News Column

Apollo Global Management, LLC Reports Second Quarter 2014 Results

August 6, 2014

  • U.S. GAAP net income attributable to Apollo Global Management, LLC of $72 million for the second quarter ended June 30, 2014, compared to $59 million for the comparable period in 2013
  • Apollo declares a distribution of $0.46 per Class A share for the second quarter of 2014
  • Total economic net income (“ENI”) after taxes of $208 million for the second quarter ended June 30, 2014, compared to $220 million for the comparable period in 2013
  • ENI after taxes per share of $0.52 for the second quarter ended June 30, 2014, compared to $0.56 per share for the comparable period in 2013
  • Total distributable earnings (“DE”) after taxes and related payables of $227 million for the second quarter ended June 30, 2014, compared to $604 million for the comparable period in 2013
  • Total assets under management (“AUM”) of $168 billion as of June 30, 2014, compared to $113 billion as of June 30, 2013

    NEW YORK--(BUSINESS WIRE)-- Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”) today reported results for the second quarter ended June 30, 2014.

    U.S. GAAP results for the second quarter ended June 30, 2014 included net income attributable to Apollo Global Management, LLC of $71.7 million, or $0.33 per Class A share, compared to $58.7 million, or $0.32 per Class A share, for the same period in 2013.

    Apollo reported ENI after taxes of $207.5 million for the second quarter ended June 30, 2014, compared to $220.1 million for the same period in 2013. The $12.6 million decrease in ENI after taxes was driven by a higher tax provision and increased profit sharing expense, partially offset by higher Management Business ENI.

    Apollo reported DE after taxes and related payables of $227.1 million for the second quarter ended June 30, 2014, compared to $603.9 million for the same period in 2013. The $376.8 million decrease in DE was driven by lower net realized carried interest income from Apollo's private equity segment compared to the same period in 2013.

    Apollo’s total AUM was $167.5 billion as of June 30, 2014, an increase of $54.4 billion, or 48%, compared to $113.1 billion as of June 30, 2013. Fee-generating AUM was $130.3 billion as of June 30, 2014, an increase of $51.0 billion, or 64%, compared to $79.3 billion as of June 30, 2013. The increase in total AUM and fee-generating AUM was driven by growth in Apollo's credit and private equity segments.

    "In the current market environment, just as we have done throughout all market cycles since Apollo’s founding in 1990, we remain disciplined and patient as we seek attractive opportunities by utilizing the firm’s integrated global platform and value-oriented investment approach. During the first half of 2014, the funds we manage have already invested or committed more than $7 billion in aggregate across Apollo’s businesses,” said Leon Black, Chairman and Chief Executive Officer. “We also continue to opportunistically monetize the portfolio of investment funds we manage, and during the first half of 2014 these funds have returned more than $6 billion to Apollo's fund investors.”

    Combined Segments

    Total revenue for Apollo's combined segments was $579.1 million for the second quarter ended June 30, 2014, an increase of $69.0 million, or 14%, compared to the same period in 2013, due to a $55.2 million increase in Management Business revenues and a $13.8 million increase in Incentive Business revenues. Total expenses for Apollo’s combined segments were $330.0 million for the second quarter ended June 30, 2014, an increase of $45.4 million, or 16%, compared to the same period in 2013, primarily driven by an increase in profit sharing expense.

    Total revenue for Apollo's Management Business was $299.7 million for the second quarter ended June 30, 2014, an increase of $55.2 million, or 23%, from the same period in 2013. This includes management fee revenues of $228.9 million for the second quarter ended June 30, 2014, an increase of $59.6 million, or 35%, from the same period in 2013 primarily due to an increase in fee-generating AUM. In addition, there was $60.8 million of advisory and transaction fees for the second quarter ended June 30, 2014, a decrease of $4.3 million, or 7%, from the same period in 2013.

    Total expenses for Apollo's Management Business were $169.4 million for the second quarter ended June 30, 2014, an increase of $12.0 million, or 8%, from the same period in 2013. Total compensation expenses, including salary and benefits and equity-based compensation, were $103.6 million for the second quarter of 2014, an increase of $17.5 million, or 20%, from the same period in 2013. This increase was driven by increased headcount to support growth in fee generating AUM. Non-compensation expenses for Apollo's Management Business were $65.8 million during the second quarter ended June 30, 2014, a decrease of $5.5 million from the same period in 2013 primarily due to lower interest expense.

    Apollo's Incentive Business reported $279.4 million of total carried interest income for the second quarter ended June 30, 2014, an increase of $13.8 million from the same period in 2013. Apollo reported total profit sharing expense of $160.6 million for the second quarter ended June 30, 2014, an increase of $33.4 million from the same period in 2013. Total profit sharing expense increased more than total carried interest income primarily due to the mix of funds that generated carried interest income during the period. During the second quarter ended June 30, 2014, the Incentive Business generated $241.7 million of realized gains, which was largely attributable to dispositions relating to a number of investments held by funds managed by Apollo, including Sprouts Farmers Market, Inc., Rexnord Corporation, Berry Plastics Group Inc., and Brit PLC.

    Private Equity Segment

    Apollo's private equity segment generated ENI of $119.1 million for the second quarter ended June 30, 2014, compared to $175.7 million for the same period in 2013. The year-over-year decrease in ENI was largely driven by lower carried interest income of $187.6 million for the second quarter of 2014, compared to $228.5 million for the second quarter of 2013.

    Apollo's traditional private equity funds continued to perform well as measured by internal rate of return (“IRR”) and the funds appreciated by approximately 5% during the second quarter ended June 30, 2014. From its inception in 2008 through June 30, 2014, Apollo Investment Fund VII, L.P. ("Fund VII") generated an annual gross and net IRR of 39% and 30%, respectively. Apollo Investment Fund VI, L.P. ("Fund VI"), which began investing in 2006, generated an annual gross and net IRR of 14% and 11%, respectively, since its inception through June 30, 2014. The combined fair value of Apollo's private equity funds, including AP Alternative Assets, L.P. (“AAA”), was 58% above cost as of June 30, 2014.

    Management fees from Apollo's private equity segment were $82.1 million for the second quarter ended June 30, 2014, which increased by $16.4 million compared to the same period in 2013 due to the commencement of Apollo Investment Fund VIII, L.P.’s ("Fund VIII") investment period, partially offset by significant realizations in Funds VI and VII as well as a change in the fee basis with respect to Fund VII. Advisory and transaction fees were $5.2 million for the second quarter ended June 30, 2014, which decreased by $36.6 million compared to the same period in 2013 due to the absence of a one-time termination fee in connection with the initial public offering of Taminco Corporation and other portfolio company transaction fees that did not recur in the current period. Total Management Business expenses within the private equity segment were $54.3 million for the second quarter of 2014, which decreased by $5.7 million compared to the same period in 2013.

    Uncalled commitments within Apollo's private equity segment were $23.5 billion as of June 30, 2014, and $0.4 billion of capital was deployed by these funds during the second quarter ended June 30, 2014. As of June 30, 2014, Apollo's private equity segment AUM was $51.6 billion, compared to $40.2 billion at June 30, 2013.

    Credit Segment

    Apollo's credit segment generated ENI of $144.3 million for the second quarter ended June 30, 2014, compared to ENI of $67.4 million for the second quarter of 2013. The year-over-year increase in ENI resulted from an increase in ENI in the Management Business, which generated ENI of $99.3 million for the second quarter of 2014, compared to $41.6 million for the same period in 2013 as a result of higher management fees and advisory and transaction fees.

    Management fees from Apollo's credit segment were $134.6 million for the second quarter ended June 30, 2014, which increased by $44.2 million, or 49%, compared to the same period in 2013 primarily due to higher fee-generating AUM from Athene Holding Ltd. and its subsidiaries ("Athene"). Total Management Business expenses within the credit segment were $101 million for the second quarter of 2014, which increased by $19.3 million compared to the same period in 2013, primarily due to costs associated with managing a greater amount of fee-generating AUM.

    Uncalled commitments within our credit segment were $7.4 billion as of June 30, 2014, and $1.0 billion of capital was deployed by Apollo's credit funds and strategic investment accounts ("SIAs") with a defined maturity date during the second quarter ended June 30, 2014. As of June 30, 2014, Apollo's credit segment AUM was $105.7 billion, compared to $62.2 billion at June 30, 2013.

    Real Estate Segment

    Apollo's real estate segment had an economic net income of $3.6 million for the second quarter of 2014, compared to an economic net loss of $1.4 million for the same period in 2013. Total revenues for the real estate segment during the second quarter of 2014 were $17.1 million, an increase of $8.8 million, compared to the same period in 2013. Total expenses for the real estate segment during the second quarter of 2014 were $16.9 million, an increase of $6.1 million compared to the same period in 2013. Income from equity method investments for the real estate segment during the second quarter of 2014 was $3.2 million, an increase of $2.4 million compared to the same period in 2013.

    Uncalled commitments within Apollo's real estate segment were $875 million as of June 30, 2014, and $882 million of capital was deployed by Apollo's real estate funds and SIAs with a defined maturity date and funds and SIAs in Apollo's real estate debt strategy during the second quarter ended June 30, 2014. As of June 30, 2014, Apollo's real estate segment AUM was $9.1 billion, compared to $9.5 billion at June 30, 2013.

