Apollo Commercial Real Estate Finance Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)



☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2020



☐	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: 001-34452

__________________________________

Apollo Commercial Real Estate Finance, Inc.

(Exact name of registrant as specified in its charter)

__________________________________



Maryland		27-0467113
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Apollo Commercial Real Estate Finance, Inc.

c/o Apollo Global Management, Inc.

9 West 57th Street, 43rd Floor,

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 515–3200

(Registrant’s telephone number, including area code)

__________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	ARI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of July 29, 2020, there were 147,661,102 shares, par value $0.01, of the registrant’s common stock issued and outstanding.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands—except share data)



	June 30, 2020			December 31, 2019
Assets:
Cash and cash equivalents	$	487,165		$	452,282
Commercial mortgage loans, net⁽¹⁾⁽²⁾	5,343,437			5,326,967
Subordinate loans and other lending assets, net⁽²⁾	1,044,400			1,048,126
Derivative assets, net	49,294			—
Other assets	45,218			52,716
Loan proceeds held by servicer	—			8,272
Total Assets	$	6,969,514		$	6,888,363
Liabilities and Stockholders' Equity
Liabilities:
Secured debt arrangements, net (net of deferred financing costs of $15,079 and $17,190 in 2020 and 2019, respectively)	$	3,425,098		$	3,078,366
Convertible senior notes, net	563,583			561,573
Senior secured term loan, net (net of deferred financing costs of $7,737 and $7,277 in 2020 and 2019, respectively)	485,179			487,961
Accounts payable, accrued expenses and other liabilities⁽³⁾	120,190			100,712
Payable to related party	9,958			10,430
Derivative liabilities	—			19,346
Total Liabilities	4,604,008			4,258,388
Commitments and Contingencies (see Note 15)
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized:
Series B preferred stock, 6,770,393 shares issued and outstanding ($169,260 liquidation preference)	68			68
Common stock, $0.01 par value, 450,000,000 shares authorized, 148,326,806 and 153,537,296 shares issued and outstanding in 2020 and 2019, respectively	1,483			1,535
Additional paid-in-capital	2,781,111			2,825,317
Accumulated deficit	(417,156		)	(196,945		)
Total Stockholders’ Equity	2,365,506			2,629,975
Total Liabilities and Stockholders’ Equity	$	6,969,514		$	6,888,363

———————

(1) Includes $5,330,380 and $4,852,087 pledged as collateral under secured debt arrangements in 2020 and 2019, respectively

(2) Net of $242,025 CECL Allowances in 2020, comprised of $197,481 Specific CECL Allowance and $44,544 General CECL Allowance. Net of $56,981 provision for loan loss in 2019.

(3) Includes $4,119 of General CECL Allowance related to unfunded commitments on our loans in 2020.

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations (Unaudited)

(in thousands—except share and per share data)



	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Net interest income:
Interest income from commercial mortgage loans	$	75,641		$	77,458		$	157,496		$	155,744
Interest income from subordinate loans and other lending assets	32,616			41,043			66,634			81,882
Interest expense	(37,498		)	(33,511		)	(78,703		)	(69,806		)
Net interest income	70,759			84,990			145,427			167,820
Operating expenses:
General and administrative expenses (includes equity-based compensation of $4,252 and $8,515 in 2020 and $4,294 and $8,195 in 2019, respectively)	(6,425		)	(6,574		)	(12,956		)	(12,725		)
Management fees to related party	(9,957		)	(10,259		)	(20,225		)	(19,872		)
Total operating expenses	(16,382		)	(16,833		)	(33,181		)	(32,597		)
Other income	591			484			1,351			1,002
Realized loss on investments	(16,405		)	(12,513		)	(16,405		)	(12,513		)
Reversal of (provision for) loan losses⁽¹⁾	25,169			15,000			(158,296		)	15,000
Foreign currency translation gain (loss)	2,559			(7,777		)	(35,390		)	(883		)
Gain (loss) on foreign currency forward contracts (includes unrealized gains (losses) of $9,004 and $53,432 in 2020 and $10,787 and $(4,198) in 2019, respectively)	(2,995		)	11,186			67,496			4,466
Loss on interest rate hedging instruments (includes unrealized gains (losses) of $50,756 and $15,208 in 2020 and $(13,113) in 2019, respectively)	(3,095		)	(13,113		)	(38,643		)	(13,113		)
Net income (loss)	$	60,201		$	61,424		$	(67,641	)	$	129,182
Preferred dividends	(3,385		)	(4,919		)	(6,770		)	(11,754		)
Net income (loss) available to common stockholders	$	56,816		$	56,505		$	(74,411	)	$	117,428
Net income (loss) per share of common stock:
Basic	$	0.37		$	0.38		$	(0.50	)	$	0.83
Diluted	$	0.36		$	0.37		$	(0.50	)	$	0.80
Basic weighted-average shares of common stock outstanding	151,523,513			145,567,963			152,735,852			140,117,813
Diluted weighted-average shares of common stock outstanding	182,083,702			174,101,234			152,735,852			169,418,177
Dividend declared per share of common stock	$	0.35		$	0.46		$	0.75		$	0.92

