Press Releases

Apollo Global Management, LLC Reports Third Quarter 2013 Results

  • Apollo declares a distribution of $1.01 per Class A share for the third quarter of 2013
  • Total economic net income (“ENI”) of $529 million for the third quarter ended September 30, 2013 compared to $379 million for the same period in 2012
  • ENI after taxes per share of $1.34 for the third quarter ended September 30, 2013, compared to $0.98 per share for the same period in 2012
  • Total realized gains from carried interest income of $639 million for the third quarter ended September 30, 2013, compared to $230 million for the same period in 2012
  • Total assets under management (“AUM”) of $112.7 billion as of September 30, 2013, compared to $109.7 billion as of September 30, 2012, which includes new capital raised of $4.0 billion and $1.5 billion for the third quarter ended September 30, 2013 and 2012, respectively
  • U.S. GAAP net income attributable to Apollo Global Management, LLC of $193 million for the third quarter ended September 30, 2013, compared to $83 million for the same period in 2012
  • Subsequent to the end of the third quarter of 2013, Athene Holding Ltd. closed its acquisition of Aviva USA. As a result of the transaction, pro-forma AUM for Apollo at September 30, 2013 was approximately $157 billion.

NEW YORK--(BUSINESS WIRE)-- Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, “Apollo”) today reported results for the third quarter ended September 30, 2013.

Apollo reported ENI after taxes of $528.6 million for the third quarter ended September 30, 2013, compared to $379.0 million for the same period in 2012. The $149.6 million increase in ENI was driven by favorable performance in Apollo's Incentive Business, which reported ENI of $552.1 million for the third quarter ended September 30, 2013, compared to $380.4 million for the same period in 2012. The $171.7 million year-over-year increase in ENI for the Incentive Business was largely the result of higher carried interest income from Apollo's private equity segment during the third quarter of 2013 compared to the same period in 2012.

Apollo's total AUM was $112.7 billion as of September 30, 2013, an increase of $3.0 billion compared to $109.7 billion as of September 30, 2012. Fee-generating AUM was $79.3 billion as of September 30, 2013, an increase of $1.6 billion compared to $77.7 billion as of September 30, 2012. Subsequent to the end of the third quarter of 2013, Athene Holding Ltd. (together with its subsidiaries, “Athene”), for which Apollo currently provides a full suite of investment management services, closed its acquisition of the U.S. annuity operations of Aviva plc (“Aviva USA”). As a result of that transaction, pro-forma AUM for Apollo at September 30, 2013 was approximately $157 billion.

U.S. GAAP results for the third quarter ended September 30, 2013 included net income attributable to Apollo Global Management, LLC of $192.5 million, or $1.13 per Class A share, compared to $82.8 million, or $0.55 per Class A share, for the third quarter ended September 30, 2012.

“Apollo delivered strong results in the third quarter of 2013 driven by solid gains across our investment portfolio,” said Leon Black, Chairman and Chief Executive Officer. “Our value-oriented, opportunistic and flexible approach to investing has produced a steady stream of realizations and yielded $3.95 of cash per share for our shareholders during the past four quarters. In addition, we have raised nearly $14 billion of new capital across the firm in the past four quarters, positioning us to capitalize on attractive investment opportunities as they present themselves."

Combined Segments

Total revenue for Apollo's combined segments was $1,153.4 million for the third quarter ended September 30, 2013, an increase of $394.3 million, or 52%, compared to the same period in 2012, driven primarily by a $376.2 million increase in total carried interest income. Total expenses for Apollo’s combined segments were $584.9 million for the third quarter ended September 30, 2013, an increase of $206.7 million, or 55%, compared to the same period in 2012, driven primarily by an increase in profit sharing expense.

Total revenue for Apollo's Management Business was $203.2 million for the third quarter ended September 30, 2013, an increase of $18.1 million, or 10%, from the same period in 2012. This includes management fee revenues of $165.2 million for the third quarter ended September 30, 2013, an increase of $5.0 million, or 3%, from the same period in 2012. There was also $28.9 million of advisory and transaction fees for the third quarter ended September 30, 2013, an increase of $13.7 million from the same period in 2012, primarily due to increased monitoring fees related to Athene in the third quarter of 2013.

