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): February 19, 2014

Apollo Residential Mortgage, Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-35246	45-0679215
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

c/o Apollo Global Management, LLC 9 West 57th Street, 43rd 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))

ITEM 2.02. Results of Operations and Financial Condition.

On February 19, 2014, Apollo Residential Mortgage, Inc. (the "Company") issued an earnings release announcing its financial results for the quarter ended December 31, 2013 and the fiscal year ended December 31, 2013. A copy of the earnings release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

On February 19, 2014, the Company posted supplemental financial information on the Investor Relations section of its website (www.apolloresidentialmortgage.com). A copy of the supplemental financial information is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

The information in 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	Earnings Release, dated February 19, 2014
99.2	Supplemental Financial Information Presentation for the quarter ended December 31, 2013

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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 Residential Mortgage, Inc.
By:	/s/ Teresa D. Covello
Name: Teresa D. Covello
Title: Chief Financial Officer, Treasurer and Secretary

Date: February 19, 2014

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Exhibit Index

Exhibit No.	Description
99.1	Earnings Release, dated February 19, 2014
99.2	Supplemental Financial Information Presentation for the quarter ended December 31, 2013

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE
CONTACT:	Hilary Ginsberg	NYSE: AMTG
	(212) 822-0767

APOLLO RESIDENTIAL MORTGAGE, INC. REPORTS

FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS

New York, NY, February 19, 2014 - Apollo Residential Mortgage, Inc. (the “Company”) (NYSE: AMTG) today reported financial results for the quarter and full year ended December 31, 2013.

Fourth Quarter 2013 Financial Highlights

• Net income allocable to common stock and participating securities of $5.1 million, or $0.16 per common share comprised of:

• Operating earnings⁽¹⁾ of $0.61 per common share;

• Realized net losses of $(0.32) per common share;

• Unrealized net losses of $(0.12) per common share; and

• Equity award plan expenses of $(0.01) per common share

• Declared a $0.40 dividend per common share for the quarter

Full Year 2013 Financial Highlights

• Net loss allocable to common stock and participating securities of $(61.0) million, or $(2.02) per common share comprised of:

• Operating earnings⁽¹⁾ of $2.26 per common share;

• Realized net losses of $(1.17) per common share;

• Unrealized net losses of $(3.08) per common share; and

• Equity award plan expenses of $(0.03) per common share

• Declared aggregate dividends of $2.20 per common share during the year

Other Highlights at December 31, 2013

• $3.5 billion RMBS portfolio consisted of Agency RMBS with an estimated fair value of $2.3 billion and non-Agency RMBS with an estimated fair value of $1.2 billion;

• RMBS and securitized mortgage loan portfolio had a 2.7% effective net interest rate spread and a 15.4% effective levered asset yield⁽¹⁾;

• Leverage multiple of 4.1x; and

• Book value per common share of $18.26.

⁽¹⁾  Reflects a “non-GAAP” financial measure (i.e., a measure that is not calculated in accordance with U.S. Generally Accepted Accounting Principles. See “Reconciliations of Non-GAAP Financial Measures”) in this press release.

“AMTG had a solid year of operating results against the backdrop of a challenging fixed income market,” said Michael Commaroto, Chief Executive Officer of the Company. “The Company’s portfolio continues to have a strong focus on non-Agency RMBS, a market that performed well in 2013, fueled by the ongoing positive trends in housing. In addition, the Company’s operating results benefitted in the fourth quarter from slower prepayments in the Agency RMBS portfolio as well as some Agency RMBS portfolio rebalancing. As we navigate through the current landscape in the mortgage market, we believe AMTG’s portfolio equity, which was allocated 47% to non- Agency RMBS and securitized mortgage loans, 44% to Agency RMBS and 9% to cash at December 31, 2013, is well positioned.”

Portfolio Summary (Table 1)

The following table sets forth additional detail regarding the Company’s investments as of December 31, 2013:

	Principal Balance		Unamortized Premium (Discount), Net(1)			Amortized Cost (2)		Estimated Fair Value		Unrealized Gain/(Loss)			Net Weighted Average Coupon			Weighted Average Yield (3)
($ amounts in thousands)
Agency RMBS:
30-Year Mortgages
ARM	$	11,619	$	782		$	12,401	$	12,339	$	(62	)		4.12	%		1.06	%
Fixed-rate coupons:
3.5%		303,026		19,925			322,951		301,068		(21,883	)		3.50	%		2.54	%
4.0%		1,558,943		120,636			1,679,579		1,602,080		(77,499	)		4.00	%		2.84	%
4.5% & 5.0%		235,127		18,266			253,393		250,136		(3,257	)		4.52	%		3.18	%
		2,108,715		159,609			2,268,324		2,165,623		(102,701	)		3.99	%		2.82	%
15-Year Mortgages
3.0% Coupons		52,699		1,413			54,112		53,711		(401	)		3.00	%		2.50	%
Agency IOs (4)		—		—			41,521		44,425		2,904			3.95	%		1.58	%
Agency IIOs(4)		—		—			27,673		26,778		(895	)		6.16	%		15.16	%
Total Agency RMBS		2,161,414		161,022			2,391,630		2,290,537		(101,093	)		4.08	%		2.94	%
Non-Agency RMBS		1,438,007		(302,827	)		1,135,180		1,212,789		77,609			1.24	%		6.73	%
Total RMBS	$	3,599,421	$	(141,805	)	$	3,526,810	$	3,503,326	$	(23,484	)		3.09	%		4.16	%
Securitized Mortgage Loans	$	148,677	$	(41,643	)	$	107,034	$	110,984	$	3,950			5.82	%		7.90	%
Other Investment Securities	$	11,180	$	—		$	11,180	$	11,515	$	335			3.57	%		3.57	%
Total Portfolio	$	3,759,278	$	(183,448	)	$	3,645,024	$	3,625,825	$	(19,199	)		3.20	%		4.27	%

⁽¹⁾  A portion of the purchase discount on non-Agency RMBS is not expected to be recognized as interest income, and is instead viewed as a credit discount. At December 31, 2013, our non-Agency RMBS had gross discounts of $302,946, which included credit discounts of $100,080 and other-than-temporary impairments (“OTTI”) of $9,219.