    Capital and Liquidity

    As of June 30, 2014, Apollo had $1,094 million of cash and cash equivalents and $999 million of debt (which does not include a $500 million undrawn revolving credit facility). These amounts exclude cash and debt associated with Apollo's consolidated funds and consolidated variable interest entities (“VIEs”).

    On May 30, 2014, Apollo Management Holdings, L.P., a subsidiary of Apollo Global Management, LLC, issued $500 million of 4.000% senior notes due 2024. The senior notes are rated A and A- by Standard and Poor’s and Fitch, respectively.

    As of June 30, 2014, Apollo had a $2,050 million carried interest receivable on an unconsolidated basis and corresponding profit sharing payable of $964 million, as well as total investments on an unconsolidated basis in its private equity, credit and real estate funds of $797 million.

    Distribution

    Apollo Global Management, LLC has declared a second quarter 2014 cash distribution of $ 0.46 per Class A share, which comprises a regular quarterly distribution of $0.15 per Class A share and a distribution of $0.31 per Class A share attributable to additional carried interest earned by Apollo's funds through realizations and Management Business earnings. This distribution will be paid on August 29, 2014 to holders of record at the close of business on August 22, 2014. Apollo intends to distribute to its shareholders on a quarterly basis substantially all of its distributable earnings after taxes and related payables in excess of amounts determined by its manager to be necessary or appropriate to provide for the conduct of its business. However, Apollo cannot assure its shareholders that they will receive any distributions.

    Conference Call

    Apollo will host a conference call on Wednesday, August 6, 2014 at 11:00 a.m. Eastern Time. During the call, members of Apollo’s senior management team will review Apollo's financial results for the second quarter ended June 30, 2014. The conference call may be accessed by dialing (888) 868-4188 (U.S. domestic) or +1 (615) 800-6914 (international), and providing conference call ID 71623183 when prompted by the operator. The number should be dialed at least ten minutes prior to the start of the call. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Investor Relations section of Apollo's website at www.agm.com.

    Following the call, a replay of the event may be accessed either telephonically or via audio webcast. A telephonic replay of the live broadcast will be available approximately two hours after the live broadcast by dialing (800) 585-8367 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 71623183. To access the audio webcast, please visit Events in the Investor Relations section of Apollo's website at www.agm.com.

    About Apollo

    Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Toronto, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $168 billion as of June 30, 2014 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.

    Forward-Looking Statements

    In this press release, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, LLC, together with its consolidated subsidiaries. This press release may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, discussions related to Apollo's expectations regarding the performance of its business, its liquidity and capital resources and the other non-historical statements in the discussion and analysis. These forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. When used in this press release, the words “believe,” “anticipate,” “estimate,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are subject to certain risks, uncertainties and assumptions, including risks relating to our dependence on certain key personnel, our ability to raise new private equity, credit or real estate funds, market conditions, generally, our ability to manage our growth, fund performance, changes in our regulatory environment and tax status, the variability of our revenues, net income and cash flow, our use of leverage to finance our businesses and investments by our funds and litigation risks, among others. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in Apollo's Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 3, 2014, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law. This press release does not constitute an offer of any Apollo fund.

    APOLLO GLOBAL MANAGEMENT, LLC

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013

    (dollars in thousands, except share data)

      Three Months Ended

    June 30,
      Six Months Ended

    June 30,
    2014     2013   2014     2013  
    Revenues:
    Advisory and transaction fees from affiliates, net $ 60,786

    $

    65,085

    $ 176,851 $ 112,504
    Management fees from affiliates 226,420 155,070 436,211 305,517
    Carried interest income from affiliates 284,946   277,106   450,490   1,388,313  
    Total Revenues 572,152   497,261   1,063,552   1,806,334  
    Expenses:
    Compensation and benefits:
    Equity-based compensation 28,711 43,501 87,689 88,787
    Salary, bonus and benefits 89,832 69,282 170,362 142,678
    Profit sharing expense 160,778   127,244   264,737   550,864  
    Total Compensation and Benefits 279,321 240,027 522,788 782,329
     
    Interest expense 4,524 7,594 7,638 15,112
    Professional fees 20,211 21,665 39,663 37,725
    General, administrative and other 25,291 26,037 49,969 48,978
    Placement fees 3,489 3,120 5,275 12,478
    Occupancy 10,418 10,149 20,321 19,954
    Depreciation and amortization 11,115   14,195   22,834   28,813  
    Total Expenses 354,369   322,787   668,488   945,389  
    Other Income (Loss):
    Net (losses) gains from investment activities (9,534 ) 1,116 213,874 53,249

    Net gains (losses) from investment activities of

    consolidated variable interest entities

    43,425 (35,198 ) 91,160 12,663
    Income from equity method investments 30,701 20,090 53,611 47,880
    Interest income 2,726 3,049 6,054 6,140
    Other income, net 2,238   2,778   19,769   4,076  
    Total Other Income (Loss) 69,556   (8,165 ) 384,468   124,008  
    Income before income tax provision 287,339 166,309 779,532 984,953
    Income tax provision (35,037 ) (18,139 ) (67,586 ) (36,718 )
    Net Income 252,302 148,170 711,946 948,235
    Net income attributable to Non-controlling Interests (180,634 ) (89,433 ) (568,109 ) (640,520 )

    Net Income Attributable to Apollo Global

    Management, LLC

    $ 71,668  

    $

    58,737

      $ 143,837   $ 307,715  
    Net Income Per Class A Share:
    Net Income Available to Class A Share – Basic $ 0.33  

    $

    0.32

      $ 0.64   $ 1.94  

    Net Income Available to Class A Share – Diluted

    $ 0.33  

    $

    0.32

      $ 0.64   $ 1.93  
    Weighted Average Number of Class A Shares – Basic 152,852,427   137,289,147   150,328,495   134,285,776  
    Weighted Average Number of Class A Shares – Diluted 152,852,427   137,289,147   150,328,495   138,104,463  
     

    APOLLO GLOBAL MANAGEMENT, LLC

    SEGMENT RESULTS (UNAUDITED)

    (dollars in millions, except share data)

    Summary of Combined Segment Results for Management Business and Incentive Business:

      Three Months Ended   Six Months Ended

    March 31,

    2013

     

    June 30,

    2013

     

    September 30,

    2013

     

    December 31,

    2013

     

    March 31,

    2014

     

    June 30,

    2014

    June 30,

    2013

       

    June 30,

    2014

    Management Business:
    Advisory and transaction fees from affiliates, net $ 47.4 $ 65.1 $ 28.9 $ 55.2 $ 116.1 $ 60.8 $ 112.5

    $

    176.9

    Management fees from affiliates 164.3 169.3 165.2 231.8 223.8 228.9 333.6 452.7
    Carried interest income from affiliates:
    Realized gains 9.0   10.1   9.1   8.7   8.5   10.0   19.1     18.5  
    Total management business revenues 220.7 244.5 203.2 295.7 348.4 299.7 465.2 648.1
    Equity-based compensation(1) 17.4 16.8 16.5 15.6 58.1 13.7 34.2 71.8
    Salary, bonus and benefits 73.4 69.3 81.3 70.8 80.5 89.9 142.7 170.4
    Interest expense 7.5 7.6 7.2 7.0 3.1 4.5 15.1 7.6
    Professional fees 15.4 21.6 18.4 27.0 19.0 19.9 37.0 38.9
    General, administrative and other 22.6 25.9 21.3 27.3 24.4 25.0 48.5 49.4
    Placement fees 9.4 3.1 3.2 26.7 1.8 3.5 12.5 5.3
    Occupancy 9.8 10.2 9.8 10.1 9.9 10.4 20.0 20.3
    Depreciation and amortization(2) 2.9   2.9   2.6   2.6   2.6   2.5   5.8     5.1  
    Total non-compensation expenses 67.6 71.3 62.5 100.7 60.8 65.8 138.9 126.6
    Total management business expenses 158.4 157.4 160.3 187.1 199.4 169.4 315.8 368.8
    Other income 7.2 5.2 22.8 8.7 6.4 4.3 12.4 10.7
    Non-controlling interest(3) (3.5 ) (3.2 ) (2.8 ) (4.5 ) (3.3 ) (3.1 ) (6.7 )   (6.4 )
    Management Business Economic Net Income 66.0   89.1   62.9   112.8   152.1   131.5   155.1     283.6  
    Incentive Business:
    Carried interest income:
    Unrealized gains (losses) 771.4 (574.9 ) 311.3 (105.0 ) (301.8 ) 37.7 196.5 (264.1 )
    Realized gains 345.2   840.5   638.9   631.8   462.7   241.7   1,185.7     704.4  
    Total carried interest income 1,116.6 265.6 950.2 526.8 160.9 279.4 1,382.2 440.3
    Profit sharing expense:
    Unrealized profit sharing expense 272.8 (219.6 ) 165.3 (23.2 ) (99.1 ) 65.9 53.2 (33.2 )
    Realized profit sharing expense 150.8   346.8   259.3   221.0   203.1   94.7   497.6     297.8  
    Total profit sharing expense 423.6 127.2 424.6 197.8 104.0 160.6 550.8 264.6
    Other income, net 0.3 2.9 7.0 14.0 0.3 14.0
    Net gains (losses) from investment activities 4.0 (5.7 ) (7.1 ) (3.8 ) 18.0 (9.3 ) (1.7 ) 8.7
    Income from equity method investments 29.4   19.2   30.7   34.0   28.3   26.0   48.6     54.3  
    Other income 33.4 13.8 26.5 37.2 60.3 16.7 47.2 77.0
    Incentive Business Economic Net Income 726.4   152.2   552.1   366.2   117.2   135.5   878.6     252.7  
    Total Economic Net Income 792.4   241.3   615.0   479.0   269.3   267.0   1,033.7     536.3  
    Income Tax Provision on Economic Net Income(4) (28.8 ) (21.2 ) (64.1 ) (35.0 ) (50.7 ) (59.5 ) (50.0 )   (110.2 )
    Total Economic Net Income After Taxes $ 763.6   $ 220.1   $ 550.9   $ 444.0   $ 218.6   $ 207.5   $ 983.7  

