Financial Performance - The Company's Book Value per Share (BVPS) was $15.52, which includes a CECL allowance of $213 million, representing 288 basis points of loan principal balance as of December 31, 2023[19, 20] - The company declared a dividend of $0.25 per share of common stock for the first quarter of 2024[21] - Net Income (Loss) was ($0.27) per diluted share for 4Q 2023 and ($0.78) per diluted share for full year 2023, including a CECL provision of $50 million and $175 million, respectively[22] - Distributable Earnings (Loss) was ($0.37) per diluted share for 4Q 2023 and $0.83 per diluted share for full year 2023, including write-offs of $59 million and $74 million, respectively[22] Portfolio Overview - The company has a $7.8 billion predominantly senior loan portfolio with a weighted average unlevered all-in yield of 90%[17, 22] - Multifamily and industrial assets represent 55% of the loan portfolio[17, 22] - The company collected 98% of interest payments during 2023[17, 22, 37] Liquidity and Capitalization - The company has $630 million of available liquidity, including $136 million in cash and $450 million undrawn capacity on the corporate revolver[17, 23] - The company has diversified financing sources totaling $8.9 billion with $2.8 billion of undrawn capacity[17, 23, 58] - 76% of the company's secured financing is fully non-mark-to-market[17, 23, 52, 58]

PART I [ITEM 1. BUSINESS](index=7&type=section&id=ITEM%201.%20BUSINESS) KREF is a real estate finance company focused on originating transitional senior loans for institutional-quality commercial real estate, externally managed by an affiliate of KKR - KREF is a real estate finance company primarily focused on originating and acquiring transitional senior loans secured by institutional-quality commercial real estate (CRE)[18](index=18&type=chunk) - The company is externally managed by KKR Real Estate Finance Manager LLC, an indirect subsidiary of KKR & Co. Inc., which had **$552.8 billion in assets under management** as of December 31, 2023[23](index=23&type=chunk) Portfolio Overview as of December 31, 2023 | Metric | Value (USD) | | :--- | :--- | | Total Investment Portfolio | $7.8 billion | | Senior and Mezzanine CRE Loans (Principal) | $7.6 billion | | Net Investment in Real Estate Owned (REO) | $158.6 million | | Investment in CMBS B-Pieces | $35.7 million | | Common Book Value | $1,077.0 million | - The loan portfolio is heavily weighted towards floating-rate instruments, with **99% of loans** by total loan exposure earning a floating rate of interest as of December 31, 2023[43](index=43&type=chunk)[307](index=307&type=chunk) - KREF utilizes a diversified financing strategy with a focus on non-mark-to-market sources, which represented **76% of its $4.8 billion in secured financing** as of December 31, 2023, reducing exposure to market fluctuations[36](index=36&type=chunk)[37](index=37&type=chunk) Loan Portfolio Diversification as of December 31, 2023 | Category | Top Allocations | | :--- | :--- | | **Property Type** | Multifamily (42%), Office (22%), Industrial (14%), Life Science (10%) | | **Geographic Location** | California (18%), Texas (15%), Massachusetts (10%), Florida (9%) | | **Loan to Value (LTV)** | Weighted Average LTV of 66% | | **Investment Type** | Senior Loans (93%), Mezzanine Loans (7%) | [ITEM 1A. RISK FACTORS](index=18&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces risks from lending competition, credit and market volatility, leverage, its external manager relationship, and complex legal and regulatory requirements - **Lending and Investment Risks:** The company operates in a highly competitive market, which may limit its ability to source desirable loans and could negatively affect yields, with investments exposed to economic downturns and interest rate fluctuations[56](index=56&type=chunk)[59](index=59&type=chunk)[62](index=62&type=chunk) - **Financing and Hedging Risks:** KREF's use of leverage subjects it to increased risk of loss, restrictive covenants, and potential margin calls if collateral values decline, while hedging activities may be imperfect and involve counterparty risk[132](index=132&type=chunk)[136](index=136&type=chunk)[145](index=145&type=chunk) - **Manager and Affiliate Risks:** The company's dependence on its external KKR manager creates potential conflicts of interest regarding fees and investment allocations, and termination of the management agreement would be difficult and costly[156](index=156&type=chunk)[159](index=159&type=chunk)[165](index=165&type=chunk) - **Legal and Regulatory Risks:** KREF must maintain its exclusion from the Investment Company Act, which limits operations, and navigate changing regulations, state licensing, and public company obligations[176](index=176&type=chunk)[177](index=177&type=chunk)[192](index=192&type=chunk) - **REIT and Tax Risks:** **Failure to maintain REIT qualification** would result in substantial corporate tax liability, and the required 90% income distribution may force asset sales or borrowings at disadvantageous times[199](index=199&type=chunk)[201](index=201&type=chunk)[209](index=209&type=chunk) - **Operational and Structural Risks:** The company is exposed to cybersecurity threats through its reliance on KKR's IT systems, and KKR's significant ownership stake and anti-takeover provisions may deter transactions favorable to shareholders[232](index=232&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=63&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[261](index=261&type=chunk) [ITEM 1C. CYBERSECURITY](index=63&type=section&id=ITEM%201C.%20CYBERSECURITY) KREF's cybersecurity is managed through KKR's comprehensive program, with oversight from the KREF audit committee and no material incidents reported - KREF is externally managed and participates in KKR's comprehensive cybersecurity program, which is led by KKR's Chief Information Security Officer (CISO)[262](index=262&type=chunk)[263](index=263&type=chunk) - Governance includes oversight from KKR's technology and information security risk committee and periodic presentations to the KREF audit committee on cybersecurity matters[265](index=265&type=chunk)[267](index=267&type=chunk) - KKR's risk management strategy includes an incident response plan, continuous infrastructure monitoring, regular audits, and periodic employee training[268](index=268&type=chunk)[269](index=269&type=chunk) - As of the filing date, the company has **not been materially affected by any cybersecurity incidents** for the reporting period[270](index=270&type=chunk) [ITEM 2. PROPERTIES](index=65&type=section&id=ITEM%202.%20PROPERTIES) The company's principal executive offices are located in New York, and it does not own any real property for its own use - The company's principal executive offices are located at 30 Hudson Yards, New York, New York, and it does not own any real property for corporate use[271](index=271&type=chunk) [ITEM 3. LEGAL PROCEEDINGS](index=65&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company was not involved in any material legal proceedings as of the end of the fiscal year - As of December 31, 2023, **KREF was not involved in any material legal proceedings**[676](index=676&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=65&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[273](index=273&type=chunk) PART II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=66&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) KREF's common stock trades on the NYSE, and the dividend for Q1 2024 was reduced to $0.25 per share, with no shares repurchased in 2023 - The company's common stock began trading on the NYSE under the symbol "KREF" on May 5, 2017[274](index=274&type=chunk) Dividends Declared Per Common Share | Year | Q1 | Q2 | Q3 | Q4 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **2023** | $0.43 | $0.43 | $0.43 | $0.43 | $1.72 | | **2022** | $0.43 | $0.43 | $0.43 | $0.43 | $1.72 | - The common stock dividend for the first quarter of 2024 was **reduced to $0.25 per share** to support dividend coverage from the performing loan portfolio[276](index=276&type=chunk) - The company has a **$100.0 million share repurchase program**, under which no shares were repurchased during the year ended December 31, 2023[284](index=284&type=chunk)[285](index=285&type=chunk) [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=69&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The company reported a net loss of $(53.9) million in 2023, driven by a significant provision for credit losses, resulting in a book value decline to $15.52 per share 2023 Operating Results Highlights | Metric | Value | | :--- | :--- | | Net Loss Attributable to Common Stockholders | $(53.9) million | | Net Loss per Diluted Share | $(0.78) | | Distributable Earnings | $57.6 million | | Distributable Earnings per Diluted Share | $0.83 | | Dividends Declared per Common Share | $1.72 | - The company took title to a defaulted senior office loan, recognizing a **$58.7 million realized loss**, which equated to $(0.85) per diluted