Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Apollo Commercial Real Estate Finance, Inc. | d281940d8k.htm |
| EX-99.3 - EX-99.3 - Apollo Commercial Real Estate Finance, Inc. | d281940dex993.htm |
| EX-99.2 - EX-99.2 - Apollo Commercial Real Estate Finance, Inc. | d281940dex992.htm |
| EX-23.1 - EX-23.1 - Apollo Commercial Real Estate Finance, Inc. | d281940dex231.htm |
Exhibit 99.1
PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Combined Financial Statements
for the nine months ended September 30, 2016 and the year ended December 31, 2015
The following unaudited pro forma combined statements of income for the nine months ended September 30, 2016 and the year ended December 31, 2015, are based on the historical financial statements of Apollo Commercial Real Estate Finance, Inc. (“ARI”) and Apollo Residential Mortgage, Inc. (“AMTG”) after giving effect to the transactions contemplated by the Agreement and Plan of Merger, dated February 26, 2016, as amended, pursuant to which, on August 31, 2016, (i) a subsidiary of ARI merged with and into AMTG after which AMTG was the surviving company and a direct subsidiary of ARI (the “First Merger”), and (ii) promptly following the effective time of the First Merger, AMTG merged with and into ARI, after which AMTG ceased to exist (the “Second Merger” and, together with the First Merger, the “mergers”). ARI applied the provisions of Financial Accounting Standards Board ASC Topic 805 in accounting for its acquisition of AMTG.
The unaudited pro forma combined financial statements are based upon available information, preliminary estimates and certain assumptions that we believe are reasonable in the circumstances, as set forth in the notes to the unaudited pro forma combined financial statements.
The unaudited pro forma combined financial statements are presented for informational purposes only and are not necessarily indicative of the future financial position or results of operations of ARI following the closing of the mergers or the combined financial position that would have been realized had the mergers been consummated as of the dates for which the unaudited pro forma combined financial statements are presented.
Certain reclassification adjustments have been made to the presentation of AMTG’s historical financial statements to conform them to the presentation followed by ARI. The unaudited pro forma combined financial statements should be read in conjunction with, and are qualified by reference to, our historical consolidated financial statements and notes thereto and those of AMTG, which are incorporated herein by reference.
Apollo Commercial Real Estate Finance, Inc.
Pro Forma Income Statement
Nine Months Ended September 30, 2016
| Historical ARI | Historical AMTG | ARI Pro-Forma | ||||||||||||||
| For the Nine Months Ended September 30, |
For the Eight Months Ended August 31, |
Pro-Forma Adjustments |
Combined | |||||||||||||
| ($ in thousands) | 2016 | 2016 |
|
2016 | ||||||||||||
| Net interest income: |
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| Interest income from securities |
$ | 23,685 | $ | 69,149 | $ | (41,253 | )(A) | $ | 51,581 | |||||||
| Interest income from securities, held to maturity |
8,597 | — | 8,597 | |||||||||||||
| Interest income from commercial mortgage loans |
72,727 | — | 72,727 | |||||||||||||
| Interest income from securitized mortgage loans and mortgage loans |
8,785 | 8,785 | ||||||||||||||
| Interest income from subordinate loans |
89,649 | — | 89,649 | |||||||||||||
| Other interest income |
7,638 | (1,991 | )(A) | 5,647 | ||||||||||||
| Interest expense |
(47,620 | ) | (21,856 | ) | 12,575 | (A) | (56,901 | ) | ||||||||
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| Net interest income |
147,038 | 63,716 | (30,669 | ) | 180,085 | |||||||||||
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| Operating expenses: |
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| General and administrative expenses (includes equity based compensation) |
(21,456 | ) | (21,287 | ) | (42,743 | ) | ||||||||||
| Management fees to related party |
(16,374 | ) | (7,037 | ) | (23,411 | ) | ||||||||||
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| Total operating expenses |
(37,830 | ) | (28,324 | ) | (66,154 | ) | ||||||||||
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| Income from unconsolidated joint venture |
207 | — | 207 | |||||||||||||
| Other income |
334 | — | 334 | |||||||||||||
| Provision for loan losses |
(15,000 | ) | — | (15,000 | ) | |||||||||||
| Realized gain (loss) on sale of securities |
(225 | ) | (657 | ) | (5,318 | )(A) | (6,200 | ) | ||||||||
| Unrealized gain (loss) on securities |
(36,601 | ) | (2,015 | ) | 30,428 | (A) | (8,188 | ) | ||||||||
| Unrealized gain (loss) on securitized debt |
— | (113 | ) | (113 | ) | |||||||||||
| Unrealized gain (loss) on securitized mortgage loans |
— | 5,428 | 5,428 | |||||||||||||
| Unrealized gain (loss) on other investment securities |
— | 6,136 | (2,859 | )(A) | 3,277 | |||||||||||
| Other than temporary impairments recognized |
— | (5,591 | ) | 1,850 | (A) | (3,741 | ) | |||||||||
| Foreign currency gain (loss) |
(21,926 | ) | — | (21,926 | ) | |||||||||||
| Bargain purchase gain |
40,021 | — | 40,021 | |||||||||||||
| Gain (loss) on derivative instruments (includes unrealized gains (losses)) |
22,831 | (36,253 | ) | (13,422 | ) | |||||||||||
| Other, net |
— | (9 | ) | (9 | ) | |||||||||||
| Merger related fair value adjustment |
— | (17,754 | ) | (17,754 | ) | |||||||||||
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| Net income |
98,849 | (15,436 | ) | (6,568 | ) | 76,845 | ||||||||||
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| Preferred Dividends |
(20,985 | ) | (6,900 | ) | (27,885 | ) | ||||||||||
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| Net income attributable to common stockholders |
$ | 77,864 | $ | (22,336 | ) | $ | (6,568 | ) | $ | 48,960 | ||||||
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| Basic and diluted net income per share of common stock |
$ | 1.11 | ||||||||||||||
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| Basic and diluted net income per share of common stock—Pro Forma |
$ | 0.70 | ||||||||||||||
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Apollo Commercial Real Estate Finance, Inc.
