Apollo Global Management, LLC Reports First Quarter 2014 Results

• Apollo declares a distribution of $0.84 per Class A share for the first quarter of 2014
• Total economic net income (“ENI”) after taxes of $219 million for the first quarter ended March 31, 2014, compared to $764 million for the comparable period in 2013
• ENI after taxes per share of $0.55 for the first quarter ended March 31, 2014, compared to $1.95 per share for the comparable period in 2013
• Total assets under management (“AUM”) of $159.3 billion as of March 31, 2014, compared to $114.3 billion as of March 31, 2013
• U.S. GAAP net income attributable to Apollo Global Management, LLC of $72 million for the first quarter ended March 31, 2014, compared to $249 million for the same period in 2013
• Apollo returned $4.4 billion and $23.6 billion of capital and realized profits to limited partner investors during the first quarter and last twelve months ended March 31, 2014, respectively

NEW YORK--(BUSINESS WIRE)-- Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”) today reported results for the first quarter ended March 31, 2014.

Apollo reported ENI after taxes of $218.6 million for the first quarter ended March 31, 2014, compared to $763.6 million for the same period in 2013. The $545.0 million decrease in ENI was driven by Apollo's Incentive Business, which reported ENI of $117.2 million for the first quarter ended March 31, 2014, compared to $726.4 million for the same period in 2013. The $609.2 million year-over-year decrease in ENI for the Incentive Business was largely the result of lower carried interest income from Apollo's private equity segment during the first quarter of 2014 compared to the same period in 2013.

Apollo’s total AUM was $159.3 billion as of March 31, 2014, an increase of $45.0 billion, or 39%, compared to $114.3 billion as of March 31, 2013. Fee-generating AUM was $128.5 billion as of March 31, 2014, an increase of $46.9 billion, or 57%, compared to $81.6 billion as of March 31, 2013. The increase in total AUM and fee-generating AUM was driven by growth in Apollo's credit and private equity segments.

U.S. GAAP results for the first quarter ended March 31, 2014 included net income attributable to Apollo Global Management, LLC of $72.2 million, or $0.32 per Class A share, compared to $249.0 million, or $1.60 per Class A share, for the first quarter ended March 31, 2013.

“Our solid first quarter results highlight Apollo’s continued success in building a truly global alternative investment management firm with an outstanding team and investment track record,” said Leon Black, Chairman and Chief Executive Officer. “The favorable secular tailwinds in our industry - including the search for yield, increasing allocations to alternatives, consolidation of general partner relationships and a shifting financial services landscape - all play to our strengths. We believe Apollo is well-positioned to navigate the investment landscape across market cycles, and we expect our limited partners and shareholders to benefit from Apollo’s integrated investment platform for many years to come.”

Combined Segments

Total revenue for Apollo's combined segments was $509.3 million for the first quarter ended March 31, 2014, a decrease of $828.0 million, or 62%, compared to the same period in 2013, driven primarily by a $955.7 million decrease in total carried interest income offset by a $127.7 million increase in management business revenues. Total expenses for Apollo’s combined segments were $303.4 million for the first quarter ended March 31, 2014, a decrease of $278.6 million, or 48%, compared to the same period in 2013, primarily driven by a decrease in profit sharing expense.

Total revenue for Apollo's Management Business was $348.4 million for the first quarter ended March 31, 2014, an increase of $127.7 million, or 58%, from the same period in 2013. This includes management fee revenues of $223.8 million for the first quarter ended March 31, 2014, an increase of $59.5 million, or 36%, from the same period in 2013 primarily due to an increase in fee-generating AUM. In addition, there was $116.1 million of advisory and transaction fees for the first quarter ended March 31, 2014, an increase of $68.7 million, or 145%, from the same period in 2013. The significant increase in advisory and transaction fee revenue during the first quarter of 2014 was driven by the termination payment related to the initial public offering of EP Energy Corporation, transaction fees associated with certain capital deployment activities in the period, and higher monitoring fees related to Athene Holding Ltd. (together with its subsidiaries, "Athene").

Total expenses for Apollo's Management Business were $199.4 million for the first quarter ended March 31, 2014, an increase of $41.0 million, or 26%, from the same period in 2013. Total compensation expenses, including salary and benefits and equity-based compensation, were $138.6 million for the first quarter of 2014, an increase of $47.8 million from the same period in 2013. The significant increase was driven by non-cash expense of $45.6 million, or approximately $0.11 of pre-tax ENI per share, related to equity-based compensation in connection with the departure of an executive officer.