Total expenses for Apollo's Management Business were $160.3 million for the third quarter ended September 30, 2013, an increase of $19.9 million from the same period in 2012. Total compensation expenses, including salary and benefits and equity-based compensation, were $97.8 million for the third quarter of 2013, an increase of $16.5 million from the same period in 2012. The year-over-year increase in compensation expenses was primarily driven by increased headcount across Apollo’s platform in connection with the company's continued growth. Non-compensation expenses for Apollo's Management Business were $62.5 million during the third quarter of 2013, an increase of $3.4 million from the same period in 2012.

Apollo's Incentive Business reported $950.2 million of total carried interest income for the third quarter ended September 30, 2013, an increase of $376.2 million from the same period in 2012. As a result of the increase in carried interest income, Apollo reported total profit sharing expense of $424.6 million for the third quarter ended September 30, 2013, an increase of $186.8 million from the same period in 2012. The increase in total carried interest income during the third quarter of 2013 was driven by increased valuations of a number of investments held by funds managed within Apollo's private equity segment, including Sprouts Farmers Market, Inc. and Athlon Energy, both of which completed initial public offerings during the quarter. During the third quarter ended September 30, 2013 the Incentive Business generated $638.9 million of realized gains, which was largely attributable to dispositions relating to a number of investments held by funds managed by Apollo, including LyondellBasell, Realogy, Evertec, Berry Plastics, Norwegian Cruise Lines, and Countrywide.

Private Equity Segment

Apollo's Private Equity segment generated ENI of $538.8 million for the third quarter ended September 30, 2013, compared to $236.5 million for the third quarter ended September 30, 2012. The year-over-year increase was largely driven by higher carried interest income of $852.4 million for the third quarter of 2013, compared to $340.6 million for the third quarter of 2012.

Apollo's private equity funds continued to perform well as measured by internal rate of return (“IRR”) and appreciated by 18% during the third quarter ended September 30, 2013. From its inception in 2008 through September 30, 2013, Fund VII generated an annual gross and net IRR of 38% and 29%, respectively. Fund VI, which began investing in 2006, generated an annual gross and net IRR of 15% and 12%, respectively, since its inception through September 30, 2013. The combined fair value of Apollo's private equity funds, including AP Alternative Assets, L.P. (“AAA”), was 65% above cost as of September 30, 2013. Uncalled private equity commitments were $16.1 billion as of September 30, 2013 and $0.1 billion of private equity capital was deployed during the third quarter ended September 30, 2013.

During the third quarter, Apollo raised approximately $3.3 billion for its newest flagship private equity fund, Apollo Investment Fund VIII, L.P. ("Fund VIII"), bringing total committed capital for the fund to $10.0 billion through September 30, 2013. As of today, Apollo has received total fund commitments of approximately $12 billion for Fund VIII.

Management fees from Apollo's private equity segment were $64.8 million for the third quarter ended September 30, 2013, which decreased by $3.7 million compared to the same period in 2012 due to a change in the contribution from funds generating management fees and their respective fee basis. Total Management Business expenses within the private equity segment were $61.3 million for the third quarter of 2013, which increased by $11.1 million compared to the same period in 2012. As of September 30, 2013, Apollo's private equity segment AUM was $42.8 billion, compared to $39.0 billion at September 30, 2012.

Credit Segment

Apollo's credit segment generated ENI of $79.2 million for the third quarter ended September 30, 2013, compared to ENI of $198.7 million for the third quarter of 2012. The year-over-year decrease in ENI resulted from a decrease in carried interest income, which was $94.5 million for the third quarter of 2013, compared to $228.6 million for the third quarter of 2012.

Management fees from Apollo's credit segment were $87.0 million for the third quarter ended September 30, 2013, which increased by $6.2 million, or 8%, compared to the same period in 2012. Total Management Business expenses within the credit segment were $80.0 million for the third quarter of 2013, which increased by $4.0 million compared to the same period in 2012. As of September 30, 2013, Apollo's credit segment AUM was $59.4 billion, compared to $60.1 billion at September 30, 2012.

Real Estate Segment

Apollo's Real Estate segment had an economic net loss of $3.1 million for the third quarter of 2013, compared to a loss of $1.7 million for the third quarter of 2012. Total revenues for the real estate segment during the third quarter of 2013 were $16.7 million, an increase of $1.0 million, or 6%, compared to the same period in 2012. As of September 30, 2013, Apollo's real estate segment AUM was $9.3 billion, compared to $8.1 billion at September 30, 2012.

