News Column

APOLLO GLOBAL MANAGEMENT LLC - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

May 9, 2014

The following discussion should be read in conjunction with Apollo Global Management, LLC's condensed consolidated financial statements and the related notes included within this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those included in the section entitled "Risk Factors" in our Form 10-K for the year ended December 31, 2013 filed with the SEC on March 3, 2014. The highlights listed below have had significant effects on many items within our condensed consolidated financial statements and affect the comparison of the current period's activity with those of prior periods.



General

Our Businesses Founded in 1990, Apollo is a leading global alternative investment manager. We are contrarian, value-oriented investors in private equity, credit and real estate with significant distressed expertise and a flexible mandate in the majority of our funds that enables our funds to invest opportunistically across a company's capital structure. We raise, invest and manage funds on behalf of some of the world's most prominent pension, endowment and sovereign wealth funds as well as other institutional and individual investors. Apollo is led by our Managing Partners, Leon Black, Joshua Harris and Marc Rowan, who have worked together for more than 24 years and lead a team of 761 employees, including 302 investment professionals, as of March 31, 2014. Apollo conducts its management and incentive businesses primarily in the United States and substantially all of its revenues are generated domestically. These businesses are conducted through the following three reportable segments: (i) Private equity-primarily invests in control equity and related debt instruments, convertible securities and distressed debt instruments; (ii) Credit-primarily invests in non-control corporate and structured debt instruments; and (iii) Real estate-primarily invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities. These business segments are differentiated based on the varying investment strategies. The performance is measured by management on an unconsolidated basis because management makes operating decisions and assesses the performance of each of Apollo's business segments based on financial and operating metrics and data that exclude the effects of consolidation of any of the affiliated funds. Our financial results vary since carried interest, which generally constitutes a large portion of the income we receive from the funds that we manage, as well as the transaction and advisory fees that we receive, can vary significantly from quarter to quarter and year to year. As a result, we emphasize long-term financial growth and profitability to manage our business. In addition, the growth in our fee-generating AUM during the last year has primarily been in our credit segment. The average management fee rate for these new credit products is at market rates for such products and in certain cases is below our historical rates. Also, due to the complexity of these new product offerings, the Company has incurred and will continue to incur additional costs associated with managing these products. To date, these additional costs have been offset by realized economies of scale and ongoing cost management. As of March 31, 2014, approximately 96% of our total AUM was in funds with a contractual life at inception of seven years or more, and 7% of our total AUM was in permanent capital vehicles with unlimited duration. As of March 31, 2014, we had total AUM of $159.3 billion across all of our businesses. On December 31, 2013, Apollo Investment Fund VIII, L.P. ("Fund VIII") held a final closing raising a total of $17.5 billion in third-party capital and approximately $880 million of additional capital from Apollo and affiliated investors, and as of December 31, 2013, Fund VIII had $18.2 billion of uncalled commitments remaining. Additionally, Apollo Investment Fund VII, L.P. ("Fund VII") held a final closing in December 2008, raising a total of $14.7 billion, and as of March 31, 2014, Fund VII had $3.3 billion of uncalled commitments remaining. We have consistently produced attractive long-term investment returns in our traditional private equity funds, generating a 39% gross IRR and a 26% net IRR on a compound annual basis from inception through March 31, 2014. For - 71-



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further detail related to fund performance metrics across all of our businesses, see "-The Historical Investment Performance of Our Funds." Holding Company Structure The diagram below depicts our current organizational structure: [[Image Removed]] Note: The organizational structure chart above depicts a simplified version of the Apollo structure. It does not include all legal entities in the structure. Ownership percentages are as of the date of the filing of this Quarterly Report on Form 10-Q. (1) The Strategic Investors hold 30.18% of the Class A shares outstanding and



11.90% of the economic interests in the Apollo Operating Group. The

Class A shares held by investors other than the Strategic Investors

represent 31.26% of the total voting power of our shares entitled to vote

and 27.54% of the economic interests in the Apollo Operating Group.

Class A shares held by the Strategic Investors do not have voting rights.

However, such Class A shares will become entitled to vote upon transfers

by a Strategic Investor in accordance with the agreements entered into in

connection with the investments made by the Strategic Investors.



(2) Our Managing Partners own BRH Holdings GP, Ltd., which in turn holds our

only outstanding Class B share. The Class B share represents 68.74% of

the total voting power of our shares entitled to vote but no economic

interest in Apollo Global Management, LLC. Our Managing Partners'

economic interests are instead represented by their indirect beneficial

ownership, through Holdings, of 53.40% of the limited partner interests

in the Apollo Operating Group.

(3) Through BRH Holdings, L.P., our Managing Partners indirectly beneficially

own through estate planning vehicles, limited partner interests in Holdings. (4) Holdings owns 60.56% of the limited partner interests in each Apollo



Operating Group entity ("AOG Units"). The AOG Units held by Holdings are

exchangeable for Class A shares. Our Managing Partners, through their interests in BRH and Holdings, beneficially own 53.40% of the AOG Units.



Our Contributing Partners, through their ownership interests in Holdings,

beneficially own 7.16% of the AOG Units. (5) BRH Holdings GP, Ltd. is the sole member of AGM Management, LLC, our manager. The management of Apollo Global Management, LLC is vested in our manager as provided in our operating agreement. (6) Represents 39.44% of the limited partner interests in each Apollo



Operating Group entity, held through intermediate holding companies.

Apollo Global Management, LLC, also indirectly owns 100% of the general

partner interests in each Apollo Operating Group entity. - 72-



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Each of the Apollo Operating Group partnerships holds interests in different businesses or entities organized in different jurisdictions. Our structure is designed to accomplish a number of objectives, the most important of which are as follows: • We are a holding company that is qualified as a partnership for U.S. Federal income tax purposes. Our intermediate holding companies enable us to maintain our partnership status and to meet the qualifying income exception. • We have historically used multiple management companies to segregate operations for business, financial and other reasons. Going forward, we may increase or decrease the number of our management companies or partnerships within the Apollo Operating Group based on our views regarding the appropriate balance between (a) administrative convenience and (b) continued business, financial, tax and other optimization. Business Environment As a global investment manager, we are affected by numerous factors, including the condition of financial markets and the economy. Fluctuations in equity prices, which may be volatile, can significantly impact the valuation of our funds' portfolio companies and related income we may recognize. In the U.S., the S&P 500 Index rose 1.3% in the first quarter of 2014, following a 9.9% rise in the fourth quarter of 2013. Outside the U.S., world equity markets were weaker in first quarter of 2014. The MSCI All Country World ex USA Index was down 0.1% in the first quarter of 2014 following a 4.4% rise in the fourth quarter of 2013. Importantly, we believe that the generally positive momentum in the equity markets overall has been accommodative for continued equity capital markets activity, including IPOs and secondary offerings of the portfolio companies within our funds. Conditions in the credit markets also have a significant impact on our business. Credit indices continued to rise in the first quarter of 2014, with the BofAML HY Master II Index up 3.0% and the S&P/LSTA Leveraged Loan Index up 1.2%. Benchmark interest rates declined during the first quarter of 2014 with the U.S. 10-year Treasury down approximately 30 basis points to 2.7%, largely due to concerns around the economic health of some emerging markets as well as tensions in Ukraine. In terms of economic conditions in the U.S., the Bureau of Economic Analysis reported that real GDP increased at an annual rate of 0.1% in the first quarter of 2014, lower than the 2.6% in the fourth quarter of 2013, likely due to lower levels of activity resulting from the country's unusually harsh winter weather. As of April 2014, The International Monetary Fund estimated that the U.S. economy will expand by 2.8% in 2014, higher than the 1.9% in 2013. Additionally, the U.S. unemployment rate continued to decline and stood at 6.7% as of March 31, 2014, though the decline versus the prior quarter end was largely attributable to a further drop in the labor force participation rate. Amid the generally favorable backdrop of elevated asset prices and positive equity market momentum, Apollo continued to generate significant realizations for fund investors. Apollo returned $4.4 billion and $23.6 billion of capital and realized gains to the limited partners of the funds it manages during the first quarter of 2014 and for the past 12 months ended March 31, 2014, respectively. Apollo's fundraising activities moderated in the first quarter from recent highs driven by the final closing of Fund VIII in the fourth quarter of 2013. Apollo reported $1.5 billion and $22.5 billion of new capital raised during the first quarter of 2014 and over past 12 months, respectively. In general, institutional investors continue to allocate capital towards alternative investment managers for more attractive risk-adjusted returns in a low rate environment. Regardless of the market or economic environment at any given time, Apollo relies on its contrarian, value-oriented approach to consistently invest capital on behalf of its investors by focusing on opportunities that management believes are often overlooked by other investors. We believe Apollo's expertise in credit and its focus on nine core industry sectors, combined with more than 20 years of investment experience, has allowed Apollo to respond quickly to changing environments. Apollo's core industry sectors cover chemicals, natural resources, consumer and retail, distribution and transportation, financial and business services, manufacturing and industrial, media and cable and leisure, packaging and materials and the satellite and wireless industries. Apollo believes that these attributes have contributed to the success of its private equity funds investing in buyouts and credit opportunities during both expansionary and recessionary economic periods. - 73-



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Managing Business Performance We believe that the presentation of Economic Net Income (Loss) supplements a reader's understanding of the economic operating performance of each of our segments. Economic Net Income (Loss) Economic Net Income (Loss) ("ENI") is a measure of profitability and does not take into account certain items included under U.S. GAAP. ENI represents segment income (loss) attributable to Apollo Global Management, LLC, which excludes the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG Units, income tax expense, amortization of intangibles associated with the reorganization of the Company's predecessor businesses on July 13, 2007 (the "2007 Reorganization"), as well as acquisitions and Non-Controlling Interests (excluding the remaining interest held by certain individuals who receive an allocation of income from certain of our credit management companies). In addition, segment data excludes the assets, liabilities and operating results of the funds and VIEs that are included in the condensed consolidated financial statements. Adjustments relating to income tax expense, intangible asset amortization and Non-Controlling Interests are common in the calculation of supplemental measures of performance in our industry. We believe the exclusion of the non-cash charges related to the 2007 Reorganization for equity-based compensation provides investors with a meaningful indication of our performance because these charges relate to the equity portion of our capital structure and not our core operating performance. During the second quarter of 2013, monitoring fees based on the capital and surplus of Athene Holding Ltd. ("Athene Holding") and its subsidiaries (together with Athene Holding, "Athene") and the change in the market value of the derivative contracts related to Athene's capital and surplus recorded in advisory and transaction fees from affiliates, net, as disclosed in note 13 to the condensed consolidated financial statements, were reclassified from the private equity segment to the credit segment to better evaluate the performance of Apollo's private equity and credit segments in making key operating decisions. Reclassifications have been made to the prior period financial data for Apollo's reportable segments to conform to the current presentation. The impact of this reclassification on the ENI for the private equity and credit segment is reflected in the table below for the three months ended March 31, 2013: Impact of Reclassification on Economic Net (Loss) Income Private Equity Credit Segment Segment (in thousands) For the three months ended March 31, 2013$(19,711)



$19,711

During the fourth quarter of 2013, certain reclassifications were made to prior period financial data within salary, bonus and benefits and profit sharing expense to conform to the current presentation. The impact of these reclassifications on management business ENI and incentive business ENI is reflected in the table below for Apollo's three reportable segments for the three months ended March 31, 2013.

