8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2023

Apollo Commercial Real Estate Finance, Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-34452	27-0467113
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Apollo Global Management, Inc.
9 West 57th Street, 42nd Floor
New York, New York	10019
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 515-3200

n/a

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02 Results of Operations and Financial Condition.

On October 30, 2023, Apollo Commercial Real Estate Finance, Inc. (the “Company”) issued a summary press release and a detailed presentation announcing its financial results for the quarter ended September 30, 2023. A copy of the summary press release and the detailed presentation are attached as Exhibit 99.1 and Exhibit 99.2, respectively, hereto and incorporated herein by reference.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless it is specifically incorporated by reference therein.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Summary press release dated October 30, 2023
99.2	Financial results presentation dated October 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Apollo Commercial Real Estate Finance, Inc.
By:	/s/ Stuart A. Rothstein
	Name: Stuart A. Rothstein
	Title: President and Chief Executive Officer

Date: October 30, 2023

EX-99.1

Exhibit 99.1

CONTACT: Hilary Ginsberg

Investor Relations

(212) 822-0767

APOLLO COMMERCIAL REAL ESTATE FINANCE, INC.

REPORTS THIRD QUARTER 2023 RESULTS

New York, NY, October 30, 2023 – Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI) today reported results for the three and nine-month period ended September 30, 2023.

Net income attributable to common stockholders per diluted share of common stock was $0.30 for the quarter ended September 30, 2023. Distributable Earnings (a non-GAAP financial measure defined below) and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt per share of common stock were $0.37 for the quarter ended September 30, 2023.

“ARI had another consistent quarter of generating distributable earnings in excess of our distribution per share of common stock,” said Stuart Rothstein, Chief Executive Officer and President of the Company. “Credit quality within ARI’s loan portfolio remains stable, and no asset specific CECL allowances were recorded during the third quarter.”

ARI issued a detailed presentation of the Company’s quarter and nine-month period ended September 30, 2023 results, which can be viewed at www.apollocref.com.

Conference Call and Webcast

The Company will hold a conference call to review third quarter results on October 31, 2023, at 10am ET. To register for the call, please use the following link:

https://register.vevent.com/register/BI84e4fe38492a48e0909267750c83359d

After you register, you will receive a dial-in number and unique pin. The Company will also post a link in the Stockholders’ section on ARI’s website for a live webcast. For those unable to listen to the live call or webcast, there will be a webcast replay link posted in the Stockholders’ section on ARI’s website approximately two hours after the call.

Distributable Earnings

“Distributable Earnings”, a non-GAAP financial measure, is defined as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on the Company’s foreign currency hedges, (v) the non-cash amortization expense related to the reclassification of a portion of the Company’s convertible senior notes (the “Notes”) to stockholders’ equity in accordance with GAAP, and (vi) provision for loan losses.

The weighted-average diluted shares outstanding used for Distributable Earnings per weighted-average diluted share has been adjusted from weighted-average diluted shares under GAAP to exclude shares issued from a potential conversion of the Notes. Consistent with the treatment of other unrealized adjustments to Distributable Earnings, these potentially issuable shares are excluded until a conversion occurs, which the Company believes is a useful presentation for investors. The Company believes that excluding shares issued in connection with a potential conversion of the Notes from its computation of Distributable Earnings per weighted-average diluted share is useful to investors for various reasons, including the following: (i) conversion of Notes to shares requires both the holder of a Note to elect to convert the Note and for the Company to elect to settle the conversion in the form of shares; (ii) future conversion decisions by Note holders will be based on the Company’s stock price in the future, which is presently not determinable; (iii) the exclusion of shares issued in connection with a potential conversion of the Notes from the computation of Distributable Earnings per weighted-average diluted share is consistent with how the Company treats other unrealized items in its computation of Distributable Earnings per weighted-average diluted share; and (iv) the Company believes that when evaluating its operating performance, investors and potential investors consider the Company’s Distributable Earnings relative to its actual distributions, which are based on shares outstanding and not shares that might be issued in the future.

As a REIT, U.S. federal income tax law generally requires the Company to distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that the Company pay tax at regular corporate rates to the extent that 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 principal reasons shareholders invest in a REIT, the Company generally intends over time to pay dividends to its stockholders in an amount equal to its net taxable income, if and to the extent authorized by the Company’s board of directors. Distributable Earnings is a key factor considered by the Company’s board of directors in setting the dividend and as such the Company believes Distributable Earnings is useful to investors.