Capital and Liquidity

As of September 30, 2013, Apollo had $1,137 million of cash and cash equivalents and $728 million of debt. These amounts exclude cash and debt associated with Apollo's consolidated funds and consolidated variable interest entities (“VIEs”). As of September 30, 2013, Apollo had a $2,332 million carried interest receivable and corresponding profit sharing payable of $1,078 million, as well as total investments in its private equity, credit and real estate funds of $425 million, excluding investments held by consolidated VIEs and consolidated funds.

Distribution

Apollo Global Management, LLC has declared a third quarter 2013 cash distribution of $1.01 per Class A share, which comprises a regular quarterly distribution of $0.07 per Class A share and a distribution of $0.94 per Class A share primarily attributable to fund realizations. This distribution will be paid on November 29, 2013 to holders of record at the close of business on November 22, 2013. 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, November 7, 2013 at 10:00 a.m. ET. During the call, Marc Spilker, President, Martin Kelly, Chief Financial Officer, and Gary Stein, Head of Corporate Communications, will review Apollo's financial results for the third quarter ended September 30, 2013. 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 73061311 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 73061311. 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, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $113 billion as of September 30, 2013, 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 the Company's Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 1, 2013, and 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 NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

(dollars in thousands, except share data)

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2013       2012     2013       2012  
Revenues:
Advisory and transaction fees from affiliates $ 28,961 $ 15,149 $ 141,465 $ 112,162
Management fees from affiliates 151,127 147,611 456,644 418,115
Carried interest income from affiliates   952,001     549,613     2,340,314     1,170,467  
Total Revenues   1,132,089     712,373     2,938,423     1,700,744  
Expenses:
Compensation and benefits:
Equity-based compensation 20,832 144,407 109,619 435,387
Salary, bonus and benefits 81,266 64,647 223,944 204,666
Profit sharing expense   424,542       237,797       975,406       506,680  
Total Compensation and Benefits 526,640 446,851 1,308,969 1,146,733
Interest expense 7,179 7,136 22,291 29,083
Professional fees 18,752 11,490 56,477 39,849
General, administrative and other 21,720 24,028 70,698 66,810
Placement fees 3,185 4,292 15,663 13,344
Occupancy 9,849 9,644 29,803 27,360
Depreciation and amortization   12,790     16,567     41,603     37,021  
Total Expenses   600,115     520,008     1,545,504     1,360,200  
Other Income:
Net gains from investment activities 74,045 20,463 127,294 149,957
Net gains (losses) from investment activities of consolidated variable interest entities 78,601 (45,475 ) 91,264 (29,913 )
Income from equity method investments 32,236 40,779 80,116 83,191
Interest income 3,304 3,277 9,444 7,093
Other income, net   22,634     8,304     26,710     1,959,669  
Total Other Income   210,820     27,348     334,828     2,169,997  
Income before income tax provision 742,794 219,713 1,727,747 2,510,541
Income tax provision   (47,204 )   (21,917 )   (83,922 )   (47,127 )
Net Income 695,590 197,796 1,643,825 2,463,414
Net income attributable to Non-controlling Interests   (503,074 )   (115,005 )   (1,143,594 )   (2,323,966 )
Net Income Attributable to Apollo Global Management, LLC $ 192,516   $ 82,791   $ 500,231   $ 139,448  
Distributions Declared per Class A Share $ 1.32   $ 0.24   $ 2.94   $ 0.95  
Net Income Per Class A Share:
Net Income Available to Class A Share – Basic $ 1.13   $ 0.55   $ 3.11   $ 0.93  
Net Income Available to Class A Share –Diluted $ 1.13   $ 0.55   $ 3.08   $ 0.93  
Weighted Average Number of Class A Shares – Basic   142,829,913     128,980,438     137,165,119     126,909,962  
Weighted Average Number of Class A Shares – Diluted   146,212,984     131,635,202     140,423,929     129,309,716  

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 Nine Months Ended

March

31,

2012

 

June

30,

2012

 

September

30,

2012

 

December

31,

2012

 

March

31,

2013

 

June

30,

2013

 

September

30,

2013

September

30,

2012

 