Impact of Reclassification on Management Business Economic Net Income (Loss) Private Equity Credit Real Estate Segment Segment Segment (in thousands)



For the three months ended March 31, 2013$5,037$(4,518)

$(519) Impact of Reclassification on Incentive Business Economic Net (Loss) Income Private Equity Credit Real Estate Segment Segment Segment (in thousands) For the three months ended March 31, 2013 $(3,564)$3,220$344



As it relates to the reclassifications described above, the impact to the combined segments' ENI for all periods presented was zero.

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ENI is a key performance measure used for understanding the performance of our operations from period to period and although not every company in our industry defines these metrics in precisely the same way we do, we believe that this metric, as we use it, facilitates comparisons with other companies in our industry. We use ENI to evaluate the performance of our private equity, credit and real estate segments. Management believes the components of ENI such as the amount of management fees, advisory and transaction fees, net and carried interest income are indicative of the Company's performance. Management also uses ENI in making key operating decisions such as the following: • Decisions related to the allocation of resources such as staffing decisions including hiring and locations for deployment of the new hires. As the amount of fees, investment income, and ENI is indicative of the performance of the management companies and advisors within each segment, management can assess the need for additional resources and the location for deployment of the new hires based on the results of this measure. • Decisions related to capital deployment such as providing capital to facilitate growth for our business and/or to facilitate expansion into new businesses. As the amount of fees, investment income, and ENI is indicative of the performance of the management companies and advisors within each segment, management can assess the availability and need to provide capital to facilitate growth or expansion into new businesses based on the results of this measure. • Decisions related to expenses, such as determining annual discretionary bonuses and equity-based compensation awards to its employees. With respect to compensation, management seeks to align the interests of certain professionals and selected other individuals with those of the investors in such funds and those of the Company's shareholders by providing such individuals a profit sharing interest in the carried interest income earned in relation to the funds. To achieve that objective, a certain amount of compensation is based on the Company's performance and growth for the year. ENI does not take into account certain items included when calculating net income under U.S. GAAP and as such, we do not rely solely on ENI as a performance measure and also consider our U.S. GAAP results. The following items, which are significant to our business, are excluded when calculating ENI: (i) non-cash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG Units (the costs associated with the 2007 private placement are expected to be recurring components of our costs but at a diminishing rate, we may be able to incur lower cash compensation costs with the granting of equity-based compensation). The AOG Units were fully vested and amortized as of June 30, 2013; (ii) income tax, which represents a necessary and recurring element of our operating costs and our ability to generate revenue because ongoing revenue generation is expected to result in future income tax expense; (iii) amortization of intangible assets associated with the 2007 Reorganization and acquisitions, which is a recurring item until all intangibles have been fully amortized; and (iv) Non-Controlling Interests, excluding the remaining interest held by certain individuals who receive an allocation of income from certain of our credit management companies, which is expected to be a recurring item and represents the aggregate of the income or loss that is not owned by the Company. We believe that ENI is helpful for an understanding of our business and that investors should review the same supplemental financial measure that management uses to analyze our segment performance. This measure supplements and should be considered in addition to and not in lieu of the results of operations discussed below in "-Overview of Results of Operations" that have been prepared in accordance with U.S. GAAP. The following summarizes the adjustments to ENI that reconcile ENI to the net income (loss) attributable to Apollo Global Management, LLC determined in accordance with U.S. GAAP: • Inclusion of the impact of RSUs granted in connection with the 2007 private placement and non-cash equity-based compensation expense comprising amortization of AOG Units. Management assesses our performance based on management fees, advisory and transaction fees, and carried interest income generated by the business and excludes the - 75-



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impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG Units because these non-cash charges are not viewed as part of our core operations. The AOG Units were fully vested and amortized as of June, 2013. • Inclusion of the impact of income taxes as we do not take income taxes into consideration when evaluating the performance of our segments or when determining compensation for our employees. Additionally, income taxes at the segment level (which exclude APO Corp.'s corporate taxes) are not meaningful, as the majority of the entities included in our segments operate as partnerships and therefore are only subject to New York City unincorporated business taxes ("NYC UBT") and foreign taxes when applicable. • Inclusion of amortization of intangible assets associated with the 2007 Reorganization and subsequent acquisitions as these non-cash charges are not viewed as part of our core operations. • Carried interest income, management fees and other revenues from Apollo funds are reflected on an unconsolidated basis. As such, ENI excludes the Non-Controlling Interests in consolidated funds, which remain consolidated in our condensed consolidated financial statements. Management views the business as an alternative investment management firm and therefore assesses performance using the combined total of carried interest income and management fees from each of our funds. One exception is the Non-Controlling Interest related to certain individuals who receive an allocation of income from certain of our credit management companies, which is deducted from ENI to better reflect the performance attributable to shareholders. ENI may not be comparable to similarly titled measures used by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. We use ENI as a measure of operating performance, not as a measure of liquidity. ENI should not be considered in isolation or as a substitute for operating income, net income, operating cash flows, investing and financing activities, or other income or cash flow statement data prepared in accordance with U.S. GAAP. The use of ENI without consideration of related U.S. GAAP measures is not adequate due to the adjustments described above. Management compensates for these limitations by using ENI as a supplemental measure to U.S. GAAP results, to provide a more complete understanding of our performance as management measures it. A reconciliation of ENI to our U.S. GAAP net income (loss) attributable to Apollo Global Management, LLC can be found in the notes to our condensed consolidated financial statements. Operating Metrics We monitor certain operating metrics that are common to the alternative investment management industry. These operating metrics include Assets Under Management, private equity dollars invested and uncalled private equity commitments. Assets Under Management Assets Under Management, or AUM, refers to the investments we manage or with respect to which we have control, including capital we have the right to call from our investors pursuant to their capital commitments to various funds. Our AUM equals the sum of: (i) the fair value of our private equity investments plus the capital that we are entitled to call from our investors pursuant to the terms of their capital commitments; (ii) the NAV, of our credit funds, other than certain CLOs and CDOs, which have a fee generating basis other than the mark-to-market value of the underlying assets, plus used or available leverage and/or capital commitments; (iii) the gross asset value or net asset value of our real estate entities and the structured portfolio company investments included within the funds we manage, which includes the leverage used by such structured portfolio companies; (iv) the incremental value associated with the reinsurance investments of the portfolio company assets we manage; and - 76-



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Table of Contents (v) the fair value of any other investments that we manage plus unused credit facilities, including capital commitments for investments that may require pre-qualification before investment plus any other capital commitments available for investment that are not otherwise included in the clauses above. Our AUM measure includes Assets Under Management for which we charge either no or nominal fees. Our definition of AUM is not based on any definition of Assets Under Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider multiple factors for determining what should be included in our definition of AUM. Such factors include but are not limited to (1) our ability to influence the investment decisions for existing and available assets; (2) our ability to generate income from the underlying assets in our funds; and (3) the AUM measures that we believe are used by other investment managers. Given the differences in the investment strategies and structures among other alternative investment managers, our calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented by other investment managers. We use AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs. Assets Under Management-Fee-Generating/Non-Fee Generating Fee-generating AUM consists of assets that we manage and on which we earn management fees or monitoring fees pursuant to management agreements on a basis that varies among the Apollo funds. Management fees are normally based on "net asset value," "gross assets," "adjusted par asset value," "adjusted cost of all unrealized portfolio investments," "capital commitments," "adjusted assets," "stockholders' equity," "invested capital" or "capital contributions," each as defined in the applicable management agreement. Monitoring fees, also referred to as advisory fees, generally are based on the total value of certain structured portfolio company investments, which normally includes leverage, less any portion of such total value that is already considered in fee-generating AUM. Non-fee generating AUM consists of assets that do not produce management fees or monitoring fees. These assets generally consist of the following: (a) fair value above invested capital for those funds that earn management fees based on invested capital, (b) net asset values related to general partner and co-investment ownership, (c) unused credit facilities, (d) available commitments on those funds that generate management fees on invested capital, (e) structured portfolio company investments that do not generate monitoring fees and (f) the difference between gross asset and net asset value for those funds that earn management fees based on net asset value. Carry Eligible AUM refers to the AUM that may eventually produce carried interest income. All funds for which we are entitled to receive a carried interest income allocation are included in Carry Eligible AUM, regardless of whether or not they are currently generating carried interest income. Carry Eligible AUM includes available capital for investment or reinvestment subject to the provisions of applicable limited partnership agreements or other governing agreements that is not currently part of the NAV or fair value of investments that may eventually produce carried interest income. Carry Generating AUM refers to AUM that is currently generating carried interest income or is above its hurdle rate or preferred return. Carry Generating AUM does not include uncalled commitments because they are not part of the NAV or fair value of investments that are currently generating carried interest income. We use non-fee generating AUM combined with fee-generating AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs. Non-fee generating AUM includes assets on which we could earn carried interest income. - 77-



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The table below presents fee-generating and non-fee generating AUM by segment as of March 31, 2014 and 2013 and December 31, 2013. Changes in market conditions, additional funds raised and acquisitions have had significant impacts to our AUM: As of As of March 31, December 31, 2014 2013 2013 (in millions) Total Assets Under Management $ 159,326 (1) $ 114,269 (1) $ 161,177 (1) Fee-generating 128,537 81,633 128,368 Non-fee generating 30,789 (1) 32,636 (1) 32,809 (1) Private Equity 48,086 39,205 49,908 Fee-generating 34,207 27,868 34,173 Non-fee generating 13,879 11,337 15,735 Credit 101,228 63,535 100,886 Fee-generating 88,404 48,488 88,249 Non-fee generating 12,824 15,047 12,637 Real Estate 8,899 9,412 9,289 Fee-generating 5,926 5,277 5,946 Non-fee generating 2,973 4,135 3,343 (1) As of March 31, 2014 and 2013 and December 31, 2013, includes $1.1



billion, $2.1 billion and $1.1 billion of commitments, respectively, that

have yet to be deployed to an Apollo fund within our three segments.

The following table presents Carry Eligible AUM and Carry Generating AUM for each of our segments as of March 31, 2014 and 2013 and December 31, 2013:

Carry Eligible AUM Carry Generating AUM As of As of As of As of March 31, December 31, March 31, December 31, 2014 2013 2013 2014 2013 2013 (in millions) Private equity $ 43,686$ 38,040$ 45,050$ 22,857$ 31,846$ 24,791 Credit 36,297 36,505 34,580 25,758 28,513 23,539 Real estate 3,132 3,466 3,041 1,004 446 941 Total(1) $ 84,254$ 80,056$ 83,729$ 49,619$ 60,805$ 49,271



(1) As of March 31, 2014 and 2013 and December 31, 2013, includes $1.1

billion, $2.0 billion, and $1.0 billion of commitments related to Carry

Eligible AUM, respectively, that have yet to be deployed to an Apollo

fund within our three segments.

