NEW YORK, April 22, 2021 (GLOBE NEWSWIRE) – Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE: ARI), today released results for the quarter ended March 31, 2021.
For the first quarter of 2021, net income available to common shareholders per diluted share of common stock was $ 0.37 and distributable income (a non-GAAP financial measure defined below) was $ 0.39 per common share.
Commenting on the results, Stuart Rothstein, CEO and President of ARI, said: “2021 has started well with more than $ 528 million in deals closed during the quarter and distributable income well above the quarterly dividend. Given the robust level of real estate transactions, our pipeline continues to grow as we focus on deploying currently available capital as well as expected additional capital from loan repayments. “
ARI has published a detailed presentation of the Company’s results for the quarter and fiscal year ended March 31, 2021, which can be viewed at www.apolloreit.com.
Conference call and webcast:
Members of the public wishing to participate in the company’s first quarter 2021 earnings conference call should dial from within the United States on (877) 331-6553, or from outside the United States on (760) 666-3769, shortly before 10:00 a.m. on Friday April 23, 2021 and refer to the Apollo Commercial Real Estate Finance, Inc. conference call (number 8790229). Please note that the teleconference will be available for a replay beginning at 1:00 p.m. on Friday April 23, 2021 and ending at midnight on Friday April 30, 2021. To access the replay, callers from the United States should dial (855) 859 -2056 and callers from outside the United States should dial (404) 537-3406 and enter the conference ID number 8790229.
Beginning in the fourth quarter of 2020, to better reflect the primary objective of the measure, “operating income” has been renamed “distributable income,” a non-GAAP financial measure. The definition continues to be net income available to common shareholders, calculated in accordance with GAAP, adjusted for (i) stock-based compensation expense (part of which may become cash-based upon final vesting and settlement. awards if the holder elects net settlement of shares to satisfy withholding income tax), (ii) any unrealized gains or losses or other non-monetary items included in net income available to common shareholders, ( iii) unrealized income of unconsolidated joint ventures, (iv) gains (foreign exchange losses)), except (a) realized gains / (losses) related to interest income, and (b) gains / ( losses) of forward points realized on the Company’s foreign exchange hedges, (v) the non-cash amortization charge related to the reclassification of part of the Company’s senior convertible bonds (the “Notes”) to equity in accordance with x GAAP, and (vi) allowance for loan losses.
The weighted average diluted shares outstanding used for distributable income per weighted average diluted share have been adjusted from the weighted average diluted shares under GAAP to exclude the issued shares from a possible conversion of the Notes. In accordance with the treatment of other unrealized adjustments to distributable income, these issuable shares are excluded until a conversion occurs, which the company considers to be a useful presentation for investors. The Company believes that the exclusion of shares issued in connection with a potential conversion of the Notes from its calculation of distributable income per weighted average diluted share is useful to investors for a variety of reasons, including the following: (i) the conversion of the Notes into shares requires both the holder of a note to choose to convert the note and the company to choose to settle the conversion in the form of shares; (ii) future conversion decisions of Noteholders will be based on the future share price of the Company, which is not currently determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Notes from the calculation of distributable income per weighted average diluted share is consistent with the way the company treats other unrealized items in its calculation of distributable income by weighted average diluted share share; and (iv) the Company believes that when evaluating its operational performance, investors and potential investors consider the distributable profit of the Company in relation to its actual distributions, which are based on the outstanding shares and not on the shares that may be issued in the future.
As a REIT, US federal tax law generally requires the Company to distribute annually at least 90% of its taxable REIT income, regardless of the deduction for dividends paid and the exclusion of net capital gains, and that the Company pays tax at customary corporate rates. insofar as it annually distributes less than 100% of its net taxable income. Given these requirements and the Company’s belief that dividends are generally one of the primary reasons shareholders invest in a REIT, the Company generally intends to pay dividends to its shareholders in the amount of equal to its net taxable income, if and to the extent authorized by the board of directors of the company. Distributable profits are a key factor taken into account by the board of directors of the company when setting the dividend and, as such, the company believes that distributable profits are useful to investors.
During the first quarter of 2021, the Company recorded a realized loss in the Condensed Consolidated Statement of Income related to the change in the expected timing of sale of the Company’s real estate held, held for sale.
The Company believes that it is useful for its investors to also present the distributable profit before losses and impairments realized on the real estate held in order to reflect its operating results, because (i) the operating results of the company consist mainly of interest income on its investments net of borrowings. and administrative expenses, which include the day-to-day operations of the Company and (ii) this has been a useful factor related to the dividend per share of the Company, as it is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Income and Distributable Income before realized losses and write-downs on real estate held, or a comparable additional performance measure, to assess and compare the performance of the Company and its peers.
An important limitation associated with distributable income as a measure of the financial performance of the company over any period is that it excludes unrealized gains (losses) on investments. In addition, the presentation of distributable income by the company may not be comparable to measures with the same title of other companies, which use different calculations. Therefore, distributable income should not be considered a substitute for the Company’s GAAP net income as a measure of its financial performance or any measure of its liquidity under GAAP. Distributable income is reduced for realized losses on loans, which include losses that management believes are almost certain to be realized.
A reconciliation of distributable income and distributable income before losses and impairments realized on real estate held, with GAAP net income (loss) available to common shareholders is included in the detailed presentation of results for the Company’s quarter ended 31 March 2021, which can be viewed at www.apolloreit.com.
About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily creates, acquires, invests and manages senior commercial mortgages, subordinated financings and other debt investments related to the commercial real estate. The Company is managed and externally advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., one of the world’s leading alternative investment managers with approximately $ 455 billion. dollars in assets under management as of December 31, 2020.
Additional information can be found on the company’s website at www.apolloreit.com.
Certain statements contained in this press release constitute forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and these statements are intended to be covered by the Safe Harbor provided by it. Forward-looking statements are subject to significant risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company. These forward-looking statements include information about the possible or expected future results of the business, the financial condition, liquidity, results of operations, plans and objectives of the company. When used in this press release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may, or similar expressions, are intended to identify forward-looking statements. Statements on the following topics, among others, may be forward-looking: macro and microeconomic impact of the COVID-19 pandemic; the severity and duration of the COVID-19 pandemic; measures taken by government authorities to contain the COVID-19 pandemic or address its impact; the effectiveness of vaccines or other remedies and the timeliness of their distribution and administration; the impact of the COVID-19 pandemic on the financial condition, results of operations, liquidity and capital resources of the company; market trends in the Company’s industry, interest rates, real estate values, debt securities markets or the economy in general; the timing and amounts of anticipated future funding of unfunded commitments; return on equity; return on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital increases or to acquire its target assets; and the risks associated with investing in real estate assets, including changes in business conditions and the economy in general. For a further list and description of these risks and uncertainties, see the Company’s reports with the Securities and Exchange Commission. Forward-looking statements and other risks, uncertainties and factors are based on the beliefs, assumptions and expectations of the company as to its future performance, taking into account all information currently available to the company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.