Non-compensation expenses for Apollo's Management Business were $60.8 million during the first quarter ended March 31, 2014, a decrease of $6.8 million from the same period in 2013 primarily due to lower placement fees.

Apollo's Incentive Business reported $160.9 million of total carried interest income for the first quarter ended March 31, 2014, a decrease of $955.7 million from the same period in 2013. In connection with the year-over-year decrease in carried interest income, Apollo reported total profit sharing expense of $104.0 million for the first quarter ended March 31, 2014, a decrease of $319.6 million from the same period in 2013. The decrease in total carried interest income during the period was driven by the absence of "catch-up" unrealized carried interest income from Apollo Investment Fund VI, L.P. ("Fund VI") in the first quarter of 2014 that was earned in the first quarter of 2013 as the fund crossed its preferred return hurdle, as well as lower portfolio appreciation in the first quarter of 2014 versus the same period in 2013. During the first quarter ended March 31, 2014, the Incentive Business generated $462.7 million of realized gains, which was largely attributable to dispositions relating to a number of investments held by funds managed by Apollo, including Rexnord Corporation, Athlon Energy Inc., Constellium N.V., Norwegian Cruise Line Holdings Ltd., Berry Plastics Group Inc., and Noranda Aluminum Holding Corporation.

Private Equity Segment

Apollo's private equity segment generated ENI of $111.0 million for the first quarter ended March 31, 2014, compared to $660.4 million for the same period in 2013. The year-over-year decrease in ENI was largely driven by lower carried interest income of $103.3 million for the first quarter of 2014, compared to $991.0 million for the first quarter of 2013.

Apollo's private equity funds continued to perform well as measured by internal rate of return (“IRR”) and appreciated by 2% during the first quarter ended March 31, 2014. From its inception in 2008 through March 31, 2014, Apollo Investment Fund VII, L.P. ("Fund VII") generated an annual gross and net IRR of 39% and 30%, respectively. Fund VI, which began investing in 2006, generated an annual gross and net IRR of 14% and 12%, respectively, since its inception through March 31, 2014. The combined fair value of Apollo's private equity funds, including AP Alternative Assets, L.P. (“AAA”), was 55% above cost as of March 31, 2014.

Management fees from Apollo's private equity segment were $79.4 million for the first quarter ended March 31, 2014, which increased by $13.1 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 step-down in fee basis with respect to Fund VII. Total Management Business expenses within the private equity segment were $65.4 million for the first quarter of 2014, which increased by $7.7 million compared to the same period in 2013, primarily due to the allocation of the aforementioned equity-based compensation.

Uncalled commitments within our private equity segment were $23.7 billion as of March 31, 2014, and $0.6 billion of capital was deployed by these funds during the first quarter ended March 31, 2014. As of March 31, 2014, Apollo's private equity segment AUM was $48.1 billion, compared to $39.2 billion at March 31, 2013.

Credit Segment

Apollo's credit segment generated ENI of $161.8 million for the first quarter ended March 31, 2014, compared to ENI of $132.8 million for the first quarter of 2013. The year-over-year increase in ENI resulted from an increase in the Management Business, which generated ENI of $103.2 million for the first quarter of 2014, compared to $32.5 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 $131.6 million for the first quarter ended March 31, 2014, which increased by $47.2 million, or 56%, compared to the same period in 2013 primarily due to higher fee-generating AUM from Athene. Total Management Business expenses within the credit segment were $115.4 million for the first quarter of 2014, which increased by $31.7 million compared to the same period in 2013, primarily due to the allocation of the aforementioned equity-based compensation.

Uncalled commitments within our credit segment were $6.4 billion as of March 31, 2014, and $1.7 billion of capital was deployed by our credit funds and strategic investment accounts ("SIAs") with a defined maturity date during the first quarter ended March 31, 2014. As of March 31, 2014, Apollo's credit segment AUM was $101.2 billion, compared to $63.5 billion at March 31, 2013.

Real Estate Segment

Apollo's real estate segment had an economic net loss of $3.5 million for the first quarter of 2014, compared to an economic net loss of $0.9 million for the same period in 2013. Total revenues for the real estate segment during the first quarter of 2014 were $13.4 million, a decrease of $2.2 million, compared to the same period in 2013. Total expenses for the real estate segment during the first quarter of 2014 were $18.0 million, an increase of $0.5 million compared to the same period in 2013.