During the three months ended March 31, 2014, our total fee-generating AUM increased primarily due to subscriptions and unrealized gains and was partially offset by distributions and decreases in leverage. The fee-generating AUM of our private equity funds increased primarily due to subscriptions which was offset primarily by distributions. The fee-generating AUM of our credit funds increased during the three months ended March 31, 2014 primarily due to increases in unrealized gains and subscriptions, and offset by distributions and decreases in leverage. The fee-generating AUM of our real estate segment decreased primarily due to distributions offset by net segment transfers and subscriptions. When the fair value of an investment exceeds invested capital, we are normally entitled to carried interest income on the difference between the fair value once realized and invested capital after also considering certain expenses and preferred return amounts, as specified in the respective partnership agreements; however, we generally do not earn management fees on such excess. With respect to our private equity funds and certain of our credit and real estate funds, we charge management fees on the amount of committed or invested capital and we generally are entitled to realized carried interest on the realized gains on the disposition of such funds' investments. Certain funds may have current fair values below invested capital; however, the management fee would still be computed on the invested capital for such funds. With respect to ARI and AMTG, we receive - 78-



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management fees on stockholders' equity as defined in the applicable management agreement. In addition, our fee-generating AUM reflects leverage vehicles that generate monitoring fees on value in excess of fund commitments. As of March 31, 2014, our total fee-generating AUM is comprised of approximately 97% of assets that earn management fees and the remaining balance of assets earn monitoring fees. The Company's entire fee-generating AUM is subject to management or monitoring fees. The components of fee-generating AUM by segment as of March 31, 2014 and 2013 and December 31, 2013 are presented below: As of March 31, 2014 Private Real Equity Credit Estate Total (in millions) Fee-generating AUM based on capital commitments $ 19,945$ 6,493$ 156$ 26,594 Fee-generating AUM based on invested capital 11,734 1,569 3,788 17,091 Fee-generating AUM based on gross/adjusted assets 804 71,784 1,740 74,328 Fee-generating AUM based on leverage 1,668 1,538 - 3,206 Fee-generating AUM based on NAV 56 7,020 242 7,318 Total Fee-Generating AUM $ 34,207 (1) $ 88,404$ 5,926$ 128,537



(1) The weighted average remaining life of the private equity funds excluding

permanent capital vehicles at March 31, 2014

was 74 months. As of March 31, 2013 Private Real Equity Credit Estate Total (in millions) Fee-generating AUM based on capital commitments $ 16,024$ 5,105$ 193$ 21,322 Fee-generating AUM based on invested capital 7,522 2,629 2,072 12,223 Fee-generating AUM based on gross/adjusted assets 924 31,315 2,740 34,979 Fee-generating AUM based on leverage(1) 3,376 2,957 - 6,333 Fee-generating AUM based on NAV 22 6,482 272 6,776 Total Fee-Generating AUM $ 27,868 (1) $ 48,488$ 5,277$ 81,633



(1) The weighted average remaining life of the private equity funds excluding

permanent capital vehicles at March 31, 2013

was 57 months. As of December 31, 2013 Private Real Equity Credit Estate Total (in millions) Fee-generating AUM based on capital commitments $ 19,630$ 5,834$ 156$ 25,620 Fee-generating AUM based on invested capital 11,923 1,649 3,753 17,325 Fee-generating AUM based on gross/adjusted assets 925 72,202 1,769 74,896 Fee-generating AUM based on leverage 1,695 1,587 - 3,282 Fee-generating AUM based on NAV - 6,977 268 7,245 Total Fee-Generating AUM $ 34,173 (1) $ 88,249$ 5,946$ 128,368



(1) The weighted average remaining life of the private equity funds excluding

permanent capital vehicles at December 31, 2013

was 75 months. - 79-



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AUM as of March 31, 2014 and 2013 and December 31, 2013 was as follows:

Total Assets Under Management As of As of March 31, December 31, 2014 2013 2013 (in millions) AUM: Private equity $ 48,086$ 39,205$ 49,908 Credit 101,228 63,535 100,886 Real estate 8,899 9,412 9,289 Total(1) $ 159,326$ 114,269$ 161,177



(1) As of March 31, 2014 and 2013 and December 31, 2013, includes $1.1

billion, $2.1 billion and $1.1 billion of commitments, respectively, that

have yet to be deployed to an Apollo fund within our three segments.

The following table presents total AUM and fee-generating AUM amounts for our private equity segment by strategy:

Total AUM Fee-Generating AUM As of As of As of As of March 31, December 31, March 31, December 31, 2014 2013 2013 2014 2013 2013 (in millions) Traditional Private (1) Equity Funds 43,803 36,478 45,872 (1) 30,857 25,148 (1) 31,094 (1) Natural Resources 1,354 1,284 1,367 1,295 1,295 1,295 Other(2) 2,929 1,443 (1) 2,669 (1) 2,055 1,425 (1) 1,784 (1) Total $ 48,086$ 39,205$ 49,908$ 34,207$ 27,868$ 34,173



(1) Reclassified to conform with current presentation.

(2) Includes co-investments contributed to Athene by AAA, through its

investment in AAA Investments, as part of the AAA Transaction as discussed

in note 3 to the condensed consolidated financial statements. - 80-



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The following table presents total AUM and fee-generating AUM amounts for our credit segment by strategy: Total AUM Fee-Generating AUM As of As of As of As of March 31, December 31, March 31, December 31, 2014 2013 2013 2014 2013 2013 (in millions) Athene(1) $ 49,371$ 9,671$ 50,345$ 49,371$ 9,546$ 50,345 U.S. Performing Credit 23,539 26,978 22,177 18,906 20,595 17,510



Structured

Credit 12,183 12,528 12,779 8,687 8,166 9,362



Opportunistic

Credit 7,572 6,130 7,068 5,236 4,524 4,763



Non-Performing

Loans 5,478 6,024 5,688 4,157 4,328 4,330 European Credit 3,085 2,204 2,829 2,047 1,329 1,939 Total $ 101,228$ 63,535$ 100,886$ 88,404$ 48,488$ 88,249



(1) Excludes AUM that is either sub-advised by Apollo or invested in Apollo

funds and investment vehicles across its private equity, credit and real estate funds.



The following table presents total AUM and fee-generating AUM amounts for our real estate segment by strategy:

Total AUM Fee-Generating AUM As of As of As of As of March 31, December 31, March 31, December 31, 2014 2013 2013 2014 2013 2013 (in millions) Debt $ 5,229$ 5,552 $ 5,731 $ 3,885$ 3,081 $ 3,701 Equity 3,670 3,860 3,558 2,041 2,196 2,245 Total $ 8,899$ 9,412 $ 9,289 $ 5,926$ 5,277 $ 5,946 - 81-



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The following tables summarize changes in total AUM and total AUM for each of our segments for the three months ended March 31, 2014 and 2013:

For the Three Months Ended March 31, 2014 2013 (in millions) Change in Total AUM: Beginning of Period $ 161,177 (1) $ 113,379 (1) Income 1,815 4,057 Subscriptions/Capital raised 1,543 1,200 Distributions (4,369 ) (3,396 ) Redemptions (173 ) (353 ) Leverage (667 ) (618 ) End of Period $ 159,326 (1) $ 114,269 (1) Change in Private Equity AUM: Beginning of Period $ 49,908$ 37,832 Income 388 3,282 Subscriptions/Capital raised 324 4 Distributions (3,022 ) (1,902 ) Net segment transfers - 212 Leverage 488 (223 ) End of Period $ 48,086$ 39,205 Change in Credit AUM: Beginning of Period $ 100,886$ 64,406 Income 1,322 731 Subscriptions/Capital raised 992 673 Distributions (942 ) (1,356 ) Redemptions (173 ) (353 ) Net segment transfers (226 ) (239 ) Leverage (631 ) (327 ) End of Period $ 101,228$ 63,535 Change in Real Estate AUM: Beginning of Period $ 9,289$ 8,800 Income 86 44 Subscriptions/Capital raised 227 523 Distributions (405 ) (138 ) Net segment transfers 226 251 Leverage (524 ) (68 ) End of Period $ 8,899$ 9,412



(1) As of March 31, 2014 and 2013, and December 31, 2013 and 2012, includes

$1.1 billion, $2.1 billion, $1.1 billion, and $2.3 billion of

commitments, respectively, that have yet to be deployed to an Apollo fund

within our three segments. - 82-



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The following tables summarize changes in total fee-generating AUM and fee-generating AUM for each of our segments for the three months ended March 31, 2014 and 2013: For the Three Months Ended March 31, 2014 2013 (in millions) Change in Total Fee-Generating AUM: Beginning of Period $ 128,368$ 81,934 Income 897 173 Subscriptions/Capital raised 1,294 1,079 Distributions (1,463 ) (911 ) Redemptions (154 ) (370 ) Net movements between Fee-Generating and Non-Fee Generating 148 165 Leverage (553 ) (437 ) End of Period $ 128,537$ 81,633 Change in Private Equity Fee-Generating AUM: Beginning of Period $ 34,173$ 27,932 (Loss) Income (2 ) 61 Subscriptions/Capital raised 324 4 Distributions (304 ) (94 ) Net segment transfers - 196



Net movements between Fee-Generating and Non-Fee Generating 43

3 Leverage (27 ) (234 ) End of Period $ 34,207$ 27,868 Change in Credit Fee-Generating AUM: Beginning of Period $ 88,249$ 49,518 Income 885 62 Subscriptions/Capital raised 817 632 Distributions (744 ) (750 ) Redemptions (154 ) (370 ) Net segment transfers (226 ) (447 ) Net movements between Fee-Generating and Non-Fee Generating 103 46 Leverage (526 ) (203 ) End of Period $ 88,404$ 48,488 Change in Real Estate Fee-Generating AUM: Beginning of Period $ 5,946$ 4,484 Income 14 50 Subscriptions/Capital raised 153 443 Distributions (415 ) (67 ) Net segment transfers 226 251 Net movements between Fee-Generating and Non-Fee Generating 2 116 End of Period $ 5,926$ 5,277 - 83-