⁽²⁾  Amortized cost is reduced by unrealized losses that are classified as OTTI. The Company recognized OTTI of $13,412 for the twelve months ended December 31, 2013.

⁽³⁾  Weighted average yield at the date presented incorporates estimates for future prepayment assumptions on all RMBS and loss assumptions on non-Agency RMBS.

⁽⁴⁾  Agency IOs and Agency IIOs have no principal balance and bear interest based on a notional balance. The notional balance is used solely to determine interest distributions on interest-only class of securities. At December 31, 2013, the Company’s Agency IOs had a notional balance of $410,187 and the Company’s Agency IIOs had a notional balance of $145,650.

As of December 31, 2013, the average cost basis of the Company’s Agency RMBS portfolio, excluding Agency IOs and Agency IIOs, was 107.4% of par value and the average cost basis of the Company’s non-Agency RMBS portfolio was 78.9% of par value.

The Agency RMBS pass-through securities portfolio experienced prepayments at an average one month constant prepayment rate (“CPR”) for the quarter ended December 31, 2013 of 4.7%. Including Agency IOs and Agency IIOs securities, the Agency RMBS portfolio experienced prepayments at an average one month CPR of 4.9% for the quarter ended December 31, 2013.

Portfolio Financing

At December 31, 2013, the Company had master repurchase agreements with 23 counterparties and had outstanding borrowings with 17 counterparties totaling $3.0 billion.

2

(Table 2)

The following table sets forth the Company’s borrowings at December 31, 2013:

($ amounts in thousands)	Balance		Weighted Average Borrowing Rate			Weighted Average Remaining Maturity
Repurchase agreement borrowings:
Agency RMBS	$	2,082,447		0.42	%	19 days
Non-Agency RMBS(1)		942,091		2.00		94 days
Other investment securities		9,520		1.74		24 days
Total repurchase agreements	$	3,034,058		0.91	%	42 days
Securitized debt	$	42,400		4.00	%	57 months(2)
Total borrowings	$	3,076,458		0.95	%

⁽¹⁾ Includes $27,014 of repurchase borrowings collateralized by $47,057 non-Agency RMBS that are eliminated from the Company’s consolidated balance sheet in consolidation with the variable interest entity associated with the Company’s securitization transaction.

⁽²⁾  Securitized debt, which represents non-recourse senior securities sold to third parties in connection with a securitization transaction, has a final contractual maturity of May 2047. Weighted average remaining maturity represents the estimated final maturity of the security based on the final projected repayment of principal. The actual maturity of the securitized debt may differ significantly from this estimate given that actual interest collections, mortgage prepayments and/or losses on liquidation of mortgages may differ significantly from those expected.

(Table 3)

The Company’s derivative instruments consisted of the following at December 31, 2013:

($ amounts in thousands)	Notional Amount		Estimated Fair Value
Swaps – assets	$	1,007,000	$	40,135
Swaptions – assets		1,375,000		12,430
Swaps – (liabilities)		580,000		(4,610	)
TBA Short Contracts – assets		400,000		750
Total derivative instruments	$	3,362,000	$	48,705

(Table 4)

The following table summarizes the average fixed-pay rate and average maturity for the Company’s Swaps at December 31, 2013:

Term to Maturity ($ amounts in thousands)	Notional Amount		Average Fixed Pay Rate			Average Maturity (Years)
Greater than 1 year to 3 years	$	110,000		1.38	%		2.8
Greater than 3 years to 5 years		999,000		1.02	%		3.7
Greater than 5 years		478,000		1.98	%		8.7
Total	$	1,587,000		1.34	%		5.1

3

(Table 5)

At December 31, 2013, the Company’s Swaptions had an aggregate notional amount of $1.4 billion. The following table presents information about the Company’s Swaptions at December 31, 2013:

($ amounts in thousands)	Option				Underlying Swap
Fixed Pay Rate for Underlying Swap	Fair Value		Weighted Average Months Until Option Expiration		Notional Amount		Swap Terms (Years)
3.00 – 3.25%	$	2,178		6	$	100,000		10.0
3.26 – 3.50%		4,773		3		575,000		10.0
3.51 – 3.75%		2,026		4		375,000		10.0
3.76 – 4.00%		2,993		10		225,000		10.0
4.01 – 4.41%		460		8		100,000		10.0
	$	12,430		5	$	1,375,000		10.0

Book Value

The Company’s book value per common share at December 31, 2013 was $18.26 as compared to book value per common share of $18.50 at September 30, 2013.

Teleconference and Website Presentation Details:

The Company will be hosting a conference call to discuss its financial results on Thursday, February 20, 2014 at 10:00 a.m. Eastern Time. Members of the public who are interested in participating in the Company’s fourth quarter and full year 2013 earnings teleconference call should dial from the U.S., (877) 445-0818, or from outside the U.S., (724) 498-0351, shortly before 10:00 a.m. and reference the Apollo Residential Mortgage, Inc. Teleconference Call (number 44456545). Please note the teleconference call will be available for replay beginning at 12:00 p.m. on Thursday, February 20, 2014, and ending at midnight on Thursday, February 27, 2014. To access the replay, callers from the U.S. should dial (855) 859-2056 and callers from outside the U.S. should dial (404) 537-3406, and enter conference identification number 44456545.

Webcast:

The conference call will also be available on the Company’s website at www.apolloresidentialmortgage.com. To listen to a live broadcast, please go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay of the call will also be available for 30 days on the Company’s website.

Supplemental Information

The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the investor relations section of the Company’s website at www.apolloresidentialmortgage.com.

About Apollo Residential Mortgage, Inc.

Apollo Residential Mortgage, Inc. is a real estate investment trust that invests in and manages residential mortgage-backed securities and other residential mortgage assets throughout the United States. The Company is externally managed and advised by ARM Manager, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, LLC (NYSE:APO), a leading global alternative investment manager with approximately $161.2 billion of assets under management at December 31, 2013.