    $

    426.1  
    Non-GAAP Weighted Average Diluted Shares Outstanding (in millions) 392.1   393.8   394.8   395.3   398.1   399.7   392.9     398.9  
    Total ENI After Taxes per Share $ 1.95   $ 0.56   $ 1.40   $ 1.12   $ 0.55   $ 0.52   $ 2.50  

    $

    1.07

     


    (1) The combined amounts relate to restricted share units (“RSUs”) (excluding RSUs granted in connection with the 2007 private placement) and share options. Excludes equity-based compensation expense comprising amortization of Apollo Operating Group (“AOG”) units.

    (2) Includes amortization of leasehold improvements.

    (3) Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of the credit management companies.

    (4) During the first quarter of 2014, the calculation of the income tax provision on economic net income was revised to include the benefit of tax deductions in excess of GAAP deductions from share-based arrangements, as further discussed in the definition of ENI After Taxes in the non-GAAP financial information and definitions section of this press release. The prior period financial data was recast to conform to the revised definition of income tax provision on economic net income. The difference in the ENI tax provision under the revised definition as compared to the previous methodology is $22.3 million or $0.06 per Class A share for each quarter presented in 2013.

    APOLLO GLOBAL MANAGEMENT, LLC

    SEGMENT RESULTS (UNAUDITED)

    (dollars in millions, except share data)

    Private Equity Segment:

      Three Months Ended   Six Months Ended
    March 31,

    2013
     

    June 30,



    2013

        September 30,

    2013
      December 31,

    2013
     

    March 31,



    2014

        June 30,

    2014
    June 30,

    2013
      June 30,

    2014
    Management Business:
    Advisory and transaction fees from affiliates, net $ 24.5 $ 41.8 $ 5.6 $ 6.5 $ 37.7 $ 5.2 $ 66.3 $ 42.9
    Management fees from affiliates 66.3   65.7   64.8   88.0   79.4   82.1   132.0   161.5  
    Total management business revenues 90.8 107.5 70.4 94.5 117.1 87.3 198.3 204.4
    Equity-based compensation 8.4 7.5 7.5 8.6 24.4 7.1 15.9 31.5
    Salary, bonus and benefits 27.4 25.7 27.9 28.8 22.3 26.7 53.1 49.0
    Other expenses 21.9   26.8   21.1   42.7   18.7   20.5   48.7   39.2  
    Total management business expenses 57.7 60.0 56.5 80.1 65.4 54.3 117.7 119.7
    Other income 1.6   0.9   6.7   3.8   1.7   0.9   2.5   2.6  
    Management Business Economic Net Income 34.7   48.4   20.6   18.2   53.4   33.9   83.1   87.3  
    Incentive Business:
    Carried interest income:
    Unrealized gains (losses) 697.6 (509.7 ) 318.3 (51.5 ) (293.6 ) (10.4 ) 187.9 (304.0 )
    Realized gains 293.4   738.2   534.1   496.9   396.9   198.0   1,031.6   594.9  
    Total carried interest income 991.0 228.5 852.4 445.4 103.3 187.6 1,219.5 290.9
    Profit sharing expense:
    Unrealized profit sharing expense 256.0 (199.6 ) 129.0 (37.7 ) (115.9 ) 33.7 56.4 (82.2 )
    Realized profit sharing expense 131.9   312.9   229.1   208.8   182.0   82.1   444.8   264.1  
    Total profit sharing expense 387.9 113.3 358.1 171.1 66.1 115.8 501.2 181.9
    Other income, net 0.1 0.4 1.2 1.6 0.1 1.6
    Income from equity method investments 22.6   12.0   23.2   21.1   18.8   13.4   34.6   32.2  
    Total other income 22.6 12.1 23.6 22.3 20.4 13.4 34.7 33.8
    Incentive Business Economic Net Income 625.7   127.3   517.9   296.6   57.6   85.2   753.0   142.8  
    Total Economic Net Income $ 660.4   $ 175.7   $ 538.5   $ 314.8   $ 111.0   $ 119.1   $ 836.1   $ 230.1  
     

    APOLLO GLOBAL MANAGEMENT, LLC

    SEGMENT RESULTS (UNAUDITED)

    (dollars in millions, except share data)

    Credit Segment:

      Three Months Ended   Six Months Ended
    March 31,

    2013
      June 30,

    2013
      September 30,

    2013
      December 31,

    2013
     

    March 31,



    2014

        June 30,

    2014
    June 30,

    2013
      June 30,

    2014
    Management Business:
    Advisory and transaction fees from affiliates, net $ 21.8 $ 22.0 $ 23.3 $ 47.6 $ 77.5 $ 55.6 $ 43.8 $ 133.1
    Management fees from affiliates 84.4 90.4 87.0 130.6 131.6 134.6 174.8 266.2
    Carried interest income from affiliates:
    Realized gains 9.0   10.1   9.1   8.7   8.5   10.0   19.1   18.5  
    Total management business revenues 115.2 122.5 119.4 186.9 217.6 200.2 237.7 417.8
    Equity-based compensation 6.5 7.1 5.9 4.6 28.3 5.5 13.6 33.8
    Salary, bonus and benefits 38.8 36.4 44.0 33.9 50.7 55.8 75.2 106.5
    Other expenses 38.4   38.2   34.4   51.1   36.4   39.7   76.6   76.1  
    Total management business expenses 83.7 81.7 84.3 89.6 115.4 101.0 165.4 216.4
    Other income 4.5 4.0 15.3 4.7 4.3 3.2 8.5 7.5
    Non-controlling interest (3.5 ) (3.2 ) (2.8 ) (4.5 ) (3.3 ) (3.1 ) (6.7 ) (6.4 )
    Management Business Economic Net Income 32.5   41.6   47.6   97.5   103.2   99.3   74.1   202.5  
    Incentive Business:
    Carried interest income:
    Unrealized gains (losses) 73.2 (58.8 ) (10.3 ) (60.7 ) (7.9 ) 47.2 14.4 39.3
    Realized gains 51.5   102.1   104.8   134.9   65.8   39.7   153.6   105.5  
    Total carried interest income 124.7 43.3 94.5 74.2 57.9 86.9 168.0 144.8
    Profit sharing expense:
    Unrealized profit sharing expense 16.5 (15.5 ) 34.5 12.4 17.4 31.0 1.0 48.4
    Realized profit sharing expense 18.8   33.9   30.2   11.9   21.1   11.0   52.7   32.1  
    Total profit sharing expense 35.3 18.4 64.7 24.3 38.5 42.0 53.7 80.5
    Other income, net

    -

    0.2 2.5 5.8 12.4

    -

    0.2 12.4
    Net gains (losses) from investment activities 4.0 (5.7 ) (7.1 ) (3.8 ) 18.0 (9.3 ) (1.7 ) 8.7
    Income from equity method investments 6.9   6.4   6.7   10.7   8.8   9.4   13.3   18.2  
    Total other income 10.9 0.9 2.1 12.7 39.2 0.1 11.8 39.3
    Incentive Business Economic Net Income 100.3   25.8   31.9   62.6   58.6   45.0   126.1   103.6  
    Total Economic Net Income $ 132.8   $ 67.4   $ 79.5   $ 160.1   $ 161.8   $ 144.3   $ 200.2   $ 306.1  
     

    APOLLO GLOBAL MANAGEMENT, LLC

    SEGMENT RESULTS (UNAUDITED)

    (dollars in millions, except share data)

    Real Estate Segment:

      Three Months Ended   Six Months Ended
    March 31,

    2013
     

    June 30,



    2013

      September 30,

    2013
      December 31,

    2013
     

    March 31,



    2014

          June 30,

    2014
    June 30,

    2013
      June 30,

    2014
    Management Business:  
    Advisory and transaction fees from affiliates, net $ 1.1 $ 1.3 $ $ 1.1 $ 0.9 $ $ 2.4 $ 0.9
    Management fees from affiliates 13.6   13.2   13.4   13.2   12.8     12.2   26.8   25.0  
    Total management business revenues 14.7 14.5 13.4 14.3 13.7 12.2 29.2 25.9
    Equity-based compensation 2.5 2.2 3.1 2.4 5.4 1.1 4.7 6.5
    Salary, bonus and benefits 7.2 7.1 9.4 8.2 7.5 7.4 14.3 14.9
    Other expenses 7.3   6.0   7.1   7.1   5.7     5.6   13.3   11.3  
    Total management business expenses 17.0 15.3 19.6 17.7 18.6 14.1 32.3 32.7
    Other income 1.1   0.3   0.8   0.2   0.4     0.2   1.4   0.6  
    Management Business Economic Net Loss (1.2 ) (0.5 ) (5.4 ) (3.2 ) (4.5 )   (1.7 ) (1.7 ) (6.2 )
    Incentive Business:
    Carried interest income (loss):
    Unrealized gains (losses) 0.6 (6.4 ) 3.3 7.2 (0.3 ) 0.9 (5.8 ) 0.6
    Realized gains 0.3   0.2           4.0   0.5   4.0  
    Total carried interest income (loss) 0.9 (6.2 ) 3.3 7.2 (0.3 ) 4.9 (5.3 ) 4.6
    Profit sharing expense:
    Unrealized profit sharing expense 0.3 (4.5 ) 1.8 2.1 (0.6 ) 1.2 (4.2 ) 0.6
    Realized profit sharing expense 0.2       0.2       1.6   0.2   1.6  
    Total profit sharing expense 0.5 (4.5 ) 1.8 2.3 (0.6 ) 2.8 (4.0 ) 2.2
    (Loss) income from equity method investments (0.1 ) 0.8   0.8   2.2   0.7     3.2   0.7   3.9  
    Incentive Business Economic Net Income (Loss) 0.3   (0.9 ) 2.3   7.1   1.0     5.3   (0.6 ) 6.3  
    Total Economic Net (Loss) Income $ (0.9 ) $ (1.4 ) $ (3.1 ) $ 3.9   $ (3.5 )   $ 3.6   $ (2.3 ) $ 0.1  
     

    APOLLO GLOBAL MANAGEMENT, LLC

    DISTRIBUTABLE EARNINGS (UNAUDITED)

    (dollars in millions, except share data)

    Summary of Distributable Earnings and Economic Net Income

      Three Months Ended   Six Months Ended

    March 31,

    2013

     

    June 30,



    2013

       

    September 30,



    2013

       

    December 31,

    2013

     

    March 31,

    2014

     

    June 30,



    2014

     

    June 30,



    2013

       

    June 30,



    2014

     
    Management Business Economic Net Income $ 66.0   $ 89.1   $ 62.9   $ 112.8   $ 152.1   $ 131.5   $ 155.1   $ 283.6  
    Net realized carried interest income 194.4 493.7 379.6 410.8 259.6 147.0 688.1 406.6
    Realized investment income(1) 19.7 29.2 27.5 31.3 24.7 5.7 48.9 30.4
    Athene capital and surplus fees(2) (20.1 ) (21.8 ) (22.6 ) (45.5 ) (59.1 ) (51.9 ) (41.9 ) (111.0 )
    Equity-based compensation 17.4 16.8 16.5 15.6 58.1 13.7 34.2 71.8
    Depreciation and amortization 2.9   2.9   2.6   2.6   2.6   2.5   5.8   5.1  
    Distributable Earnings 280.3   609.9   466.5   527.6   438.0   248.5   890.2   686.5  
    Taxes and related payables(3) (4.9 ) (6.0 ) (10.9 ) (19.4 ) (25.9 ) (21.4 ) (10.9 ) (47.3 )
    Distributable Earnings After Taxes and Related Payables $ 275.4   $ 603.9   $ 455.6   $ 508.2   $ 412.1   $ 227.1   $ 879.3   $ 639.2  
    Net unrealized carried interest income (loss) 498.6 (355.4 ) 146.0 (81.7 ) (202.7 ) (28.2 ) 143.2 (230.9 )
    Unrealized investment and other income (loss) 13.7 (15.3 ) (1.0 ) 5.8 35.6 11.0 (1.6 ) 46.6
    Add back: Athene capital and surplus fees(2) 20.1 21.8 22.6 45.5 59.1 51.9 41.9 111.0
    Add back: Taxes and related payables(3) 4.9 6.0 10.9 19.4 25.9 21.4 10.9 47.3
    Less: Equity-based compensation (17.4 ) (16.8 ) (16.5 ) (15.6 ) (58.1 ) (13.7 ) (34.2 ) (71.8 )
    Less: Depreciation and amortization (2.9 ) (2.9 ) (2.6 ) (2.6 ) (2.6 ) (2.5 ) (5.8 ) (5.1 )
    Total Economic Net Income 792.4   241.3   615.0   479.0   269.3   267.0   1,033.7   536.3  
    Income Tax Provision on Economic Net Income (28.8 ) (21.2 ) (64.1 ) (35.0 ) (50.7 ) (59.5 ) (50.0 ) (110.2 )
    Total Economic Net Income After Taxes $ 763.6   $ 220.1   $ 550.9   $ 444.0   $ 218.6   $ 207.5   $ 983.7   $ 426.1  


    (1) Represents realized gains from our general partner investments in our funds and other balance sheet investments.

    (2) Represents monitoring fees paid by Athene to Apollo by delivery of common shares of Athene Holding, calculated based on Athene's capital and surplus, as defined in our transaction and advisory services agreement with Athene.

    (3) Represents the estimated current corporate, local and Non-U.S. taxes as well as the payable under Apollo's tax receivable agreement.

    APOLLO GLOBAL MANAGEMENT, LLC

    DISTRIBUTABLE EARNINGS (UNAUDITED)

    (dollars in millions, except share data)

    Distribution to Common and Equivalents(1)

      Three Months Ended   Six Months Ended

    March 31,

    2013

     

    June 30,



    2013

       

    September 30,

    2013

     

    December 31,

    2013

     

    March 31,

    2014

     

    June 30,



    2014

     

    June 30,

    2013

     

    June 30,

    2014

    Distributable Earnings After Taxes and Related Payables $ 275.4 $ 603.9 $ 455.6 $ 508.2 $ 412.1 $ 227.1 $ 879.3 $ 639.2

    Add back: Taxes and related payables attributable to common and

    equivalents

    2.7   3.7   8.6   17.2   22.6   18.7   6.4   41.3  
    Distributable earnings before certain payables(2) 278.1 607.6 464.2 525.4 434.7 245.8 885.7 680.5
    Percent to common and equivalents 40 % 42 % 42 % 43 % 43 % 45 % 42 % 44 %
    Distributable earnings before other payables attributable to common and equivalents 111.0 257.8 195.5 225.4 186.8 111.1 368.8 297.9

    Less: Taxes and related payables attributable to common and

    equivalents

    (2.7 ) (3.7 ) (8.6 ) (17.2 ) (22.6 ) (18.7 ) (6.4 ) (41.3 )
    Distributable earnings attributable to common and equivalents 108.3   254.1   186.9   208.2   164.2   92.4   362.4   256.6  
    Distributable earnings per share of common and equivalent(3) $ 0.69 $ 1.51 $ 1.11 $ 1.21 $ 0.94 $ 0.51 $ 2.20 $ 1.45
    Retained capital per share of common and equivalent(3) (0.12 ) (0.19 ) (0.10 ) (0.13 ) (0.10 ) (0.05 ) (0.31 ) (0.15 )
    Net distribution per share of common and equivalent(3) $ 0.57   $ 1.32   $ 1.01   $ 1.08   $ 0.84   $ 0.46   $ 1.89   $ 1.30  


    (1) Common and equivalents refers to Class A shares and RSUs that participate in distributions.

    (2) Distributable earnings before certain payables represents distributable earnings before the deduction for the estimated current corporate taxes and the payable under Apollo's tax receivable agreement.

    (3) Per share calculations are based on total Class A shares outstanding and RSUs that participate in distributions.

    APOLLO GLOBAL MANAGEMENT, LLC

    RECONCILIATION OF U.S. GAAP NET INCOME

    ATTRIBUTABLE TO APOLLO GLOBAL MANAGEMENT, LLC

    TO ECONOMIC NET INCOME

    (UNAUDITED)

    (dollars in millions)

    Reconciliation of U.S. GAAP Net IncomeAttributable to Apollo Global Management, LLC to Economic Net Income:

      Three Months Ended   Six Months Ended
    March 31,

    2013
      June 30,

    2013

        September 30,

    2013
      December 31,

    2013
      March 31,

    2014

        June 30,

    2014
    June 30,

    2013
      June 30,

    2014
    Net Income Attributable to Apollo Global Management, LLC $ 249.0 $ 58.7   $ 192.5 $ 159.2 $ 72.2   $ 71.7 $ 307.7 $ 143.8
    Impact of non-cash charges related to equity-based compensation:
    AOG units 15.0 15.0 30.0
    RSUs - Private placement awards(1) 11.4 11.0 3.3 0.1 0.1 (0.2 ) 22.4 (0.1 )
    Other equity-based compensation awards (2) 1.3 0.5 0.6 0.4 0.1 (0.1 ) 1.8
    AAA RDUs 0.3   0.2   0.3   0.4   0.2   (0.1 ) 0.5   0.1  
    Total non-cash charges related to equity-based compensation 28.0 26.7 4.2 0.9 0.4 (0.4 ) 54.7
    Income tax provision 18.6 18.1 47.2 23.7 32.5 35.0 36.7 67.6
    Amortization of intangible assets associated with the 2007

    reorganization and acquisitions

    11.6 11.3 10.3 10.0 9.1 8.6 22.9 17.7

    Net income attributable to Non-controlling Interests in

    Apollo Operating Group

     

    485.2   126.5   360.8   285.2   155.1   152.1   611.7   307.2  
    Economic Net Income $ 792.4   $ 241.3   $ 615.0   $ 479.0   $ 269.3   $ 267.0   $ 1,033.7   $ 536.3  


    (1) Represents RSU awards granted in connection with the 2007 private placement.