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Private Equity During the three months ended March 31, 2014, the AUM in our private equity segment decreased by $1.8 billion, or 3.7%. This decrease was a result of distributions of $3.0 billion including $1.9 billion and $1.0 billion in Fund VII and Apollo Investment Fund VI, L.P. ("Fund VI"), respectively. Offsetting this decrease was a change in leverage of $0.5 billion and increases in unrealized gains of $0.4 billion. During the three months ended March 31, 2013, the AUM in our private equity segment increased by $1.4 billion, or 3.6%. This increase was a result of $3.3 billion of income that was primarily attributable to improved unrealized gains in our private equity funds including $1.6 billion in Fund VI and $1.5 billion in Fund VII. Offsetting this increase was $1.9 billion of distributions, including $1.4 billion in Fund VII and $0.4 billion in Fund VI. Credit During the three months ended March 31, 2014, AUM in our credit segment increased by $0.3 billion. There were increases in unrealized gains of $1.3 billion and subscriptions of $1.0 billion, including $0.5 billion in Financial Credit Investment II, L.P. ("FCI II") and $0.2 billion in Apollo Structured Credit Recovery Master Fund III, L.P. ("ACRF III"). This was offset by distributions of $0.9 billion, which included $0.3 billion from Apollo European Principal Finance Fund, L.P. ("EPF I") and $0.1 billion from Apollo Credit Opportunity Fund II, L.P. ("COF II"), and the majority of the remaining portion related to CLOs, decreases in leverage of $0.6 billion and decreases of $0.2 billion in redemptions and net segment transfers. During the three months ended March 31, 2013, AUM in our credit segment decreased by $0.9 billion, or 1.4%. This decrease consisted of $1.4 billion of distributions, $0.3 billion of leverage, redemptions of $0.4 billion and segment transfers out of $0.2 billion. This decrease in AUM was offset by $0.7 billion of income that was primarily attributable to improved unrealized gains across our credit funds, and additional subscriptions of $0.7 billion. Real Estate During the three months ended March 31, 2014, AUM in our real estate segment decreased by $0.4 billion, or 4.2%. This decrease was the result of a decrease in leverage of $0.5 billion, including $0.7 billion from AGRE 2011 A-4 Fund, L.P. ("CMBS II") which was partially offset by an increase in leverage of $0.2 billion in ARI. There were also distributions of $0.4 billion including a distribution of $0.2 billion from the AGRE 2011 A-4 Fund, L.P. These decreases were partially offset by increases in net segment transfers of $0.2 billion in accounts owned by or related to Athene and subscriptions of $0.2 billion including $0.1 billion in AGRE Debt Fund I, L.P. During the three months ended March 31, 2013, AUM in our real estate segment increased by $0.6 billion, or 7.0%, which was primarily the result of $0.5 billion of additional subscriptions and $0.3 billion of segment transfers in. These increases were offset by segment transfers out of $0.1 billion and distributions of $0.1 billion. Dollars Invested and Uncalled Commitments Dollars invested is the aggregate amount of capital, including capital commitments from the limited partner investors in our funds, that have been invested by our multi-year drawdown, commitment-based funds and SIAs that have a defined maturity date and for funds and SIAs in our real estate debt strategy during a reporting period. Uncalled commitments, by contrast, represents unfunded capital commitments that certain of Apollo's funds and SIAs have received from limited partners to fund future or current investments and expenses as of the reporting date. Dollars invested and uncalled commitments are indicative of the pace and magnitude of fund capital that is deployed or will be deployed, and which therefore could result in future revenues that include transaction fees and incentive income to the extent fee generating. Dollars invested and uncalled commitments can also give rise to future costs that are related to the hiring of additional resources to manage and account for the additional capital that is deployed or will be deployed. Management uses dollars invested and uncalled commitments as key operating metrics since we believe the results measure our investment activities. - 84-



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Dollars Invested and Uncalled Commitments The following table summarizes by segment the dollars invested for funds and SIAs with a defined maturity date and certain funds in our real estate debt strategy during the specified reporting periods: For the Three Months Ended March 31, 2014 2013 (in millions) Private equity $ 557$ 1,190 Credit 1,729 1,135 Real Estate 494 848 Total dollars invested $ 2,780$ 3,173



The following table summarizes the uncalled commitments by segment as of March 31, 2014 and 2013, and December 31, 2013:

As of As of December As of March 31, March 31, 31, 2014 2013 2013 (in millions) Private equity $ 23,687 $ 6,315$ 23,689 Credit 6,413 5,349 7,113 Real Estate 983 1,221 971



Total Uncalled Commitments(1)(2) $ 32,173 $ 15,005$ 32,852

(1) As of March 31, 2014 and 2013 and December 31, 2013, includes $1.1 billion,

$2.1 billion and $1.1 billion of commitments, respectively, that have yet to

be deployed to an Apollo fund within our three segments.

(2) As of March 31, 2014 and 2013 and December 31, 2013, $28.5 billion, $13.9

billion, and $29.5 billion, respectively, represents the amount of capital

available for investment or reinvestment subject to the provisions of the

applicable limited partnership agreements or other governing agreements.

A The Historical Investment Performance of Our Funds Below we present information relating to the historical performance of our funds, including certain legacy Apollo funds that do not have a meaningful amount of unrealized investments, and in respect of which the general partner interest has not been contributed to us. When considering the data presented below, you should note that the historical results of our funds are not indicative of the future results that you should expect from such funds, from any future funds we may raise or from your investment in our Class A shares. An investment in our Class A shares is not an investment in any of the Apollo funds, and the assets and revenues of our funds are not directly available to us. The historical and potential future returns of the funds we manage are not directly linked to returns on our Class A shares. Therefore, you should not conclude that continued positive performance of the funds we manage will necessarily result in positive returns on an investment in our Class A shares. However, poor performance of the funds that we manage would cause a decline in our revenue from such funds, and would therefore have a negative effect on our performance and in all likelihood the value of our Class A shares. There can be no assurance that any Apollo fund will continue to achieve the same results in the future. Moreover, the historical returns of our funds should not be considered indicative of the future results you should expect from such funds or from any future funds we may raise, in part because: • market conditions during previous periods were significantly more favorable for generating positive performance, particularly in our private equity business, than the market conditions we have experienced for the last few years and may experience in the future; • our funds' returns have benefited from investment opportunities and general market conditions that may not exist and may not repeat themselves, and there can be no assurance that our current or future funds will be able to avail themselves of profitable investment opportunities; - 85-



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Table of Contents • our private equity funds' rates of return, which are calculated on the basis of net asset value of the funds' investments, reflect unrealized gains, which may never be realized; • our funds' returns have benefited from investment opportunities and general market conditions that may not repeat themselves, including the availability of debt capital on attractive terms and the availability of distressed debt opportunities, and we may not be able to achieve the same returns or profitable investment opportunities or deploy capital as quickly; • the historical returns that we present are derived largely from the performance of our earlier private equity funds, whereas future fund returns will depend increasingly on the performance of our newer funds, which may have little or no realized investment track record; • Fund VIII, Fund VII and Fund VI are several times larger than our previous private equity funds, and this additional capital may not be deployed as profitably as our prior funds; • the attractive returns of certain of our funds have been driven by the rapid return of invested capital, which has not occurred with respect to all of our funds and we believe is less likely to occur in the future; • our track record with respect to our credit and real estate funds is relatively short as compared to our private equity funds; • in recent years, there has been increased competition for private equity investment opportunities resulting from the increased amount of capital invested in private equity funds and periods of high liquidity in debt markets, which may result in lower returns for the funds; and • our newly established funds may generate lower returns during the period that they take to deploy their capital; consequently, we do not provide return information for any funds which have not been actively investing capital for at least 24 months prior to the valuation date as we believe this information is not meaningful. Finally, our private equity IRRs have historically varied greatly from fund to fund. For example, Apollo Investment Fund IV, L.P. ("Fund IV") has generated a 12% gross IRR and a 9% net IRR since its inception through March 31, 2014, while Apollo Investment Fund V, L.P. ("Fund V") has generated a 61% gross IRR and a 44% net IRR since its inception through March 31, 2014. Accordingly, the IRR going forward for any current or future fund may vary considerably from the historical IRR generated by any particular fund, or for our private equity funds as a whole. Future returns will also be affected by the applicable risks, including risks of the industries and businesses in which a particular fund invests. See "Item 1A. Risk Factors-Risks Related to Our Businesses-The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our Class A shares" in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on March 3, 2014. - 86-



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Table of Contents Investment Record The following table summarizes the investment record by segment of our multi-year drawdown, commitment based funds and strategic investment accounts ("SIAs") that have a defined maturity date in which investors make a commitment to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available. All amounts are as of March 31, 2014, unless otherwise noted: As of As of March 31, 2014 December 31, 2013 Total Vintage Committed Invested Gross Net Gross Net Strategy Year CapitalCapital Realized Unrealized(1) Total Value IRR IRR IRR IRR (in millions) Private Equity(2): Traditional Private Fund VIII(3) Equity Funds 2013 $ 18,377$ 462 $ - $ 462 $ 462 NM (4) NM (4) NM (4) NM (4) Fund VII Traditional Private Equity Funds 2008 14,676 15,052 21,475 9,809 31,284 39 % 30 % 39 % 30 % Fund VI Traditional Private Equity Funds 2006 10,136 12,457 13,483 8,292 21,775 14 12 15 12 Fund V Traditional Private Equity Funds 2001 3,742 5,192 12,453 506 12,959 61 44 61 44 Fund IV Traditional Private Equity Funds 1998 3,600 3,481 6,776 26 6,802 12 9 12 9 Fund III Traditional Private Equity Funds 1995 1,500 1,499 2,695 - 2,695 18 11 18 11 Traditional Private 1990/ Fund I, II & MIA(5) Equity Funds 1992 2,220 3,773 7,924 - 7,924 47 37 47 37 Subtotal $ 54,251$ 41,916$ 64,806$ 19,095$ 83,901



39% (6) 26% (6) 39% (6) 26% (6) AION(3)

Other 2013 700 83 - 93 93 NM (4) NM (4) NM (4) NM (4) ANRP Natural Resources 2012 1,323 403 25 464 489 15 % 5 % 18 % 7 % Total Private Equity $ 56,274$ 42,402$ 64,831$ 19,652$ 84,483 Credit:(7) FCI II(3) Structured Credit 2013 $ 1,542$ 653 $ - $ 683 $ 683 NM (4) NM (4) NM (4) NM (4) ACRF II(8) Structured Credit 2012 104 233 131 132 263 NM (4) NM (4) NM (4) NM (4) EPF II(9)(10) Non-Performing Loans 2012 3,666 1,502 82 1,705 1,787 NM (4) NM (4) NM (4) NM (4) FCI(9) Structured Credit 2012 559 443 173 468 641 16 % 13 % NM (4) NM (4) AESI(9)(10) European Credit 2011 490 840 698 360 1,058 23 18 23 % 18 % AEC(9) European Credit 2012 293 496 336 195 531 19 12 19 12 AIE II(10) European Credit 2008 284 916 1,344 106 1,450 20 17 20 17 U.S. Performing COF I Credit 2008 1,485 1,611 3,858 541 4,399 30 27 30 27 U.S. Performing COF II Credit 2008 1,583 2,176 2,905 237 3,142 14 11 14 11 EPF I(10) Non-Performing Loans 2007 1,783 2,343 2,422 1,136 3,558 21 16 21 16 U.S. Performing ACLF Credit 2007 984 1,449 2,425 169 2,594 13 11 13 11 U.S. Performing Artus(11) Credit 2007 107 190 226 - 226 7 7 7 7 Total Credit $ 12,880$ 12,852$ 14,600 $ 5,732 $ 20,332 Real Estate:(7) AGRE U.S. Real Estate Fund, L.P(12) Equity 2012 867 496 78 558 636 18 % 14 % 17 % 14 % AGRE Debt Fund I, LP Debt 2011 957 954 241 825 1,066 13 11 13 11 2011 A4 Fund, L.P. Debt 2011 235 206 280 24 304 15 13 14 12 AGRE CMBS Fund, L.P. Debt 2009 419 301 489 26 515 14 11 14 11 CPI Capital Partners North America(13) Equity 2006 600 453 319 61 380 17 12 17 13 CPI Capital Partners Asia Pacific(13) Equity 2006 1,292 1,168 1,458 231 1,689 36 32 37 33 CPI Capital PartnersEurope(10)(13) Equity 2006 1,600 1,056 187 547 734 2 1 2 1 CPI Other(14) Equity Various 2,406 N/A N/A (14) N/A (14) N/A (14) NM (14) NM (14) NM (14) NM (14) Total Real Estate $ 8,376$ 4,634$ 3,052 $ 2,272 $ 5,324



(1) Figures include the market values, estimated fair value of certain

unrealized investments and capital committed to investments.

(2) Amounts presented are computed based on actual timing of the funds' cash

inflows and outflows

(3) Fund VIII, AION Capital Partners Limited ("AION"), and FCI II were launched

during 2013, 2012, and 2013 respectively. Fund VIII, AION, and FCI II had their final capital raises in 2013 establishing their vintage years.