share[292](index=292&type=chunk) Book Value Per Share Reconciliation | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Stockholders' Equity | $1,404.8M | $1,571.5M | | Less: Preferred Stock Liquidation Preference | $(327.8)M | $(327.8)M | | Common Stockholders' Equity | $1,077.0M | $1,243.8M | | Total Shares Outstanding | 69,386,568 | 69,095,011 | | **Book Value per Share** | **$15.52** | **$18.00** | - The book value as of December 31, 2023, includes the impact of a **$212.5 million CECL credit loss allowance**, equivalent to $(3.06) per share[302](index=302&type=chunk) - The loan portfolio's average risk rating was 3.2, with loans rated 4 or 5 (High Risk/Impaired) representing **13% of the total loan exposure**[305](index=305&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) - Net interest income decreased by $4.3 million YoY to $181.6 million, primarily due to the suspension of interest income accrual on nonaccrual loans[374](index=374&type=chunk)[375](index=375&type=chunk) - Operating expenses increased by $66.3 million YoY, driven mainly by a **$62.7 million increase in the provision for credit losses**[378](index=378&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=94&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is primarily exposed to credit, interest rate, and real estate market risks, with rising rates generally increasing net income from its floating-rate portfolio - The company's primary market risks include credit risk, interest rate risk, prepayment risk, financing risk, and real estate risk[425](index=425&type=chunk) - As of December 31, 2023, the company's floating-rate loan portfolio and financing arrangements were all indexed to Term SOFR, completing the transition from LIBOR[436](index=436&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2023) | Change in Index Rates | Impact on Quarterly Cash Flow | Impact per Common Share | | :--- | :--- | :--- | | **+100 bps** | +$2.2 million | +$0.03 | | **+50 bps** | +$1.1 million | +$0.02 | | **-50 bps** | -$1.1 million | -$0.02 | | **-100 bps** | -$2.2 million | -$0.03 | - The company faces financing risk from potential weakness or volatility in financial markets, which could affect lenders' ability or willingness to provide financing[439](index=439&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=97&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section contains the audited consolidated financial statements, which received an unqualified opinion, and detailed notes on the company's financial condition - The independent registered public accounting firm, Deloitte & Touche LLP, issued an **unqualified opinion** on the company's financial statements and its internal control over financial reporting as of December 31, 2023[446](index=446&type=chunk) - **Critical Audit Matters** identified by the auditor include the estimation of the Allowance for Credit Losses (specifically regarding economic conditions and collateral value determination) and the valuation of Real Estate Owned (REO) assets[452](index=452&type=chunk)[453](index=453&type=chunk)[458](index=458&type=chunk) Consolidated Balance Sheet Summary (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$7,547,618** | **$7,802,321** | | Commercial real estate loans, net | $7,133,078 | $7,387,164 | | Real estate owned assets (total) | $183,108 | $80,231 | | **Total Liabilities** | **$6,143,436** | **$6,230,885** | | Secured financing agreements, net | $3,782,419 | $3,748,691 | | Collateralized loan obligations, net | $1,942,171 | $1,935,592 | | **Total Equity** | **$1,404,182** | **$1,571,436** | Consolidated Statement of Income Summary (in thousands) | | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total net interest income | $181,610 | $185,873 | | Total other income | $21,199 | $19,194 | | Total operating expenses | $233,756 | $167,416 | | *Provision for credit losses, net* | *$175,116* | *$112,373* | | **Net Income (Loss)** | **$(31,657)** | **$37,593** | | **Net Income (Loss) Attributable to Common Stockholders** | **$(53,919)** | **$15,371** | [Note 3. Commercial Real Estate Loans](index=119&type=section&id=Note%203.%20Commercial%20Real%20Estate%20Loans) The loan portfolio's carrying value was $7.13 billion, net of a significantly increased $210.5 million allowance for credit losses driven by office sector stress Loan Portfolio Summary | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Outstanding Principal** | **$7,369.4M** | **$7,562.4M** | | Amortized Cost | $7,343.5M | $7,494.1M | | Allowance for Credit Losses | $(210.5)M | $(107.0)M | | **Carrying Value** | **$7,133.1M** | **$7,387.2M** | | Number of Loans | 69 | 76 | Allowance for Credit Losses Activity (in thousands) | | Commercial Real Estate Loans | Unfunded Loan Commitments | Total | | :--- | :--- | :--- | :--- | | **Balance at Dec 31, 2022** | **$106,974** | **$4,138** | **$111,112** | | Provision for credit losses, net | $177,202 | $(2,086) | $175,116 | | Write-offs charged | $(73,706) | — | $(73,706) | | **Balance at Dec 31, 2023** | **$210,470** | **$2,052** | **$212,522** | - The portfolio's weighted average risk rating was 3.2, with loans rated 5 (Impaired/Loss Likely) having a total exposure of **$512.1 million (7% of total)** and a carrying value of $505.4 million as of December 31, 2023[576](index=576&type=chunk)[579](index=579&type=chunk) [Note 5. Debt Obligations](index=127&type=section&id=Note%205.%20Debt%20Obligations) KREF maintained $3.78 billion in secured financing with a weighted average cost of 7.6% and was in compliance with all financial covenants Secured Financing Agreements Summary (as of Dec 31, 2023) | Facility Type | Maximum Size | Outstanding Principal | Weighted Avg. Funding Cost | | :--- | :--- | :--- | :--- | | Master Repurchase Agreements | $2,000.0M | $1,477.2M | 7.5% (avg) | | Term Loan Facility | $1,000.0M | $561.4M | 7.3% | | Term Lending Agreements | $1,977.4M | $1,329.4M | 7.6% (avg) | | Revolving Credit Agreement | $610.0M | $160.0M | 7.5% | | **Total / Weighted Average** | **$6,578.0M** | **$3,794.1M** | **7.6%** | - The company is subject to financial covenants including a minimum interest coverage ratio of 1.4x and a maximum total indebtedness ratio of 83.3% of total assets, and **was in compliance with all covenants** as of December 31, 2023[615](index=615&type=chunk) [Note 10. Equity](index=135&type=section&id=Note%2010.%20Equity) KKR and its affiliates held 14.4% of KREF's common stock, and the company did not repurchase shares or issue stock via its ATM program in 2023 - As of December 31, 2023, KKR and its affiliates beneficially owned 10,000,001 shares, representing **14.4% of KREF's outstanding common stock**[646](index=646&type=chunk) - The company **did not repurchase any common stock** under its $100.0 million repurchase program during 2023, with the full capacity remaining available[649](index=649&type=chunk) - **No shares were sold** under the At-The-Market (ATM) stock offering program in 2023, with $93.2 million remaining available for issuance[651](index=651&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=152&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2023 - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of December 31, 2023[728](index=728&type=chunk) - Management concluded that the company's **internal control over financial reporting was effective** as of December 31, 2023, based on the COSO 2013 framework[731](index=731&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter ended December 31, 2023[732](index=732&type=chunk) PART III [ITEMS 10-14. Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=154&type=section&id=ITEMS%2010-14) Information regarding directors, corporate governance, compensation, and other related matters is incorporated by reference from the company's 2024 proxy statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the company's definitive proxy statement, to be filed no later than 120 days after the fiscal year-end[739](index=739&type=chunk)[740](index=740&type=chunk)[741](index=741&type=chunk)[742](index=742&type=chunk)[743](index=743&type=chunk) PART IV [ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](index=154&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed as part of the annual report - This section provides a comprehensive list of all documents filed as part of the Form 10-K, including financial statements, schedules, and exhibits[744](index=744&type=chunk) [ITEM 16. FORM 10-K SUMMARY](index=160&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a summary for its Form 10-K - None[752](index=752&type=chunk)

KKR Real Estate Finance Trust Inc. (NYSE:KREF) Q3 2023 Results Conference Call October 24, 2023 10:00 AM ET Company Participants Jack Switala - IR Matt Salem - CEO Patrick Mattson - President and COO Kendra Decious - CFO Conference Call Participants Sarah Barcomb - BTIG Stephen Laws - Raymond James Don Fandetti - Wells Fargo Jade Rahmani - KBW Rick Shane - JP Morgan Steve Delaney - JMP Securities Operator Good morning, and welcome to the KKR Real Estate Finance Trust Incorporated Third Quarter 2023 Financia ...