September

30,

2013

Management Business:
Advisory and transaction fees from affiliates $ 27.3 $ 70.0 $ 15.2 $ 37.5 $ 47.4 $ 65.1 $ 28.9 $ 112.5 $ 141.4
Management fees from affiliates 130.0 156.4 160.2 176.4 164.3 169.3 165.2 446.6 498.8
Carried interest income from affiliates:
Realized gains 9.6   9.2   9.7   9.3   9.0   10.1   9.1   28.5   28.2  
Total management business revenues 166.9 235.6 185.1 223.2 220.7 244.5 203.2 587.6 668.4
Equity-based compensation(1) 18.9 14.1 16.7 19.2 17.4 16.8 16.5 49.7 50.7
Salary, bonus and benefits 65.1 74.9 64.6 70.0 73.4 69.3 81.3 204.6 224.0
Interest expense 11.4 10.2 7.5 8.0 7.5 7.6 7.2 29.1 22.3
Professional fees 11.3 16.5 10.9 24.6 15.4 21.6 18.4 38.7 55.4
General, administrative and other 18.7 23.1 23.9 20.9 22.6 25.9 21.3 65.7 69.8
Placement fees 0.9 8.1 4.3 9.0 9.4 3.1 3.2 13.3 15.7
Occupancy 8.7 9.0 9.7 9.8 9.8 10.2 9.8 27.4 29.8
Depreciation and amortization(2) 2.4   2.4   2.8   2.6   2.9   2.9   2.6   7.6   8.4  
Total non-compensation expenses 53.4 69.3 59.1 74.9 67.6 71.3 62.5 181.8 201.4
Total management business expenses 137.4 158.3 140.4 164.1 158.4 157.4 160.3 436.1 476.1
Other income (loss) 7.0 (4.5 ) 11.1 7.4 7.2 5.2 22.8 13.6 35.2
Non-controlling interest(3) (1.4 ) (2.4 ) (2.7 ) (2.2 ) (3.5 ) (3.2 ) (2.8 ) (6.5 ) (9.5 )
Management Business Economic Net Income 35.1   70.4   53.1   64.3   66.0   89.1   62.9   158.6   218.0  
Incentive Business:
Carried interest income:
Unrealized gains (losses) 474.3 (52.8 ) 344.2 400.7 771.4 (574.9 ) 311.3 765.7 507.8
Realized gains 149.8   56.0   229.8   561.6   345.2   840.5   638.9   435.6   1,824.6  
Total carried interest income 624.1 3.2 574.0 962.3 1,116.6 265.6 950.2 1,201.3 2,332.4
Profit sharing expense:
Unrealized profit sharing expense 178.4 (10.8 ) 124.7 133.8 272.8 (219.6 ) 165.3 292.3 218.5
Realized profit sharing expense 70.7   30.7   113.1   231.6   150.8   346.8   259.3   214.5   756.9  
Total profit sharing expense 249.1 19.9 237.8 365.4 423.6 127.2 424.6 506.8 975.4
Other income, net 0.2 2.5 2.7
Net gains (losses) from investment activities 3.4 (13.1 ) 2.1 6.5 4.0 (5.7 ) (7.1 ) (7.6 ) (8.8 )
Income from equity method investments 48.5   1.4   42.1   29.2   29.4   19.3   31.1   92.0   79.8  
Other income (loss) 51.9 (11.7 ) 44.2 35.7 33.4 13.8 26.5 84.4 73.7
Incentive Business Economic Net Income (Loss) 426.9   (28.4 ) 380.4   632.6   726.4   152.2   552.1   778.9   1,430.7  
Total Economic Net Income 462.0   42.0   433.5   696.9   792.4   241.3   615.0   937.5   1,648.7  
Income Tax Provision on Economic Net Income(4) (39.7 ) (23.3 ) (54.5 ) (41.1 ) (51.1 ) (43.5 ) (86.4 ) (117.5 ) (181.0 )
Total Economic Net Income After Taxes $ 422.3   $ 18.7   $ 379.0   $ 655.8   $ 741.3   $ 197.8   $ 528.6   $ 820.0   $ 1,467.7  
Non-GAAP Weighted Average Diluted Shares Outstanding (in millions) 383.6   386.0   386.9   388.3   392.1   393.8   394.8   385.5   393.7  
Total ENI After Taxes per Share $ 1.10   $ 0.05   $ 0.98   $ 1.69   $ 1.89   $ 0.50   $ 1.34   $ 2.13   $ 3.73  

(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) See the definition of ENI After Taxes in the non-GAAP financial information and definitions section of this press release.