(4) Returns have not been presented as the fund commenced investing capital less

than 24 months prior to the period indicated and therefore such return information was deemed not meaningful. - 87-



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(5) Fund I and Fund II were structured such that investments were made from

either fund depending on which fund had available capital. We do not

differentiate between Fund I and Fund II investments for purposes of

performance figures because they are not meaningful on a separate basis and

do not demonstrate the progression of returns over time. The general

partners and managers of Funds I, II and MIA, as well as the general partner

of Fund III were excluded assets in connection with the 2007 Reorganization.

As a result, Apollo Global Management, LLC did not receive the economics

associated with these entities. The investment performance of these funds is

presented to illustrate fund performance associated with our managing

partners and other investment professionals.

(6) Total IRR is calculated based on total cash flows for all funds presented.

(7) The investment record table for the credit and real estate funds and SIAs

presented is computed based on the actual dates of capital contributions,

distributions and ending limited partners' capital as of the specified date.

(8) As part of the acquisition of Stone Tower Capital LLC ("Stone Tower"),

Apollo acquired the manager of Apollo Structured Credit Recovery Master Fund

II, Ltd. ("ACRF II"). Apollo became the manager of this fund upon completing

the acquisition on April 2, 2012.

(9) Apollo European Strategic Investment, L.P. ("AESI") was launched during 2011

and established its vintage year in the fourth quarter of 2011. Apollo

European Principal Finance Fund II, L.P. ("EPF II"), Apollo European Credit

Master Fund, L.P, ("AEC"), and Financial Credit Investment I, L.P. ("FCI")

deployed capital prior to their vintage year and had their final capital

raises in 2012, establishing their vintage year.

(10) Funds are denominated in Euros and translated into U.S. dollars at an

exchange rate of €1.00 to $1.38 as of March 31, 2014.

(11) Apollo/ Artus Investors 2007-I, L.P. ("Artus") liquidated during the fourth

quarter of 2013. Amounts presented represent the historical performance and

returns for the fund.

(12) AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund that

intends to make real estate-related investments principally located in the

United States, held closings in January 2011, June 2011 and April 2012 for a

total of $263 million in base capital commitments and $450 million in

additional capital commitments. Additionally, there was $154 million of

co-invest commitments raised, which is included in the figures in the table

above. A co-invest entity within AGRE U.S. Real Estate Fund is denominated

in GBP and translated into U.S. dollars at an exchange rate of £1.00 to $1.67 as of March 31, 2014.



(13) As part of the CPI acquisition, Apollo acquired general partner interests in

fully invested funds. The gross and net IRRs are presented in the investment

record table above since acquisition on November 12, 2010. The net IRRs from

the inception of the respective fund to March 31, 2014 were (7)%, 8% and

(9)% for the CPI Capital Partners North America, Asia Pacific and Europe

funds, respectively. These net IRRs were primarily achieved during a period

in which Apollo did not make the initial investment decisions and Apollo

only became the general partner or manager of these funds upon completing

the acquisition on November 12, 2010.

(14) CPI Other consists of funds or individual investments of which we are not

the general partner or manager and only receive fees pursuant to either a

sub-advisory agreement or an investment management and administrative

agreement. CPI Other fund performance is a result of invested capital prior

to Apollo's management of these funds. Return and certain other performance

data are therefore not considered meaningful as we perform primarily an

administrative role. The following table summarizes the investment record for distressed investments made in our private equity fund portfolios excluding ANRP and AION, since the Company's inception. All amounts are as of March 31, 2014: Total Invested Capital Total Value Gross IRR(1) (in millions) Distressed for Control $ 5,608 $ 16,629 29 % Non-Control Distressed 6,136 9,209 71 Total 11,744 25,838 49 Buyout Equity, Portfolio Company Debt and Other Credit(2) 30,172 58,063 23 Total $ 41,916$ 83,901 39 %



(1) IRR information is presented gross and does not give effect to management

fees, incentive compensation, certain other expenses and taxes.

(2) Other Credit is defined as investments in debt securities of issuers

other than portfolio companies that are not considered to be distressed.

The following tables provide additional detail on the composition of our Fund VIII, Fund VII, Fund VI and Fund V private equity portfolios based on investment strategy. All amounts are as of March 31, 2014: Fund VIII(1) Total Invested Capital Total Value (in millions) Buyout Equity and Portfolio Company Debt $ 462 $ 462 Total $ 462 $ 462 - 88-



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Table of Contents Fund VII(1) Total Invested Capital Total Value (in millions)



Buyout Equity and Portfolio Company Debt $ 10,318$ 23,504 Other Credit and Classic Distressed(2)

4,734 7,780 Total $ 15,052$ 31,284 Fund VI Total Invested Capital Total Value (in millions)



Buyout Equity and Portfolio Company Debt $ 10,312$ 18,075 Other Credit and Classic Distressed(2)

2,145 3,700 Total $ 12,457$ 21,775 Fund V Total Invested Capital Total Value (in millions) Buyout Equity $ 4,412 $ 11,985 Classic Distressed(2) 780 974 Total $ 5,192 $ 12,959 (1) Committed capital less unfunded capital commitments for Fund VIII and Fund VII is $652 million and $12,922 million, respectively, which represents capital commitments from limited partners to invest in a particular fund less capital that is available for investment or reinvestment subject to the provisions of the applicable limited partnership agreement or other governing agreements. (2) Classic Distressed is defined as investments in debt securities of issuers other than portfolio companies that are considered to be distressed. During the recovery and expansionary periods of 1994 through 2000 and late 2003 through the first half of 2007, our private equity funds invested or committed to invest approximately $13.7 billion primarily in traditional and corporate partner buyouts. During the recessionary periods of 1990 through 1993, 2001 through late 2003 and the current recessionary and post recessionary periods (second half of 2007 through March 31, 2014), our private equity funds have invested $30.1 billion, of which $16.5 billion was in distressed buyouts and debt investments when the debt securities of quality companies traded at deep discounts to par value. Our average entry multiple for Fund VII, VI and V was 6.1x, 7.7x and 6.6x, respectively, as of March 31, 2014. The average entry multiple for a private equity fund is the average of the total enterprise value over an applicable EBITDA which we believe captures the true economics for our funds' purchases of portfolio companies. - 89-



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Credit

The following table summarizes the investment record for certain funds and SIAs within our credit segment with no maturity date. All amounts are as of March 31, 2014, unless otherwise noted: Net Return For the For the Three Three Since Months Months For the Year Net Asset Value Inception Ended Ended Since Inception Ended as of March 31, to March March 31, March 31, to December 31, Strategy Vintage Year 2014 31, 2014 2014 2013 December 31, 2013 2013 (in millions) Opportunistic ACSP(1) Credit 2012 $ 327 29 % (2) 6 % (2) NM (2) NM (2) NM (2) Opportunistic ACSF(3) Credit 2011 292 NM (3) NM (3) NM (3) NM (3) NM (3) Opportunistic STCS(3) Credit 2010 4 NM (3) NM (3) NM (3) NM (3) NM (3) Opportunistic SOMA(4) Credit 2007 731 67 5 2 % 58 % 9 % U.S. Performing ACF(3) Credit 2005 2,252 NM (3) NM (3) NM (3) NM (3) NM (3) Opportunistic Value Funds(5) Credit 2003/2006 266 74 - 4 74 5 Totals $ 3,872



(1) Apollo Centre Street Partnership, L.P. ("ACSP") is a strategic investment

account with $615 million of committed capital. Net asset value is presented

for the primary mandate and excludes investments in other Apollo funds.

(2) Returns have not been presented as the fund commenced investing capital less

than 24 months prior to the period indicated and therefore such return

information was deemed not meaningful.

(3) As part of the Stone Tower acquisition, Apollo acquired the manager of

Apollo Credit Strategies Master Fund Ltd. ("ACSF"), Stone Tower Credit

Solutions Master Fund Ltd. ("STCS"), and Apollo Credit Master Fund Ltd.

("ACF"). As of March 31, 2014, the net returns from inception for ACSF, STCS

and ACF were 42%, 42%, and 6%, respectively. These returns were primarily

achieved during a period in which Apollo did not make the initial investment

decisions. Apollo became the manager of these funds upon completing the acquisition on April 2, 2012.



(4) Net asset value and returns are for the primary mandate and excludes Apollo

Special Opportunities Managed Account, L.P.'s ("SOMA") investments in other

Apollo funds.

(5) Value Funds consist of Apollo Strategic Value Master Fund, L.P., together

with its feeder funds, and Apollo Value Investment Master Fund, L.P., together with its feeder funds.



The following table summarizes the investment record for our publicly traded vehicles by segment as of March 31, 2014:

Net Returns For the Three For the Months Three For the Year Current Since Inception to Ended Months Since Inception to Ended IPO Raised Gross Net Asset March 31, March 31, Ended March December 31, December 31, Strategy Year(2) Capital(3) Assets Value 2014 2014 31, 2013 2013 2013 (in millions) Private Equity: AAA(1) Other 2006 $ 1,823 $ 2,148$ 2,146 N/A 11 % 3 % N/A 21 % Credit: AIF(4) U.S. Performing Credit 2013 276 425 287 NM (5) NM (5) NM (5) NM (5) NM (5) AFT(4) U.S. Performing Credit 2011 295 452 299 24 % 2 4 22 9 AMTG(6) Structured Credit 2011 791 3,820 770 N/A (6) N/A (6) N/A (6) N/A (6) N/A (6) AINV(7) Opportunistic Credit 2004 2,978 3,380 1,925 N/A N/A N/A 70 % 16 Real Estate: ARI(8) Debt 2009 720 1,016 688 N/A (8) N/A (8) N/A (8) N/A (8) N/A (8) Totals $ 6,883 $ 11,241$ 6,115



(1) AAA completed its initial public offering in June 2006 and is the sole

limited partner in AAA Investments, L.P. ("AAA Investments"). Athene was AAA

Investments' only material investment as of March 31, 2014. AAA, through its

investment in AAA Investments, was the largest shareholder of Athene Holding

Ltd. as of March 31, 2014, with an approximate 72.5% ownership stake

(without giving effect to restricted common shares issued under Athene's

management equity plan and conversion of AAA Investments' note receivable),

and effectively 45% of the voting power of Athene. On April 4, 2014, Athene

Holding Ltd. completed a private placement offering of common equity in

which it raised $1.048 billion of primary commitments from third-party

institutional and certain existing investors in Athene Holding Ltd. (the

"Athene Private Placement"). Once the Athene Private Placement is fully

drawn down, AAA Investments' economic ownership of Athene is expected to

decrease to approximately 51.5 % (without giving effect to restricted common

shares issued under Athene's management equity plan, conversion to common

shares of AAA Investments' note receivable from Athene, or common shares to

be issued under Apollo's services agreements with Athene and AAA subsequent

to April 29, 2014). Represents the net return calculated based on period

over period changes in net asset value. Additional information related to

AAA can be found on its website www.apolloalternativeassets.com. The

information contained in AAA's website is not part of this Quarterly Report

on Form 10-Q. (2) An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. AIF, AFT, and



AMTG are publicly traded vehicles traded on the New York Stock Exchange

("NYSE"). AINV is a public company traded on the National Association of

Securities Dealers Automated Quotation. AAA is a publicly traded vehicle

traded on Eurnoext Amsterdam.