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

4

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, including information about the ability of the Company to generate attractive returns while attempting to mitigate risk. 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: the return on equity; the yield on investments; the ability to borrow to finance 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and other 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.

5

Apollo Residential Mortgage, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands—except share and per share data)

	December 31, 2013			December 31, 2012
Assets:
Cash	$	127,959		$	149,576
Restricted cash		67,458			93,641
RMBS, at fair value (of which $3,317,060 and $3,940,913 were pledged as collateral, respectively)		3,503,326			4,231,291
Securitized mortgage loans (transferred to a consolidated VIE), at fair value		110,984			—
Other investment securities, at fair value (of which $11,515 and $0 were pledged as collateral, respectively)		11,515			—
Investment related receivable (of which $21,959 and $0 were pledged as collateral, respectively)		24,887			—
Interest receivable		10,396			11,341
Deferred financing costs, net		882			346
Derivative instruments, at fair value		53,315			750
Other assets		854			976
Total Assets	$	3,911,576		$	4,487,921
Liabilities and Stockholders’ Equity
Liabilities:
Borrowings under repurchase agreements	$	3,034,058		$	3,654,436
Non-recourse securitized debt, at fair value		43,354			—
Investment related payables		—			50,032
Obligation to return cash held as collateral		38,654			—
Accrued interest payable		8,708			6,774
Derivative instruments, at fair value		4,610			23,184
Payable to related party		5,444			4,295
Dividends payable		16,812			30,675
Accounts payable and accrued expenses		2,335			1,742
Total Liabilities	$	3,153,975		$	3,771,138
Stockholders’ Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, 6,900,000 shares issued and outstanding ($172,500 aggregate liquidation preference)	$	69		$	69
Common stock, $0.01 par value, 450,000,000 shares authorized, 32,038,970 and 24,205,972 shares issued and outstanding, respectively		320			242
Additional paid-in-capital		792,010			619,399
Retained earnings/(accumulated deficit)		(34,798	)		97,073
Total Stockholders’ Equity	$	757,601		$	716,783
Total Liabilities and Stockholders’ Equity	$	3,911,576		$	4,487,921

6

Apollo Residential Mortgage, Inc. and Subsidiaries

Consolidated Statements of Operations

(in thousands – except per share data)

	Three months ended December 31,						Twelve months ended December 31,
	2013			2012			2013			2012
Interest Income:
RMBS	$	38,304		$	33,578		$	146,263		$	94,369
Securitized mortgage loans		2,313			—			8,267			—
Other investment securities		104			—			183			—
Total Interest Income	$	40,721		$	33,578		$	154,713		$	94,369
Interest Expense:
Repurchase agreements		(6,873	)		(6,110	)		(25,808	)		(14,631	)
Securitized debt		(486	)		—			(1,794	)		—
Total Interest Expense		(7,359	)		(6,110	)		(27,602	)		(14,631	)
Net Interest Income	$	33,362		$	27,468		$	127,111		$	79,738
Other Income/(Loss):
Realized gain/(loss) on sale of RMBS, net	$	(18,541	)	$	7,573		$	(66,850	)	$	39,817
Unrealized gain/(loss) on RMBS, net		(7,648	)		24,941			(147,375	)		100,402
Unrealized gain on securitized mortgage loans		4,038			—			3,950			—
Unrealized (loss) on securitized debt		(541	)		—			(954	)		—
Unrealized gain on other investment securities		219			—			335			—
Gain/(loss) on derivative instruments, net (includes ($174), $4,041, $50,373 and ($20,151) of unrealized gains/(losses), net, respectively)		3,692			821			59,576			(32,665	)
Other, net		4			23			76			48
Other Income/(Loss), net	$	(18,777	)	$	33,358		$	(151,242	)	$	107,602
Operating Expenses:
General and administrative (includes $295, $170, $1,047 and $444 of non-cash stock based compensation, respectively)	$	(3,127	)	$	(2,569	)	$	(11,501	)	$	(7,780	)
Management fee – related party		(2,928	)		(2,418	)		(11,579	)		(6,804	)
Total Operating Expenses	$	(6,055	)	$	(4,987	)	$	(23,080	)	$	(14,584	)
Net Income/(Loss)	$	8,530		$	55,839		$	(47,211	)	$	172,756
Preferred Stock Dividends Declared		(3,450	)		(5,022	)		(13,800	)		(5,022	)
Net Income/(Loss) Allocable to Common Stock and Participating Securities	$	5,080		$	50,817		$	(61,011	)	$	167,734
Earnings/(Loss) per Common Share – Basic and Diluted	$	0.16		$	2.09		$	(2.02	)	$	8.36
Dividends Declared per Share of Common Stock	$	0.40		$	1.05		$	2.20		$	3.40

7

Reconciliations of Non-GAAP Financial Measures

Included in this press release are disclosures about the Company’s “operating earnings,” “operating earnings per common share,” “effective cost of funds,” “effective interest expense,” “effective levered asset yield” and “effective net interest rate spread” which measures constitute non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The Company believes that the non-GAAP financial measures presented, when considered together with GAAP financial measures, provide information that is useful to investors in understanding the Company’s operating results. An analysis of any non-GAAP financial measures should be made in conjunction with results presented in accordance with GAAP.

Operating earnings and operating earnings per common share presented exclude, as applicable: (i) certain realized and unrealized gains and losses recognized through earnings; (ii) non-cash equity compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Operating earnings is a non-GAAP financial measure that is used by the Company to assess its business results.

To determine the effective cost of funds, interest expense is adjusted to include the net interest component related to Swaps. While the Company has not elected hedge accounting for its Swaps, such derivative instruments are viewed by the Company as an economic hedge against increases in future market interest rates. Therefore, the Company presents the effective cost of funds to reflect interest expense as adjusted to include a portion of the realized loss (i.e., the interest expense component) for Swaps.