During the nine months ended September 30, 2023, the Company recorded in the condensed consolidated statement of operations a realized loss on a subordinate loan secured by an ultra-luxury residential property and a realized loss related to the acquisition of a hotel property through a deed-in-lieu of foreclosure. The realized losses were partially offset by realized gains on extinguishment of debt related to our convertible notes.

The Company believes it is useful to its investors to also present Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt to reflect its operating results because (i) the Company’s operating results are primarily comprised of earning interest income on its investments net of borrowing and administrative costs, which comprise the Company’s ongoing operations and (ii) it has been a useful factor related to the Company’s dividend per share because it is one of the considerations when a dividend is determined. The Company believes that its investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt, or a comparable supplemental performance measure, to evaluate and compare the performance of the Company and its peers.

A significant limitation associated with Distributable Earnings as a measure of the Company’s financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, the Company’s presentation of Distributable Earnings may not be comparable to similarly-titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as 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 Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized.

A reconciliation of Distributable Earnings, and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt, to GAAP net income (loss) available to common stockholders is included in the detailed presentation of the Company’s three and nine months ended September 30, 2023 results, which can be viewed at www.apollocref.com.

About Apollo Commercial Real Estate Finance, Inc.

Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, acquires, invests in and manages performing commercial first mortgage loans, subordinate financings and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, Inc., a high-growth, global alternative asset manager with approximately $617 billion of assets under management at June 30, 2023.

Additional information can be found on the Company’s website at www.apollocref.com.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements as such 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 such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These forward-looking statements include information about possible or assumed future results of the Company’s business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: macro- and micro-economic impact of the COVID-19 pandemic, increasing interest rates and inflation; market trends in the Company’s industry, real estate values, the debt securities markets or the general economy; the timing and amounts of expected future fundings of unfunded commitments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company’s ability to deploy the proceeds of its capital raises or acquire its target assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

EX-99.2

Q3 2023 Financial Results Apollo Commercial Real Estate Finance, Inc. October 2023 September 30, 2023 Exhibit 99.2

This presentation may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond management’s control. These forward-looking statements may include information about possible or assumed future results of Apollo Commercial Real Estate Finance, Inc.’s (the “Company,” “ARI,” “we,” “us” and “our”) business, financial condition, liquidity, results of operations, plans and objectives. When used in this presentation, the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the macro- and micro-economic impact of the coronavirus (“COVID-19”) pandemic; increasing interest rates and inflation; market trends in our industry, real estate values, the debt securities markets or the general economy; ARI’s business and investment strategy; ARI’s operating results; ARI’s ability to obtain and maintain financing arrangements; the timing and amounts of expected future fundings of unfunded commitments; and the return on equity, the yield on investments and risks associated with investing in real estate assets including changes in business conditions and the general economy. The forward-looking statements are based on management’s beliefs, assumptions and expectations of future performance, taking into account all information currently available to ARI. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to ARI. Some of these factors are described under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ARI’s Annual Report on Form 10-K for the year ended December 31, 2022 and other filings with the Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. If a change occurs, ARI’s business, financial condition, liquidity and results of operations may vary materially from those expressed in ARI’s forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for management to predict those events or how they may affect ARI. Except as required by law, ARI is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation contains information regarding ARI’s financial results that is calculated and presented on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States (“GAAP”), including Distributable Earnings and Distributable Earnings per share. Please refer to page 21 for a definition of “Distributable Earnings” and the reconciliation of the applicable GAAP financial measures to non-GAAP financial measures set forth on page 20. This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available by third-party service providers. ARI makes no representation or warranty, expressed or implied, with respect to the accuracy, reasonableness or completeness of such information. Past performance is not indicative nor a guarantee of future returns. Index performance and yield data are shown for illustrative purposes only and have limitations when used for comparison or for other purposes due to, among other matters, volatility, credit or other factors (such as number and types of securities). Indices are unmanaged, do not charge any fees or expenses, assume reinvestment of income and do not employ special investment techniques such as leveraging or short selling. No such index is indicative of the future results of any investment by ARI. Unless the context requires otherwise, references in this presentation to “Apollo” refer to Apollo Global Management, Inc., together with its subsidiaries, and references in this presentation to the “Manager” refer to ACREFI Management, LLC, an indirect subsidiary of Apollo Global Management, Inc. Forward Looking Statements and Other Disclosures

