying value was **$8.4 billion** as of December 31, 2023, with a **weighted-average risk rating of 3.0** (on a 5-point scale), consistent with the prior year[254](index=254&type=chunk)[263](index=263&type=chunk) - The company's **debt-to-equity ratio increased slightly to 3.0** at year-end 2023 from 2.8 at year-end 2022[267](index=267&type=chunk) - In 2023, the company **repaid its remaining 5.375% Convertible Senior Notes** due 2023 and **secured additional financing capacity** through new and upsized credit facilities[233](index=233&type=chunk)[275](index=275&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages credit, interest rate, liquidity, and market value risks, with a 50 basis point rate increase projected to raise net interest income by $5.7 million annually - The company is subject to **credit risk**, which it seeks to mitigate by acquiring **high-quality assets** and employing a **value-driven underwriting process**[304](index=304&type=chunk) - Interest Rate Sensitivity Analysis (as of Dec 31, 2023) | Change in Benchmark Rate | Hypothetical Impact on Net Interest Income (12-month period) | | :--- | :--- | | +50 basis points | +$5.7 million | | -50 basis points | -$5.7 million | - The company manages **market risk** associated with **commercial mortgage assets**, which are subject to economic conditions, real estate values, and other factors[309](index=309&type=chunk) - **Foreign currency risk** on loans denominated in currencies other than USD is mitigated through the use of **foreign currency forward contracts**[311](index=311&type=chunk) [Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2023, with Deloitte & Touche LLP issuing an unqualified opinion and highlighting two Critical Audit Matters related to CECL allowance estimations - The independent auditor, **Deloitte & Touche LLP**, identified **two Critical Audit Matters (CAMs)** in their report: 1. **CECL Allowance - Estimation of Economic Conditions:** The subjectivity and complexity in determining the impact of macroeconomic factors on the company's loss rate 2. **CECL Allowance - Estimation of Fair Value of Underlying Collateral:** The significant estimates and assumptions required to value the collateral of loans exhibiting signs of financial difficulty[323](index=323&type=chunk)[325](index=325&type=chunk) - Consolidated Balance Sheet Highlights (as of Dec 31, 2023 vs 2022) | Account (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Assets | $9,296,730 | $9,568,352 | | Commercial mortgage loans, net | $7,925,359 | $8,121,109 | | Total Liabilities | $7,087,997 | $7,213,848 | | Total Stockholders' Equity | $2,208,733 | $2,354,504 | - Consolidated Statement of Operations Highlights (Year ended Dec 31) | Account (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Net interest income | $252,172 | $241,578 | | Total net revenue | $344,591 | $303,640 | | Net income | $58,127 | $265,232 | | Net income available to common stockholders | $45,855 | $252,960 | - The **total CECL allowance increased to $223.5 million** as of December 31, 2023, from **$164.1 million** at year-end 2022 The increase was driven by a **$59.5 million net increase** in the **Specific CECL Allowance**, primarily related to two mezzanine loans on a Manhattan property[419](index=419&type=chunk)[420](index=420&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=98&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None [Controls and Procedures](index=98&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, a finding attested by Deloitte & Touche LLP - Management concluded that the company's disclosure controls and procedures were **effective as of December 31, 2023**[567](index=567&type=chunk) - Management's assessment concluded that the company's internal control over financial reporting was **effective as of December 31, 2023**, based on the **COSO framework**[569](index=569&type=chunk)[570](index=570&type=chunk) [Other Information](index=98&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None Part III Part III incorporates information on directors, executive officers, corporate governance, executive compensation, security ownership, and related party transactions by reference from the 2024 proxy statement [Directors, Executive Officers and Corporate Governance](index=98&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required for this item is incorporated by reference from the company's 2024 proxy statement - Information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the **definitive proxy statement for the 2024 annual meeting of stockholders**[572](index=572&type=chunk) [Executive Compensation](index=99&type=section&id=Item%2011.%20Executive%20Compensation) Information required for this item is incorporated by reference from the company's 2024 proxy statement - Information regarding executive compensation is **incorporated by reference** from the **definitive proxy statement for the 2024 annual meeting of stockholders**[573](index=573&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=99&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20Related%20Stockholder%20Matters) Information required for this item is incorporated by reference from the company's 2024 proxy statement - Information regarding security ownership is **incorporated by reference** from the **definitive proxy statement for the 2024 annual meeting of stockholders**[573](index=573&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=99&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required for this item is incorporated by reference from the company's 2024 proxy statement - Information regarding related party transactions and director independence is **incorporated by reference** from the **definitive proxy statement for the 2024 annual meeting of stockholders**[574](index=574&type=chunk) [Principal Accountant Fees and Services](index=99&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required for this item is incorporated by reference from the company's 2024 proxy statement - Information regarding principal accountant fees and services is **incorporated by reference** from the **definitive proxy statement for the 2024 annual meeting of stockholders**[575](index=575&type=chunk) Part IV Part IV lists all exhibits filed with the Form 10-K, including financial statements, schedules, corporate agreements, and required officer certifications [Exhibits, Financial Statement Schedules](index=99&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides a comprehensive list of all financial statements, schedules, and exhibits filed with the Form 10-K - This section provides a **comprehensive list** of all **financial statements, schedules, and exhibits** filed with the Form 10-K[576](index=576&type=chunk) [Form 10-K Summary](index=102&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not Applicable

Apollo Commerical Finance (ARI) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released ...

EXTREME-PHOTOGRAPHER Co-authored by Treading Softly I've long been cursed with the inability to picture or visualize how something could look in the future. I'm highly practical and analytical, so my mind thrives on figuring out systems and conducting research. My wife, however, can imagine redesigning our entire living room and living in that space in the future. We complement each other well. She can dream of our retirement together and all we want to do; I can figure out how to make that happen financial ...

NEW YORK, Jan. 22, 2024 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the "Company" or "ARI") (NYSE:ARI) today announced the estimated federal income tax treatment of the Company's 2023 distributions on its common stock (CUSIP #03762U105) and its 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock. The federal income tax classification of the 2023 distributions on the Company's common stock as it is expected to be reported on Form 1099-DIV is set forth in the following table ...

NEW YORK, Jan. 18, 2024 (GLOBE NEWSWIRE) -- Apollo Commercial Real Estate Finance, Inc. (the "Company" or "ARI") (NYSE:ARI), today announced the Company will hold a conference call to review its fourth quarter and full year 2023 financial results on Wednesday, February 7, 2024 at 10:00 a.m. Eastern Time. The Company's fourth quarter and full year 2023 financial results will be released after the market closes on Tuesday, February 6, 2023. During the conference call, Company officers will review fourth quart ...