The Company believes that the presentation of effective cost of funds is useful for investors as it presents the Company’s borrowing costs as viewed by management. The Company believes that the non-GAAP measures presented provide investors, and other readers of this press release with meaningful information to assess the performance of the Company’s ongoing business and believe it is useful supplemental information for both management and investors in evaluating the Company’s financial results. The primary limitation associated with operating earnings as a measure of the Company’s financial performance over any period is that such measure excludes, except for the net interest component of Swaps, the effects of net realized and unrealized gains and losses from investments and realized and unrealized gains and losses from derivative instruments. In addition, the Company’s presentation of operating earnings may not be comparable to similarly-titled measures of other companies, who may use different definitions or calculations for such term. As a result, operating earnings should not be considered as a substitute for GAAP net income as a measure of the Company’s financial performance or the Company’s liquidity under GAAP.

A reconciliation of the GAAP items discussed above to their non-GAAP measures for the three and twelve months ended December 31, 2013 and the three and twelve months ended December 31, 2012, are presented in the tables below.

(Table 6)

The following table reconciles net income/(loss) allocable to common stockholders with operating earnings for the three months ended December 31, 2013 and December 31, 2012, respectively:

	Three months ended December 31, 2013						Three months ended December 31, 2012
($ amounts in thousands except per share data)				Earnings Per Share(1)						Earnings Per Share(1)
Net income allocable to common stockholders	$	5,027		$	0.16		$	50,495		$	2.09
Adjustments:
Non-cash stock-based compensation expense		295			0.01			170			0.01
Unrealized (gain)/loss on RMBS, net		7,648			0.24			(24,941	)		(1.03	)
Unrealized (gain)/loss on derivatives, net		174			—			(4,041	)		(0.17	)
Unrealized (gain) on securitized mortgage loans, net		(4,038	)		(0.13	)		—			—
Unrealized loss on securitized debt, net		541			0.02			—			—
Unrealized (gain) on other investment securities		(219	)		(0.01	)		—			—
Realized (gain)/loss on sale of RMBS, net		18,541			0.58			(7,573	)		(0.31	)
Realized (gain)/loss on Swap/Swaption terminations, net		(8,429	)		(0.26	)		—			—
Preferred dividend declared related to other periods		—			—			1,572			0.06
Total adjustments to arrive at operating earnings:		14,513			0.45			(34,813	)		(1.44	)
Operating earnings	$	19,540		$	0.61		$	15,682		$	0.65
Basic and diluted weighted average common shares outstanding:		32,007						24,168

(1) Reflects basic and diluted earnings per share for each component presented.

8

(Table 7)

The following table reconciles net income/(loss) allocable to common stockholders with operating earnings for the twelve months ended December 31, 2013 and December 31, 2012, respectively:

	Twelve months ended December 31, 2013						Twelve months ended December 30, 2012
($ amounts in thousands except per share data)				Earnings Per Share(1)						Earnings Per Share(1)
Net income/(loss) allocable to common stockholders	$	(61,416	)	$	(2.02	)	$	167,123		$	8.36
Adjustments:
Non-cash stock-based compensation expense		1,047			0.03			444			0.02
Unrealized (gain)/loss on RMBS, net		147,375			4.84			(100,402	)		(5.02	)
Unrealized (gain)/loss on derivative contracts, net		(50,373	)		(1.65	)		20,151			1.00
Unrealized (gain) on securitized mortgage loans, net		(3,950	)		(0.13	)		—			—
Unrealized loss on securitized debt, net		954			0.03			—			—
Unrealized (gain) on other investment securities		(335	)		(0.01	)		—			—
Realized (gain)/loss on sale of RMBS, net		66,850			2.20			(39,817	)		(1.99	)
Realized (gain)/loss on Swap/Swaption terminations, net		(30,956	)		(1.02	)		4,709			0.24
Realized (gain) on TBA Shorts(2), net		(281	)		(0.01	)		—			—
Preferred divided declared related to future period		—			—			1,150			0.06
Total adjustments to arrive at operating earnings:		130,331			4.28			(113,765	)		(5.69	)
Operating earnings	$	68,915		$	2.26		$	53,358		$	2.67
Basic and diluted weighted average common shares outstanding:		30,444						19,984

(1) Reflects basic and diluted earnings per share for each component presented.

(2) A TBA Short refers to a “to-be-announced” contract to sell certain Agency RMBS on a forward basis.

9

(Table 8)

The following table reconciles the effective cost of funds with interest expense for the three and twelve months ended December 31, 2013:

	Three months ended December 31, 2013					Twelve months ended December 31, 2013
($ amounts in thousands except per share data)	Reconciliation		Cost of Funds/ Effective Cost of Funds			Reconciliation		Cost of Funds/ Effective Cost of Funds
Interest Expense	$	7,358		0.96	%	$	27,602		0.79	%
Adjustment:
Net interest paid for Swaps		4,564		0.60			22,034		0.63
Effective interest expense/effective cost of funds	$	11,922		1.56	%	$	49,636		1.42	%
Weighted average balance of borrowings	$	2,995,533				$	3,501,312

10

EX-99.2

February 20, 2014

Supplemental Financial Information Presentation

Q4 2013

Information is as of December 31, 2013 except as otherwise noted. 

It should not be assumed that investments made in the future will be profitable or will equal the performance of investments in this document.

Exhibit 99.2

2

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Apollo Residential Mortgage, Inc.

Fourth Quarter and Year End 2013 Earnings Call

February 20, 2014

Michael A. Commaroto

Chief Executive Officer

Teresa D. Covello

Chief Financial Officer

Keith Rosenbloom

Agency Portfolio Manager

Paul Mangione

Non-Agency Portfolio Manager

Hilary Ginsberg

Investor Relations Manager

3

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Forward Looking Statements

We make forward-looking statements in this presentation and other filings we make with the Securities and Exchange Commission

(“SEC”) 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 our control.

These forward-looking statements include information about possible or assumed future results of our business, financial condition,

liquidity, results of operations, plans and objectives, including information about our ability to generate attractive returns while

attempting to mitigate risk. 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: the return on equity; the yield on investments; the ability to borrow to

finance assets; 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 our beliefs, assumptions and expectations of our future performance, taking into account all

information currently available to us. 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 us. Some of these factors are

described in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and other filings with the SEC. If a

change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our

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 us to predict those events or how they may affect us. Except as required by law, we are not

obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future

events or otherwise. 

