Apollo Commercial Real Estate Finance Inc

Previous wording

For the three months ended June 30, 2024 and 2023, our net income (loss) available to common stockholders was $32.7 million, or $0.23 per diluted share of common stock, and ($86.5) million, or ($0.62) per diluted share of common stock, respectively.

Current wording

For the three months ended September 30, 2024 and 2023, our net income (loss) available to common stockholders was ($94.6) million, or $(0.69) per diluted share of common stock, and $43.0 million, or $0.30 per diluted share of common stock, respectively.

Previous wording

For the six months ended June 30, 2024 and 2023, our net income (loss) available to common stockholders was ($74.9) million, or ($0.54) per diluted share of common stock, and ($40.6) million, or ($0.30) per diluted share of common stock, respectively.

Current wording

For the nine months ended September 30, 2024 and 2023, our net income (loss) available to common stockholders was ($169.5) million, or ($1.23) per diluted share of common stock, and $2.4 million, or $0.00 per diluted share of common stock, respectively.

Previous wording

For the three months ended June 30, 2024, we recorded net income related to real estate owned of $5.3 million, compared to a net loss of $0.7 million for the three months ended March 31, 2024. The increase in net income was primarily due to the seasonality of the D.C. Hotel's operations which led to $3.7 million higher net income from operations, prior to depreciation, during the three months ended June 30, 2024 as compared to the three months ended March 31, 2024. The increase in net income was also due to a decrease in depreciation recorded relating to the Atlanta Hotel during the three months ended June 30, 2024 as compared to the three months ended March 31, 2024 as a result of reclassification from held for sale to held for investment as of March 31, 2024. On the date of reclassification, we recorded $3.6 million in depreciation, representing the amount that would have been recorded had the asset remained as held for investment throughout 2023 and in the first quarter of 2024. Refer to "Note 5 - Real Estate Owned" for full discussion of the reclassification and operations related to real estate owned.

Current wording

For the three months ended September 30, 2024, we recorded net income related to real estate owned of $2.3 million, compared to net income of $5.3 million for the three months ended June 30, 2024. The decrease in net income was primarily due to the seasonality of the D.C. Hotel's operations which led to $3.2 million lower net income from operations, prior to depreciation, during the three months ended September 30, 2024 as compared to the three months ended June 30, 2024. Refer to "Note 5 – Real Estate Owned" for full discussion of the reclassification and operations related to real estate owned.

Previous wording

During the three months ended March 31, 2024, we reclassified one of our commercial mortgage loans collateralized by a hotel property located in Honolulu, HI to held for sale and recorded a valuation allowance of $0.7 million to carry the loan at its fair value which reflected the agreed upon selling price of 99.5%. Loans held for sale are carried at the lower of amortized cost or fair value less costs to sell. We subsequently sold the loan during the three months ended June 30, 2024, and reversed the full allowance, recording a realized loss within realized loss on investments on our condensed consolidated statement of operations. Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for full discussion.

Current wording

During the three months ended June 30, 2024, we sold one of our commercial mortgage loans collateralized by a hotel property in Honolulu, HI. The loan was classified as held for sale during the three months ended March 31, 2024 and a $0.7 million valuation allowance was recorded to carry the loan at its fair value in the first quarter of 2024. At the time of sale, we reversed the full valuation allowance and recorded a $0.7 million realized loss within realized loss on investments on our condensed consolidated statement of operations.

Previous wording

During the three months ended June 30, 2024, we recorded a $7.5 million Specific CECL Allowance on a subordinate loan secured by our interest in a Class A office building in Troy, MI. This allowance was attributable to low occupancy and limited leasing activity in the property's submarket. Comparatively, during the three months ended March 31, 2024, there was an increase of $142.0 million in our Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY. The additional Specific CECL Allowance was primarily attributable to a reduction in list pricing of remaining units. Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related in our Specific CECL Allowance and further detail on the mezzanine loan.

Current wording

Comparatively, during the three months ended June 30, 2024, we recorded a $7.5 million Specific CECL Allowance on a subordinate loan secured by our interest in a Class A office building in Troy, MI. This allowance was attributable to low occupancy and limited leasing activity in the property's submarket. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related to our Specific CECL Allowance and further detail on the mezzanine loan.