———————

(1) Comprised of $(9,500) and $140,500 of Specific CECL (Reversals) Allowance and $(15,669) and $17,796 of General CECL (Reversals) Allowance for the three and six months ended June 30, 2020, respectively.

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

(in thousands—except share and per share data)



	Preferred Stock			Common Stock					Additional Paid-In-Capital			Accumulated Deficit			Total
	Shares	Par		Shares		Par			Additional Paid-In-Capital			Accumulated Deficit			Total
Balance at January 1, 2020	6,770,393	$	68	153,537,296		$	1,535		$	2,825,317		$	(196,945	)	$	2,629,975
Adoption of ASU 2016-13, see Note 2	—	—		—		—			—			(30,867		)	(30,867		)
Capital increase (decrease) related to Equity Incentive Plan	—	—		503,251		5			(2,236		)	—			(2,231		)
Repurchase of common stock	—	—		(300,000	)	(3		)	(2,438		)	—			(2,441		)
Net loss	—	—		—		—			—			(127,842		)	(127,842		)
Dividends declared on preferred stock - $0.50 per share	—	—		—		—			—			(3,385		)	(3,385		)
Dividends declared on common stock - $0.40 per share	—	—		—		—			—			(62,298		)	(62,298		)
Balance at March 31, 2020	6,770,393	$	68	153,740,547		$	1,537		$	2,820,643		$	(421,337	)	$	2,400,911
Capital increase related to Equity Incentive Plan	—	—		82,235		1			4,251			—			4,252
Repurchase of common stock	—	—		(5,495,976	)	(55		)	(43,783		)	—			(43,838		)
Net income	—	—		—		—			—			60,201			60,201
Dividends declared on preferred stock - $0.50 per share	—	—		—		—			—			(52,635		)	(52,635		)
Dividends declared on common stock - $0.35 per share	—	—		—		—			—			(3,385		)	(3,385		)
Balance at June 30, 2020	6,770,393	$	68	148,326,806		$	1,483		$	2,781,111		$	(417,156	)	$	2,365,506



	Preferred Stock					Common Stock			Additional Paid-In-Capital			Accumulated Deficit			Total
	Shares		Par			Shares	Par		Additional Paid-In-Capital			Accumulated Deficit			Total
Balance at January 1, 2019	13,670,393		$	137		133,853,565	$	1,339	$	2,638,441		$	(130,170	)	$	2,509,747
Capital increase (decrease) related to Equity Incentive Plan	—		—			433,426	4		(1,099		)	—			(1,095		)
Conversions of convertible senior notes for common stock	—		—			1,967,361	20		33,758			—			33,778
Net income	—		—			—	—		—			67,758			67,758
Dividends declared on preferred stock - $0.50 per share	—		—			—	—		—			(6,835		)	(6,835		)
Dividends declared on common stock - $0.46 per share	—		—			—	—		—			(63,529		)	(63,529		)
Balance at March 31, 2019	13,670,393		$	137		136,254,352	$	1,363	$	2,671,100		$	(132,776	)	$	2,539,824
Capital increase related to Equity Incentive Plan	—		—			27,245	—		4,294			—			4,294
Issuance of common stock	—		—			17,250,000	172		314,985			—			315,157
Redemption of preferred stock	(6,900,000	)	(69		)	—	—		(172,431		)	—			(172,500		)
Offering costs	—		—			—	—		(406		)	—			(406		)
Net income	—		—			—	—		—			61,424			61,424
Dividends declared on preferred stock - $0.50 per share	—		—			—	—		—			(4,919		)	(4,919		)
Dividends declared on common stock - $0.46 per share	—		—			—	—		—			(71,475		)	(71,475		)
Balance at June 30, 2019	6,770,393		$	68		153,531,597	$	1,535	$	2,817,542		$	(147,746	)	$	2,671,399