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) This section presents KKR Real Estate Finance Trust Inc.'s unaudited financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents KKR Real Estate Finance Trust Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of income, changes in equity, and cash flows, along with detailed notes explaining significant accounting policies, loan portfolio specifics, debt obligations, equity, and related party transactions for the periods ended September 30, 2023, and December 31, 2022 [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents KKR Real Estate Finance Trust Inc.'s unaudited balance sheets as of September 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------- | :----------- | :----------- | | **Assets** | | | | Cash and cash equivalents | $108,038 | $239,791 | | Commercial real estate loans, net | $7,309,459 | $7,387,164 | | Total Assets | $7,625,442 | $7,802,321 | | **Liabilities** | | | | Secured financing agreements, net | $3,827,399 | $3,748,691 | | Collateralized loan obligations, net | $1,941,114 | $1,935,592 | | Convertible notes, net | — | $143,237 | | Total Liabilities | $6,172,145 | $6,230,885 | | **Equity** | | | | Total KKR Real Estate Finance Trust Inc. Stockholders' Equity | $1,453,724 | $1,571,538 | | Total Equity | $1,453,297 | $1,571,436 | | Total Liabilities and Equity | $7,625,442 | $7,802,321 | - Cash and cash equivalents decreased significantly from **$239.8 million** at December 31, 2022, to **$108.0 million** at September 30, 2023. Total Assets decreased by approximately **$176.9 million**, while Total Liabilities decreased by approximately **$58.7 million**, primarily due to the repayment of convertible notes. Total Equity decreased by approximately **$118.1 million**[16](index=16&type=chunk) [Condensed Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) This section presents KKR Real Estate Finance Trust Inc.'s unaudited income statements for the three and nine months ended September 30, 2023 and 2022 Condensed Consolidated Statements of Income (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income | $163,229 | $114,627 | $475,388 | $278,460 | | Interest expense | $118,617 | $67,311 | $340,270 | $144,503 | | Total net interest income | $44,612 | $47,316 | $135,118 | $133,957 | | Total other income | $5,443 | $3,846 | $17,025 | $14,381 | | Total operating expenses | $23,056 | $94,077 | $170,176 | $130,846 | | Net Income (Loss) Attributable to Common Stockholders | $21,401 | $(48,421) | $(35,181) | $769 | | Basic EPS | $0.31 | $(0.70) | $(0.51) | $0.01 | | Diluted EPS | $0.31 | $(0.70) | $(0.51) | $0.01 | | Dividends Declared per Share of Common Stock | $0.43 | $0.43 | $1.29 | $1.29 | - For the three months ended September 30, 2023, Net Income Attributable to Common Stockholders was **$21.4 million**, a significant improvement from a loss of **$(48.4) million** in the prior year period. This was primarily driven by a substantial decrease in the provision for credit losses (from **$80.6 million** to **$8.8 million**) and higher interest income, partially offset by increased interest expense[19](index=19&type=chunk) - For the nine months ended September 30, 2023, the company reported a Net Loss Attributable to Common Stockholders of **$(35.2) million**, compared to a net income of **$0.8 million** in the prior year. This was mainly due to a higher provision for credit losses (**$125.6 million** vs. **$91.2 million**) and significantly increased interest expense, despite a substantial rise in interest income[19](index=19&type=chunk) [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(Unaudited)) This section presents KKR Real Estate Finance Trust Inc.'s unaudited statements of changes in equity for the nine months ended September 30, 2023 Changes in Equity (Amounts in thousands) | Metric | Balance at Dec 31, 2022 | Balance at Sep 30, 2023 | | :------------------------------------- | :---------------------- | :---------------------- | | Total KKR Real Estate Finance Trust Inc. Stockholders' Equity | $1,571,538 | $1,453,724 | | Total Equity | $1,571,436 | $1,453,297 | **Key Changes (Nine Months Ended Sep 30, 2023):** * Net income (loss): $(25,077) (Q1), $(20,028) (Q2), $27,141 (Q3) * Common dividends declared: $(29,711) (Q1), $(29,716) (Q2), $(29,716) (Q3) * Series A preferred dividends declared: $(5,326) (Q1), $(5,326) (Q2), $(5,326) (Q3) * Stock-based compensation, net: $2,152 (Q1), $2,174 (Q2), $2,184 (Q3) - Total KKR Real Estate Finance Trust Inc. Stockholders' Equity decreased from **$1,571.5 million** at December 31, 2022, to **$1,453.7 million** at September 30, 2023, primarily due to net losses in the first two quarters of 2023 and consistent dividend declarations, partially offset by stock-based compensation[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents KKR Real Estate Finance Trust Inc.'s unaudited cash flow statements for the nine months ended September 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $118,874 | $103,953 | | Net cash provided by (used in) investing activities | $(62,986) | $(970,596) | | Net cash provided by (used in) financing activities | $(184,881) | $783,510 | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $(128,993) | $(83,133) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $121,628 | $190,637 | - Operating cash flows increased to **$118.9 million** in the nine months ended September 30, 2023, from **$104.0 million** in the prior year. Investing activities shifted from a significant outflow of **$(970.6) million** in 2022 to a smaller outflow of **$(63.0) million** in 2023, mainly due to reduced loan originations and fundings. Financing activities saw a substantial change from a net inflow of **$783.5 million** in 2022 to a net outflow of **$(184.9) million** in 2023, driven by lower proceeds from borrowings and stock issuances, and repayment of convertible notes[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to KKR Real Estate Finance Trust Inc.'s unaudited financial statements, explaining policies and financial details [Note 1. Business and Organization](index=11&type=section&id=Note%201.%20Business%20and%20Organization) This note describes KKR Real Estate Finance Trust Inc.'s business, organizational structure, and investment focus as a mortgage REIT - KKR Real Estate Finance Trust Inc. (KREF) is a Maryland corporation formed in 2014, operating as a mortgage REIT focused on originating and acquiring transitional senior loans secured by commercial real estate (CRE) assets. KREF maintains REIT qualification for U.S. federal income tax purposes and is externally managed by KKR Real Estate Finance Manager LLC, an indirect subsidiary of KKR & Co. Inc[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - As of September 30, 2023, KKR beneficially owned **14.5%** of KREF's outstanding common stock. KREF operates within a single reporting segment, assessing performance based on its leveraged and unleveraged commercial real estate loan portfolio[34](index=34&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines KKR Real Estate Finance Trust Inc.'s key accounting policies, including consolidation, credit loss recognition, and fair value measurements - KREF's unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information. Key accounting policies include consolidation of entities where KREF has control or is the primary beneficiary of Variable Interest Entities (VIEs), such as Collateralized Loan Obligations (CLOs) and a Real Estate Owned (REO) joint venture[36](index=36&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk) - The company recognizes and measures the allowance for credit losses under the Current Expected Credit Loss (CECL) model, which incorporates historical experience, current conditions, and forward-looking information. This applies to financial assets at amortized cost and off-balance sheet credit exposures like unfunded loan commitments[68](index=68&type=chunk)[69](index=69&type=chunk) - The macroeconomic environment, including rising interest rates by the Federal Reserve, continues to impact commercial real estate values and demand, potentially increasing KREF's interest expense and affecting borrower prepayment and extension options. KREF uses Level 3 inputs for fair value measurements of illiquid commercial real estate loans, relying on discounted cash flow models and independent valuation firms[38](index=38&type=chunk)[56](index=56&type=chunk) [Note 3. Commercial Real Estate Loans](index=22&type=section&id=Note%203.