Uncalled commitments within our real estate segment were $983 million as of March 31, 2014, and $494 million of capital was deployed by our real estate funds and SIAs with a defined maturity date and funds and SIAs in our real estate debt strategy during the first quarter ended March 31, 2014. As of March 31, 2014, Apollo's real estate segment AUM was $8.9 billion, compared to $9.4 billion at March 31, 2013.

Capital and Liquidity

As of March 31, 2014, Apollo had $1,126 million of cash and cash equivalents and $750 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”). As of March 31, 2014, Apollo had a $1,999 million carried interest receivable on an unconsolidated basis and corresponding profit sharing payable of $894 million, as well as total investments on an unconsolidated basis in its private equity, credit and real estate funds of $557 million.

Distribution

Apollo Global Management, LLC has declared a first quarter 2014 cash distribution of $0.84 per Class A share, which comprises a regular quarterly distribution of $0.15 per Class A share and a distribution of $0.69 per Class A share attributable to additional carried interest earned by our funds through realizations and Management Business earnings. This distribution will be paid on May 30, 2014 to holders of record at the close of business on May 20, 2014. Apollo intends to distribute to its shareholders on a quarterly basis substantially all of its net after tax cash flow 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 Thursday, May 8, 2014 at 11:00 a.m. Eastern Time. During the call, Leon Black, Chairman & CEO, Martin Kelly, Chief Financial Officer, and Gary Stein, Head of Corporate Communications, will review Apollo's financial results for the first quarter ended March 31, 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 34213342 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 34213342. 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 $159 billion as of March 31, 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

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
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 March 31, 2014 and 2013 and December 31, 2013. Changes in market conditions, the additional funds raised and strategic acquisitions have had significant impacts to our AUM.

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:

APOLLO GLOBAL MANAGEMENT, LLC
ASSETS UNDER MANAGEMENT
(UNAUDITED)

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

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 our segments for the three months ended March 31, 2014 and 2013:

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)

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:

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)

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:

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)

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

Athene and SIAs

As of March 31, 2014, Athene Asset Management, L.P. 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.

Apollo also manages 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.

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 our real estate debt strategy during the specified reporting periods:

Uncalled Commitments

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

Cost and Fair Value of our Funds’ Investments by Segment

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 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.

APOLLO GLOBAL MANAGEMENT, LLC
CARRIED INTEREST RECEIVABLE AND CARRIED INTEREST INCOME
(LOSS) SUMMARY (UNAUDITED)

The table below presents an analysis of our (i) carried interest receivable on an unconsolidated basis 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:

APOLLO GLOBAL MANAGEMENT, LLC
SUPPLEMENTAL SHARE INFORMATION (UNAUDITED)

The table below presents Non-GAAP weighted average diluted shares outstanding for the three months ended March 31, 2014 and 2013:

The table below presents Non-GAAP diluted shares outstanding as of March 31, 2014 and 2013:

Note: In addition to fully diluted shares outstanding above, there were approximately 4.0 million and 4.2 million unvested RSUs that participate in distributions as of March 31, 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 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.

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 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 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 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.
• ENI After Taxes per Share represents ENI After Taxes which is divided by Non-GAAP Weighted Average Diluted Shares Outstanding. We believe ENI After Taxes per Share provides useful information to shareholders because management uses ENI After Taxes per Share as the basis to derive our earnings available for the determination of distributions to Class A shareholders.

• 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 228,954,598 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 described above.
• 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 228,954,598 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.

Definitions

• 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 net asset value, or “NAV,” of our credit funds, 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 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 that we manage; and

(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 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 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, are generally based on the total value of certain structured portfolio company investments, which normally include 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, regardless of whether or not they are currently generating carried interest income. Carry Eligible AUM is inclusive of 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.
• 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.

• 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 March 31, 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:
Apollo Global Management, LLC
Gary M. Stein
Head of Corporate Communications
212-822-0467
gstein@apollolp.com
or
Apollo Global Management, LLC
Noah Gunn
Investor Relations Manager
212-822-0540
ngunn@apollolp.com
or
For media inquiries regarding Apollo:
Rubenstein Associates, Inc. for Apollo Global Management, LLC
Charles Zehren
212-843-8590
czehren@rubenstein.com

Source: Apollo Global Management, LLC

Released May 8, 2014