Amount reflects Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt Includes loan proceeds held by servicer as of September 30, 2023 $176 million of cash was utilized to pay off our Convertible Notes at maturity in October 2023 See footnotes on page 21 ARI Highlights Dividend Coverage 1.1x Coverage Ratio2 for Dividend per Share of Common Stock Quarter-End Liquidity $480 Millionc Cashb and Available Leverage on Secured Debt Arrangements Well-Positioned for Continued Tailwinds from Rising Interest Rates 99% Percentage of Portfolio Consisting of Floating Rate Loans Strong Distributable Earnings1,a $0.37 Distributable Earnings1 per Diluted Share of Common Stock

Amount reflects Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt Excludes benefit of forward points on currency hedges related to loans denominated in currencies other than USD Reflects book value per share (excluding General CECL Allowance and depreciation) of $14.74 multiplied by shares of common stock outstanding Includes cash, loan proceeds held by servicer, and available leverage on our secured debt arrangements $176 million of cash was utilized to pay off our Convertible Notes at maturity in October 2023 See footnotes on page 21 Summary Results Q3 Financial Results Loan Portfolio Capitalization Net income available to common stockholders of $43 million, or $0.30 per diluted share of common stock Distributable Earnings1,a of $53 million, or $0.37 per diluted share of common stock Declared common stock dividends of $0.35 per share for Q3 2023, which implies a dividend yield4 of 15.0% Total loan portfolio of $8.0 billion with w/a unlevered all-in yield6,b of 8.9% 95% first mortgages and 99% floating rate Weighted-average risk rating of 3.1 No Specific CECL Allowance recorded during Q3 Funded $174 million year-to-date in connection with the refinancing of two floating rate first mortgage loans Gross add-on fundings5 of $342 million year-to-date, $97 million in Q3 Received $1.0 billion from loan repayments year-to-date, $286 million in Q3 Includes $210 million year-to-date of proceeds from loans secured by office properties Includes $140 million of proceeds from loan sales year-to-date Ended quarter with total common equity book value of $2.1 billionc Ended quarter with $480 milliond,e of total liquidity Repurchased $10 million of our Convertible Notes at a price of 99.7%. Subsequent Events In October 2023, we repaid the remaining principal of our Convertible Notes of $176 million at par

Amount reflects Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt Includes net unrealized loss on forward currency contracts and interest hedges, and realized gain on forward currency contracts related to principal outside impact of forward points Includes realized gain on extinguishment of convertible notes See footnotes on page 21 Per Share Overview Distributable Earnings per Share1,a 1,a Book Value per Share9 BVPS Post-General CECL Allowance & Depreciation General CECL Allowance & Depreciation $0.35 Book Value per Share9 Roll Forward 8 b c a Distributable Earnings per Share Quarterly Dividend

See footnotes on page 21 Portfolio Activity & REO Overview Debt related to real estate owned is net of $4 million in deferred financing costs; Maximum financing commitment of $388 million related to Brooklyn Development Includes depreciation expense of $6.0 million and $1.2 million related to the D.C. Hotel and Atlanta Hotel, respectively REO Overview 7 8 Q3 Loan Portfolio Activity ($ in mm) ($ in mm) a Total proceeds from Q3 repayments of $286 million $170 million of full repayments across 4 deals $116 million of partial repayments including: $45 million from condo sales related to our loans secured by an ultra-luxury residential-for-sale property in Manhattan, NY $35 million in proceeds from loans secured by office properties Repayments Fundings $97 million in add-on fundings5 Brooklyn Development Washington D.C. Hotel Hotel continues to benefit from strong leisure and group demand; performance remains above pre-COVID levels based on net cash flows. Continue to develop multifamily tower with retail component in Brooklyn, NY. Above-grade work commenced in September 2023. Continue to negotiate purchase and sales agreement. Property sale expected to close in the fourth quarter of 2023. Atlanta Hotel b

$5,147 (56%) 2.8x Debt to Equity Ratio10 Weighted-average rates of applicable benchmark rates and credit spread adjustments plus spreads of USD: +2.45% / GBP: +1.99% / EUR: +1.65% / SEK: +1.50% Our secured credit facilities do not contain capital markets-based mark-to-market provisions Consists of nine secured credit facility counterparties, one revolving credit facility and one private securitization Reflects book value per share (excluding General CECL Allowance and depreciation) of $14.74 multiplied by shares of common stock outstanding Based on maximum available advance rates across secured debt counterparties See footnotes on page 21 Capital Structure Overview ($ in mm) Capital Structure Composition Conservative Capital Management Strategy ~71% Weighted Average Available Advance Ratee $805 Million of Unencumbered Real Estate Assets3 1.4x Fixed Charge Coverage11 $2,084 (23%) Secured Debt Obligationsa,b,c Common Equity Book Valued Convertible Notes – repaid October 2023 Preferred Stock $1,271 (15%) Senior Notes $500 (6%) Term Loan B $771 (9%) $169 (2%) Debt Related to Real Estate Owned $165 (2%) $176 (2%) Corporate Debt Maturities Convertible Notes repaid October 2023 Term Loan Term Loan Senior Notes