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (Unaudited)

(in thousands)



	For the six months ended June 30,
	2020			2019
Cash flows provided by operating activities:
Net income (loss)	$	(67,641	)	$	129,182
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of discount/premium and PIK	(36,449		)	(40,490		)
Amortization of deferred financing costs	6,577			5,487
Equity-based compensation	8,515			3,195
Provision for (reversal of) loan losses	158,296			(15,000		)
Realized loss on investments	16,405			12,513
Foreign currency loss	48,404			3,068
Unrealized (gain) loss on derivative instruments	(68,640		)	17,311
Changes in operating assets and liabilities:
Other assets	(9,615		)	(6,460		)
Accounts payable, accrued expenses and other liabilities	(1,921		)	668
Payable to related party	(472		)	455
Net cash provided by operating activities	53,459			109,929
Cash flows used in investing activities:
New funding of commercial mortgage loans	(447,440		)	(511,310		)
Add-on funding of commercial mortgage loans	(197,261		)	(175,497		)
New funding of subordinate loans and other lending assets	—			(276,607		)
Add-on funding of subordinate loans and other lending assets	(25,766		)	(12,825		)
Proceeds received from the repayment and sale of commercial mortgage loans	397,994			341,453
Proceeds received from the repayment of subordinate loans and other lending assets	1,885			130,567
Origination and exit fees received on commercial mortgage loans, and subordinate loans and other lending assets, net	6,110			12,275
Increase (decrease) in collateral held related to derivative contracts, net	55,550			(18,180		)
Net cash (used in) provided by investing activities	(208,928		)	(510,124		)
Cash flows from financing activities:
Proceeds from issuance of common stock	—			315,157
Redemption of preferred stock	—			(172,500		)
Repurchase of common stock	(46,279		)	—
Payment of offering costs	—			(141		)
Proceeds from secured debt arrangements	1,373,643			981,529
Repayments of secured debt arrangements	(980,280		)	(1,063,071		)
Repayments of senior secured term loan principal	(2,500		)	—
Proceeds from issuance of senior secured term loan	—			497,500
Exchanges of convertible senior notes	—			(704		)
Payment of deferred financing costs	(7,522		)	(9,416		)
Other financing activities	(6,494		)	—
Dividends on common stock	(133,446		)	(126,289		)
Dividends on preferred stock	(6,770		)	(15,204		)
Net cash (used in) provided by financing activities	190,352			406,861
Net increase in cash and cash equivalents	34,883			6,666
Cash and cash equivalents, beginning of period	452,282			109,806
Cash and cash equivalents, end of period	$	487,165		$	116,472
Supplemental disclosure of cash flow information:
Interest paid	$	71,974		$	62,915
Supplemental disclosure of non-cash financing activities:
Exchange of convertible senior notes for common stock	$	—		$	33,778
Dividend declared, not yet paid	$	56,256		$	74,295
Offering costs payable	$	—		$	265
Loan proceeds held by servicer	$	—		$	4,619
Deferred financing costs, not yet paid	$	2,596		$	4,095
Transfer of proceeds borrowed under secured credit facilities to Barclays Private Securitization	$	782,006		$	—

See notes to unaudited condensed consolidated financial statements.