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.

4

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Fourth Quarter and Year End 2013 Summary

Reported

operating

earnings

of

$19.5

million,

or

$0.61

per

common

share

for

the

fourth

quarter

of

2013

(1)

Reported

operating

earnings

of

$68.9

million

or

$2.26

per

common

share

for

the

year

ended

December

31,

2013

(1)

RMBS portfolio at December 31, 2013 consisted of Agency RMBS with an estimated fair value of $2.3 billion and

non-Agency RMBS with an estimated fair value of $1.2 billion

RMBS and securitized mortgage loan portfolio had a 2.7% effective net interest spread and an 15.4% effective

levered

asset

yield

at

December

31,

2013

(2)

Quarter-end leverage multiple of 4.1x at December 31, 2013

Declared a $0.40 per common share quarterly dividend for stockholders of record as of December 31, 2013

Book value per common share of $18.26 at December 31, 2013

(1) Operating Earnings and Operating Earnings per common share are non-GAAP financial measures.  Operating Earnings and Operating Earnings per common share presented exclude, as applicable: (i) realized and unrealized gains and losses recognized through earnings; (ii) non-cash equity

compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Please see pages 17 and 18 for a reconciliation of Operating Earnings and Operating Earnings per common share to GAAP net income/loss allocable to common stockholders and GAAP

net income/loss allocable to common stockholders per common share. Operating Earnings represents the earnings, as adjusted, allocable to common stock.

(2) Effective net interest spread and effective levered asset yield are non-GAAP financial measures, which include the cost of the Company’s Swaps as a component of its interest expense.  Please see page 8.

5

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Financial Summary

($ amounts in thousands except share and per share data)

December 31,       

2013

September 30,       December 31,    

2013

2012

December 31,    

2013

December 31,

2012

Interest Income

$40,721

$34,416

$33,578

$154,713

$94,369

Interest Expense

(7,359)

(6,789)

(6,110)

(27,602)

(14,631)

Net Interest Income

$33,362

$27,627

$27,468

$127,111

$79,738

Operating Earnings

$19,540

$11,386

$15,682

$68,915

$53,358

Weighted Average Common Shares Outstanding

32,006,511

31,999,792

24,167,506

30,443,620

19,984,233

Operating Earnings per Common Share

$0.61

$0.36

$0.65

$2.26

$2.67

Leverage Multiple (Debt / Equity)

4.1x

3.8x

5.1x

4.1x

5.1x

Annualized Return on Average Assets

2.6%

1.7%

1.9%

2.0%

2.2%

Annualized Return on Average Equity

11.9%

7.7%

10.8%

10.5%

12.7%

Three Months Ended

Twelve Months Ended

(1)

(1)

(2)

(3)

(1)

Operating Earnings and Operating Earnings per common share are non-GAAP financial measures.  Operating Earnings and Operating Earnings per common share presented exclude, as applicable: (i) realized and unrealized gains and losses recognized through earnings; (ii) non-

cash equity compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Please see pages 17 and 18 for a reconciliation of Operating Earnings and Operating Earnings per common share to GAAP net income/(loss) allocable to

common stockholders and GAAP net income/(loss) allocable to common stockholders per share. Operating Earnings represents the earnings, as adjusted, allocable to common stock.

(2)

Annualized Return on Average Assets is calculated as annualized Operating Earning plus preferred dividend requirement for the period, as a percentage of average interest earning assets.

(3)

Annualized Return on Average Equity is calculated as annualized Operating Earnings plus preferred dividend requirement for the period, as a percentage of average equity.

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Financial Summary

Operating Earnings per Common Share

(1)

Book Value per Common Share

Dividends per Common Share

(2)

$0.65

$0.74

$0.59

$0.36

$0.61

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

$22.49

$21.72

$18.63

$18.50

$18.26

$0.00

$4.00

$8.00

$12.00

$16.00

$20.00

$24.00

$28.00

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

6

$0.70

$0.70

$0.70

$0.40

$0.40

$0.35

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

(1)

Operating Earnings and Operating Earnings per common share are non-GAAP financial measures.  Operating Earnings and Operating Earnings per common share presented exclude, as applicable: (i) realized and unrealized gains and

losses recognized through earnings; (ii) non-cash equity compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Please see page 17 for a reconciliation of Operating Earnings and

Operating Earnings per common share to GAAP net income/(loss) allocable to common stockholders and GAAP net income/(loss) allocable to common stockholders per common share. Operating Earnings represents the earnings, as

adjusted, allocable to common stock.

(2)

The common stock dividend in the fourth quarter of 2012 consisted of a $0.70 per common share quarterly dividend and a $0.35 per common share special dividend.

7

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Book Value Roll-Forward

7

Book Value -

September 30, 2013 (Unaudited)

18.50

$

Common stock dividend declared

(0.40)

Operating Earnings, net of preferred dividend

0.61

Non-Operating Items Impacting Net Income:

Unrealized loss on Agency RMBS, net

(0.61)

Unrealized gain on non-Agency RMBS, net

0.37

Unrealized gain on securitized mortgage loans, net

0.13

Realized loss on sales of Agency RMBS

(0.68)

Realized gain on sales of non-Agency RMBS, net

0.10

Realized gain on Swap/Swaption terminations, net

0.26

Other, net

(0.02)

Book Value -

December 31, 2013

18.26

$

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

8

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Portfolio Summary and Net Interest Spread

Allocation

of

Portfolio

Equity

at

December

31,

2013

(1)

Effective

Net

Interest

Spread

at

December

31,

2013

(2)

Allocation

of

Portfolio

Equity

at

September

30,

2013

(1)

Securitized

Mortgage Loans

5%

Agency RMBS

47%

Cash and Other,

net

10%

Non-Agency

RMBS

38%

Effective

Net

Interest

Spread

at

September

30,

2013

(2)