Carrying Value $8.0 billion Number of Loans 49 Excludes benefit of forward points on currency hedges related to loans denominated in currencies other than USD Weighted average loan-to-value (“LTV”) reflects the LTV at the time the loan was originated; excludes risk-rated 5 loans Other property types include Parking Garages (3%), Caravan Parks (3%) and Urban Predevelopment (1%) Retail property types include: Outlet Center (6%), Retail Distribution Warehouse (5%), Urban Retail (3%), and Lifestyle Center (3%) See footnotes on page 21 Loan Portfolio Overview Collateral Diversification12 Loan Position12 W/A Unlevered All-in Yield on Loan Portfolio6,12,a 8.9% W/A Remaining Fully-Extended Term12,14 2.4 Years W/A Portfolio Risk Rating12 3.1 W/A Portfolio Loan-to-Value12,b 57% Origination Vintage12 c d

New York City 21% West 7% Midwest 7% Southeast 7% Northeast 6% Italy 5% United Kingdom 31% Spain 4% Germany 5% Sweden 3% Collateral Diversification Other geographies include Southwest (2%), Mid-Atlantic (1%), and Other (1%) Other property types include Parking Garages (3%), Caravan Parks (3%) and Urban Predevelopment (1%) Note: Map does not show locations where percentages are 2% or lower See footnotes on page 21 Loan Portfolio Overview (cont’d) b a 8 8 8,13

W/A Risk Rating12 3.1 Excludes one loan which consists of office, industrial and retail property types located in various cities across Germany Weighted average loan-to-value (“LTV”) reflects the LTV at the time the loan was originated Gross of General CECL Allowance See footnotes on page 21 Office Loan Portfolio Overview Number of Loans a 9 Loans First Mortgage 99% W/A Loan-to-Value12,b 50% Carrying Value c $1.4 Billion Location Loans with 3rd Party Subordinate Debt 3 Loans Origination Vintage12 Fully Extended Maturities12,14

Hedged with forward currency contracts Offset by local currency denominated secured debt arrangements 30% 70% ARI is well-positioned for fluctuating foreign exchange rates due to several risk mitigating steps we have taken to structure and fund our non-US loan portfolio and associated secured financing facilities Mitigating Foreign Exchange Risk Secured debt arrangements are structured in local currency thereby reducing FX exposure to our net equity on foreign loans. As of September 30, 2023 the percentage of net equity to total foreign denominated carrying value was 29%, or $1.1 billion 70% weighted average advance on total foreign loan portfolio 72%a weighted average advance on foreign loans with secured debt financing Net equity and net interest income of foreign loans are economically hedged through forward currency contracts Forward point impact on forward currency contracts resulted in a $2.7 million realized gain in Q3 2023 Foreign Exchange Rate Change (Local/USD) GBP: 9% EUR: 8% SEK: 2% % FX Change YoY Mitigating Foreign Exchange Risk ($ in mm) Weighted average advance based on carrying value of first mortgage loans with secured debt financing Carrying value includes all commercial mortgage and subordinate loans denominated in foreign currencies with or without secured debt financing Represents the net change in unrealized gains (losses) on foreign loans of ($142) million and respective foreign secured debt arrangements of $99 million for the quarter ended September 30, 2023. Represents the net change in unrealized gains (losses) on foreign loans of ($5) million and respective foreign secured debt arrangements of $1 million for the year ended September 30, 2023. Represents net change in unrealized gain (loss) on forward contracts for the quarter and year ended September 30, 2023, respectively, excluding gains (losses) on forward currency contracts economically hedging foreign currency interest

Note: Assumes future financing, in certain cases, against mortgages that are not currently financed. There is no assurance such future financing against mortgages that are not currently financed will occur Net of expected secured credit facility advances Reflects incremental increases in respective benchmark rates as of September 30, 2023 (SOFR 1 month: 5.32%, EURIBOR 3.95% and SONIA ON: 5.20% adjusted for compounding) See footnotes on page 21 Loan Maturities and Future Funding Profile Net Interest Income Sensitivity to Benchmark Rates17,b Fully-Extended Loan Maturities and Expected Future Fundings by Net Equity14,15,16 ($ in mm) a a