Apollo Commercial Real Estate Finance, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Organization

Apollo Commercial Real Estate Finance, Inc. (together with its consolidated subsidiaries, is referred to throughout this report as the "Company," "ARI," "we," "us" and "our") is a corporation that has elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes and primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments. These asset classes are referred to as our target assets.

We were formed in Maryland on June 29, 2009, commenced operations on September 29, 2009 and are externally managed and advised by ACREFI Management, LLC (the "Manager"), an indirect subsidiary of Apollo Global Management, Inc. (together with its subsidiaries, "Apollo").

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, commencing with the taxable year ended December 31, 2009. To maintain our tax qualification as a REIT, we are required to distribute at least 90% of our taxable income, excluding net capital gains, to stockholders and meet certain other asset, income, and ownership tests.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include our accounts and those of our consolidated subsidiaries. All intercompany amounts have been eliminated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our most significant estimates include loan loss allowances. Actual results could differ from those estimates.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 ("Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"). In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows have been included. Our results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year or any other future period.

We currently operate in one reporting segment.

Risks and Uncertainties

During the first quarter of 2020, there was a global outbreak of a novel coronavirus ("COVID-19"), which was declared by the World Health Organization as a pandemic. In response to COVID-19, the United States and numerous other countries have declared national emergencies, which has led to large scale quarantines as well as restrictions to business deemed non-essential. These responses to COVID-19 have disrupted economic activities and could have a continued significant adverse effect on economic and market conditions. As we are still in the midst of the COVID-19 pandemic we are not in a position to estimate the ultimate impact this will have on our business and the economy as a whole. We believe the estimates used in preparing our financial statements and related footnotes are reasonable and supportable based on the best information available to us as of June 30, 2020. The uncertainty surrounding COVID-19 may materially impact the accuracy of the estimates and assumptions used in the financial statements and related footnotes and, as a result, actual results may vary significantly from estimates.

Current Expected Credit Losses ("CECL")

In June 2016, the FASB issued ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"), which we refer to as the "CECL Standard." This update has changed how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value. The CECL Standard replaced the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost. The CECL Standard requires entities to record allowances for held-to-maturity debt securities that are deducted from the carrying amount of the assets to present the net carrying value at the amounts expected to be collected on the assets. We continue to record loan specific allowances as a practical expedient under the CECL Standard ("Specific CECL Allowance"), which we apply to assets that are collateral dependent and where the borrower or sponsor is experiencing

financial difficulty. In addition, we now record a general allowance in accordance with the CECL Standard on the remainder of the loan portfolio ("General CECL Allowance", and together with the Specific CECL Allowance, "CECL Allowances") on a collective basis by assets with similar risk characteristics.

The CECL Standard requires us to record an allowance for credit losses that are deducted from the carrying amount of our loan portfolio to present the net carrying value at the amounts expected to be collected on the assets. We adopted the CECL Standard through a cumulative-effect adjustment to retained earnings on January 1, 2020. Subsequent changes to the General CECL Allowance are recognized through net income (loss) on our condensed consolidated statement of operations.

The CECL Standard requires an entity to consider historical loss experience, current conditions, and a reasonable and supportable forecast of the macroeconomic environment. The FASB recognizes what is known as the weighted average remaining maturity ("WARM") method as an acceptable approach for computing current expected credit losses. We have adopted the WARM method to comply with the CECL Standard in determining a General CECL Allowance for a majority of our portfolio. In the future, we may use other acceptable methods, such as a probability-of-default/loss-given-default method. For loans where we have deemed the borrower/sponsor to be experiencing financial difficulty, we have elected to apply a practical expedient in which the fair value of the underlying collateral is compared to the amortized cost of the loan in determining a Specific CECL Allowance.

In accordance with the WARM method, an annual historical loss rate is applied to the amortized cost of an asset or pool of assets over the remaining expected life. The WARM method requires consideration of the timing of expected future fundings of existing commitments and repayments over each asset’s remaining life. An annual loss factor, adjusted for macroeconomic estimates, is applied over each subsequent period and aggregated to arrive at the General CECL Allowance.