Previous wording

Our General CECL Allowance increased by $2.8 million during the three months ended June 30, 2024, primarily driven by new loan originations as well as a more adverse outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning. Comparatively, our General CECL Allowance increased by $5.7 million during the three months ended March 31, 2024, which was primarily driven by an increase in our view of the remaining expected term of certain of our loans and an increase in the historical loss rate derived from Trepp's data.

Current wording

Our General CECL Allowance decreased by $0.9 million during the three months ended September 30, 2024, primarily driven by the favorable impacts of portfolio seasoning, earlier than expected loan repayments, and transfer of the Massachusetts Healthcare Loan to the loans evaluated for Specific CECL Allowances. The decrease was partially offset by the effects of loan originations and a more adverse macroeconomic outlook on our office portfolio. Comparatively, our General CECL Allowance increased by $2.8 million during the three months ended June 30, 2024, which was primarily driven by new loan originations as well as a more adverse outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning.

Previous wording

We use forward currency contracts to economically hedge net interest and principal repayments under our loans denominated in currencies other than USD. Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended June 30, 2024 and March 31, 2024 were net gains of $5.0 million and $3.8 million, respectively. The change in net gain (loss) for the three months ended June 30, 2024 compared to the three months ended March 31, 2024 was predominantly due to lower forward point estimates and gains on forward currency contracts related to our net interest hedges for the three months ended June 30, 2024 compared to the three months ended March 31, 2024.

Current wording

We use forward currency contracts to economically hedge net interest and principal repayments under our loans denominated in currencies other than USD. Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended September 30, 2024 and the three months ended June 30, 2024 were net gains of $0.6 million and $5.0 million, respectively. The change in net gain for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was predominantly due to higher forward point estimates and losses on forward currency contracts related to our net interest hedges for the three months ended September 30, 2024 compared to the three months ended June 30, 2024.

Previous wording

During the three months ended June 30, 2024, Fx rates fell at a greater rate in relation to USD compared to the three months ended March 31, 2024. The decrease in Fx rates resulted in a gain on our foreign currency forward contracts and a loss related to foreign currency translation. Gains and losses on our forward currency contracts are derived from changes in market spot rates, forward point estimates, and discount factors. Gains and losses related to foreign currency translation are derived only from changes in market spot rates. Forward currency contract gains and losses derived from market spot rates offset the gains and losses related to foreign currency translation except for the gains and losses from forward currency contracts related to our net interest hedges which have no offset in foreign currency translation. A net gain or loss arises each period due to the change in forward point estimates and discount factors as well as gains and losses from forward currency contracts related to our net interest hedges.

Current wording

During the three months ended September 30, 2024, Fx rates increased in relation to USD while Fx rates slightly decreased in relation to USD during the three months ended June 30, 2024. The increase in Fx rates resulted in a loss on our foreign currency forward contracts and a gain related to foreign currency translation. Gains and losses on our forward currency contracts are derived from changes in market spot rates, forward point estimates, and discount factors. Gains and losses related to foreign currency translation are derived only from changes in market spot rates. Forward currency contract gains and losses derived from market spot rates offset the gains and losses related to foreign currency translation except for the gains and losses from forward currency contracts related to our net interest hedges which have no offset in foreign currency translation. A net gain or loss arises each period due to the change in forward point estimates and discount factors as well as gains and losses from forward currency contracts related to our net interest hedges.

Previous wording

During the three months ended June 30, 2024, we recorded a net gain of $0.1 million on our interest rate caps compared to a net gain of $0.4 million recorded during the three months ended March 31, 2024. The $0.3 million net decrease was primarily driven by unrealized losses attributable to a decline in fair value of our construction financing interest rate cap as it approaches its October 1, 2024 maturity. These unrealized losses were partially offset by realized gains, attributable to SOFR exceeding the interest rate cap's strike rate.

Current wording

During the three months ended September 30, 2024, we recorded a net loss of $14.0 thousand on our interest rate caps compared to a net gain of $0.1 million recorded during the three months ended June 30, 2024. The net loss was primarily driven by unrealized losses attributable to a decline in fair value of our construction financing interest rate cap as it approached its October 1, 2024 original maturity. These unrealized losses were partially offset by realized gains, attributable to SOFR exceeding the interest rate cap's strike rate.