    (2) Includes non-cash revenue and expense related to equity awards granted by unconsolidated affiliates to employees of the Company.

    APOLLO GLOBAL MANAGEMENT, LLC

    ASSETS UNDER MANAGEMENT (UNAUDITED)

    Assets Under Management—Fee-Generating and Non-Fee Generating

    The table below sets forth fee-generating and non-fee generating AUM by segment as of June 30, 2014 and 2013 and December 31, 2013. Changes in market conditions and additional funds raised have had significant impact on Apollo's AUM.

      As of

    June 30,
      As of

    December 31,
    2014   20132013
    (in millions)
    Total Assets Under Management $ 167,496 (1) $ 113,116 (1) $ 161,177 (1)
    Fee-generating 130,329 79,290 128,368
    Non-fee generating 37,167 (1) 33,826 (1) 32,809 (1)
     
    Private Equity 51,585 40,213 49,908
    Fee-generating 33,554 26,014 34,173
    Non-fee generating 18,031 14,199 15,735
     
    Credit 105,725 62,212 100,886
    Fee-generating 90,780 47,507 88,249
    Non-fee generating 14,945 14,705 12,637
     
    Real Estate 9,056 9,473 9,289
    Fee-generating 5,995 5,769 5,946
    Non-fee generating 3,061 3,704 3,343


    (1) As of June 30, 2014 and 2013 and December 31, 2013, includes $1.1 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments.

    The following table presents Carry Eligible AUM and Carry Generating AUM for each of Apollo's three segments as of June 30, 2014, June 30, 2013 and December 31, 2013:

        Carry Eligible AUM     Carry Generating AUM
      As of

    June 30,
        As of

    December 31,
      As of

    June 30,
      As of

    December 31,
      2014     2013   2013   2014     2013   2013
    (in millions)
    Private equity

    $

    44,543

    $

    32,131

    $

    45,050

    $

    24,381

    $

    25,332

    $

    24,791
    Credit 38,234 33,979 34,580

    28,036

    24,164 23,539
    Real estate   2,525     3,166     3,041     821     573     941
    Total(1)(2)

    $

    86,412  

    $

    70,498  

    $

    83,729  

    $

    53,238  

    $

    50,069  

    $

    49,271


    (1) As of June 30, 2014 and 2013 and December 31, 2013, includes $1.1 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments.

    (2) As of June 30, 2014 and 2013 and December 31, 2013, includes $27.7 billion, $12.6 billion and $28.7 billion of Uninvested Carry Eligible AUM, respectively, and $5.4 billion, $7.8 billion and $5.8 billion of AUM Not Currently Generating Carry, respectively.

    APOLLO GLOBAL MANAGEMENT, LLC

    ASSETS UNDER MANAGEMENT (UNAUDITED)

    The following tables summarize changes in total AUM for each of Apollo's three segments for the three and six months ended June 30, 2014 and 2013:

      For the

    Three Months Ended June 30,
      For the

    Six Months Ended June 30,
      2014   20132014   2013
    (in millions)
    Change in Total AUM:
    Beginning of Period $ 159,326 (1) $ 114,269

    (1)

    $ 161,177 (1) $ 113,379 (1)
    Income 1,580 2,277 3,395 6,334
    Subscriptions/Capital raised 4,517 (2) 6,926 6,060 (2) 8,126
    Distributions (1,722 ) (3) (7,186 ) (6,091 ) (3) (10,582 )
    Redemptions (147 ) (665 ) (320 ) (1,018 )

    Leverage/Other(4)

    3,942   (2,505 ) 3,275   (3,123 )
    End of Period $ 167,496   (1) $ 113,116   (1) $ 167,496   (1) $ 113,116   (1)
    Change in Private Equity AUM:
    Beginning of Period $ 48,086 $ 39,205 $ 49,908 $ 37,832
    Income 1,200 1,233 1,588 4,515
    Subscriptions/Capital raised 2,496 (2) 5,834 2,820 (2) 5,838
    Distributions (735 ) (3) (5,669 ) (3,757 ) (3) (7,571 )

    Redemptions

    (19 ) (19 )
    Net segment transfers (11 ) 850 (11 ) 1,062
    Leverage 549   (1,221 ) 1,037   (1,444 )
    End of Period $ 51,585   $ 40,213   $ 51,585   $ 40,213  
    Change in Credit AUM:
    Beginning of Period $ 101,228 $ 63,535 $ 100,886 $ 64,406
    Income 162 1,165 1,484 1,896

    Subscriptions/Capital raised

    1,807 (2) 627 2,799 (2) 1,300
    Distributions (516 ) (1,285 ) (1,458 ) (2,641 )
    Redemptions (13 ) (356 ) (186 ) (709 )
    Net segment transfers (272 ) (256 ) (498 ) (495 )

    Leverage/Other(4)

    3,329   (1,218 ) 2,698   (1,545 )
    End of Period $ 105,725   $ 62,212   $ 105,725   $ 62,212  
    Change in Real Estate AUM:
    Beginning of Period $ 8,899 $ 9,412 $ 9,289 $ 8,800
    Income (loss) 202 (125 ) 288 (81 )
    Subscriptions/Capital raised 214 465 441 988
    Distributions (471 ) (232 ) (876 ) (370 )

    Redemptions(5)

    (134 ) (290 ) (134 ) (290 )
    Net segment transfers 283 309 509 560
    Leverage 63   (66 ) (461 ) (134 )
    End of Period $ 9,056   $ 9,473   $ 9,056   $ 9,473  


    (1) As of June 30, 2014 and 2013, March 31, 2014 and 2013, and December 31, 2013 and 2012 includes $1.1 billion, $1.2 billion, $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 Apollo's three segments.

    (2) For the three and six months ended June 30, 2014, includes $2.5 billion of AUM from co-investment vehicles that was raised in prior periods.

    (3) During the three months ended June 30, 2014, an additional $0.5 billion of cash was received and distributed in connection with two dispositions of fund related investments. This cash was included within distributions for the first quarter of 2014.

    (4) Represents changes in used and available leverage, and includes the changes in NAV on AUM managed by Athene Asset Management that is not sub-advised by Apollo.

    (5) Represents release of unfunded commitments primarily related to two legacy Citi Property Investors ("CPI") real estate funds that were past their investment periods.

    APOLLO GLOBAL MANAGEMENT, LLC

    ASSETS UNDER MANAGEMENT (UNAUDITED)

    The following tables summarize changes in total fee-generating AUM and fee-generating AUM for each of Apollo's three segments for the three and six months ended June 30, 2014 and 2013:

      For the

    Three Months Ended June 30,
      For the

    Six Months Ended June 30,
    2014     20132014   2013
    (in millions)
    Change in Total Fee-Generating AUM:
    Beginning of Period $ 128,537 $ 81,633 $ 128,368 $ 81,934
    (Loss) Income (111 ) 2,917 786 3,090
    Subscriptions/Capital raised 889 1,084 2,183 2,163
    Distributions (1,110 ) (4,298 ) (2,573 ) (5,209 )
    Redemptions (9 ) (340 ) (163 ) (710 )
    Net movements between Fee-Generating and Non-Fee Generating (629 ) 256 (481 ) 421

    Leverage/Other(1)

    2,762     (1,962 ) 2,209   (2,399 )
    End of Period $ 130,329     $ 79,290   $ 130,329   $ 79,290  
    Change in Private Equity Fee-Generating AUM:
    Beginning of Period $ 34,207 $ 27,868 $ 34,173 $ 27,932
    (Loss) Income (44 ) 2,070 (46 ) 2,131
    Subscriptions/Capital raised 131 39 455 43
    Distributions (176 ) (3,201 ) (480 ) (3,295 )
    Redemptions (19 ) (19 )
    Net segment transfers (11 ) (11 ) 196
    Net movements between Fee-Generating and Non-Fee Generating (508 ) (193 ) (465 ) (190 )

    Leverage

    (45 )   (550 ) (72 ) (784 )
    End of Period $ 33,554     $ 26,014   $ 33,554   $ 26,014  
    Change in Credit Fee-Generating AUM:
    Beginning of Period $ 88,404 $ 48,488 $ 88,249 $ 49,518
    (Loss) Income (139 ) 923 746 985
    Subscriptions/Capital raised 575 572 1,392 1,204
    Distributions (484 ) (879 ) (1,228 ) (1,629 )
    Redemptions (9 ) (321 ) (163 ) (691 )
    Net segment transfers (272 ) (259 ) (498 ) (706 )
    Net movements between Fee-Generating and Non-Fee Generating (102 ) 395 1 441

    Leverage/Other(1)

    2,807     (1,412 ) 2,281   (1,615 )
    End of Period $ 90,780     $ 47,507   $ 90,780   $ 47,507  
    Change in Real Estate Fee-Generating AUM:
    Beginning of Period $ 5,926 $ 5,277 $ 5,946 $ 4,484
    Income (Loss) 72 (76 ) 86 (26 )
    Subscriptions/Capital raised 183 473 336 916
    Distributions (450 ) (218 ) (865 ) (285 )
    Net segment transfers 283 259 509 510
    Net movements between Fee-Generating and Non-Fee Generating (19 )   54   (17 ) 170  
    End of Period $ 5,995     $ 5,769   $ 5,995   $ 5,769  
     


    (1) Represents changes in used and available leverage, and includes the changes in NAV on AUM managed by Athene Asset Management that is not sub-advised by Apollo.

