Ares Commercial Real Estate CorpACRE

Ares Commercial Real Estate Corp Segments Disclosure

10-KFiled Feb 10, 20262 min read
SEGMENT INFORMATION
As described in Note 1 included in these consolidated financial statements, the Company operates as a single reportable segment, which derives its revenues by directly originating and managing a diversified portfolio of CRE debt-related investments. The Company manages its business activities on a consolidated basis and the accounting policies of the segment are the same as those described in Note 2 included in these consolidated financial statements. The Company’s Chief Operating Decision Maker (“CODM”) is the chief executive officer.

The CODM assesses performance for the segment and decides how to allocate resources based on net income (loss) attributable to common stockholders. The measure of segment assets is reported in the consolidated balance sheets as total assets.

The following table summarizes the information about segment net income (loss) and significant segment expenses for the years ended December 31, 2025, 2024 and 2023 ($ in thousands):

 For the Years Ended December 31,
202520242023
Net interest margin$32,431 $51,732 $88,956 
Revenue from real estate owned22,402 17,918 3,970 
Total revenue54,833 69,650 92,926 
Expenses from real estate owned(18,157)(12,964)(2,518)
(Provision for) reversal of current expected credit losses, net17,845 18,152 (91,825)
Realized losses on loans(34,643)(83,591)(10,499)
Realized gain (loss) on sale of real estate owned2,757 (2,287)— 
Other segment items (1)(23,537)(23,953)(26,951)
Segment net income (loss)(902)(34,993)(38,867)
Adjustments and reconciling items— — — 
Net income (loss) attributable to common stockholders$(902)$(34,993)$(38,867)
______________________________

(1)Other segment items included in Segment net income (loss) include management and incentive fees to affiliate, professional fees, general and administrative expenses, general and administrative expenses reimbursed to affiliate, change in unrealized losses on loans held for sale and income tax expense (benefit), including excise tax.

Historical Timeline

Fiscal YearFiled
2025Feb 10, 2026Showing above
2015Mar 1, 2016

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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