Previous wording

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the six months ended June 30, 2024 and 2023 ($ in thousands):

Current wording

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the nine months ended September 30, 2024 and 2023 ($ in thousands):

Previous wording

Net interest income decreased by $25.5 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in net interest income was primarily driven by a decrease in interest income from placing a first mortgage loan and subordinate loan collateralized by the same ultra-luxury residential-for-sale property in Manhattan on non-accrual status as of May 1, 2023. Additionally, we modified two of our loans to convert from floating rate loans to fixed rate loans, which resulted in a decrease in net interest income earned during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Net interest income decreased by $38.7 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in net interest income was primarily driven by a decrease in interest income from placing a first mortgage loan and subordinate loan collateralized by the same ultra-luxury residential-for-sale property in Manhattan on non-accrual status as of May 1, 2023 and placing the Massachusetts Healthcare Loan on non-accrual status as of July 1, 2024. Additionally, we modified two of our loans to convert from floating rate loans to fixed rate loans, which resulted in a decrease in net interest income earned during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Previous wording

Refer to "Note 5 - Real Estate Owned" for full discussion of operations related to real estate owned.

Current wording

Net income related to real estate owned increased by $0.8 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was a result of greater net income attributable to the D.C. Hotel during the nine months ended September 30, 2024 primarily due to catch-up depreciation recorded upon reclassification of the asset from held-for-sale to held-for-investment as of March 31, 2023. Additionally, the increase in net income related to real estate owned is a result of taking title to the Atlanta Hotel on March 31, 2023. Given the timing of title acquisition, there was no net income associated with the Atlanta Hotel during the first quarter of 2023. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.

Previous wording

General and administrative expenses and management fees to related party remained generally the same for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

General and administrative expenses remained generally the same for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Other income, net decreased by $1.9 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was due to a decrease in bank interest earned on our cash balances and money market funds, as we deployed capital into loan originations and stock repurchases during 2024.

Current wording

Other income, net decreased by $1.8 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was due to a decrease in bank interest earned on our cash balances and money market funds, as we deployed capital into loan originations and stock repurchases during 2024.

Previous wording

During the three months ended June 30, 2024, we sold a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI. The loan was previously classified as held for sale and was sold at a price of 99.5%. We recorded a realized loss of $0.7 million within realized loss on investments on our condensed consolidated statement of operations for the three and six months ended June 30, 2024. Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Current wording

During the nine months ended September 30, 2024, we recorded a $128.2 million net realized loss on investments, consisting of i) a $0.7 million realized loss related to the sale of a commercial mortgage loan collateralized by a hotel property located in Honolulu, HI, which was previously classified as held for sale and was sold at a price of 99.5% and ii) a $127.5 million realized loss related to the extinguishment of the Massachusetts Healthcare Loan. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Previous wording

Comparatively, during the six months ended June 30, 2023, we recorded a net realized loss on investments of $86.6 million, consisting of i) a $4.8 million realized loss related to the acquisition of the Atlanta Hotel through a deed-in-lieu of foreclosure and ii) a $82.0 million realized loss on investments representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY. These losses were partially offset by a $0.2 million gain on investments recorded in connection with the sale of our entire interest in three commercial loans secured by properties in Europe and a partial interest in one commercial loan secured by property located in London, UK. Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 5 - Real Estate Owned" for additional detail.

Current wording

Comparatively, during the nine months ended September 30, 2023, we recorded a net realized loss on investments of $86.6 million, consisting of i) a $4.8 million realized loss related to the acquisition of the Atlanta Hotel through a deed-in-lieu of foreclosure and ii) a $82.0 million realized loss on investments representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY. These losses were partially offset by a $0.2 million gain on investments recorded in connection with the sale of our entire interest in three commercial loans secured by properties in Europe and a partial interest in one commercial loan secured by property located in London, UK.

Previous wording

During the six months ended June 30, 2023, we repurchased $43.9 million aggregate principal amount of the 2023 Notes. As a result of this transaction, we recognized a $0.5 million gain on extinguishment of debt. We repaid the remaining principal of the 2023 Notes in full during the fourth quarter of 2023.