In determining the General CECL Allowance, we considered various factors including (i) historical loss experience in the commercial real estate lending market, (ii) timing of expected repayments and satisfactions, (iii) expected future funding, (iv) capital subordinate to us when we are the senior lender, (v) capital senior to us when we are the subordinate lender, and (vi) our current and future view of the macroeconomic environment. The standard requires the use of significant judgment to arrive at an estimated credit loss. There is significant uncertainty related to future macroeconomic conditions as the result of COVID-19.

We derived an annual historical loss rate based on a commercial mortgage backed securities ("CMBS") database with historical losses from 1998 to the first quarter of 2020 provided by a third party, Trepp LLC. We applied various filters to arrive at a CMBS dataset most analogous to our current portfolio from which to determine an appropriate historical loss rate. The annual historical loss rate was further adjusted to reflect our expectations of the macroeconomic environment for a reasonable and supportable forecast period which we have determined to be one year.

The General CECL Allowance on subordinate loans is calculated by incorporating both the loan balance of the position(s) of the structurally senior third-party lender(s) and the balance of our subordinate loan. The subordinate loan, by virtue of being the first loss position, is required to absorb losses prior to the senior position(s) being impacted, resulting in a higher percentage allowance attributable to the subordinate loan. The General CECL Allowance on unfunded loan commitments is time-weighted based on our expected commitment to fund such obligations. The General CECL Allowance on unfunded commitments is recorded as a liability on the condensed consolidated balance sheet within accounts payable, accrued expenses and other liabilities. At adoption, the General CECL Allowance was $30.9 million and was recorded in the condensed consolidated statement of changes in stockholders’ equity.

Refer to Note 4 - Commercial Mortgage, Subordinate Loans and Other Lending Assets for further information regarding CECL.

Secured Debt Arrangements

Secured debt arrangements are accounted for as financing transactions, unless they meet the criteria for sale accounting. Loans financed through a secured debt arrangement remain on our balance sheet as an asset and cash received from the purchaser is recorded on our condensed consolidated balance sheet as a liability. Interest incurred in accordance with secured debt arrangements is recorded as interest expense.

During the second quarter 2020, we entered into a private securitization with Barclays Bank, plc (the "Barclays Private Securitization"). We have determined that the issuer of this securitization, ACRE Debt 2 PLC, is a Variable Interest Entity ("VIE") of which we were deemed to be the primary beneficiary and therefore, we consolidated the operations of this entity for GAAP. The collateral assets of the securitization are included in commercial mortgage loans, net on our condensed consolidated balance sheet. The liabilities of the securitization to the senior noteholders, excluding the notes held by us, are included in secured debt arrangements, net on our condensed consolidated balance sheet.

Note 3 – Fair Value Disclosure

GAAP establishes a hierarchy of valuation techniques based on the observability of the inputs utilized in measuring financial instruments at fair values. Market-based or observable inputs are the preferred source of values, followed by valuation models using management's assumptions in the absence of market-based or observable inputs. The three levels of the hierarchy as noted in ASC 820 "Fair Value Measurements and Disclosures" are described below:

Level I — Quoted prices in active markets for identical assets or liabilities.

Level II — Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

Level III — Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used.

While we anticipate that our valuation methods will be appropriate and consistent with valuation methods used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We will use inputs that are current as of the measurement date, which may include periods of market dislocation, during which price transparency may be reduced.

The estimated fair values of our derivative instruments are determined using a discounted cash flow analysis on the expected cash flows of each instrument. Our derivative instruments are classified as Level II in the fair value hierarchy.

The fair values of foreign exchange forwards are determined by comparing the contracted forward exchange rate to the current market exchange rate. The current market exchange rates are determined by using market spot rates, forward rates and interest rate curves for the underlying countries.

The fair value of interest rate swaps is determined by comparing the present value of remaining fixed payments to the present value of expected floating rate payments based on the forward one-month London Inter-bank Offered Rate ("LIBOR") curve. As of June 30, 2020, we had no interest rate swaps on our condensed consolidated balance sheet.