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

 

Private Equity Segment:

   
Three Months Ended Nine Months Ended

March

31,

2012

 

June

30,

2012

 

September

30,

2012

 

December

31,

2012

 

March

31,

2013

 

June

30,

2013

 

September

30,

2013

September

30,

2012

 

September

30,

2013

Management Business:
Advisory and transaction fees from affiliates $ 23.2 $ 61.5 $ 9.6 $ 27.4 $ 24.5 $ 41.8 $ 5.6 $ 94.3 $ 71.9
Management fees from affiliates 67.0   69.2   68.5   72.3   66.3   65.7   64.8   204.7   196.8
Total management business revenues 90.2 130.7 78.1 99.7 90.8 107.5 70.4 299.0 268.7
Equity-based compensation 7.8 7.4 7.2 8.8 8.4 7.5 7.5 22.4 23.4
Salary, bonus and benefits 30.8 37.8 25.7 34.2 32.4 30.6 32.7 94.3 95.7
Other expenses 20.8   23.9   17.3   21.3   21.9   26.8   21.1   62.0   69.8
Total management business expenses 59.4 69.1 50.2 64.3 62.7 64.9 61.3 178.7 188.9
Other income (loss) 3.3   (3.2 ) 2.9   1.7   1.6   0.9   6.7   3.0   9.2
Management Business Economic Net Income 34.1   58.4   30.8   37.1   29.7   43.5   15.8   123.3   89.0
Incentive Business:
Carried interest income:
Unrealized gains (losses) 326.0 (37.7 ) 152.4 414.2 697.6 (509.7 ) 318.3 440.7 506.2
Realized gains 122.1   43.4   188.2   458.9   293.4   738.2   534.1   353.7   1,565.7
Total carried interest income 448.1 5.7 340.6 873.1 991.0 228.5 852.4 794.4 2,071.9
Profit sharing expense:
Unrealized profit sharing expense 153.7 (9.1 ) 70.2 129.2 256.0 (199.6 ) 129.0 214.8 185.4
Realized profit sharing expense 50.6   22.9   89.6   195.4   128.3   306.9   224.0   163.1   659.2
Total profit sharing expenses 204.3 13.8 159.8 324.6 384.3 107.3 353.0 377.9 844.6
Income from equity method investments 30.6   1.9   24.9   16.6   22.6   12.1   23.6   57.4   58.3
Total other income 30.6 1.9 24.9 16.6 22.6 12.1 23.6 57.4 58.3
Incentive Business Economic Net Income (Loss) 274.4   (6.2 ) 205.7   565.1   629.3   133.3   523.0   473.9   1,285.6
Total Economic Net Income $ 308.5   $ 52.2   $ 236.5   $ 602.2   $ 659.0   $ 176.8   $ 538.8   $ 597.2   $ 1,374.6

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

 

Credit Segment:

   
 
Three Months Ended Nine Months Ended

March

31,

2012

 

June

30,

2012

 

September

30,

2012

 

December

31,

2012

 

March

31,

2013

 

June

30,

2013

 

September

30,

2013

September

30,

2012

 