Pro Forma Income Statement
Year Ended December 31, 2015
| Historical ARI |
Historical AMTG |
Pro-Forma Adjustments |
ARI Pro- Forma |
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| Net interest income: |
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| Interest income from securities |
$ | 33,188 | $ | 137,238 | $ | (76,009 | )(A) | $ | 94,417 | |||||||
| Interest income from securities, held-to-maturity |
12,054 | — | 12,054 | |||||||||||||
| Interest income from commercial mortgage loans |
56,092 | — | 56,092 | |||||||||||||
| Interest income from securitized mortgage loans and mortgage loans |
— | 13,444 | 13,444 | |||||||||||||
| Interest income from subordinate loans |
90,830 | — | 90,830 | |||||||||||||
| Other interest income |
— | 9,418 | (2,535 | )(A) | 6,883 | |||||||||||
| Interest expense |
(48,861 | ) | (32,358 | ) | 19,983 | (A) | (61,236 | ) | ||||||||
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| Net interest income |
143,303 | 127,742 | (58,561 | ) | 212,484 | |||||||||||
| Operating expenses: |
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| General and administrative expenses |
(9,492 | ) | (15,415 | ) | (24,907 | ) | ||||||||||
| Management fees to related party |
(16,619 | ) | (11,069 | ) | (27,688 | ) | ||||||||||
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| Total operating expenses |
(26,111 | ) | (26,484 | ) | — | (52,595 | ) | |||||||||
| Income from unconsolidated joint venture |
3,464 | — | 3,464 | |||||||||||||
| Interest income from cash balances |
1,239 | — | 1,239 | |||||||||||||
| Realized loss on sale of securities |
(443 | ) | 17,100 | 16,657 | ||||||||||||
| Other than temporary impairments recognized |
— | (12,089 | ) | 9,031 | (A) | (3,058 | ) | |||||||||
| Unrealized gain (loss) on securities |
(17,408 | ) | (64,027 | ) | 44,167 | (A) | (37,268 | ) | ||||||||
| Unrealized gain (loss) on securitized debt |
— | 1,031 | 1,031 | |||||||||||||
| Unrealized gain (loss) on securitized mortgage loans |
— | (1,958 | ) | (1,958 | ) | |||||||||||
| Unrealized gain (loss) on other investment securities |
— | (6,376 | ) | 2,823 | (A) | (3,553 | ) | |||||||||
| Foreign currency gain (loss) |
(4,894 | ) | — | (4,894 | ) | |||||||||||
| Gain (loss) on derivative instruments |
4,106 | (46,411 | ) | (42,305 | ) | |||||||||||
| Other, net |
— | (123 | ) | (123 | ) | |||||||||||
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| Net income |
103,256 | (11,595 | ) | (2,539 | ) | 89,121 | ||||||||||
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| Preferred dividends |
(11,884 | ) | (13,800 | ) | (25,684 | ) | ||||||||||
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| Net income available to common stockholders |
$ | 91,372 | $ | (25,395 | ) | $ | (2,539 | ) | $ | 63,437 | ||||||
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| Diluted net income per share of common stock—As Previously Reported |
$ | 1.54 | ||||||||||||||
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| Diluted net income per share of common stock—Pro Forma |
$ | 0.87 | (B) | |||||||||||||
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Notes to Unaudited Pro Forma Combined Financial Statements
Pro Forma Adjustments
The accompanying unaudited pro forma combined financial statements have been prepared as if the acquisition had occurred as of January 1, 2015 and reflect the following pro forma adjustments (amounts in thousands):
(A) Adjustment represents the elimination of revenues, gains and losses related to securities sold to Athene and the expenses related to the corresponding repurchase agreements.
(B) Represents the pro forma combined earnings per share of ARI common stock, including the impact of the 13,400,000 shares of ARI common stock issued in connection with the mergers.