(3) Amounts represent raised capital net of offering and issuance costs.

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(4) AFT and AIF completed their initial public offerings during the first

quarter of 2011 and 2013, respectively. Gross Assets represents total

managed assets of these closed-end funds. Refer to www.agmfunds.com for the

most recent financial information on AFT and AIF. The information contained

on AFT's and AIF's website is not part of this Quarterly Report on Form

10-Q.

(5) Returns have not been presented as the publicly traded vehicle commenced

investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful.



(6) Refer to www.apolloresidentialmortgage.com for the most recent financial

information on AMTG. The information contained in AMTG's website is not part

of this Quarterly Report on Form 10-Q.

(7) Net return for AINV represents net asset value return including reinvested

dividends. Refer to www.apolloic.com for the most recent public financial

information on AINV. The information contained in AINV's website is not part

of this Quarterly Report on Form 10-Q. All amounts are as of December 31,

2013 unless otherwise noted.

(8) ARI is a public company traded on the NYSE. Refer to www.apolloreit.com for

the most recent financial information on ARI. The information contained in

ARI's website is not part of this Quarterly Report on Form 10-Q.

Athene and SIAs

As of March 31, 2014, Athene Asset Management, L.P. ("Athene Asset Management") had $59.2 billion of total AUM in accounts owned by or related to Athene, of which approximately $9.8 billion, was either sub-advised by Apollo or invested in Apollo funds and investment vehicles. Of the approximately $9.8 billion of assets, the vast majority were in sub-advisory managed accounts that manage high grade credit asset classes, such as CLO debt, commercial mortgage backed securities, and insurance-linked securities.



We also manage CLOs within our credit segment, with such CLOs representing a total AUM of approximately $9.6 billion as of March 31, 2014. Such CLO performance information is not included in the above investment record tables.

As of March 31, 2014, Apollo managed approximately $14 billion of total AUM in SIAs which include certain SIAs in the investment record tables above and capital deployed from certain SIAs across our private equity, credit and real estate funds. The above investment record tables exclude certain funds with an aggregate AUM of approximately $5.2 billion as of March 31, 2014, which were excluded because management deemed them to be immaterial. The following table provides a summary of the cost and fair value of our funds' investments by segment for the funds and SIAs listed in the investment record tables: As of As of March 31, December 31, 2014 2013 2013 (in millions) Private Equity: Cost $ 14,063$ 17,529$ 14,213 Fair Value 21,800 28,408 23,432 Credit: Cost $ 16,636 (1) $ 15,509 (2) $ 15,642 Fair Value 17,128 (1) 16,697 (2) 16,656 Real Estate: Cost $ 3,184$ 4,202 $ 4,246 Fair Value 3,117 4,083 4,160



(1) AINV cost and fair value amounts are as of December 31, 2013.

(2) AINV and AMTG cost and fair value amounts are as of December 31, 2012.

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Overview of Results of Operations Revenues Advisory and Transaction Fees from Affiliates, Net. As a result of providing advisory services with respect to actual and potential private equity, credit, and real estate investments, we are entitled to receive fees for transactions related to the acquisition and, in certain instances, disposition of portfolio companies as well as fees for ongoing monitoring of portfolio company operations and directors' fees. We also receive an advisory fee for advisory services provided to certain credit funds. In addition, monitoring fees are generated on certain structured portfolio company investments. Under the terms of the limited partnership agreements for certain funds, the management fee payable by the funds may be subject to a reduction based on a certain percentage of such advisory and transaction fees, net of applicable broken deal costs ("Management Fee Offset"). Such amounts are presented as a reduction to advisory and transaction fees from affiliates, net, in the condensed consolidated statements of operations. See note 2 to our condensed consolidated financial statements for more detail. The Management Fee Offsets are calculated for each fund as follows: • 65%-100% for private equity funds, gross advisory, transaction and other special fees; • 65%-100% for certain credit funds, gross advisory, transaction and other special fees; and • 100% for certain real estate funds, gross advisory, transaction and other special fees. Additionally, during the normal course of business, the Company incurs certain costs related to certain transactions that are not consummated ("broken deal costs"). These costs (e.g. research costs, due diligence costs, professional fees, legal fees and other related items) are determined to be broken deal costs upon management's decision to no longer pursue the transaction. In accordance with the related fund agreement, in the event the deal is deemed broken, all of the costs are reimbursed by the funds and then included as a component of the calculation of the Management Fee Offset. If a deal is successfully completed, Apollo is reimbursed by the fund or fund's portfolio company for all costs incurred and no offset is generated. As the Company acts as an agent for the funds it manages, any transaction costs incurred and paid by the Company on behalf of the respective funds relating to successful or broken deals are presented net on the Company's condensed consolidated statements of operations, and any receivable from the respective funds is presented in Due from Affiliates on the condensed consolidated statements of financial condition. Management Fees from Affiliates. The significant growth of the assets we manage has had a positive effect on our revenues. Management fees are typically calculated based upon any of "net asset value," "gross assets," "adjusted par asset value," "adjusted costs of all unrealized portfolio investments," "capital commitments," "invested capital," "adjusted assets," "capital contributions," or "stockholders' equity," each as defined in the applicable limited partnership agreement and/or management agreement of the unconsolidated funds. Carried Interest Income from Affiliates. The general partners of our funds, in general, are entitled to an incentive return that can amount to as much as 20% of the total returns on fund capital, depending upon performance of the underlying funds and subject to preferred returns and high water marks, as applicable. The carried interest income from affiliates is recognized in accordance with U.S. GAAP guidance applicable to accounting for arrangement fees based on a formula. In applying the U.S. GAAP guidance, the carried interest from affiliates for any period is based upon an assumed liquidation of the funds' assets at the reporting date, and distribution of the net proceeds in accordance with the funds' allocation provisions. As of March 31, 2014, approximately 70% of the value of our fund investments on a gross basis was determined using market-based valuation methods (i.e., reliance on broker or listed exchange quotes) and the remaining 30% was determined primarily by comparable company and industry multiples or discounted cash flow models. For our private equity, credit and real estate segments, the percentage determined using market-based valuation methods as of March 31, 2014 was 58%, 80% and 52%, respectively. See "Item 1A. Risk Factors-Risks Related to Our Businesses-Our private equity funds' performance, and our performance, may be adversely affected by the financial performance of our portfolio companies and the industries in which our funds invest" in our Annual Report on Form10-K for the year ended December 31, 2013 filed with the SEC on March 3, 2014 for a discussion regarding certain industry-specific risks that could affect the fair value of our private equity funds' portfolio company investments. Carried interest income fee rates can be as much as 20% for our private equity funds. In our private equity funds, the Company does not earn carried interest income until the investors in the fund have achieved cumulative investment returns on invested capital (including management fees and expenses) in excess of an 8% hurdle rate. Additionally, certain of our credit and - 92-



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real estate funds have various carried interest rates and hurdle rates. Certain credit funds allocate carried interest to the general partner in a similar manner as the private equity funds. In our private equity, certain credit and real estate funds, so long as the investors achieve their priority returns, there is a catch-up formula whereby the Company earns a priority return for a portion of the return until the Company's carried interest income equates to its incentive fee rate for that fund; thereafter, the Company participates in returns from the fund at the carried interest income rate. Carried interest income is subject to reversal to the extent that the carried interest income distributed exceeds the amount due to the general partner based on a fund's cumulative investment returns. The Company recognizes potential repayment of previously received carried interest income as a general partner obligation representing all amounts previously distributed to the general partner that would need to be repaid to the Apollo funds if these funds were to be liquidated based on the current fair value of the underlying funds' investments as of the reporting date. This actual general partner obligation, however, would not become payable or realized until the end of a fund's life. The table below presents an analysis of our (i) carried interest receivable on an unconsolidated basis as of March 31, 2014 and (ii) realized and unrealized carried interest income (loss) for our combined segments' incentive business as of and for the three months ended March 31, 2014: As of For the Three Months Ended March 31, 2014 March 31, 2014 Unrealized Total Carried Realized Carried Carried Interest Interest Carried Interest Receivable on an (Loss) Interest Income Unconsolidated Basis Income Income (Loss) (in millions) Private Equity Funds: Fund VII $ 773.5 $ (117.3 )$ 259.1$ 141.8 Fund VI 522.0 (175.6 ) 111.7 (63.9 ) Fund V 54.3 11.2 10.5 21.7 Fund IV 5.4 (2.3 ) - (2.3 ) AAA/Other(1)(2) 219.0 (9.6 ) 15.6 6.0 Total Private Equity Funds 1,574.2 (293.6 ) 396.9 103.3 Credit Funds: U.S. Performing Credit 162.9 1.1 17.5 18.6 Opportunistic Credit 48.5 15.1 1.0 16.1 Structured Credit 60.7 7.0 - 7.0 European Credit 18.0 3.2 3.3 6.5 Non-Performing Loans 119.8 (34.3 ) 44.0 9.7 Total Credit Funds 409.9 (7.9 ) 65.8 57.9 Real Estate Funds: CPI Funds 4.0 (1.3 ) - (1.3 ) AGRE U.S. Real Estate Fund 6.8 1.2 - 1.2 Other 4.1 (0.2 ) - (0.2 ) Total Real Estate Funds 14.9 (0.3 ) - (0.3 ) Total $ 1,999.0 (3) $ (301.8 )$ 462.7$ 160.9 (1) Includes certain SIAs.



(2) Includes $121.3 million of carried interest receivable from AAA

Investments' investment in Athene Holding Ltd., which may be settled in

shares of Athene Holding Ltd. (valued at the then fair market value) if

there is a distribution in kind of shares of Athene Holding Ltd. by AAA

Investments to AAA; in the event there is not a distribution of shares,

the receivable will be settled in cash. During the three months ended March 31, 2014, Apollo earned $20.4 million from AAA Investments' investment in Athene Holding Ltd. (3) There was a corresponding profit sharing payable of $894.1 million as of March 31, 2014 that resulted in a net carried interest receivable on an



unconsolidated basis of $1,104.9 million as of March 31, 2014. Included

within profit sharing payable are contingent consideration obligations of

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The general partners of the private equity, credit and real estate funds listed in the table above were accruing carried interest income as of March 31, 2014. The investment manager of AINV accrues carried interest in the management company business as it is earned. The general partners of certain of our credit funds accrue carried interest when the fair value of investments exceeds the cost basis of the individual investors' investments in the fund, including any allocable share of expenses incurred in connection with such investments. These high water marks are applied on an individual investor basis. Certain of our credit funds have investors with various high water marks and are subject to market conditions and investment performance. Carried interest income from our private equity funds and certain credit and real estate funds is subject to contingent repayment by the general partner in the event of future losses to the extent that the cumulative carried interest distributed from inception to date exceeds the amount computed as due to the general partner at the final distribution. These general partner obligations, if applicable, are included in due to affiliates on the condensed consolidated statements of financial condition. As of March 31, 2014, there were no such general partner obligations related to our funds. Carried interest receivable is reported on a separate line item within the condensed consolidated statements of financial condition. - 94-



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The following table summarizes our carried interest income since inception for our combined segments through March 31, 2014:

Carried Interest Income Since Inception Total Undistributed Maximum Carried and General Partner Interest Income Undistributed Distributed by Distributed by Obligation as of Subject to by Fund and Fund and Fund and March 31, Potential Recognized Recognized (1) Recognized(2) 2014(2) Reversal(3) (in millions) Private Equity Funds: Fund VII $ 773.5 $ 2,218.8$ 2,992.3 $ - $ 2,332.9 Fund VI 522.0 1,290.3 1,812.3 - 1,394.3 Fund V 54.3 1,420.7 1,475.0 - 90.4 Fund IV 5.4 597.2 602.6 - 5.3 AAA/Other 219.0 82.9 301.9 - 219.7 Total Private Equity Funds 1,574.2 5,609.9 7,184.1 - 4,042.6 Credit Funds: U.S. Performing Credit 162.9 653.8 816.7 - 438.3 Opportunistic Credit(4) 39.7 185.6 225.3 - 59.5 Structured Credit 60.7 44.7 105.4 - 70.0 European Credit 18.0 76.8 94.8 - 79.4 Non-Performing Loans 119.8 79.0 198.8 - 198.8 Total Credit Funds 401.1 1,039.9 1,441.0 - 846.0 Real Estate Funds: CPI Funds 4.0 5.2 9.2 - 4.0 AGRE U.S. Real Estate Fund 6.8 - 6.8 - 6.8 Other 4.1 - 4.1 - 4.1 Total Real Estate Funds 14.9 5.2 20.1 - 14.9 Total $ 1,990.2$ 6,655.0$ 8,645.2 $ - $ 4,903.5 (1) Amounts in "Distributed by Fund and Recognized" for the CPI, Gulf Stream



and Stone Tower funds and SIAs are presented for activity subsequent to

the respective acquisition dates. (2) Amounts were computed based on the fair value of fund investments on March 31, 2014. Carried interest income has been allocated to and recognized by the general partner. Based on the amount of carried



interest income allocated, a portion is subject to potential reversal or,

to the extent applicable, has been reduced by the general partner

obligation to return previously distributed carried interest income or

fees at March 31, 2014. The actual determination and any required payment

of any such general partner obligation would not take place until the final disposition of the fund's investments based on contractual termination of the fund.



(3) Represents the amount of carried interest income that would be reversed

if remaining fund investments became worthless on March 31, 2014. Amounts

subject to potential reversal of carried interest income include amounts

undistributed by a fund (i.e., the carried interest receivable), as well

as a portion of the amounts that have been distributed by a fund, net of

taxes not subject to a general partner obligation to return previously

distributed carried interest income, except for those funds that are

gross of taxes as defined in the respective funds' management agreement.

(4) Amounts exclude AINV, as carried interest income from this fund is not subject to contingent repayment by the general partner.



Expenses

Compensation and Benefits. Our most significant expense is compensation and benefits expense. This consists of fixed salary, discretionary and non-discretionary bonuses, profit sharing expense associated with the carried interest income earned from private equity, credit and real estate funds and compensation expense associated with the vesting of non-cash equity-based awards. Our compensation arrangements with certain partners and employees contain a significant performance-based incentive component. Therefore, as our net revenues increase, our compensation costs also rise or can be lower when net revenues decrease. In addition, our compensation costs reflect the increased investment in people as we expand geographically and create new funds. All payments for services rendered by our Managing Partners prior to the 2007 Reorganization have been accounted for as partnership distributions rather than compensation and benefits expense. See note 1 to our condensed consolidated financial - 95-



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statements for further discussion of the 2007 Reorganization. Subsequent to the 2007 Reorganization, our Managing Partners are considered employees of Apollo. As such, payments for services made to these individuals, including the expense associated with the AOG Units described below, have been recorded as compensation expense. The AOG Units were granted to the Managing Partners and Contributing Partners at the time of the 2007 Reorganization, as discussed in note 1 to our condensed consolidated financial statements. In addition, certain professionals and selected other individuals have a profit sharing interest in the carried interest income earned in relation to our private equity, certain credit and real estate funds in order to better align their interests with our own and with those of the investors in these funds. Profit sharing expense is part of our compensation and benefits expense and is generally based upon a fixed percentage of private equity, credit and real estate carried interest income on a pre-tax and a pre-consolidated basis. Profit sharing expense can reverse during periods when there is a decline in carried interest income that was previously recognized. Profit sharing amounts are normally distributed to employees after the corresponding investment gains have been realized and generally before preferred returns are achieved for the investors. Therefore, changes in our unrealized gains (losses) for investments have the same effect on our profit sharing expense. Profit sharing expense increases when unrealized gains increase. Realizations only impact profit sharing expense to the extent that the effects on investments have not been recognized previously. If losses on other investments within a fund are subsequently realized, the profit sharing amounts previously distributed are normally subject to a general partner obligation to return carried interest income previously distributed back to the funds. This general partner obligation due to the funds would be realized only when the fund is liquidated, which generally occurs at the end of the fund's term. However, indemnification obligations also exist for pre-reorganization realized gains, which, although our Managing Partners and Contributing Partners would remain personally liable, may indemnify our Managing Partners and Contributing Partners for 17.5% to 100% of the previously distributed profits regardless of the fund's future performance. See note 13 to our condensed consolidated financial statements for further discussion of indemnification. Each Managing Partner receives $100,000 per year in base salary for services rendered to us. Additionally, our Managing Partners can receive other forms of compensation. In connection with the 2007 Reorganization, the Managing Partners and Contributing Partners received AOG Units with a vesting period of five to six years (all of which have fully vested) and certain employees were granted RSUs with a vesting period of typically six years (all of which have also fully vested). Managing Partners, Contributing Partners and certain employees have also been granted AAA RDUs, or incentive units that provide the right to receive AAA RDUs, which both represent common units of AAA and generally vest over three years for employees and are fully-vested for Managing Partners and Contributing Partners on the grant date. In addition, ARI RSUs, ARI restricted stock and AMTG RSUs have been granted to the Company and certain employees in the real estate and credit segments, which generally vest over three years. In addition, the Company grants equity awards to certain employees, including RSUs and options, that generally vest and become exercisable in quarterly installments or annual installments depending on the contract terms over a period of three to six years. See note 12 to our condensed consolidated financial statements for further discussion of AOG Units and other equity-based compensation. Other Expenses. The balance of our other expenses includes interest, professional fees, placement fees, occupancy, depreciation and amortization and other general operating expenses. Interest expense consists primarily of interest related to the 2007 AMH Credit Agreement and 2013 AMH Credit Facilities as discussed in note 10 to our condensed consolidated financial statements. Placement fees are incurred in connection with our capital raising activities. Occupancy expense represents charges related to office leases and associated expenses, such as utilities and maintenance fees. Depreciation and amortization of fixed assets is normally calculated using the straight-line method over their estimated useful lives, ranging from two to sixteen years, taking into consideration any residual value. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected term of the lease. Intangible assets are amortized based on the future cash flows over the expected useful lives of the assets. Other general operating expenses normally include costs related to travel, information technology and administration. Other Income (Loss) Net Gains (Losses) from Investment Activities. The performance of the consolidated Apollo funds has impacted our net gains (losses) from investment activities. Net gains (losses) from investment activities include both realized gains and losses and the change in unrealized gains and losses in our investment portfolio between the opening reporting date and the closing reporting date. Net unrealized gains (losses) are a result of changes in the fair value of unrealized investments and reversal of unrealized gains (losses) due to dispositions of investments during the reporting period. For results of AAA, a portion of the net gains (losses) from investment activities are attributable to Non-Controlling Interests in the condensed consolidated statements of operations. Significant judgment and estimation goes into the assumptions that drive these models and the actual values realized with respect to investments could be materially different from values obtained based on the use of those models. The valuation methodologies applied impact the reported value of investment company holdings and their underlying portfolios in our condensed consolidated financial statements. - 96-



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Net Gains (Losses) from Investment Activities of Consolidated Variable Interest Entities. Changes in the fair value of the consolidated VIEs' assets and liabilities and related interest, dividend and other income and expenses subsequent to consolidation are presented within net gains (losses) from investment activities of consolidated variable interest entities and are attributable to Non-Controlling Interests in the condensed consolidated statements of operations. Interest Income. The Company recognizes security transactions on the trade date. Interest income is recognized as earned on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized over the life of the respective securities using the effective interest method. Interest income also includes payment-in-kind interest (or "PIK" interest) on a convertible note and from one of our credit funds. Other Income (Loss), Net. Other income (loss), net includes the recognition of bargain purchase gains as a result of Apollo acquisitions, gains (losses) arising from the remeasurement of foreign currency denominated assets and liabilities of foreign subsidiaries, reversal of a portion of the tax receivable agreement liability (see note 13 to our condensed consolidated financial statements), gains (losses) arising from the remeasurement of derivative instruments associated with fees from certain of the Company's affiliates and other miscellaneous non-operating income and expenses. Income Taxes. The Apollo Operating Group and its subsidiaries generally operate as partnerships for U.S. Federal income tax purposes. As a result, except as described below, the Apollo Operating Group has not been subject to U.S. income taxes. However, these entities in some cases are subject to NYC UBT, and non-U.S. entities, in some cases, are subject to non-U.S. corporate income taxes. In addition, APO Corp., a wholly-owned subsidiary of the Company, is subject to U.S. Federal, state and local corporate income tax, and the Company's provision for income taxes is accounted for in accordance with U.S. GAAP. As significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties, we recognize the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained upon examination, including resolutions of any related appeals or litigation, based on the technical merits of the position. The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized. The Company's tax positions are reviewed and evaluated quarterly to determine whether or not we have uncertain tax positions that require financial statement recognition. Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amount of assets and liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Non-Controlling Interests For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than Apollo. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in Non-Controlling Interests in the condensed consolidated financial statements. The Non-Controlling Interests relating to Apollo Global Management, LLC primarily include the 60.6% and 64.5% ownership interest in the Apollo Operating Group held by the Managing Partners and Contributing Partners through their limited partner interests in Holdings as of March 31, 2014 and 2013, respectively, and other ownership interests in consolidated entities, which primarily consist of the approximate 97.5%, and 97.3% ownership interests held by limited partners in AAA as of March 31, 2014 and 2013, respectively. Non-Controlling Interests also include limited partner interests of Apollo managed funds in certain consolidated VIEs. The authoritative guidance for Non-Controlling Interests in the condensed consolidated financial statements requires reporting entities to present Non-Controlling Interest as equity and provides guidance on the accounting for transactions between an entity and Non-Controlling Interests. According to the guidance, (1) Non-Controlling Interests are presented as a separate component of shareholders' equity on the Company's condensed consolidated statements of financial condition, (2) net income (loss) includes the net income (loss) attributable to the Non-Controlling Interest holders on the Company's condensed consolidated statements of operations, (3) the primary components of Non-Controlling Interest are separately presented in the Company's condensed consolidated statements of changes in shareholders' equity to clearly distinguish the interests in the Apollo Operating Group and other ownership interests in the consolidated entities and (4) profits and losses are allocated to Non-Controlling Interests in proportion to their ownership interests regardless of their basis. On January 1, 2010, the Company adopted amended consolidation guidance issued by the Financial Accounting Standards Board ("FASB") on issues related to VIEs. The amended guidance significantly affects the overall consolidation analysis, changing the approach taken by companies in identifying which entities are VIEs and in determining which party is the primary beneficiary. The amended guidance requires continuous assessment of the reporting entity's involvement with such VIEs. The - 97-