September

30,

2013

Management Business:
Advisory and transaction fees from affiliates $ 4.1 $ 7.9 $ 5.6 $ 10.0 $ 21.8 $ 22.0 $ 23.3 $ 17.6 $ 67.1
Management fees from affiliates 52.6 74.3 80.8 92.0 84.4 90.4 87.0 207.7 261.8
Carried interest income from affiliates:
Realized gains 9.6   9.2   9.7   9.3   9.0   10.1   9.1   28.5   28.2  
Total management business revenues 66.3 91.4 96.1 111.3 115.2 122.5 119.4 253.8 357.1
Equity-based compensation 8.1 4.3 6.9 7.7 6.5 7.1 5.9 19.3 19.5
Salary, bonus and benefits 27.6 31.2 31.7 32.3 34.3 32.0 39.7 90.5 106.0
Other expenses 25.9   39.2   37.4   46.6   38.4   38.2   34.4   102.5   111.0  
Total management business expenses 61.6 74.7 76.0 86.6 79.2 77.3 80.0 212.3 236.5
Other income (loss) 2.9 (0.7 ) 7.5 5.3 4.5 4.0 15.3 9.7 23.8
Non-controlling interest (1.4 ) (2.4 ) (2.7 ) (2.2 ) (3.5 ) (3.2 ) (2.8 ) (6.5 ) (9.5 )
Management Business Economic Net Income 6.2   13.6   24.9   27.8   37.0   46.0   51.9   44.7   134.9  
Incentive Business:
Carried interest income (loss):
Unrealized gains (losses) 148.3 (16.7 ) 187.0 (17.5 ) 73.2 (58.8 ) (10.3 ) 318.6 4.1
Realized gains 26.0   10.0   41.6   102.3   51.5   102.1   104.8   77.6   258.4  
Total carried interest income (loss) 174.3 (6.7 ) 228.6 84.8 124.7 43.3 94.5 396.2 262.5
Profit sharing expense:
Unrealized profit sharing expense 24.7 (2.9 ) 51.1 2.5 16.5 (15.5 ) 34.5 72.9 35.5
Realized profit sharing expense 18.6   6.8   22.7   32.0   22.0   39.3   34.8   48.1   96.1  
Total profit sharing expense 43.3 3.9 73.8 34.5 38.5 23.8 69.3 121.0 131.6
Other income, net 0.2 2.5 2.7
Net gains (losses) from investment activities 3.4 (13.1 ) 2.1 6.5 4.0 (5.7 ) (7.1 ) (7.6 ) (8.8 )
Income (loss) from equity method investments 17.7   (0.7 ) 16.9   12.2   6.9   6.4   6.7   33.9   20.0  
Total other income (loss) 21.1 (13.8 ) 19.0 18.7 10.9 0.9 2.1 26.3 13.9
Incentive Business Economic Net Income (Loss) 152.1   (24.4 ) 173.8   69.0   97.1   20.4   27.3   301.5   144.8  
Total Economic Net Income (Loss) $ 158.3   $ (10.8 ) $ 198.7   $ 96.8   $ 134.1   $ 66.4   $ 79.2   $ 346.2   $ 279.7  

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

 

Real Estate Segment:

   
 
Three Months Ended Nine Months Ended

March

31,

2012

 

June

30,

2012

 

September

30,

2012

 

December

31,

2012

 

March

31,

2013

 

June

30,

2013

 

September

30,

2013

September

30,

2012

 

September

30,

2013

Management Business:
Advisory and transaction fees from affiliates $ $ 0.6 $ $ 0.1 $ 1.1 $ 1.3 $ $ 0.6 $ 2.4
Management fees from affiliates 10.4   12.9   10.9   12.1   13.6   13.2   13.4   34.2   40.2  
Total management business revenues 10.4 13.5 10.9 12.2 14.7 14.5 13.4 34.8 42.6
Equity-based compensation 3.0 2.4 2.6 2.7 2.5 2.2 3.1 8.0 7.8
Salary, bonus and benefits 6.7 5.9 7.2 3.5 6.7 6.7 8.9 19.8 22.3
Other expenses 6.7   6.2   4.4   6.9   7.3   6.0   7.1   17.3   20.4  
Total management business expenses 16.4 14.5 14.2 13.1 16.5 14.9 19.1 45.1 50.5
Other income (loss) 0.8   (0.6 ) 0.7   0.4   1.1   0.3   0.8   0.9   2.2  
Management Business Economic Net Loss (5.2 ) (1.6 ) (2.6 ) (0.5 ) (0.7 ) (0.1 ) (4.9 ) (9.4 ) (5.7 )
Incentive Business:
Carried interest income:
Unrealized gains (losses) 1.6 4.8 4.0 0.6 (6.4 ) 3.3 6.4 (2.5 )
Realized gains 1.7   2.6     0.4   0.3   0.2     4.3   0.5  
Total carried interest income 1.7 4.2 4.8 4.4 0.9 (6.2 ) 3.3 10.7 (2.0 )
Profit sharing expense:
Unrealized profit sharing expense 1.2 3.4 2.1 0.3 (4.5 ) 1.8 4.6 (2.4 )
Realized profit sharing expense 1.5   1.0   0.8   4.2   0.5   0.6   0.5   3.3   1.6  
Total profit sharing expense 1.5 2.2 4.2 6.3 0.8 (3.9 ) 2.3 7.9 (0.8 )
Income (Loss) from equity method investments 0.2   0.2   0.3   0.3   (0.1 ) 0.8   0.8   0.7   1.5  
Incentive Business Economic Net Income (Loss) 0.4   2.2   0.9   (1.6 )   (1.5 ) 1.8   3.5   0.3  
Total Economic Net (Loss) Income $ (4.8 ) $ 0.6   $ (1.7 ) $ (2.1 ) $ (0.7 )   $ (1.6 )   $ (3.1 ) $ (5.9 ) $ (5.4 )