%20Commercial%20Real%20Estate%20Loans) This note details KKR Real Estate Finance Trust Inc.'s commercial real estate loan portfolio, including loan types, credit loss allowance, and risk ratings Commercial Real Estate Loans, Held-for-Investment (Amounts in thousands) | Loan Type | Sep 30, 2023 Outstanding Principal | Sep 30, 2023 Carrying Value | Dec 31, 2022 Outstanding Principal | Dec 31, 2022 Carrying Value | | :-------------------------- | :------------------------------- | :-------------------------- | :------------------------------- | :-------------------------- | | Senior loans | $7,520,591 | $7,266,050 | $7,463,459 | $7,288,635 | | Mezzanine loans | $44,470 | $43,409 | $98,933 | $98,529 | | Total/Weighted Average | $7,565,061 | $7,309,459 | $7,562,392 | $7,387,164 | | Weighted Average Floating Rate Coupon (Sep 30, 2023) | 8.7% | | 7.8% | | | Weighted Average Life (Years) (Sep 30, 2023) | 2.8 | | 3.3 | | Allowance for Credit Losses (Amounts in thousands) | Category | Balance at Dec 31, 2022 | Provision for (reversal of) credit losses, net (9M 2023) | Write-off charged (9M 2023) | Balance at Sep 30, 2023 | | :-------------------------- | :---------------------- | :------------------------------------------------------- | :-------------------------- | :---------------------- | | Commercial Real Estate Loans | $106,974 | $127,018 | $(15,000) | $218,992 | | Unfunded Loan Commitments | $4,138 | $(1,402) | — | $2,736 | | Total | $111,112 | $125,616 | $(15,000) | $221,728 | - The allowance for credit losses increased significantly from **$111.1 million** at December 31, 2022, to **$221.7 million** at September 30, 2023, primarily due to a **$125.6 million** CECL provision driven by additional reserves on risk-rated 5 senior office loans and macroeconomic conditions. Three risk-rated 5 senior office loans were identified as collateral dependent, with expected losses based on collateral fair value using capitalization rates between **6.6%** and **8.7%** and discount rates between **9.0%** and **10.1%**[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - The average risk rating of KREF's loan portfolio remained consistent at **3.2** as of September 30, 2023, weighted by total loan exposure. The portfolio is concentrated in Multifamily (**42.3%**) and Office (**23.5%**) properties, with California (**16.9%**) and Texas (**14.9%**) as top geographies[134](index=134&type=chunk)[144](index=144&type=chunk) [Note 4. Real Estate Owned](index=27&type=section&id=Note%204.%20Real%20Estate%20Owned) This note provides information on KKR Real Estate Finance Trust Inc.'s Real Estate Owned (REO) assets and their operational performance REO Assets and Liabilities (Amounts in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Real estate owned, net | $81,618 | $80,231 | | Total REO Assets | $86,474 | $83,125 | | Total REO Liabilities | $5,776 | $3,714 | REO Operations Income (Loss) (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue from real estate owned operations | $1,795 | $2,093 | $6,025 | $6,554 | | Expenses from real estate owned operations | $(2,819) | $(2,598) | $(8,233) | $(7,520) | | Total Income (Loss) | $(981) | $(461) | $(499) | $417 | - KREF's sole Real Estate Owned (REO) property, a retail asset in Portland, OR, had a net carrying value of **$81.6 million** as of September 30, 2023. The REO is held within a joint venture where KREF holds a **90%** interest and has priority of distributions up to **$76.4 million**. The REO operations generated a net loss of **$(0.98) million** for the three months ended September 30, 2023, and **$(0.50) million** for the nine months ended September 30, 2023[147](index=147&type=chunk)[148](index=148&type=chunk)[151](index=151&type=chunk)[202](index=202&type=chunk) [Note 5. Debt Obligations](index=29&type=section&id=Note%205.%20Debt%20Obligations) This note describes KKR Real Estate Finance Trust Inc.'s various debt obligations, including secured financing agreements and covenant compliance Secured Financing Agreements (Amounts in thousands) | Facility Type | Sep 30, 2023 Outstanding Principal | Dec 31, 2022 Outstanding Principal | Sep 30, 2023 Carrying Value | Dec 31, 2022 Carrying Value | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------- | :-------------------------- | | Master Repurchase Agreements | $1,520,508 | $1,436,166 | $1,517,787 | $1,432,330 | | Term Lending Agreements | $1,406,013 | $1,530,105 | $1,402,067 | $1,526,002 | | Asset Specific Financing | $239,136 | $172,873 | $236,192 | $170,212 | | Revolving Credit Agreement | $110,000 | — | $110,000 | — | | Total/Weighted Average | $3,275,657 | $3,117,934 | $3,262,128 | $3,128,544 | | Weighted Average Funding Cost (Sep 30, 2023) | 7.6% | 7.1% | | | - KREF's total secured financing agreements increased to **$3.28 billion** at September 30, 2023, from **$3.12 billion** at December 31, 2022. The weighted average funding cost rose to **7.6%** from **7.1%** over the same period. The company was in compliance with all financial debt covenants as of September 30, 2023, including interest income to interest expense ratio (**1.4 to 1.0**), consolidated tangible net worth (approx. **$1,353.4 million**), cash liquidity (greater of **$10.0 million** or **5.0%** of recourse indebtedness), and total indebtedness (**83.3%** of Total Assets)[156](index=156&type=chunk)[176](index=176&type=chunk) Debt Maturities (Amounts in thousands) | Year | Nonrecourse | Recourse | Total | | :--- | :---------- | :--------- | :------ | | 2023 | $110,300 | $12,500 | $122,800 | | 2024 | $1,376,326 | $315,586 | $1,691,912 | | 2025 | $860,709 | $275,761 | $1,136,470 | | 2026 | $601,484 | $127,783 | $729,267 | | Thereafter | $50,956 | $110,000 | $160,956 | | Total | $2,999,775 | $841,630 | $3,841,405 | [Note 6. Collateralized Loan Obligations](index=33&type=section&id=Note%206.%20Collateralized%20Loan%20Obligations) This note details KKR Real Estate Finance Trust Inc.'s Collateralized Loan Obligations (CLOs) used for financing and their associated collateral assets CLO Collateral Assets and Borrowings (Amounts in thousands) | CLO | Sep 30, 2023 Collateral Assets (Outstanding Principal) | Sep 30, 2023 Financing Provided (Outstanding Principal) | Dec 31, 2022 Collateral Assets (Outstanding Principal) | Dec 31, 2022 Financing Provided (Outstanding Principal) | | :-------------------------- | :----------------------------------------------------- | :---------------------------------------------------- | :----------------------------------------------------- | :---------------------------------------------------- | | KREF 2021-FL2 | $1,300,000 | $1,095,250 | $1,300,000 | $1,095,250 | | KREF 2022-FL3 | $1,000,000 | $847,500 | $1,000,000 | $847,500 | | Total | $2,300,000 | $1,942,750 | $2,300,000 | $1,942,750 | | Weighted Avg. Yield/Cost (Sep 30, 2023) | S + 3.1% | S + 1.8% | L/S + 3.2% | L/S + 1.9% | - KREF utilizes two managed CLOs (KREF 2021-FL2 and KREF 2022-FL3) for match-term, non-mark-to-market, and non-recourse financing of loan participations. As of September 30, 2023, these CLOs financed **$2.3 billion** in collateral assets with **$1.94 billion** in outstanding financing. All CLO collateral loan assets are now indexed to Term SOFR, shifting from a mix of Term SOFR and LIBOR in 2022[179](index=179&type=chunk)[180](index=180&type=chunk)[182](index=182&type=chunk) CLO Net Interest Income (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income | $48,753 | $31,403 | $134,741 | $72,289 | | Interest expense | $35,378 | $20,325 | $100,463 | $41,152 | | Net interest income | $13,375 | $11,078 | $34,278 | $31,137 | [Note 7. Secured Term Loan, Net](index=35&type=section&id=Note%207.%20Secured%20Term%20Loan,%20Net) This note provides details on KKR Real Estate Finance Trust Inc.'s secured term loan, including its principal, carrying value, and interest rate Secured Term Loan (Amounts in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Principal | $343,875 | $346,500 | | Carrying value | $335,680 | $336,828 | | Total Cost (Sep 30, 2023) | SOFR + 4.1% | LIBOR + 3.5% | | Maturity | Sep 1, 2027 | Sep 1, 2027 | - KREF's secured term loan, with a principal of **$343.9 million** as of September 30, 2023, transitioned from LIBOR to Term SOFR in June 2023, now bearing interest at Adjusted Term SOFR plus a **4.1%** margin. The company remains in compliance with all associated covenants, including a minimum consolidated tangible net worth of **$650.0 million** and a maximum Total Debt to Total Assets ratio of **83.3%**[192](index=192&type=chunk)[193](index=193&type=chunk) [Note 8. Convertible Notes, Net](index=36&type=section&id=Note%208.%20Convertible%20Notes,%20Net) This note outlines the status of KKR Real Estate Finance Trust Inc.'s convertible notes, including their repayment and associated interest expense Convertible Notes (Amounts in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Principal | — | $143,750 | | Carrying value | — | $143,237 | - The entire **$143.75 million** principal balance of the Convertible Notes matured and was repaid in cash on May 15, 2023. As of September 30, 2023, there were no Convertible Notes outstanding[196](index=196&type=chunk) Convertible Notes Interest Expense (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total interest expense | — | $2,550 | $3,789 | $7,641 | [Note 9. Variable Interest Entities](index=37&type=section&id=Note%209.