    APOLLO GLOBAL MANAGEMENT, LLC

    FUND PERFORMANCE (UNAUDITED)

    Investment Record

    The following table summarizes the investment record by segment for Apollo's multi-year drawdown, commitment-based funds and strategic investment accounts (“SIAs”) that have a defined maturity date in which investors make commitments to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available. All amounts are as of June 30, 2014, unless otherwise noted:

                    As of

    June 30, 2014
      As of

    December 31, 2013
    StrategyVintage

    Year
    Committed

    Capital

    Total

    Invested

    Capital

    RealizedUnrealized(1)Total ValueGross

    IRR
      Net

    IRR
    Gross

    IRR
      Net

    IRR
    (in millions)
    Private Equity:(2)
    Fund VIII Traditional Private Equity Funds 2013 $ 18,377 $ 688 $

    -

    $ 688 $ 688 NM(3) NM(3) NM(3) NM(3)
    Fund VII Traditional Private Equity Funds 2008 14,677 15,102 21,580 11,034 32,614 39 % 30 % 39 % 30 %
    Fund VI Traditional Private Equity Funds 2006 10,136 12,457 14,045 7,495 21,540 14 11 15 12
    Fund V Traditional Private Equity Funds 2001 3,742 5,192 12,537 430 12,967 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
    Fund I, II & MIA(4) Traditional Private Equity Funds 1990/

    1992
    2,220   3,773   7,924  

    -

      7,924   47 37 47 37
    Subtotal $ 54,252   $ 42,192   $ 65,557   $ 19,673   $ 85,230   39%(5) 26%(5) 39%(5) 26%(5)
    AION Other 2013 825 134

    -

    167 167 NM(3) NM(3) NM(3) NM(3)
    ANRP Natural Resources 2012 1,323   475   25   589   614   20 % 9 % 18 % 7 %
    Total Private Equity $ 56,400   $ 42,801   $ 65,582   $ 20,429   $ 86,011  
    Credit:(6)
    ACRF III (7) Structured Credit

    -

    $ 205 $ 64 $

    -

    $ 106 $ 106 NM(3) NM(3) NM(3) NM(3)
    COF III (7) Opportunistic Credit

    -

    1,421 651 79 701 780 NM(3) NM(3) NM(3) NM(3)
    FCI II Structured Credit 2013 1,555 653 5 678

    683

    NM(3) NM(3) NM(3) NM(3)
    EPF II(8) Non-Performing Loans 2012 3,659 1,811 143 2,007 2,150 28 % 10 % NM(3) NM(3)
    FCI Structured Credit 2012 559 443 170 450 620 14 11 NM(3) NM(3)
    AEC European Credit 2012 292 539 389 193 582 17 11 19 % 12 %
    AIE II(8) European Credit 2008 283 911 1,336 107 1,443 20 17 20 17
    COF I U.S. Performing Credit 2008 1,485 1,611 3,871 567 4,438 30 27 30 27
    COF II U.S. Performing Credit 2008 1,583 2,176 2,905 238

    3,143

    14 11 14 11
    EPF I(8) Non-Performing Loans 2007 1,773 2,330 2,466 1,169 3,635 22 17 21 16
    ACLF U.S. Performing Credit 2007 984   1,449   2,429   187   2,616   13 12 13 11
    Total Credit $ 13,799   $ 12,638   $ 13,793   $ 6,403   $

    20,196

     
    Real Estate:(6)
    AGRE U.S. Real Estate Fund, L.P(9) Equity 2012 869 530 283 397 680 17 % 13 % 17 % 14 %
    AGRE Debt Fund I, LP Debt 2011 957 954 259 838

    1,097

    13 12 13 11
    CPI Capital Partners North America(10) Equity 2006 600 453 350 30 380 16 11 17 13
    CPI Capital Partners Asia Pacific(10) Equity 2006 1,292 1,176 1,461 223 1,684 35 30 37 33
    CPI Capital Partners Europe(8)(10) Equity 2006 1,591 1,050 277 512 789 5 4 2 1
    CPI Other(11) Equity Various 2,399   N/A N/A (11) N/A (11) N/A (11) NM(11) NM(11) NM(11) NM(11)
    Total Real Estate $ 7,708   $ 4,163   $ 2,630   $ 2,000   $

    4,630

     


    (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) 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.

    (4) Fund I and Fund II were structured such that investments were made from either fund depending on which fund had available capital. Apollo does 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 Apollo's managing partners and other investment professionals.

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

    (6) 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 dates.

    (7) Apollo Credit Opportunity Fund III, L.P. ("COF III") and Apollo Structured Recovery Fund III, L.P. ("ACRF III") were launched during 2013 and 2014, respectively, and have not established their vintage year.

    (8) Funds are denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.36 as of June 30, 2014.

    (9) AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund has $154 million of co-invest commitments raised, which are included in the figures in the table above. The 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 $1.71 as of June 30, 2014.

    (10) 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 June 30, 2014 were (7)%, 7% and (7)% 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.

    (11) CPI Other consists of funds or individual investments of which Apollo is not the general partner or manager and only receives 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 Apollo performs primarily an administrative role.

    Credit

    The following table summarizes the investment record for certain funds and SIAs within Apollo's credit segment with no maturity date. All amounts are as of June 30, 2014, unless otherwise noted:

            Net Return
    Strategy

    Vintage

    Year

    Net Asset

    Value as of

    June 30,

    2014

    Since

    Inception to

    June

    30, 2014

     

    For the Six

    Months

    Ended June

    30, 2014

     

    For the Six

    Months

    Ended June

    30, 2013

     

    Since

    Inception



    to

    December 31,

    2013

     

    For the Year

    Ended

    December 31,

    2013

       
    (in millions)
    ACSF(1) Opportunistic Credit 2011 379 27

    %(1)

     

    5

    %(1)

     

    NM

    (1)

     

    NM

    (1)

     

    NM

    (1)

     

    SOMA(2) Opportunistic Credit 2007 745 68 6

    3

    %

    58

    %

    9

    %

    ACF(1) U.S. Performing Credit 2005 2,299 33

    (1)

     

    5

    (1)

     

    NM

    (1)

     

    NM

    (1)

     

    NM

    (1)

     

    Value Funds(3) Opportunistic Credit 2003/2006 252   74

    -

    6 74 5
    Totals $ 3,675  


    (1) As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Credit Strategies Master Fund Ltd. (“ACSF”) and Apollo Credit Master Fund Ltd. (“ACF”). The net returns are presented in the investment record table above since acquisition on April 2, 2012. As of June 30, 2014, the net returns from inception for ACSF and ACF were 44% and 8% 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.

    (2) 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.

    (3) 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.

    APOLLO GLOBAL MANAGEMENT, LLC

    FUND PERFORMANCE (UNAUDITED)

    The following table summarizes the investment record for publicly traded vehicles that Apollo manages by segment as of June 30, 2014:

                Total Returns(1)
    Strategy

    IPO



    Year(2)

    Raised



    Capital(3)

    Gross



    Assets

    Current



    Net Asset



    Value

    Since

    Inception

    to



    June 30,



    2014

     

    For the Six

    Months

    Ended June

    30, 2014

    For the Six

    Months

    Ended June

    30, 2013

     

    Since Inception

    to December 31,

    2013

     

    For the Year

    Ended

    December

    31,



    2013

    (in millions)  
    Private Equity:
    AAA(4) Other 2006 $ 1,823 $ 2,148 $ 2,145 60%

    13%

    42% 41% 91%
    Credit:
    AIF(5) U.S. Performing Credit 2013 276 426 288

    NM(6)

     

    NM(6)

    NM(6)

     

    NM(6)

     

    NM(6)

     

    AFT(5) U.S. Performing Credit 2011 295 448 299 13 3 8 10 3
    AMTG Structured Credit 2011 791 3,895 797 29 19 (12) 8 (17)
    AINV (7) Opportunistic Credit 2004 3,080 3,642 2,050 65 6 (3) 55 12
    Real Estate:
    ARI Debt 2009 879   1,466   850   28 6 3 20 10
    Totals $ 7,144   $ 12,025   $ 6,429  


    (1) Total returns are based on the change in closing trading prices during the respective periods presented taking into account dividends and distributions, if any, as if they were reinvested without regard to commissions.

    (2) An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. Apollo Tactical Income Fund Inc. (“AIF”), Apollo Senior Floating Rate Fund Inc. ("AFT"), Apollo Residential Mortgage, Inc. ("AMTG") and Apollo Commercial Real Estate Finance, Inc. ("ARI") are publicly traded vehicles traded on the New York Stock Exchange ("NYSE"). Apollo Investment Corporation ("AINV") is a public company traded on the National Association of Securities Dealers Automated Quotation. AAA is a publicly traded vehicle traded on Euronext Amsterdam.