The fair value of our interest rate cap is determined by using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the interest rate cap. The variable interest rates used in the calculation of projected receipts on the interest rate cap are based on a third party expert's expectation of future interest rates derived from observable market interest rate curves and volatilities.

The following table summarizes the levels in the fair value hierarchy into which our derivative assets were categorized as of June 30, 2020 and December 31, 2019 ($ in thousands):



	Fair Value as of June 30, 2020								Fair Value as of December 31, 2019
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Foreign currency forward, net	$	—	$	48,556	$	—	$	48,556	$	—	$	—	$	—	$	—
Interest rate cap	—		738		—		738		—		—		—

Price	19.65	EPS	1
Shares	154	P/E	14
MCap	3,017	P/FCF	16
Net Debt	400	EBIT	353
TEV	3,417	TEV/EBIT	10
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-30
10-Q	2020-03-31	Filed 2020-05-07
10-K	2019-12-31	Filed 2020-02-13
10-Q	2019-09-30	Filed 2019-10-23
10-Q	2019-06-30	Filed 2019-07-24
10-Q	2019-03-31	Filed 2019-04-24
10-K	2018-12-31	Filed 2019-02-13
10-Q	2018-09-30	Filed 2018-10-24
10-Q	2018-06-30	Filed 2018-07-25
10-Q	2018-03-31	Filed 2018-05-02
10-K	2017-12-31	Filed 2018-02-14
10-Q	2017-09-30	Filed 2017-11-01
10-Q	2017-06-30	Filed 2017-08-01
10-Q	2017-03-31	Filed 2017-05-02
10-K	2016-12-31	Filed 2017-02-28
10-Q	2016-09-30	Filed 2016-11-01
10-Q	2016-06-30	Filed 2016-07-28
10-Q	2016-03-31	Filed 2016-04-27
10-K	2015-12-31	Filed 2016-02-26
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-07-29
10-Q	2015-03-31	Filed 2015-04-30
10-K	2014-12-31	Filed 2015-02-26
10-Q	2014-09-30	Filed 2014-10-31
10-Q	2014-06-30	Filed 2014-07-30
10-Q	2014-03-31	Filed 2014-04-30
10-K	2013-12-31	Filed 2014-02-27
10-Q	2013-09-30	Filed 2013-11-06
10-Q	2013-06-30	Filed 2013-08-06
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-03-01
10-Q	2012-09-30	Filed 2012-11-08
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-07
10-K	2011-12-31	Filed 2012-03-02
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-11
10-Q	2010-09-30	Filed 2010-11-12
10-Q	2010-06-30	Filed 2010-08-12
10-Q	2010-03-31	Filed 2010-05-13
10-K	2009-12-31	Filed 2010-03-17

8-K	2020-07-30	Earnings, Exhibits
8-K	2020-06-30	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2020-06-02
8-K	2020-05-07
8-K	2020-03-16
8-K	2020-02-13
8-K	2020-02-03
8-K	2019-10-23
8-K	2019-10-22
8-K	2019-07-24
8-K	2019-06-17
8-K	2019-05-15
8-K	2019-05-08
8-K	2019-05-08
8-K	2019-04-25
8-K	2019-04-24
8-K	2019-02-13
8-K	2019-02-12
8-K	2018-10-24
8-K	2018-10-02
8-K	2018-08-02
8-K	2018-07-25
8-K	2018-06-28
8-K	2018-06-07
8-K	2018-05-02
8-K	2018-03-13
8-K	2018-02-14

EX-31.1	ari-20200630xex311.htm
EX-31.2	ari-20200630xex312.htm
EX-32.1	ari-20200630xex321.htm



	Page
Part I — Financial Information
Item 1. Financial Statements	4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures about Market Risk	48
Item 4. Controls and Procedures	50
Part II — Other Information
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3. Defaults Upon Senior Securities	52
Item 4. Mine Safety Disclosures	52
Item 5. Other Information	52
Item 6. Exhibits	52

ARI 10Q Quarterly Report

Apollo Commercial Real Estate Finance Earnings 2020-06-30