Current wording

During the nine months ended September 30, 2023, we repurchased $53.9 million aggregate principal amount of the 2023 Notes. As a result of this transaction, we recognized a $0.5 million gain on extinguishment of debt. We repaid the remaining principal of the 2023 Notes in full during the fourth quarter of 2023.

Previous wording

During the six months ended June 30, 2024, we recorded an increase in our Specific CECL Allowance of $149.5 million, related to two of our subordinate loans. During the three months ended March 31, 2024, we recorded a $142.0 million Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY, primarily attributable to a reduction in list pricing of remaining units and slower sales pace at the property. During the three months ended June 30, 2024, we recorded a Specific CECL Allowance of $7.5 million on a subordinate loan secured by our interest in a Class A office building in Troy, MI, attributable to low occupancy and limited leasing activity in the property's submarket.

Current wording

During the nine months ended September 30, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million, related to two of our subordinate loans. During the three months ended March 31, 2024, we recorded a $142.0 million Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY, primarily attributable to a reduction in list pricing of remaining units and slower sales pace at the property. During the three months ended June 30, 2024, we recorded a Specific CECL Allowance of $7.5 million on a subordinate loan secured by our interest in a Class A office building in Troy, MI, attributable to low occupancy and limited leasing activity in the property's submarket. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our September 30, 2024 condensed consolidated statement of operations.

Previous wording

During the six months ended June 30, 2023, we recorded a net increase to our Specific CECL Allowance of $59.5 million. We recorded a $141.5 million Specific CECL Allowance related to two mezzanine loans secured by the same ultra-luxury residential property in Manhattan, NY. As of June 30, 2023, $82.0 million related to the most junior mezzanine loan was deemed unrecoverable. Accordingly, $82.0 million of previously recorded Specific CECL was written-off and recorded as a realized loss within net realized loss on investments in our June 30, 2023 condensed consolidated statement of operations.

Current wording

During the nine months ended September 30, 2023, we recorded a net increase to our Specific CECL Allowance of $59.5 million. We recorded a $141.5 million Specific CECL Allowance related to two mezzanine loans secured by the same ultra-luxury residential property in Manhattan, NY. As of June 30, 2023, $82.0 million related to the most junior mezzanine loan was deemed unrecoverable. Accordingly, $82.0 million of previously recorded Specific CECL was written-off and recorded as a realized loss within net realized loss on investments in our June 30, 2023 condensed consolidated statement of operations.

Previous wording

For the six months ended June 30, 2024, we recorded a net increase in our General CECL Allowance of $8.4 million. The increase was primarily driven by new loan originations as well as a more adverse macroeconomic outlook. The increase was partially offset by the favorable impacts of portfolio seasoning.

Current wording

For the nine months ended September 30, 2024, we recorded a net increase in our General CECL Allowance of $7.5 million. The increase was primarily driven by new loan originations as well as a more adverse macroeconomic outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning.

Previous wording

During the six months ended June 30, 2023, we recorded a net increase in our General CECL Allowance of $6.5 million primarily driven by an increase in our view of the remaining expected term of certain of our loans and a more adverse macroeconomic outlook, which was partially offset by the effects of portfolio seasoning.

Current wording

During the nine months ended September 30, 2023, we recorded a net increase in our General CECL Allowance of $0.7 million primarily driven by a more adverse macroeconomic outlook, which was partially offset by the effects of portfolio seasoning and loan repayment activity outpacing origination activity.

Previous wording

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for both the six months ended June 30, 2024 and six months ended June 30, 2023 was a net gain of $8.9 million.

Current wording

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the nine months ended September 30, 2024 and nine months ended September 30, 2023 was a net gain of $9.4 million and $4.3 million, respectively.

Previous wording

During the six months ended June 30, 2024, the GBP rate and the EUR rate fell in relation to USD while both rates rose during the six months ended June 30, 2023. The decrease in Fx rates during the six months ended June 30, 2024 resulted in a gain on our foreign currency forward contracts and a loss related to foreign currency translation. The increase in Fx rates during the six months ended June 30, 2023 resulted in a loss on our foreign currency forward contracts and a gain related to foreign currency translation. The net gain both for the six months ended June 30, 2024 and the six months ended June 30, 2023 was due to lower forward point estimates.