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amended guidance also enhances the disclosure requirements for a reporting entity's involvement with VIEs, including presentation on the condensed consolidated statements of financial condition of assets and liabilities of consolidated VIEs that meet the separate presentation criteria and disclosure of assets and liabilities recognized in the condensed consolidated statements of financial condition and the maximum exposure to loss for those VIEs in which a reporting entity is determined to not be the primary beneficiary but in which it has a variable interest. The guidance provides a limited scope deferral for a reporting entity's interest in an entity that meets all of the following conditions: (a) the entity has all the attributes of an investment company as defined under the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide, Investment Companies, or does not have all the attributes of an investment company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with the AICPA Audit and Accounting Guide, Investment Companies, (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the entity that could potentially be significant to the entity and (c) the entity is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualifying special-purpose entity. The reporting entity is required to perform a consolidation analysis for entities that qualify for the deferral in accordance with previously issued guidance on variable interest entities. Apollo's involvement with the funds it manages is such that all three of the above conditions are met with the exception of certain vehicles which fail condition (c) above. As previously discussed, the incremental impact of adopting the amended consolidation guidance has resulted in the consolidation of certain VIEs managed by the Company. Additional disclosures related to Apollo's involvement with VIEs are presented in note 4 to our condensed consolidated financial statements. Results of Operations Below is a discussion of our condensed consolidated results of operations for the three months ended March 31, 2014 and 2013. For additional analysis of the factors that affected our results at the segment level, see "-Segment Analysis" below: Three Months Ended March 31, Amount Percentage 2014 2013 Change Change (dollars in thousands) Revenues: Advisory and transaction fees from affiliates, net $ 116,065$ 47,419$ 68,646 144.8 % Management fees from affiliates 209,791 150,447 59,344 39.4 Carried interest income from affiliates 165,544 1,111,207 (945,663 ) (85.1 ) Total Revenues 491,400 1,309,073 (817,673 ) (62.5 ) Expenses: Compensation and benefits: Equity-based compensation 58,978 45,286 13,692 30.2 Salary, bonus and benefits 80,530 73,396 7,134 9.7 Profit sharing expense 103,959 423,620 (319,661 ) (75.5 ) Total Compensation and Benefits 243,467 542,302 (298,835 ) (55.1 ) Interest expense 3,114 7,518 (4,404 ) (58.6 ) Professional fees 19,452 16,060 3,392 21.1 General, administrative and other 24,678 22,941 1,737 7.6 Placement fees 1,786 9,358 (7,572 ) (80.9 ) Occupancy 9,903 9,805 98 1.0 Depreciation and amortization 11,719 14,618 (2,899 ) (19.8 ) Total Expenses 314,119 622,602 (308,483 ) (49.5 ) Other Income: Net gains from investment activities 223,408 52,133 171,275 328.5 Net gains from investment activities of consolidated variable interest entities 47,735 47,861 (126 ) (0.3 ) Income from equity method investments 22,910 27,790 (4,880 ) (17.6 ) Interest income 3,328 3,091 237 7.7 Other income, net 17,531 1,298 16,233 NM Total Other Income 314,912 132,173 182,739 138.3 Income before income tax provision 492,193 818,644 (326,451 ) (39.9 ) Income tax provision (32,549 ) (18,579 ) (13,970 ) 75.2 Net Income 459,644 800,065 (340,421 ) (42.5 ) Net income attributable to Non-controlling Interests (387,475 ) (551,087 ) 163,612 (29.7 ) Net Income Attributable to Apollo Global Management, LLC $ 72,169$ 248,978$ (176,809 ) (71.0 )% - 98-



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Note: "NM" denotes not meaningful. Changes from negative to positive amounts and positive to negative amounts are not considered meaningful. Increases or decreases from zero and changes greater than 500% are also not considered meaningful. Revenues Our revenues and other income include fixed components that result from measures of capital and asset valuations and variable components that result from realized and unrealized investment performance, as well as the value of successfully completed transactions. Advisory and transaction fees from affiliates, net, increased by $68.6 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This was attributable to an increase in advisory and transaction fees, net in the credit and private equity segments of $55.8 million and $13.0 million, respectively. The increase in the credit segment was primarily driven by an increase in monitoring fees based on Athene's capital and surplus of $39.2 million and net transaction fees earned from EPF II of $13.8 million during the three months ended March 31, 2014. This increase in the private equity segment was primarily attributable to an increase of $15.2 million in net transaction and termination fees driven by the portfolio company investments of Fund VII and ANRP. Management fees from affiliates increased by $59.3 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to an increase in management fees earned by our credit and private equity segments of $47.3 million, $13.1 million, respectively, as a result of an increase in fee-generating AUM with respect to these segments during the period. A primary driver of the increase in management fees earned from the credit funds was attributable to an increase of $43.2 million of fees earned from Athene Asset Management as a result of Athene's acquisition of the U.S. annuity operations of Aviva plc ("Aviva USA") which closed in the fourth quarter of 2013. The increase was also due to Fund VIII, which generated an additional $48.2 million of management fees for the three months ended March 31, 2014 as compared to the same period in 2013. The increase in management fees from affiliates was partially offset by a $33.5 million reduction in management fees for Fund VII due to a change in fee basis. Carried interest income from affiliates decreased by $945.7 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to decreased carried interest income primarily from Fund VI, Fund VII, AAA Co-Invest VI, SOMA, COF I, Stanhope Life II, L.P., COF II and the Value Funds, of $708.5 million, $171.2 million, $27.1 million, $25.5 million, $25.5 million, $13.8 million, $8.6 million, and $4.8 million respectively. The decrease with respect to Fund VI was primarily due to the absence of "catch-up" unrealized carried interest income in the first quarter of 2014 that was earned in the first quarter of 2013 as the fund crossed its preferred return hurdle. This was offset by increases in the fair value of portfolio investments held by AAA, EPF I, Stanhope Life I, L.P., and Fund V which had increased carried interest income of $18.3 million, $10.0 million, $10.7 million, and $6.6 million, respectively, during the three months ended March 31, 2014 as compared to the same period in 2013. Expenses Compensation and benefits decreased by $298.8 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to a reduction within profit sharing expense of $319.7 million, due to a decrease in carried interest income earned by certain of our private equity, credit and real estate funds during the three months ended March 31, 2014. Included within profit sharing expense was an $11.8 million expense related to the Incentive Pool (as defined below) for the three months ended March 31, 2014 and 2013. Lower amortization of AOG Units of $15.0 million due to the end of their vesting period as of June 30, 2013, lower amortization of RSU awards granted in connection with the 2007 private placement and other equity-based awards of $11.3 million further contributed to the overall decrease in compensation and benefits for the three months ended March 31, 2014 as compared to the same period in 2013. This decrease was partially offset by a non-cash expense of $45.6 million related to equity-based compensation in connection with the departure of an executive officer during the three months ended March 31, 2014. Additionally, salary, bonus and benefits increased by $7.1 million during the three months ended March 31, 2014 as a result of an increase in headcount during the period as compared to the same period in 2013. The Company intends to, over time, seek to more directly tie compensation of its professionals to realized performance of the Company's business, which will likely result in greater variability in compensation. In June 2011, the Company adopted a performance based incentive arrangement (the "Incentive Pool") whereby certain partners and employees earned discretionary compensation based on carried interest realizations earned by the Company during the year, which amounts are reflected as profit sharing expense in the Company's condensed consolidated financial statements. The Company adopted the Incentive Pool to attract and retain, and provide incentive to, partners and employees of the Company and to more closely align the overall compensation of partners and employees with the overall realized performance of the Company. Allocations to the Incentive Pool and to its participants contain both a fixed and a discretionary component and may vary year-to-year depending on the overall realized - 99-



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performance of the Company and the contributions and performance of each participant. There is no assurance that the Company will continue to compensate individuals through performance-based incentive arrangements in the future and there may be periods when the Executive Committee of the Company's manager determines that allocations of realized carried interest income are not sufficient to compensate individuals, which may result in an increase in salary, bonus and benefits. Interest expense decreased by $4.4 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to decreased interest expense related to a lower margin rate incurred from the 2013 AMH Credit Facilities as compared to the 2007 AMH Credit Agreement during the three months ended March 31, 2014 as compared to the same period in 2013 (see note 10 to our condensed consolidated financial statements). Professional fees increased by $3.4 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was attributable to higher accounting and consulting fees incurred during the three months ended March 31, 2014 as compared to the same period in 2013. General, administrative and other expenses increased by $1.7 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to an increase in costs associated with the launch of new funds, increased travel, information technology, recruiting and other expenses incurred during the three months ended March 31, 2014 as compared to the same period in 2013. Placement fees decreased by $7.6 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. Placement fees are incurred in connection with the raising of capital for new and existing funds. The fees are normally payable to placement agents, who are third parties that assist in identifying potential investors, securing commitments to invest from such potential investors, preparing or revising offering marketing materials, developing strategies for attempting to secure investments by potential investors and/or providing feedback and insight regarding issues and concerns of potential investors. This change was primarily attributable to $6.7 million related to the IPO of AIF during the three months ended March 31, 2013. Depreciation and amortization expense decreased $2.9 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to lower amortization of intangible assets during the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. Other Income (Loss) Net gains from investment activities increased by $171.3 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to a $157.6 million and $14.0 million increase in net unrealized gains related to changes in the fair value of AAA Investments' portfolio investments and the investment in HFA, respectively, for the three months ended March 31, 2014 compared to the three months ended March 31, 2013. Income from equity method investments decreased by $4.9 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily driven by changes in the fair values of certain Apollo funds and other entities in which the Company has a direct interest. Fund VII, COF I, EPF I, VC Holdings, L.P. Series C ("Vantium C"), AION and AINV had the most significant impact and together generated $18.9 million of income from equity method investments during the three months ended March 31, 2014 as compared to $23.2 million during the three months ended March 31, 2013, resulting in a year-over-year net decrease of $4.3 million. See note 3 to our condensed consolidated financial statements for a complete summary of income from equity method investments by fund for the three months ended March 31, 2014 and 2013. Other income, net increased by $16.2 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. This change was primarily attributable to a $14.0 million unrealized gain on Athene related derivative contracts for the three months ended March 31, 2014 (see note 13 to our condensed consolidated financial statements). This change was also attributable to increased income of $2.2 million related to the reduction of the tax receivable agreement liability due to a change in estimated tax rates. Income Tax Provision Income tax expense increased by $14.0 million primarily due to higher taxable income driven by a change in the mix of our earnings which are subject to corporate-level taxation. The Apollo Operating Group and its subsidiaries generally operate as partnerships for U.S. Federal income tax purposes. Due to our legal structure, only a portion of the income we earn is subject to corporate-level tax rates in the United States and foreign jurisdictions. The provision for income taxes includes federal, state and local income taxes in the United States and foreign income taxes at an effective tax rate of 6.6% and 2.3% for the three months ended March 31, 2014 and 2013, respectively. The reconciling items between our statutory tax rate and our effective tax rate were - 100-



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due to the following: (i) income passed through to Non-Controlling Interests; (ii) income passed through to Class A shareholders; (iii) amortization of AOG Units that are non-deductible for income tax purposes; and (iv) state and local income taxes including NYC UBT. Non-Controlling Interests The table below presents equity interests in Apollo's consolidated, but not wholly-owned, subsidiaries and funds. Net income attributable to Non-Controlling Interests consisted of the following:


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