Securitized

Mortgage Loans

6%

Agency RMBS

44%

Cash and Other,

net

9%

Non-Agency

RMBS

41%

Agency   

RMBS

Non-Agency

RMBS

Securitized

Mortgage

Loans

Weighted

Average

Including

Cash

Asset Yield

2.9%

6.7%

7.9%

4.3%

Interest Expense

0.4%

2.0%

3.3%

1.0%

Cost of Swaps

0.8%

0.0%

2.0%

0.6%

Effective Net Interest Spread

1.7%

4.7%

2.6%

2.7%

Debt / Equity

(3)

6.2x

2.9x

1.6x

4.1x

Effective Levered Asset Yield

(2)

13.6%

20.6%

12.2%

15.4%

Agency

Non-Agency

Securitized

Mortgage

Loans

Weighted

Average

Including

Cash

Asset Yield

2.9%

6.9%

8.2%

4.3%

Interest Expense

0.4%

2.0%

3.3%

1.0%

Cost of Swaps

1.1%

0.0%

2.0%

0.8%

Effective Net Interest Spread

1.4%

4.9%

2.9%

2.6%

Debt / Equity

(3)

5.5x

3.0x

1.9x

3.8x

Effective Levered Asset Yield

(2)

10.6%

21.5%

13.7%

14.0%

8

(1)

Percentages reflect amount of equity allocated to Agency and non-Agency RMBS and securitized mortgage loans, net of associated assets and liabilities, including the fair value of interest rate derivatives. Cash and other net, represents cash and

other assets and liabilities not specifically allocable to Agency RMBS, non-Agency RMBS or securitized mortgage loans.

(2)

Effective net interest spread and effective levered asset yield are non-GAAP financial measures, which include the cost of the Company’s Swaps as a component of its interest expense, as presented.The presentation of Effective Net Interest Spread

at September 30, 2013 was conformed to be consistent with the presentation at December 31, 2013.

(3)

Debt/Equity multiples for each asset class are adjusted to reflect cash held to meet margin calls and certain other assets and liabilities specifically allocable to Agency RMBS, non-Agency RMBS or securitized mortgage loans.

9

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

(1)

Other includes Short Reset ARMs, Interest Only and Inverse Interest Only Securities.

6.0%

3.7%

5.2%

5.8%

7.0%

7.1%

6.7%

4.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Total Agency Portfolio average one month CPR

Loan Balance 15

2%

Loan Balance 30

54%

Low Credit 30 Year

7%

Other(1)

4%

New Production 30

3%

HARP / MHA  /

High LTV 30 Year

Pass -

Throughs

30%

Agency RMBS Portfolio at December 31, 2013

Agency Portfolio Overview

Constant Prepayment Rates

Year Pass-Throughs

Year Pass-Throughs

Year Pass-Throughs

Pass-Throughs

($ in thousands)

Estimated Fair Value

Q4 2013 CPR

Agency Pass-Throughs

2,219,334

$                

4.7

%

Agency IOs and Agency  IIOs

71,203

11.7

Total

2,290,537

$              

4.9

%

10

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Agency RMBS Portfolio at December 31, 2013

($ in thousands)

Principal Balance

Unamortized

Premium

Amortized Cost

(1)

Estimated Fair

Value

Net Weighted

Average

Coupon

Weighted

Average

Yield

(2)

Agency RMBS:

30-Year Mortgages

ARM

11,619

$                     

782

$             

12,401

$                

12,339

$               

4.12

%

1.06

%

Fixed rate coupons:

3.5%

303,026

19,925

322,951

301,068

3.50

2.54

4.0%

1,558,943

120,636

1,679,579

1,602,080

4.00

2.84

4.5% & 5.0%

235,127

18,266

253,393

250,136

4.52

3.18

2,108,715

159,609

2,268,324

2,165,623

3.99

%

2.82

%

15-Year Mortgages

3.0% Coupons

52,699

1,413

54,112

53,711

3.00

%

2.50

%

Agency IOs

(3)

-

-

41,521

44,425

3.95

%

1.58

%

Agency IIOs

(3)

-

-

27,673

26,778

6.16

%

15.16

%

Total Agency RMBS

2,161,414

$              

161,022

$  

2,391,630

$        

2,290,537

$      

4.08

%

2.94

%

Agency Portfolio Composition Summary

(1)

Amortized cost is reduced by unrealized losses that are classified as other-than-temporary impairments.  The Company recognized other-than-temporary impairments of $2,048 on Agency RMBS  for the three months ended

December 31, 2013.

(2)

Weighted average yield at the date presented incorporates estimates for future prepayment assumptions on Agency RMBS.

(3)

Agency IOs and Agency IIOs have no principal balance and bear interest on a notional balance.  The notional balance is used solely to determine interest distributions on interest-only class of securities.  At December 31, 2013,

Agency IOs had a notional balance of $410,187 and Agency Inverse IOs had a notional balance of $145,650.

11

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Non-Agency RMBS portfolio continues to focus on

seasoned, subprime assets with significant credit

enhancement as well as Alt-A and pay-option

adjustable rate mortgages.

Non-Agency RMBS Portfolio Overview

Non-Agency RMBS Portfolio at December 31, 2013

The non-Agency RMBS portfolio continues to focus

on pre-2007 vintage. 

Non-Agency RMBS Portfolio Vintage

1999

-2002

4%

2003

8%

2004

32%

2005

29%

2006

2007

9%

Subprime

80%

Alt-A

Pay-

option

ARM

9%

11%

18%

12

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Non-Agency RMBS Portfolio at December 31, 2013

Portfolio Characteristics

Estimated Fair Value ($ in thousands)

$1,212,789

Amortized Cost to Par Value

78.9%

Net Weighted Average Coupon

1.2%

Collateral Attributes

Weighted Average Loan Age (months)

107

Weighted Average Original Loan-to-Value

79.2%

Weighted Average Original FICO Credit Score

632

Current Performance

60+ Day Delinquencies

30.6%

Average Credit Enhancement

(1)

33.8%

3 Month CRR

(2)

4.0%

(1)  Credit enhancement is expressed as a percentage of all outstanding mortgage loan collateral.  The Company's non-Agency RMBS may incur losses if credit enhancement is reduced to zero. 