%20Variable%20Interest%20Entities) This note explains KKR Real Estate Finance Trust Inc.'s involvement with Variable Interest Entities (VIEs), including CLOs and a Real Estate Owned joint venture - KREF consolidates Collateralized Loan Obligations (CLOs) and a Real Estate Owned (REO) Joint Venture as Variable Interest Entities (VIEs) where it is deemed the primary beneficiary due to control over significant activities and the obligation/right to absorb losses/benefits. The REO JV held **$71.9 million** in assets as of September 30, 2023, with KREF having priority distributions up to **$76.4 million**[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) - KREF also holds a **3.5%** interest in RECOP I, an unconsolidated VIE, valued at **$35.5 million** as of September 30, 2023. KREF is not the primary beneficiary of RECOP I and records its share of net asset value and unrealized gains/losses under the equity method[203](index=203&type=chunk) [Note 10. Equity](index=38&type=section&id=Note%2010.%20Equity) This note provides details on KKR Real Estate Finance Trust Inc.'s equity, including common shares, share repurchase program, and dividends declared - As of September 30, 2023, KREF had **69,106,061** common shares outstanding. KKR and its affiliates beneficially owned **10,000,001** shares, or **14.5%** of KREF's outstanding common stock[211](index=211&type=chunk)[213](index=213&type=chunk) - KREF's share repurchase program, effective February 3, 2023, allows for repurchases of up to **$100.0 million** of common stock. No repurchases were made during the three and nine months ended September 30, 2023, leaving **$100.0 million** remaining capacity[214](index=214&type=chunk)[216](index=216&type=chunk) - KREF did not issue or sell any common stock under its At-the-Market (ATM) program during the three and nine months ended September 30, 2023, with **$93.2 million** remaining available for issuance[217](index=217&type=chunk)[218](index=218&type=chunk) Common Stock Dividends Declared (Amounts in thousands, except per share data) | Declaration Date | Record Date | Payment Date | Per Share | Total | | :--------------- | :---------- | :----------- | :-------- | :---- | | March 17, 2023 | March 31, 2023 | April 14, 2023 | $0.43 | $29,711 | | June 15, 2023 | June 30, 2023 | July 14, 2023 | $0.43 | $29,716 | | September 15, 2023 | September 29, 2023 | October 13, 2023 | $0.43 | $29,716 | | **Total 2023 (9M)** | | | | **$89,143** | | **Total 2022 (9M)** | | | | **$88,977** | Series A Preferred Stock Dividends Declared (Amounts in thousands, except per share data) | Declaration Date | Record Date | Payment Date | Per Share | Total | | :--------------- | :---------- | :----------- | :-------- | :---- | | February 3, 2023 | February 28, 2023 | March 15, 2023 | $0.41 | $5,326 | | April 21, 2023 | May 31, 2023 | June 15, 2023 | $0.41 | $5,326 | | July 21, 2023 | August 31, 2023 | September 15, 2023 | $0.41 | $5,326 | | **Total 2023 (9M)** | | | | **$15,978** | | **Total 2022 (9M)** | | | | **$15,978** | [Note 11. Stock-based Compensation](index=41&type=section&id=Note%2011.%20Stock-based%20Compensation) This note details KKR Real Estate Finance Trust Inc.'s stock-based compensation expense, unvested Restricted Stock Units, and Deferred Stock Units Stock-based Compensation Expense (Amounts in thousands) | Period | Stock-based Compensation Expense | | :------------------------------ | :------------------------------- | | Three Months Ended Sep 30, 2023 | $2,200 | | Nine Months Ended Sep 30, 2023 | $6,500 | | Three Months Ended Sep 30, 2022 | $2,200 | | Nine Months Ended Sep 30, 2022 | $6,300 | - As of September 30, 2023, KREF had **953,579** unvested Restricted Stock Units (RSUs) outstanding, with a weighted-average grant date fair value of **$16.43** per RSU. Total unrecognized stock-based compensation expense was **$8.0 million**, expected to be recognized over a weighted average period of **0.9 years**[227](index=227&type=chunk)[229](index=229&type=chunk) - KREF's board of directors adopted a Deferral Plan in March 2022, allowing participants to defer receipt of common stock upon RSU vesting. As of September 30, 2023, **16,575** Deferred Stock Units (DSUs) were outstanding[232](index=232&type=chunk) [Note 12. Earnings (Loss) per Share](index=43&type=section&id=Note%2012.%20Earnings%20(Loss)%20per%20Share) This note presents KKR Real Estate Finance Trust Inc.'s basic and diluted earnings (loss) per share calculations for the reported periods Basic and Diluted EPS (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) attributable to common stockholders, basic and diluted | $21,401 | $(48,421) | $(35,181) | $769 | | Weighted average common shares outstanding, basic and diluted | 69,122,636 | 69,382,730 | 69,111,201 | 67,029,140 | | Basic common share | $0.31 | $(0.70) | $(0.51) | $0.01 | | Diluted common share | $0.31 | $(0.70) | $(0.51) | $0.01 | - For the three months ended September 30, 2023, basic and diluted EPS improved to **$0.31** from **$(0.70)** in the prior year. However, for the nine months ended September 30, 2023, basic and diluted EPS declined to **$(0.51)** from **$0.01** in the prior year. Unvested RSUs and convertible notes were excluded from diluted EPS calculations when their effect was anti-dilutive[239](index=239&type=chunk)[240](index=240&type=chunk) [Note 13. Commitments and Contingencies](index=44&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note outlines KKR Real Estate Finance Trust Inc.'s future funding commitments, remaining commitments, and potential macroeconomic risks - As of September 30, 2023, KREF had future funding commitments of **$1,007.6 million** related to its commercial real estate loans, primarily for construction projects, capital improvements, and leasing commissions. These commitments are subject to certain conditions[245](index=245&type=chunk) - KREF also had a remaining commitment of **$4.3 million** to RECOP I as of September 30, 2023. The company was not involved in any material legal proceedings[243](index=243&type=chunk)[246](index=246&type=chunk) - The macroeconomic environment, characterized by rising interest rates from the Federal Reserve, poses risks of adversely impacting real estate asset values, increasing interest expense, and potentially decreasing loan prepayments while increasing borrower extension options[247](index=247&type=chunk) [Note 14. Related Party Transactions](index=45&type=section&id=Note%2014.%20Related%20Party%20Transactions) This note details KKR Real Estate Finance Trust Inc.'s transactions with related parties, including management fees and incentive compensation - KREF is externally managed by KKR Real Estate Finance Manager LLC (the "Manager") under a three-year agreement with automatic one-year renewals. The Manager receives a quarterly management fee (greater of **$62,500** or **0.375%** of weighted average adjusted equity) and quarterly incentive compensation (**20.0%** of excess trailing 12-month distributable earnings over a **7.0%** Hurdle Rate)[250](index=250&type=chunk)[252](index=252&type=chunk) Amounts Due to Affiliates (Amounts in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Management fees | $6,566 | $6,578 | | KCM fees | $1,747 | $2,044 | | Total Due to Affiliates | $8,313 | $8,722 | Affiliate Expenses (Amounts in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Management fees | $6,566 | $6,589 | $19,648 | $19,102 | | Incentive compensation | $69 | — | $2,491 | — | | Expense reimbursements and other | $1,234 | $904 | $3,680 | $3,412 | | Total | $7,869 | $7,493 | $25,819 | $22,514 | - KREF incurred **$25.8 million** in total affiliate expenses for the nine months ended September 30, 2023, up from **$22.5 million** in the prior year, primarily due to a **$2.5 million** increase in Manager incentive compensation[259](index=259&type=chunk) [Note 15. Fair Value of Financial Instruments](index=48&type=section&id=Note%2015.