See footnotes on page 21 Senior Loan Portfolio (1 of 3) 14

Senior Loan Portfolio (2 of 3) See footnotes on page 21 18 19 14

Includes portfolio of office, industrial, and retail property types See footnotes on page 21 Senior Loan Portfolio (3 of 3) a 8,12 14

See footnotes on page 21 Subordinate Loan Portfolio 19 18,19 8,12 8,12,14 8 14

Appendix Consolidated Balance Sheets Consolidated Statement of Operations Reconciliation of GAAP Net Income to Distributable Earnings

Includes $7,203,350 and $7,482,658 pledged as collateral under secured debt arrangements in 2023 and 2022, respectively. Includes $213,139 and $191,608 pledged as collateral under secured debt arrangements in 2023 and 2022, respectively. Net of $220,305 and $159,724 CECL Allowance in 2023 and 2022, respectively, comprised of $193,000 and $133,500 Specific CECL Allowance and $27,305 and $26,224 General CECL Allowance, respectively. Includes $3,972 and $4,347 of General CECL Allowance related to unfunded commitments on commercial mortgage loans, subordinate loans and other lending assets, net in 2023 and 2022, respectively. Consolidated Balance Sheets

See footnotes on page 21 Consolidated Statement of Operations

See footnotes on page 21 Reconciliation of GAAP Net Income to Distributable Earnings1

Footnotes Distributable Earnings is a non-GAAP financial measure that we define as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization on real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, (v) the non-cash amortization expense related to the reclassification of a portion of our convertible senior notes to stockholders’ equity in accordance with GAAP, and (vi) provision for loan losses and impairments. Please see page 20 for a reconciliation of GAAP net income to Distributable Earnings. Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt per share to dividend per share for the quarter ended September 30, 2023. We believe it is useful to our investors to present Distributable Earnings prior to net realized losses on investments and realized gain on extinguishment of debt to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers. Represents loan and real estate owned assets with no asset-specific financing. Pursuant to our Term Loan B agreement, we are required to maintain a ratio of total unencumbered assets to total pari-passu indebtedness of at least 2.50:1. Unencumbered assets are comprised of unencumbered loan assets, cash, other assets and residual equity interests in entities where we hold assets financed under repurchase obligations. Reflects closing share price on October 27, 2023. Quarterly add-on fundings represent fundings committed prior to the quarter ended September 30, 2023. Weighted Average Unlevered All-in Yield on the loan portfolio is based on the applicable benchmark rates as of period end on the floating rate loans and includes accrual of origination, extension, and exit fees. For non-US deals, yield excludes incremental forward points impact from currency hedging. Other includes changes in General CECL Allowance, cost recovery interests, and the accretion of loan costs and fees. Amounts and percentages may not foot due to rounding. Book value per share of common stock is common stockholders’ equity divided by shares of common stock outstanding. Represents total debt, less cash and loan proceeds held by servicer divided by total stockholders' equity, adjusted to add back the General CECL Allowance in line with our covenants. Fixed charge coverage is EBITDA divided by interest expense and preferred stock dividends. Based on loan amortized cost. Gross of $27 million of General CECL Allowance. Assumes exercise of all extension options. There is no assurance that all or any extension options will be exercised. Future funding dates and amounts are based upon the Manager’s estimates, which are derived from the best information available to the Manager at the time. There is no assurance that the payments will occur in accordance with these estimates or at all, which could affect our operating results. Excludes risk-rated 5 loans. Any such hypothetical impact on interest rates on our variable rate borrowings does not consider the effect of any change in overall economic activity that could occur in a rising interest rate environment.  Further, in the event of a change in interest rates of that magnitude, we may take actions to further mitigate our exposure to such a change.  However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in our financial structure. There is no assurance that there will be no changes in our financial structure. The analysis incorporates movements in USD and GBP benchmark rates only. Amortized cost for these loans is net of the recorded Specific CECL Allowances. Loans are secured by the same property.

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Document and Entity Information	Oct. 30, 2023
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Entity Central Index Key	0001467760
Document Type	8-K
Document Period End Date	Oct. 30, 2023
Entity Registrant Name	Apollo Commercial Real Estate Finance, Inc.
Entity Incorporation State Country Code	MD
Entity File Number	001-34452
Entity Tax Identification Number	27-0467113
Entity Address, Address Line One	c/o Apollo Global Management, Inc.
Entity Address, Address Line Two	9 West 57th Street
Entity Address, Address Line Three	42nd Floor
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