Investor Presentaiton
Glossary
Ares Warehouse
Distributable Earnings
Unleveraged Effective
Yield
Weighted Average
Unleveraged Effective
Yield
The Ares Warehouse represents a real estate debt warehouse investment vehicle maintained by an affiliate of ACREM. The Ares
Warehouse holds Ares Management originated commercial real estate loans, which are made available to purchase by other
investment vehicles, including ACRE and other Ares Management managed investment vehicles.
Beginning in Q4 2020, the non-GAAP financial measure of Core Earnings was renamed to Distributable Earnings to more
appropriately reflect the principal purpose of the measure. Distributable Earnings helps the Company evaluate its financial
performance excluding the effects of certain transactions and GAAP adjustments that it believes are not necessarily indicative
of its current loan origination portfolio and operations. To maintain the Company's REIT status, the Company is generally
required to annually distribute to its stockholders substantially all of its taxable income. The Company believes the disclosure
of Distributable Earnings provides useful information to investors regarding the Company's ability to pay dividends, which is
one of the principal reasons investors invest in the Company. The presentation of this additional information is not meant to
be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Distributable Earnings is
defined as net income (loss) computed in accordance with GAAP, excluding non-cash equity compensation expense, the
incentive fees the Company pays to its Manager, depreciation and amortization (to the extent that any of the Company's target
investments are structured as debt and the Company forecloses on any properties underlying such debt), any unrealized
gains, losses or other non-cash items recorded in net income (loss) for the period, regardless of whether such items are
included in other comprehensive income or loss, or in net income (loss), one-time events pursuant to changes in GAAP and
certain non-cash charges after discussions between the Company's manager and the Company's independent directors and
after approval by a majority of the Company's independent directors. Loan balances that are deemed to be uncollectible are
written off as a realized loss and are included in Distributable Earnings. Distributable Earnings is aligned with the calculation
of "Core Earnings," which is defined in the Management Agreement and is used to calculate the incentive fees the Company
pays to its Manager.
Unleveraged effective yield is the compounded effective rate of return that would be earned over the life of the investment
based on the contractual interest rate (adjusted for any deferred loan fees, costs, premiums or discounts) and assumes no
dispositions, early prepayments or defaults.
Weighted average unleveraged effective yield is calculated based on the average of unleveraged effective yield of all loans held
by the Company as weighted by the outstanding principal balance of each loan.
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ARES
COMMERCIAL REAL ESTATE CORPORATIONView entire presentation