%20Fair%20Value%20of%20Financial%20Instruments) This note describes KKR Real Estate Finance Trust Inc.'s fair value measurements for financial instruments, categorized by a three-level hierarchy Fair Value of Financial Instruments (Amounts in thousands) | Instrument | Sep 30, 2023 Carrying Value | Sep 30, 2023 Fair Value (Total) | Sep 30, 2023 Fair Value (Level 3) | | :------------------------------------- | :-------------------------- | :------------------------------ | :------------------------------ | | Cash and cash equivalents | $108,038 | $108,038 | — | | Commercial real estate loans, held-for-investment, net | $7,309,459 | $7,326,031 | $7,326,031 | | Equity method investments | $35,540 | $35,540 | $35,540 | | Secured financing agreements, net | $3,827,399 | $3,827,399 | $3,827,399 | | Collateralized loan obligations, net | $1,941,114 | $1,888,916 | $1,888,916 | | Secured term loan, net | $335,680 | $345,594 | — | - KREF categorizes the fair value of financial instruments into a three-level hierarchy. Commercial real estate loans and equity method investments are primarily Level 3 assets, valued using discounted cash flow models and other unobservable inputs. The fair value of secured financing agreements approximated their carrying value as of September 30, 2023[52](index=52&type=chunk)[56](index=56&type=chunk)[274](index=274&type=chunk)[282](index=282&type=chunk) Level 3 Unobservable Inputs for Commercial Real Estate Loans (Sep 30, 2023) | Input | Weighted Average | Range | | :---------------- | :--------------- | :---------- | | Discount margin | 4.3% | 3.2% - 16.2% | | Discount rate | 9.6% | 9.0% - 10.1% | | Capitalization rate | 7.7% | 6.6% - 8.7% | [Note 16. Income Taxes](index=50&type=section&id=Note%2016.%20Income%20Taxes) This note explains KKR Real Estate Finance Trust Inc.'s income tax treatment as a REIT and its income tax provision for the reported periods - KREF has elected to be taxed as a REIT, generally avoiding U.S. federal and state income tax on distributed income if at least **90%** of its REIT taxable income is distributed. For the nine months ended September 30, 2023, KREF recorded an income tax provision of **$0.5 million** related to its taxable REIT subsidiaries and state/local taxes, compared to zero in the prior year[284](index=284&type=chunk)[285](index=285&type=chunk) - There were no material deferred tax assets or liabilities or uncertain tax positions as of September 30, 2023, and December 31, 2022[285](index=285&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Note 17. Subsequent Events](index=51&type=section&id=Note%2017.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period, including common stock dividend payments - In October 2023, KREF paid **$29.7 million** in common stock dividends, or **$0.43** per share, for the third quarter of 2023[288](index=288&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides KKR Real Estate Finance Trust Inc.'s management's perspective on the company's financial condition, results of operations, and key performance indicators. It covers the investment strategy, portfolio performance, financing activities, liquidity, and critical accounting policies, highlighting the impact of macroeconomic factors and credit quality on the business [Overview](index=52&type=section&id=Overview) This section provides an overview of KKR Real Estate Finance Trust Inc.'s business model, investment objectives, and macroeconomic impacts - KKR Real Estate Finance Trust Inc. (KREF) is a real estate finance company focused on originating and acquiring transitional senior loans secured by institutional-quality commercial real estate (CRE) assets. The company's investment objective is capital preservation and generating attractive risk-adjusted returns primarily through dividends, while maintaining REIT qualification[291](index=291&type=chunk) - KREF is externally managed by KKR Real Estate Finance Manager LLC, an indirect subsidiary of KKR & Co. Inc., which handles investment selection, financing, and day-to-day operations[292](index=292&type=chunk) - The macroeconomic environment, characterized by rising inflation and interest rates, has created volatility. While rising interest rates generally increase KREF's net income, they may adversely affect borrowers, real estate asset values, and increase KREF's interest expense. Remote work trends continue to impact commercial real estate values and demand[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [Key Financial Measures and Indicators](index=54&type=section&id=Key%20Financial%20Measures%20and%20Indicators) This section presents KKR Real Estate Finance Trust Inc.'s key financial measures, including EPS, distributable earnings, and book value per share Earnings (Loss) Per Share and Dividends Declared (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Jun 30, 2023 | | :------------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) attributable to common stockholders | $21,401 | $(25,772) | | Net income (loss) per share, basic and diluted | $0.31 | $(0.37) | | Dividends declared per share | $0.43 | $0.43 | Distributable Earnings (Amounts in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Jun 30, 2023 | | :------------------------------------- | :------------------------------ | :------------------------------ | | Net Income (Loss) Attributable to Common Stockholders | $21,401 | $(25,772) | | Adjustments (Non-cash equity comp, unrealized gains/losses, credit losses, loan write-off) | $(4,027) | $58,845 | | Distributable Earnings | $17,374 | $33,073 | | Distributable Earnings per Diluted Weighted Average Share | $0.25 | $0.48 | Book Value per Share (Amounts in thousands, except per share data) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------- | :----------- | :----------- | | Common stockholders' equity | $1,125,974 | $1,243,788 | | Total shares outstanding at period end | 69,122,636 | 69,095,011 | | Book value per share | $16.29 | $18.00 | - Book value per share decreased from **$18.00** at December 31, 2022, to **$16.29** at September 30, 2023, reflecting the impact of an estimated CECL credit loss allowance of **$221.7 million**, or **($3.21)** per share[305](index=305&type=chunk) [Our Portfolio](index=56&type=section&id=Our%20Portfolio) This section details KKR Real Estate Finance Trust Inc.'s loan portfolio, including its composition, risk ratings, and recent loan activity and modifications - As of September 30, 2023, KREF's portfolio totaled **$7,869.9 million**, primarily consisting of senior commercial real estate loans. The average risk rating of the loan portfolio was **3.2**, consistent with December 31, 2022. Multifamily and industrial loans comprised **55%** of the portfolio, and **99%** of loans earned a floating rate of interest[307](index=307&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk)[341](index=341&type=chunk) Quarterly Loan Activity (Amounts in thousands) | Activity | Three Months Ended Sep 30, 2023 | Three Months Ended Jun 30, 2023 | Three Months Ended Mar 31, 2023 | Three Months Ended Dec 31, 2022 | | :---------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Loan originations | — | — | — | $370,400 | | Loan fundings | $164,882 | $177,162 | $203,612 | $423,330 | | Loan repayments | $(152,301) | $(339,288) | $(86,928) | $(209,152) | | Net fundings | $12,581 | $(162,126) | $116,684 | $214,178 | | Write-off | $(15,000) | — | — | $(25,000) | | Total activity | $(2,419) | $(162,126) | $116,684 | $189,635 | - KREF completed several loan modifications in 2023, including a risk-rated 5 senior office loan in Philadelphia (restructured after a **$25.0 million** write-off), a risk-rated 4 senior multifamily loan in West Hollywood, a risk-rated 5 senior office loan in Minneapolis, and a risk-rated 4 senior office loan in Chicago (restructured after a **$15.0 million** principal repayment and write-off of a subordinated note)[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk) [Total Financing](index=63&type=section&id=Total%20Financing) This section describes KKR Real Estate Finance Trust Inc.'s financing structure, including various debt facilities, outstanding balances, and covenant compliance Total Financing Outstanding Principal Balance (Amounts in thousands) | Financing Type | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Master repurchase agreements | $1,520,508 | $1,436,166 | | Collateralized loan obligations | $1,942,750 | $1,942,750 | | Term lending agreements | $1,406,013 | $1,530,105 | | Term loan facility | $565,748 | $631,557 | | Secured term loan | $343,875 | $346,500 | | Asset specific financing | $239,136 | $172,873 | | Revolver | $110,000 | — | | Non-consolidated senior interests | $187,554 | $263,086 | | Total financing | $6,315,584 | $6,323,037 | - As of September 30, 2023, KREF's total financing was **$6.32 billion**, with **76%** from Non-Mark-to-Market Financing Sources, reducing exposure to market volatility. The remaining **24%** from master repurchase agreements are subject only to credit marks, and KREF has not received any margin calls to date[352](index=352&type=chunk)[353](index=353&type=chunk) Available Borrowings under Financing Agreements (Amounts in thousands) | Facility Type | Sep 30, 2023 Available | | :-------------------------- | :--------------------- | | Master Repurchase Agreements | $74,720 | | Term Loan Facility | — | | Term Lending Agreements | $2,976 | | Warehouse Facility | — | | Asset Specific Financing | — | | Revolver | $500,000 | | Total | $577,696 | - KREF was in compliance with all covenants of its financing facilities as of September 30, 2023, including interest income to interest expense ratio (**1.4 to 1.0**), consolidated tangible net worth (up to **$1,353.4 million**), cash liquidity (greater of **$10.0 million** or **5.0%** of recourse indebtedness), and total indebtedness (**83.3%** of Total Assets)[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk) [Real Estate Owned and Joint Venture](index=69&type=section&id=Real%20Estate%20Owned%20and%20Joint%20Venture) This section provides details on KKR Real Estate Finance Trust Inc.'s Real Estate Owned (REO) asset and its associated joint venture - KREF holds one Real Estate Owned (REO) asset, a retail property in Portland, OR, with a net carrying value of **$81.6 million** as of September 30, 2023. This asset was acquired in December 2021 through foreclosure and a portion was contributed to a joint venture (REO JV) where KREF holds a **90%** interest. KREF has priority of distributions up to **$76.4 million** from the REO JV[309](index=309&type=chunk)[385](index=385&type=chunk)[386](index=386&type=chunk) [Results of Operations](index=70&type=section&id=Results%20of%20Operations) This section analyzes KKR Real Estate Finance Trust Inc.'s financial performance, comparing results for the three and nine months ended September 30, 2023 and 2022 Three Months Ended September 30, 2023 vs. June 30, 2023 (Amounts in thousands, except per share data) | Metric | Sep 30, 2023 | Jun 30, 2023 | Increase (Decrease) | Percentage Change | | :------------------------------------- | :----------- | :----------- | :------------------ | :---------------- | | Interest income | $163,229 | $159,629 | $3,600 | 2% | | Interest expense | $118,617 | $115,677 | $2,940 | 3% | | Total net interest income | $44,612 | $43,952 | $660 | 2% | | Total other income | $5,443 | $6,972 | $(1,529) | (22)% | | Total operating expenses | $23,056 | $70,871 | $(47,815) | (67)% | | Net Income (Loss) Attributable to Common Stockholders | $21,401 | $(25,772) | $47,173 | 183% | | Basic EPS | $0.31 | $(0.37) | $0.68 | 184% | - Net interest income increased by **$0.7 million** (**2%**) quarter-over-quarter, primarily due to higher index rates. Total operating expenses decreased significantly by **$47.8 million** (**67%**), mainly driven by a **$47.5 million** net decrease in the provision for credit losses. This led to a substantial improvement in Net Income Attributable to Common Stockholders, from a loss of **$(25.8) million** to a gain of **$21.4 million**[388](index=388&type=chunk)[389](index=389&type=chunk)[391](index=391&type=chunk) Nine Months Ended September 30, 2023 vs. 2022 (Amounts in thousands, except per share data) | Metric | 9M 2023 | 9M 2022 | Increase (Decrease) | Percentage Change | | :------------------------------------- | :----------- | :----------- | :------------------ | :---------------- | | Interest income | $475,388 | $278,460 | $196,928 | 71% | | Interest expense | $340,270 | $144,503 | $195,767 | 135% | | Total net interest income | $135,118 | $133,957 | $1,161 | 1% | | Total other income (loss) | $17,025 | $14,381 | $2,644 | 18% | | Total operating expenses | $170,176 | $130,846 | $39,330 | 30% | | Net Income (Loss) Attributable to Common Stockholders | $(35,181) | $769 | $(35,950) | (4,675)% | | Basic EPS | $(0.51) | $0.01 | $(0.52) | (5,200)% | - Year-over-year, net interest income increased by **$1.2 million** (**1%**), driven by higher index rates and an increased loan portfolio, partially offset by the suspension of interest income accrual on nonaccrual loans. Total operating expenses increased by **$39.3 million** (**30%**), primarily due to a **$34.4 million** increase in the provision for credit losses and a **$2.5 million** increase in Manager incentive compensation. This resulted in a net loss attributable to common stockholders of **$(35.2) million** for the nine months ended September 30, 2023, compared to a net income of **$0.8 million** in the prior year[393](index=393&type=chunk)[395](index=395&type=chunk)[398](index=398&type=chunk) [COVID-19 Impact](index=73&type=section&id=COVID-19%20Impact) This section discusses the ongoing impact of the COVID-19 pandemic and macroeconomic factors on commercial real estate and KREF's operations - The COVID-19 pandemic continues to impact commercial real estate values and demand due to increased remote working arrangements. Global supply chain disruptions, labor shortages, and inflationary pressures negatively affect borrowers' ability to execute business plans and meet loan obligations. Rising interest rates by the Federal Reserve further impact real estate asset values and KREF's interest expense, potentially decreasing prepayments and increasing extension options[399](index=399&type=chunk)[400](index=400&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) This section outlines KKR Real Estate Finance Trust Inc.'s liquidity sources, capital structure, and cash flow activities for the reported periods - KREF's primary liquidity sources include **$108.0 million** in cash, **$500.0 million** available on its corporate Revolver, **$77.7 million** in available borrowings under other financing arrangements, and **$30.0 million** in loan repayment proceeds held by a servicer. Additionally, KREF had **$22.9 million** of unencumbered senior loans available for financing[401](index=401&type=chunk) Debt-to-Equity Ratio and Total Leverage Ratio | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------- | :----------- | :----------- | | Debt-to-equity ratio | 2.3x | 2.0x | | Total leverage ratio | 4.1x | 3.8x | - The debt-to-equity ratio increased from **2.0x** to **2.3x**, and the total leverage ratio increased from **3.8x** to **4.1x** between December 31, 2022, and September 30, 2023, indicating increased reliance on debt financing relative to equity[408](index=408&type=chunk)[409](index=409&type=chunk) Cash Flows (Amounts in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------- | :----------------------------- | :----------------------------- | | Operating Activities | $118,874 | $103,953 | | Investing Activities | $(62,986) | $(970,596) | | Financing Activities | $(184,881) | $783,510 | | Net Increase (Decrease) in Cash | $(128,993) | $(83,133) | - Cash flows from operating activities increased by **$14.9 million** year-over-year. Investing activities saw a significant reduction in net cash used, from **$(970.6) million** in 2022 to **$(63.0) million** in 2023, primarily due to lower loan originations. Financing activities shifted from a net inflow of **$783.5 million** in 2022 to a net outflow of **$(184.9) million** in 2023, largely due to convertible note repayments and reduced proceeds from borrowings and stock issuances[413](index=413&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) [Critical Accounting Policies and Use of Estimates](index=78&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) This section explains KKR Real Estate Finance Trust Inc.'s critical accounting policies, particularly the allowance for credit losses and fair value estimates - KREF's financial statements rely on estimates and assumptions, particularly for the allowance for credit losses under the Current Expected Credit Loss (CECL) model. This model incorporates historical data, current conditions, and forward-looking macroeconomic forecasts to estimate lifetime credit losses for commercial real estate loans and unfunded commitments[424](index=424&type=chunk)[425](index=425&type=chunk)[426](index=426&type=chunk)[427](index=427&type=chunk) - Loan risk ratings (**1-5**, less to greater risk) are key credit quality indicators, assessed quarterly based on factors like LTV, debt yield, property type, market dynamics, and sponsor financial strength. For collateral-dependent loans, expected losses are measured based on the difference between collateral fair value and amortized cost[428](index=428&type=chunk)[429](index=429&type=chunk) - KREF has not adopted optional expedients for Reference Rate Reform (LIBOR transition) but continues to evaluate them. The adoption of ASU 2022-02 (Troubled Debt Restructurings and Vintage Disclosures) on January 1, 2023, had no significant impact on the financial statements[432](index=432&type=chunk)[433](index=433&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=80&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines KKR Real Estate Finance Trust Inc.'s exposure to various market risks, including credit risk, interest rate risk, prepayment