(2)  CRR stands for conditional repayment rate.  Information is based on loans for individual groups owned by the Company.  Amounts presented reflect the weighted average monthly performance for the three months ended  December 31, 2013. 

December

31,

2013

13

Financing and Derivative Instruments Overview

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Borrowings at December 31, 2013

Derivative Instruments at December 31, 2013

Swaps Overview at December 31, 2013

Swaptions Overview at December 31, 2013

($ in thousands)

Balance

Weighted

Average

Borrowing Rate

Weighted

Average

Remaining

Maturity

Repurchase agreement borrowings:

Agency RMBS

2,082,447

$         

0.42%

19 days

Non-Agency RMBS

(1)

942,091

2.00%

94 days

Other investment securities

9,520

1.74%

24 days

Total repurchase agreements

3,034,058

$         

0.91%

42 days

Securitized debt

42,400

$               

4.00%

57 months

(2)

Total Borrowings

3,076,458

$      

0.95%

($ in thousands)          

Notional Amount

Estimated Fair

Value

Swaps -

assets

1,007,000

$         

40,135

$                

Swaptions -

assets

1,375,000

12,430

Swaps -

(liabilities)

580,000

(4,610)

TBA Short Contracts -

assets

400,000

750

Total Derivative Instruments

3,362,000

$      

48,705

$              

($ in thousands)

Term to Maturity

Notional Amount

Average Fixed

Pay Rate

Average

Maturity

(Years)

Greater than 1 year to 3 years

110,000

$             

1.38%

2.8

Greater than 3 years to 5 years

999,000

1.02%

3.7

Greater than 5 years

478,000

1.98%

8.7

Total

1,587,000

$      

1.34%

5.1

($ in thousands)

Weighted Average

Months Until

Fixed Pay Rate for

Option

Notional

Swap Terms

Underlying Swap

Fair Value

Expiration

Amount

(Years)

3.00 -

3.25%

2,178

$                 

6

100,000

$           

10

3.26 -

3.50%

4,773

3

575,000

10

3.51 -

3.75%

2,026

4

375,000

10

3.76 -

4.00%

2,993

10

225,000

10

4.01 -

4.41%

460

8

100,000

10

12,430

$            

5

1,375,000

$     

10

Option

Underlying Swap

(1)

Includes $27,014 of repurchase borrowings collateralized by non-Agency RMBS of $47,057 that are eliminated from the Company’s consolidated balance sheet in consolidation with the variable interest entity associated with our securitization transaction.

(2)

Securitized debt, which represents non-recourse senior securities sold to third parties in connection with a securitization transaction, has a final contractual maturity of May 2047.  Weighted average remaining maturity represents the estimated final maturity

of the security based on the final projected repayment of principal.  The actual maturity of the securitized debt may differ significantly from this estimate given that actual interest collections, mortgage prepayments and/or losses on liquidation of mortgages

may differ significantly from those expected.

14

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Financials

15

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Balance Sheet

(in thousands—except share and per share data)

December 31, 2013

December 31, 2012

Assets:

Cash

127,959

$                 

149,576

$                  

Restricted cash

67,458

93,641

RMBS, at fair value (of which $3,317,060 and $3,940,913 were pledged as collateral, respectively)

3,503,326

4,231,291

Securitized mortgage loans (transferred to a consolidated VIE ), at fair value

110,984

-

Other investment securities, at fair value (of which $11,515 and $0 were pledged as collateral, respectively)

11,515

-

Investment related receivable (of which $21,959 and $0 pledged as collateral, respectively)

24,887

-

Interest receivable

10,396

11,341

Deferred financing costs, net

882

346

Derivative instruments, at fair value

53,315

750

Other assets

854

976

Total Assets

3,911,576

$              

4,487,921

$               

Liabilities and Stockholders' Equity

Liabilities:

Borrowings under repurchase agreements

3,034,058

$              

3,654,436

$               

Non-recourse securitized debt, at fair value

43,354

-

Investment related payables

-

50,032

Obligation to return cash held as collateral

38,654

-

Accrued interest payable

8,708

6,774

Derivative instruments, at fair value

4,610

23,184

Payable to related party

5,444

4,295

Dividends payable

16,812

30,675

Accounts payable and accrued expenses

2,335

1,742

Total Liabilities

3,153,975

$              

3,771,138

$               

Stockholders' Equity:

Preferred stock, $0.01 par value, 50,000,000 shares authorized, 6,900,000 shares issued and outstanding

($172,500 aggregate liquidation preference)

69

$                        

69

$                         

Common stock, $0.01 par value, 450,000,000 shares authorized, 32,038,970 and 24,205,972 shares issued and    

outstanding, respectively

320

242

Additional paid-in-capital

792,010

619,399

Retained earnings/(accumulated deficit)

(34,798)

97,073

Total Stockholders' Equity

757,601

$                 

716,783

$                  

Total Liabilities and Stockholders' Equity

3,911,576

$              

4,487,921

$               

16

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Income Statement

(in

thousands

—

except

per

share

data)

2013

2012

2013

2012

Interest Income:

RMBS

38,304

$             

33,578

$        

146,263

$             

94,369

$               

Securitized mortgage loans

2,313

-

8,267

-

Other investment securities

104

-

183

-

Total Interest Income

40,721

33,578

154,713

94,369

Interest Expense:

Repurchase agreements

(6,873)

(6,110)

(25,808)

(14,631)

Securitized debt

(486)

-

(1,794)

-

Total Interest Expense

(7,359)

(6,110)

(27,602)

(14,631)

Net Interest Income

33,362

$          

27,468

$      

127,111

$          

79,738

$            

Other Income/(Loss):

Realized gain/(loss) on sale of RMBS, net

(18,541)

$          

7,573

$         

(66,850)

$             

39,817

$               

Unrealized gain/(loss) on RMBS, net

(7,648)

24,941

(147,375)

100,402

Unrealized gain on securitized mortgage loans

4,038

-

3,950

-

Unrealized (loss) on securitized debt

(541)

-

(954)

-

Unrealized gain on other investment securities

219

-

335

-

Gain/(loss) on derivative instruments, net (includes ($174),

$4,041, $50,373 and ($20,151) of unrealized gains/(losses), net,

respectively)