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

    (4) AAA is the sole limited partner in AAA Investments, L.P. (“AAA Investments”). Athene was AAA Investments’ only investment as of June 30, 2014. During the second quarter of 2014, Athene Holding Ltd. raised $1.218 billion of net equity commitments (the “Athene Private Placement”) primarily from third-party institutional investors, certain existing investors in Athene, and employees of Athene and its affiliates (the “Athene Private Placement”). As of June 30, 2014, AAA Investments' ownership stake in Athene was reduced as a result of the Athene Private Placement and the issuance of 3.7 million unrestricted common shares of Athene Holding Ltd. under Athene’s management equity plan resulting in an approximate 47.8% economic ownership stake (calculated as if the commitments in the Athene Private Placement closed through June 30, 2014 were fully drawn down but without giving effect to (i) restricted common shares issued under Athene’s management equity plan, (ii) the conversion to common shares of AAA Investments’ note receivable from Athene, or (iii) common shares to be issued under the amended AAA services agreement or the amended Athene services agreement) and effectively 45% of the voting power of Athene.

    (5) Gross Assets presented for AFT and AIF represents total managed assets of these closed-end funds.

    (6) 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.

    (7) Refer to www.apolloic.com for the most recent financial information on AINV. The information contained on AINV’s website is not part of this press release. All amounts are as of March 31, 2014 except for total returns.

    Athene and SIAs

    As of June 30, 2014, Athene Asset Management, L.P. had $61.0 billion of total AUM in accounts owned by or related to Athene, of which approximately $10.4 billion, was either sub-advised by Apollo or invested in Apollo funds and investment vehicles. Of the approximately $10.4 billion of assets, the vast majority were in sub-advisory managed accounts that manage high grade credit asset classes, such as collateralized loan obligation ("CLO") debt, commercial mortgage backed securities, and insurance-linked securities.

    Apollo also manages CLOs within Apollo's credit segment, with such CLOs representing a total AUM of approximately $10.6 billion as of June 30, 2014. Such CLO performance information is not included in the above investment record tables.

    As of June 30, 2014, Apollo managed approximately $15 billion of total AUM in SIAs, which include certain SIAs in the investment record tables above and capital deployed from certain SIAs across Apollo's private equity, credit and real estate funds. The above investment record tables exclude certain funds with an aggregate AUM of approximately $6.2 billion as of June 30, 2014 because management deemed them to be immaterial.

    APOLLO GLOBAL MANAGEMENT, LLC

    SUPPLEMENTAL SEGMENT INFORMATION (UNAUDITED)

    Supplemental Segment Information

    Dollars Invested

    The following table summarizes by segment the dollars invested for funds and SIAs with a defined maturity date and certain funds and SIAs in Apollo's real estate debt strategy during the specified reporting periods:

      For the

    Three Months Ended June 30,
      For the

    Six Months Ended June 30,
    2014   20132014   2013
    (in millions)
    Private equity $ 413 $ 177 $ 969 $ 1,368
    Credit 1,010 474 2,739 1,609
    Real Estate (1) 882   828   1,376   1,676
    Total dollars invested $ 2,305   $ 1,479   $ 5,084   $ 4,653


    (1) Included in dollars invested is $793 million and $1,177 million for the three and six months ended June 30, 2014, respectively, and $713 million and $1,347 million for the three and six months ended June 30, 2013, respectively, for funds in Apollo's real estate debt strategy.

    Uncalled Commitments

    The following table summarizes the uncalled commitments by segment during the specified reporting periods:

      As of

    June 30, 2014
      As of

    June 30, 2013
     

    As of

    December 31, 2013

    (in millions)
    Private equity $ 23,538 $ 13,026 $ 23,689
    Credit 7,447 5,829 7,113
    Real Estate 875   1,020   971
    Total Uncalled Commitments(1)(2) $ 32,941   $ 21,092   $ 32,852


    (1) As of June 30, 2014 and 2013 and December 31, 2013, includes $1.1 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments.

    (2) As of June 30, 2014 and 2013 and December 31, 2013, $29.2 billion, $19.4 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.

    Cost and Fair Value of Apollo's Funds’ Investments by Segment

    The following table provides a summary of the cost and fair value of Apollo's funds’ investments by segment for the funds and SIAs listed in the investment record tables:

      As of

    June 30, 2014

    As of

    June 30, 2013

    As of

    December 31, 2013

    (in millions)
    Private Equity:
    Cost $ 14,300 $ 15,807 $ 14,213
    Fair Value 22,575 24,019 23,432
    Credit:
    Cost $ 17,304 (1) $ 14,651 (2) $ 15,262 (2)
    Fair Value 17,672 (1) 15,264 (2) 16,177 (2)
    Real Estate:
    Cost $ 3,456 $ 3,100 (2) $ 3,073 (2)
    Fair Value 3,351 2,915 (2) 2,966 (2)


    (1) AINV cost and fair value amounts are as of March 31, 2014.

    (2) Prior periods have been restated to conform to current presentation.

    As of June 30, 2014, approximately 70% of the value of Apollo's funds' investments on a gross basis were determined using market-based valuation methods (i.e., reliance on broker or listed exchange quotes) and the remaining 30% were determined primarily by comparable company and industry multiples or discounted cash flow models. For Apollo's private equity, credit and real estate segments, the percentages determined using market-based valuation methods as of June 30, 2014 were 50%, 82% and 51%, respectively.

    APOLLO GLOBAL MANAGEMENT, LLC

    CARRIED INTEREST RECEIVABLE AND CARRIED INTEREST INCOME

    (LOSS) SUMMARY (UNAUDITED)

    The table below presents an analysis of Apollo's (i) carried interest receivable on an unconsolidated basis and (ii) realized and unrealized carried interest income (loss) for Apollo's combined segments’ Incentive Business as of and for the three and six months ended June 30, 2014:

      As of

    June 30, 2014
      For the Three Months Ended

    June 30, 2014
      For the Six Months Ended

    June 30, 2014

    Carried Interest

    Receivable on an

    Unconsolidated

    Basis

    Unrealized



    Carried



    Interest



    Income



    (Loss)

     

    Realized



    Carried



    Interest



    Income

     

    Total



    Carried



    Interest



    Income



    (Loss)

    Unrealized

    Carried

    Interest

    Income

    (Loss)

       

    Realized

    Carried

    Interest

    Income

       

    Total

    Carried

    Interest

    Income

    (Loss)

    (in millions)
    Private Equity Funds:
    Fund VII $ 999.0 $ 216.2 $ 30.5 $ 246.7 $ 98.9 $ 289.6 $ 388.5
    Fund VI 342.2 (184.2 ) 136.1 (48.1 ) (359.8 ) 247.8 (112.0 )
    Fund V 41.4 (12.9 ) 13.3 0.4 (1.7 ) 23.8 22.1
    Fund IV 5.3 (0.2 ) (0.2 ) (2.5 ) (2.5 )
    AAA/Other (1)(2) 189.7   (29.3 ) 18.1   (11.2 ) (38.9 )   33.7     (5.2 )
    Total Private Equity Funds 1,577.6   (10.4 ) 198.0   187.6   (304.0 )   594.9     290.9  
    Credit Funds:
    U.S. Performing Credit

    149.0

    (9.6 ) 25.0 15.4 (8.5 ) 42.5 34.0
    Opportunistic Credit 53.9 5.7 3.6 9.3 20.8 4.6 25.4
    Structured Credit 58.5 (3.3 ) 4.0 0.7 3.7 4.0 7.7
    European Credit 14.4 (3.7 ) 5.4 1.7 (0.5 ) 8.7 8.2
    Non-Performing Loans 177.9   58.1   1.7   59.8   23.8     45.7     69.5  
    Total Credit Funds

    453.7

      47.2   39.7   86.9   39.3     105.5     144.8  
    Real Estate Funds:
    CPI Funds 6.6 2.6 0.6 3.2 1.3 0.6 1.9
    AGRE U.S. Real Estate Fund, L.P. 8.7 (0.9 ) 2.7 1.8 0.3 2.7 3.0
    Other 3.2   (0.8 ) 0.7   (0.1 ) (1.0 )   0.7     (0.3 )
    Total Real Estate Funds 18.5   0.9   4.0   4.9   0.6     4.0     4.6  
    Total $

    2,049.8

      (3) $ 37.7   $ 241.7   $ 279.4   $ (264.1 )   $ 704.4     $ 440.3  


    (1) Includes certain strategic investment accounts.

    (2) Includes $121.3 million of carried interest receivable from AAA Investments which will be paid in common 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. (unless such payment in shares would violate Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended), or paid in cash if AAA sells the shares of Athene Holding Ltd.

    (3) There was a corresponding profit sharing payable of $963.9 million as of June 30, 2014 that resulted in a net carried interest receivable on an unconsolidated basis of $1,085.9 million as of June 30, 2014. Included within profit sharing payable are contingent consideration obligations of $115.2 million.