Current wording

During the nine months ended September 30, 2024, the GBP and EUR rates rose in relation to USD while the GBP rate rose and the EUR rate fell during the nine months ended September 30, 2023. The increase in Fx rates during the nine months ended September 30, 2024 resulted in a loss on our foreign currency forward contracts and a gain related to foreign currency translation. The slight overall decrease in Fx rates during the nine months ended September 30, 2023 resulted in a gain on our foreign currency forward contracts and a loss related to foreign currency translation. The net gain both for the nine months ended September 30, 2024 and the nine months ended September 30, 2023 was due to lower forward point estimates.

Previous wording

During the six months ended June 30, 2024, we recorded a net gain of $0.5 million on our interest rate hedges or caps. The net gain was primarily driven by a $1.1 million realized gain recorded in relation to our construction financing interest rate cap, which we purchased in September 2023. The realized gain is attributable to SOFR exceeding the interest rate cap's strike rate. Additionally, we recorded a partially offsetting unrealized loss of $0.6 million, driven by a decrease in the interest rate cap's fair value, as it approaches its maturity.

Current wording

During the nine months ended September 30, 2024, we recorded a net gain of $0.4 million on our interest rate hedges or caps. The net gain was primarily driven by a $1.6 million realized gain recorded in relation to our construction financing interest rate cap, which we purchased in September 2023. The realized gain is attributable to SOFR exceeding the interest rate cap's strike rate. Additionally, we recorded a partially offsetting unrealized loss of $1.2 million, driven by a decrease in the interest rate cap's fair value, as it approaches its maturity.

Previous wording

During the six months ended June 30, 2023, we recorded a net loss of $0.1 million on our interest rate cap related to our 2026 Term Loan. Though we recorded a realized gain of $9.1 million driven by an increase in LIBOR over the cap strike rate, this gain was offset by unrealized losses of $9.2 million, resulting from a decrease in the interest rate cap's fair value as it reached its June 2023 maturity.

Current wording

During the nine months ended September 30, 2023, we recorded a net loss of $0.1 million on our interest rate cap related to our 2026 Term Loan. Though we recorded a realized gain of $9.1 million driven by an increase in the applicable index rate above the interest rate cap strike rate, this gain was offset by unrealized losses of $9.2 million, resulting from a decrease in the interest rate cap's fair value as it reached its June 2023 maturity.

Previous wording

During the six months ended June 30, 2024, we recorded an income tax provision of $0.2 million. Comparatively, we did not record an income tax provision for the six months ended June 30, 2023. The income tax provision recorded during the six months ended June 30, 2024 reflects our expectations of aggregate projected taxable income of one of our TRS entities for the taxable year ending December 31, 2024.

Current wording

During the nine months ended September 30, 2024, we recorded an income tax provision of $0.3 million. Comparatively, we recorded an income tax provision of $0.5 million for the nine months ended September 30, 2023. The income tax provisions recorded during the nine months ended September 30, 2024 and 2023 reflect our expectations of aggregate projected taxable income of one of our TRS entities for the taxable years ending December 31, 2024 and 2023, respectively.

Previous wording

For the three and six months ended June 30, 2024, our Distributable Earnings were $49.4 million, or $0.35 per share, and $99.8 million, or $0.69 per share, respectively, as compared to ($15.9) million, or ($0.11) per share, and $53.3 million, or $0.37 per share, respectively, for the same period in the prior year.

Current wording

For the three and nine months ended September 30, 2024, our Distributable Earnings were ($83.2) million, or $(0.59) per share, and $16.6 million, or $0.12 per share, respectively, as compared to $52.7 million, or $0.37 per share, and $106.0 million, or $0.73 per share, respectively, for the same period in the prior year.

Previous wording

Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were 172,857 and no incremental shares included in the three and six months ended 2024, respectively. For 2023, the weighted-average diluted shares for GAAP were determined using the if-converted method.

Current wording

Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were no incremental shares included in the three and nine months ended September 30, 2024. For 2023, the weighted-average diluted shares for GAAP were determined using the if-converted method.

Previous wording

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Distributable Earnings is a key factor considered by the board of directors in setting the dividend and as such we believe Distributable Earnings is useful to investors.

Current wording

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors.