3,692

821

59,576

(32,665)

Other, net

4

23

76

48

Other Income/(Loss), net

(18,777)

$         

33,358

$      

(151,242)

107,602

$          

Operating Expenses:

General and administrative (includes $295, $170, $1,047 and

$444 of non-cash stock based compensation, respectively)

(3,127)

$             

(2,569)

$        

(11,501)

$             

(7,780)

$               

Management

fees

-

related

party

(2,928)

(2,418)

(11,579)

(6,804)

Total Operating Expenses

(6,055)

$           

(4,987)

$       

(23,080)

(14,584)

$           

Net Income/(Loss) 

8,530

$            

55,839

$      

(47,211)

$           

172,756

$          

Preferred Stock Dividends Declared

(3,450)

(5,022)

(13,800)

(5,022)

Net Income/(Loss) Allocable to Common Stock and

5,080

$            

50,817

$      

(61,011)

$           

167,734

$          

0.16

$               

2.09

$          

(2.02)

$                

8.36

$                 

Dividends Declared per Share of Common Stock

0.40

$               

1.05

$          

2.20

$                 

3.40

$                 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

Participating Securities

Earnings/(Loss)

per

Common

Share

-

Basic

and

Diluted

17

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Reconciliation of Operating Earnings

(1)

(1)

Operating Earnings and Operating Earnings per common share are non-GAAP financial measures.  Operating Earnings and Operating Earnings per common share presented exclude, as applicable: (i) realized and unrealized gains and losses recognized

through earnings; (ii) non-cash equity compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Operating Earnings represents the earnings, as adjusted, allocable to common stock.

(2)

Reflects per share amount for each component presented.

(in thousands—except per share data)

December 31, 2013

Per Share

Amount

(2)

December 31, 2012

Per Share

Amount

(2)

Operating Earnings:

Net income allocable to common stockholders

$                         5,027

$                       0.16

$                       50,495

$                       2.09

Adjustments:

Non-cash stock-based compensation expense

295

0.01

170

0.01

Unrealized (gain)/loss on RMBS, net

7,648

0.24

(24,941)

(1.03)

Unrealized (gain)/loss on derivatives, net

174

-

(4,041)

(0.17)

Unrealized (gain) on securitized mortgage loans, net

(4,038)

(0.13)

-

-

Unrealized loss on securitized debt, net

541

0.02

-

-

Unrealized (gain) on other investment securities

(219)

(0.01)

-

-

Realized (gain)/loss on sale of RMBS, net

18,541

0.58

(7,573)

(0.31)

Realized (gain) on Swap/Swaption terminations, net

(8,429)

(0.26)

-

-

Preferred dividend declared related to other periods

-

-

1,572

0.06

Total adjustments to arrive at operating earnings:

14,513

0.45

(34,813)

(1.44)

Operating Earnings

$                       19,540

0.61

$                         

$                       15,682

Basic and diluted weighted average common shares outstanding

32,007

24,168

Three Months Ended

Three Months Ended

$                       0.65

18

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Reconciliation

of

Operating

Earnings

(1)

(cont.)

and

Effective

Cost

of

Funds

(2)

($ in thousands)

Reconciliation

Cost of Funds/Effective

Borrowing Costs

Reconciliation

Cost of Funds/Effective

Borrowing Costs

Interest expense

7,358

$                    

0.96%

27,602

$                 

0.79%

Adjustment:

Net-interest paid for Swaps

4,564

0.60%

22,034

0.63%

Effective interest expense/effective cost of funds

11,922

$                  

1.56%

49,636

$                 

1.42%

Weighted average balance of borrowings

2,995,533

$             

3,501,312

$           

December 31, 2013

Three Months Ended

Twelve Months Ended

December 31, 2013

(in thousands—except per share data)

December 31, 2013

Per Share

Amount

(3)

December 31, 2012

Per Share

Amount

(3)

Operating Earnings:

Net income/(loss) allocable to common stockholders

(61,416)

167,123

8.36

Adjustments:

Non-cash stock-based compensation expense

1,047

0.03

444

0.02

Unrealized (gain)/loss on RMBS, net

147,375

4.84

(100,402)

(5.02)

Unrealized (gain)/loss on derivatives, net

(50,373)

(1.65)

20,151

1.00

Unrealized (gain) on securitized mortgage loans, net

(3,950)

(0.13)

-

-

Unrealized loss on securitized debt, net

0.03

-

-

Unrealized (gain) on other investment securities

(335)

(0.01)

-

-

Realized (gain)/loss on sale of RMBS, net

66,850

2.20

(39,817)

(1.99)

Realized (gain)/loss on Swap/Swaption terminations, net

(30,956)

(1.02)

4,709

0.24

Realized (gain) on TBA Shorts, net

(4)

(281)

(0.01)

-

-

Preferred dividend declared related to future period

-

1,150

0.06

Total adjustments to arrive at operating earnings:

130,331

4.28

(113,765)

(5.69)

Operating Earnings

68,915

2.26

$                         

53,358

2.67

$                         

Basic and diluted weighted average common shares outstanding

30,444

19,984

Twelve Months Ended

Twelve Months Ended

Effective Cost of Funds

(1)

Operating Earnings and Operating Earnings per common share are non-GAAP financial measures.  Operating Earnings and Operating Earnings per common share presented exclude, as applicable: (i) realized and unrealized gains and losses recognized through earnings; (ii) non-cash

equity compensation; (iii) one time events pursuant to changes in GAAP; and (iv) certain other non-cash charges. Operating Earnings represents the earnings, as adjusted, allocable to common stock.

(2)

Effective cost of funds reflects interest expense adjusted to include the net interest component related to Swaps.

(3)

Reflects per share amount for each component presented. 

(4)

A TBA Short refers to a “to-be-announced” contract to sell certain Agency RMBS on a forward basis.

$

$

$

$

$

(2.02)

$

954

-

19

APOLLO RESIDENTIAL MORTGAGE, INC. (“AMTG”)

Contact Information

Hilary Ginsberg

Investor Relations Manager

212-822-0767