risk, financing risk, and real estate risk. It details how these risks are managed and their potential impact on the company's financial performance [Credit Risk](index=80&type=section&id=Credit%20Risk) This section describes KKR Real Estate Finance Trust Inc.'s exposure to credit risk, including default risk, and its mitigation strategies - KREF's investments are subject to credit risk, including default risk, which depends on sponsors' ability to operate collateral properties to generate sufficient cash flows for debt service. The Manager actively monitors the portfolio, collateral performance, and enforces rights to mitigate this risk[436](index=436&type=chunk) [Credit Yield Risk](index=80&type=section&id=Credit%20Yield%20Risk) This section explains credit yield risk, reflecting market demand for returns on credit-sensitive financial instruments and its impact on KREF's holdings - Credit yield risk reflects the return demanded by the lending market based on default risk. Increased supply and reduced demand for credit-sensitive financial instruments can lead to higher required yields and lower prices for KREF's holdings[437](index=437&type=chunk) [Interest Rate Risk](index=80&type=section&id=Interest%20Rate%20Risk) This section details KKR Real Estate Finance Trust Inc.'s exposure to interest rate fluctuations and the impact of rising or declining rates on its net income - KREF's business model generally benefits from rising interest rates, which increase net income, while declining rates decrease it. Rate floors on the loan portfolio may partially offset the impact of declining rates. As of September 30, 2023, a **50 basis point** decrease in index rates would decrease expected cash flows by approximately **$4.7 million** (or **$0.07** per common share) for the next twelve months, while a **50 basis point** increase would have the opposite effect[438](index=438&type=chunk)[440](index=440&type=chunk) - All of KREF's floating rate loan portfolio and financing arrangements were indexed to Term SOFR as of September 30, 2023, following the LIBOR transition. Differences between LIBOR and SOFR could result in higher interest costs[443](index=443&type=chunk) [Prepayment Risk](index=81&type=section&id=Prepayment%20Risk) This section discusses prepayment risk, where principal is repaid earlier than expected, potentially affecting KKR Real Estate Finance Trust Inc.'s returns and financing terms - Prepayment risk involves principal being repaid earlier than anticipated, potentially reducing returns. Higher interest rates may decrease prepayment speeds and increase borrower extension options, which could extend beyond KREF's financing terms, potentially forcing asset sales and incurring losses[445](index=445&type=chunk)[446](index=446&type=chunk) [Financing Risk](index=81&type=section&id=Financing%20Risk) This section outlines KKR Real Estate Finance Trust Inc.'s financing risk, including potential adverse effects from market volatility on its various debt facilities - KREF finances assets through various facilities, including repurchase agreements, term lending agreements, and CLOs. Weakness or volatility in financial, CRE, or mortgage markets could adversely affect lenders, leading to reduced or more costly financing, or margin calls[447](index=447&type=chunk) [Real Estate Risk](index=81&type=section&id=Real%20Estate%20Risk) This section describes the risks associated with the volatility of commercial real estate market values and their impact on KKR Real Estate Finance Trust Inc.'s collateral - The market values of commercial real estate assets are volatile and can be affected by economic conditions, local real estate dynamics, and other factors. Decreases in property values reduce collateral value and potential repayment proceeds, leading to potential losses for KREF[448](index=448&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details KKR Real Estate Finance Trust Inc.'s disclosure controls and procedures and internal control over financial reporting. As of September 30, 2023, management concluded that disclosure controls and procedures were effective, and no material changes occurred in internal control over financial reporting during the quarter - As of September 30, 2023, KREF's management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[451](index=451&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2023[452](index=452&type=chunk) [Part II - Other Information](index=83&type=section&id=Part%20II%20-%20Other%20Information) This section provides additional information not included in the financial statements, covering legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the legal proceedings information provided in Note 13 of the condensed consolidated financial statements, indicating that KREF was not involved in any material legal proceedings as of September 30, 2023 - KREF was not involved in any material legal proceedings regarding claims or legal actions against the company as of September 30, 2023[454](index=454&type=chunk) [Item 1A. Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in KREF's Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in KREF's Annual Report on Form 10-K[455](index=455&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details KREF's share repurchase program. As of September 30, 2023, KREF had $100.0 million of remaining capacity under its share repurchase program, with no shares repurchased during the three months ended September 30, 2023 - KREF's share repurchase program allows for repurchases of up to an aggregate of **$100.0 million** of common stock, effective February 3, 2023. No shares were repurchased during the three months ended September 30, 2023[456](index=456&type=chunk)[457](index=457&type=chunk) - As of September 30, 2023, KREF had **$100.0 million** of remaining capacity to repurchase shares under the program, which has no expiration date and can be suspended, modified, or discontinued at any time[457](index=457&type=chunk) [Item 3. Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - None[458](index=458&type=chunk) [Item 4. Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to KREF - Not applicable[459](index=459&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to disclose - None[460](index=460&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various amendments to guaranty and repurchase agreements, certificates from the CEO and CFO, and XBRL-related documents - Exhibits include amendments to guaranty and repurchase agreements (e.g., with Goldman Sachs Bank USA, Morgan Stanley Bank, N.A., Wells Fargo Bank, National Association, MUFG Bank, Ltd.), certificates from the CEO and CFO (pursuant to Sarbanes-Oxley Act), and Inline XBRL documents[461](index=461&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 001-38082 KKR Real Estate Finance Trust Inc. (Exact name of registrant as specified in its charter) Maryland 47- ...

KKR Real Estate Finance Trust Inc. (NYSE:KREF) Q1 2023 Earnings Conference Call April 25, 2023 10:00 AM ET Company Participants Jack Switala - IR Matt Salem - CEO Patrick Mattson - President and COO Kendra Decious - CFO Conference Call Participants Don Fandetti - Wells Fargo Stephen Laws - Raymond James Sarah Barcomb - BTIG Jade Rahmani - KBW Steve Delaney - JMP Securities Rick Shane - JPMorgan Operator Good morning, and welcome to the KKR Real Estate Finance Trust Inc. First Quarter 2023 Financial Results ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 001-38082 KKR Real Estate Finance Trust Inc. (Exact name of registrant as specified in its charter) Non-acceler ...

KKR Real Estate Finance Trust Inc. (NYSE:KREF) Q4 2022 Earnings Conference Call February 8, 2023 10:00 AM ET Company Participants Jack Switala - Investor Relations Matt Salem - Chief Executive Officer Patrick Mattson - President and Chief Operating Officer Kendra Decious - Chief Financial Officer Conference Call Participants Don Fandetti - Wells Fargo Rick Shane - JPMorgan Stephen Laws - Raymond James Jade Rahmani - KBW Eric Hagen - BTIG Operator Good morning and welcome to the KKR Real Estate Finance Trust ...

(11) For Senior Loan 28, Total Whole Loan, Committed Principal Amount, and Current Principal Amount are shown net of a $25.0 million write-off. (13) Represents our investment in an aggregator vehicle alongside RECOP I that invests in CMBS B-Pieces. Committed principal represents our total commitment to the aggregator vehicle whereas current principal represents the current funded amount. Portfolio Details ($ in Millions) Portfolio Details 19 Portfolio Details (1) Our total portfolio represents the current p ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 001-38082 KKR Real Estate Finance Trust Inc. (Exact name of registrant as specified in its charter) Maryland 47-2009 ...