Previous wording

During the three months ended June 30, 2023, we recorded an $82.0 million realized loss on investments representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY. Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail. Additionally, during the three months ended June 30, 2023, we recorded a gain on extinguishment of debt of $0.3 million related to a partial repurchase of our 2023 Notes. See "Note 10 - Convertible Senior Notes, Net" for full discussion of this transaction.

Current wording

During nine months ended September 30, 2023, we recorded a net realized loss on investments of $86.6 million consisting of i) $4.8 million realized loss related to the acquisition of a hotel property through a deed-in-lieu of foreclosure, ii) $82.0 million realized loss on investments representing a write-off of previously recorded Specific CECL Allowance on one of our subordinate loans secured by an ultra-luxury residential property in Manhattan, NY, iii) which was partially offset by a $0.2 million net realized gain on loan sales. No realized loss on investments was recorded during the three months ended September 30, 2023. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Previous wording

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.

Current wording

Includes net unrealized loss on forward currency contracts and interest hedges, and realized loss on forward currency contracts related to principal outside impact of forward points.

Previous wording

During the six months ended June 30, 2024, we committed $504.6 million of capital to new loans ($495.3 million was funded at closing), and provided $437.8 million of add-on fundings, including $212.9 million to a first mortgage loan secured by a portfolio of pubs across the United Kingdom, that was originated in December 2023. During the six months ended June 30, 2024, we received $758.9 million in loan repayments and sales.

Current wording

During the nine months ended September 30, 2024, we committed $1.1 billion of capital to new loans ($955.3 million was funded at closing), and provided $530.7 million of add-on fundings, including $212.9 million to a first mortgage loan secured by a portfolio of pubs across the United Kingdom, that was originated in December 2023. During the nine months ended September 30, 2024, we received $1.7 billion in loan repayments and sales.

Previous wording

Gross of deferred financing costs of $10.8 million.

Current wording

Gross of deferred financing costs of $10.9 million.

Previous wording

Represents loan portfolio at amortized cost less secured debt outstanding.

Current wording

Represents loan portfolio at carrying value less secured debt outstanding.

Previous wording

Our average asset and debt balances for the six months ended June 30, 2024 were ($ in thousands):

Current wording

Our average asset and debt balances for the nine months ended September 30, 2024 were ($ in thousands):

Previous wording

$3.6 million of the General CECL Allowance for 2024 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Current wording

$3.9 million of the General CECL Allowance for 2024 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Previous wording

At June 30, 2024, our debt-to-equity ratio was 3.4 and our portfolio was comprised of $7.9 billion of commercial mortgage loans and $0.4 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Current wording

At September 30, 2024, our debt-to-equity ratio was 3.5 and our portfolio was comprised of $7.5 billion of commercial mortgage loans and $0.4 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Previous wording

Represents total debt less cash and loan proceeds held by servicer (recorded with Other Assets, see "Note 6 - Other Assets" for more information) to total stockholders' equity.

Current wording

Represents total debt less cash and net loan proceeds held by servicer (recorded with Other Assets, see "Note 6– Other Assets" for more information) to total stockholders' equity.

Previous wording

Our current debt obligations consist of $1.3 billion, at face value, of corporate debt, $5.6 billion of asset specific financings, and $235.4 million of debt related to real estate owned. Our corporate debt includes $765.3 million of term loan borrowings and $500.0 million of senior secured notes. Our asset specific financings are generally tied to the underlying loans, and we anticipate repayments of $1.2 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.

Current wording

Our current debt obligations consist of $1.3 billion, at face value, of corporate debt, $5.5 billion of asset specific financings, and $282.4 million of debt related to real estate owned. Our corporate debt includes $763.3 million of term loan borrowings and $500.0 million of senior secured notes. Our asset specific financings are generally tied to the underlying loans, and we anticipate repayments of $1.3 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.

Previous wording

In addition to our debt obligations, as of June 30, 2024, we had $436.6 million of unfunded loan commitments. We expect that approximately $423.1 million will be funded to existing borrowers in the short term.

Current wording

In addition to our debt obligations, as of September 30, 2024, we had $503.9 million of unfunded loan commitments. We expect that approximately $440.7 million will be funded to existing borrowers in the short term.