    APOLLO GLOBAL MANAGEMENT, LLC

    SUPPLEMENTAL SHARE INFORMATION (UNAUDITED)

    The table below presents Non-GAAP weighted average diluted shares outstanding for the three and six months ended June 30, 2014 and 2013:

      For the

    Three Months Ended June 30,
      For the

    Six Months Ended June 30,
    2014   20132014   2013
    Total GAAP Weighted Average Outstanding Class A Shares:
    Basic 152,852,427 137,289,147 150,328,495 134,285,776
    Non-GAAP Adjustments:
    AOG units 225,725,411 235,470,768 227,331,084 237,722,872

    Vested RSUs(1)

    21,142,309   20,948,076   21,263,534   20,894,686
    Non-GAAP Weighted Average Diluted Shares Outstanding 399,720,147   393,707,991   398,923,113   392,903,334


    (1) Vested RSUs presented have not yet been issued in the form of Class A shares. As a result, the amount of vested RSUs indicated has been excluded from the outstanding Class A share basic and diluted amounts.

    The table below presents Non-GAAP diluted shares outstanding as of June 30, 2014 and 2013:

      As of

    June 30,
    2014   2013
    Total GAAP Outstanding Class A Shares:
    Basic 156,296,748 141,722,471
    Non-GAAP Adjustments:
    AOG units 222,736,477 231,230,636
    Vested RSUs(1) 21,573,419   22,518,436
    Non-GAAP Diluted Shares Outstanding 400,606,644   395,471,543


    (1) Vested RSUs presented have not yet been issued in the form of Class A shares. As a result, the amount of vested RSUs indicated has been excluded from the outstanding Class A share basic and diluted amounts.

    Note: In addition to fully diluted shares outstanding above, there were approximately 4.3 million and 4.2 million unvested RSUs that participate in distributions as of June 30, 2014 and 2013, respectively.

    APOLLO GLOBAL MANAGEMENT, LLC

    NON-GAAP FINANCIAL INFORMATION AND DEFINITIONS (UNAUDITED)

    Non-GAAP Financial Information

    Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America (“Non-GAAP”):

  • Economic Net Income, or ENI, as well as ENI After Taxes are key performance measures used by management in evaluating the performance of Apollo’s private equity, credit and real estate segments. Management also believes the components of ENI such as the amount of management fees, advisory and transaction fees and carried interest income are indicative of Apollo’s performance. Management uses these performance measures 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;
                  Decisions related to capital deployment such as providing capital to facilitate growth for the business and/or to facilitate expansion into new businesses; and
               



      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 the funds and those of Apollo'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 Apollo's performance and growth for the year.


    These measures of profitability have certain limitations in that they do 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 (i) non-cash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG units, (ii) income tax expense, (iii) amortization of intangibles associated with the 2007 reorganization as well as acquisitions, (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 and (v) non-cash revenue and expense related to equity awards granted by unconsolidated affiliates to employees of the Company. In addition, segment data excludes the assets, liabilities and operating results of the funds and VIEs that are included in the consolidated financial statements.

  • ENI After Taxes represents ENI adjusted to reflect income tax provision on ENI that has been calculated assuming that all income is allocated to Apollo Global Management, LLC, which would occur following an exchange of all AOG units for Class A shares of Apollo Global Management, LLC. The assumptions and methodology impact the implied income tax provision which is consistent with those methodologies and assumptions used in calculating the income tax provision for Apollo’s consolidated statements of operations under U.S. GAAP, with the exception of including the benefit of tax deductions in excess of GAAP deductions from share-based arrangements. We believe this measure is more consistent with how we assess the performance of our segments which is described above in our definition of ENI.
  • Non-GAAP Weighted Average Diluted Shares Outstanding is calculated using the GAAP Weighted Average Outstanding Class A Shares plus Non-GAAP adjustments assuming (i) the exchange of all of the AOG units for 225,725,411 Class A shares and (ii) the settlement of the weighted average vested RSUs in the form of Class A shares during the period. Management uses this measure in determining ENI After Taxes per share.
  • Non-GAAP Diluted Shares Outstanding is calculated using the GAAP Outstanding Class A Shares plus Non-GAAP adjustments assuming (i) the exchange of all of the AOG units for 222,736,477 Class A shares and (ii) the settlement of the vested RSUs in the form of Class A shares during the period. Management uses this measure, taking into account the unvested RSUs that participate in distributions, in determining our Class A shares eligible for cash distributions.
  • Distributable Earnings, or DE, as well as DE After Taxes and Related Payables are derived from our segment reported results, and are supplemental measures to assess performance and amounts available for distribution to Class A shareholders, holders of RSUs that participate in distributions and holders of AOG units. DE represents the amount of net realized earnings without the effects of the consolidation of any of the affiliated funds. DE, which is a component of ENI, is the sum across all segments of (i) total management fees and advisory and transaction fees, excluding monitoring fees received from Athene based on its capital and surplus (as defined in Apollo's transaction advisory services agreement with Athene), (ii) realized carried interest income, and (iii) realized investment income, less (i) compensation expense, excluding the expense related to equity-based awards, (ii) realized profit sharing expense, and (iii) non-compensation expenses, excluding depreciation and amortization expense. DE after taxes and related payables represents DE less estimated current corporate, local and non-U.S. taxes as well as the payable under Apollo's tax receivable agreement.
  • Assets Under Management, or AUM, refers to the assets we manage for the funds, partnerships and accounts to which we provide investment management services, including, without limitation, capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments. Our AUM equals the sum of:

    (i) the fair value of the investments of the private equity funds, partnerships and accounts we manage plus the capital that such funds, partnerships and accounts are entitled to call from investors pursuant to capital commitments;

    (ii) the net asset value, or “NAV,” of the credit funds, partnerships and accounts for which we provide investment management services, other than certain collateralized loan obligations (“CLOs”) and collateralized debt obligations (“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 the real estate funds, partnerships and accounts we manage, and the structured portfolio company investments of the funds, partnerships and accounts we manage, which includes the leverage used by such structured portfolio company investments;

    (iv) the incremental value associated with the reinsurance investments of the portfolio company assets we manage; and

    (v) the fair value of any other assets that we manage for the funds, partnerships and accounts to which we provide investment management services, plus unused credit facilities, including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification before investment plus any other capital commitments to such funds, partnerships and accounts 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 use internally or 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.

  • Fee-generating AUM consists of assets we manage for the funds, partnerships and accounts to which we provide investment management services and on which we earn management fees, monitoring fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts we manage. 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, with respect to the structured portfolio company investments of the funds, partnerships and accounts we manage, are generally based on the total value of such 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:

    (i) fair value above invested capital for those funds that earn management fees based on invested capital;

    (ii) net asset values related to general partner and co-investment ownership;

    (iii) unused credit facilities;

    (iv) available commitments on those funds that generate management fees on invested capital;

    (v) structured portfolio company investments that do not generate monitoring fees; and

    (vi) 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, which consists of the following:



  • Carry Generating AUM refers to funds' invested capital that is currently above its hurdle rate or preferred return, and the funds' profit is allocated to the general partner in accordance with the applicable limited partnership agreements or other governing agreements.
  • AUM Not Currently Generating Carry refers to funds' invested capital that is currently below its hurdle rate or preferred return.
  • Uninvested Carry Eligible AUM refers to available capital for investment or reinvestment subject to the provisions of applicable limited partnership agreements or other governing agreements that are not currently part of the NAV or fair value of investments that may eventually produce carried interest income, which would be allocated to the general partner.

    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.

  • 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 given period, which we believe is a useful supplemental measure because it provides shareholders with information about the capital deployed for investment opportunities in a given period.
  • Uncalled commitments 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, which we believe is a useful supplemental measure because it provides shareholders with information about the unfunded capital commitments available to be deployed for future or current investments and expenses for our private equity funds.
  • “Gross IRR” of a private equity fund represents the cumulative investment-related cash flows for all of the investors in the fund on the basis of the actual timing of investment inflows and outflows (for unrealized investments assuming disposition on June 30, 2014 or other date specified) aggregated on a gross basis quarterly, and the return is annualized and compounded before management fees, carried interest and certain other fund expenses (including interest incurred by the fund itself) and measures the returns on the fund’s investments as a whole without regard to whether all of the returns would, if distributed, be payable to the fund’s investors.
  • “Net IRR” of a private equity fund means the gross IRR applicable to all investors, including related parties which may not pay fees, net of management fees, organizational expenses, transaction costs, and certain other fund expenses (including interest incurred by the fund itself). The realized and the estimated unrealized value is adjusted such that a percentage of up to 20.0% of the unrealized gain is allocated to the general partner, thereby reducing the balance attributable to fund investors carried interest all offset to the extent of interest income, and measures returns based on amounts that, if distributed, would be paid to investors of the fund to the extent that a private equity fund exceeds all requirements detailed within the applicable fund agreement.



    For inquiries regarding Apollo:

    Gary M. Stein

    Head of Corporate Communications

    Apollo Global Management, LLC

    212-822-0467

    gstein@apollolp.com



    or



    Noah Gunn

    Investor Relations Manager

    Apollo Global Management, LLC

    212-822-0540

    ngunn@apollolp.com



    or



    For media inquiries regarding Apollo:

    Charles Zehren

    Rubenstein Associates, Inc. for Apollo Global Management, LLC

    212-843-8590

    czehren@rubenstein.com

    Source: Apollo Global Management, LLC


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