APOLLO GLOBAL MANAGEMENT, LLC
RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) ATTRIBUTABLE TO APOLLO GLOBAL MANAGEMENT TO ECONOMIC NET INCOME
(UNAUDITED)
(dollars in millions)
 

Reconciliation of U.S. GAAP Net Income (Loss) Attributable to Apollo Global Management, LLC to Economic Net Income:

 

   
Three Months Ended Nine Months Ended

March

31,

2012

 

June

30,

2012

 

September

30,

2012

 

December

31,

2012

 

March

31,

2013

 

June

30,

2013

 

September

30,

2013

September

30,

2012

 

September

30,

2013

Net Income (Loss) Attributable to Apollo Global Management, LLC $ 98.0 $ (41.3 ) $ 82.7 $ 171.6 $ 249.0 $ 58.7 $ 192.5 $ 139.4 $ 500.2
Impact of non-cash charges related to equity-based compensation:
AOG units 116.2 116.1 116.2 132.4 15.0 15.0 348.5 30.0
RSUs - Private placement awards(1) 13.3 11.0 10.9 10.9 11.4 11.0 3.3 35.2 25.7
ARI restricted stock awards, ARI RSUs and AMTG RSUs 0.4 0.4 0.5 0.4 1.3 0.5 0.6 1.3 2.4
AAA RDUs 0.1   0.3   0.3   0.3   0.3   0.2   0.3   0.7   0.8
Total non-cash charges related to equity-based compensation 130.0 127.8 127.9 144.0 28.0 26.7 4.2 385.7 58.9
Income tax provision 14.6 10.6 21.9 18.3 18.6 18.1 47.2 47.1 83.9
Amortization of intangible assets associated with the 2007 reorganization and acquisitions 6.1 9.6 13.7 13.6 11.6 11.3 10.3 29.4 33.2
Net income (loss) attributable to Non-controlling Interests in Apollo Operating Group 213.3   (64.7 ) 187.3   349.4   485.2   126.5   360.8   335.9   972.5
Economic Net Income $ 462.0   $ 42.0   $ 433.5   $ 696.9   $ 792.4   $ 241.3   $ 615.0   $ 937.5   $ 1,648.7

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

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 September 30,
2013 and 2012 and December 31, 2012. Changes in market conditions, the additional funds raised and
strategic acquisitions have had significant impacts to our AUM:

 
As of
September 30,
As of
December 31,
2013 2012 2012
(in millions)
Total Assets Under Management $ 112,687 (1) $ 109,702 (1) $ 113,379 (1)
Fee-generating 79,343 77,676 81,934
Non-fee generating 33,344 (1) 32,026 (1) 31,445 (1)
 
Private Equity 42,767 38,983 37,832
Fee-generating 27,059 28,146 27,932
Non-fee generating 15,708 10,837 9,900
 
Credit 59,359 60,107 64,406 (2)
Fee-generating 46,625 45,302 49,518 (2)
Non-fee generating 12,734 14,805 14,888 (2)
 
Real Estate 9,339 8,129 8,800 (2)
Fee-generating 5,659 4,228 4,484 (2)
Non-fee generating 3,680 3,901 4,316 (2)

(1) As of September 30, 2013 and 2012 and December 31, 2012, includes $1.2 billion, $2.5 billion, and $2.3 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within our three segments.

(2) Includes fee-generating and non-fee generating AUM as of September 30, 2012 for certain publicly traded vehicles managed by Apollo.

APOLLO GLOBAL MANAGEMENT, LLC
ASSETS UNDER MANAGEMENT
(UNAUDITED)

 
The following tables summarize changes in total AUM and total AUM for each of our segments for the three
and nine months ended September 30, 2013 and 2012:
 
For the Three Months
Ended
September 30,
For the Nine Months
Ended
September 30,
 
2013 2012 2013 2012  
(in millions)
Change in Total AUM:
Beginning of Period $ 113,116 (1) $ 104,893 (1) $ 113,379 (1) $ 75,222
Income 5,327 3,616 11,661 8,453
Subscriptions/Capital raised 4,022 1,538 12,148 8,130
Other inflows/Acquisitions 19,928
Distributions (6,259 ) (2,367 ) (16,841 ) (5,950 )
Redemptions (104 ) (283 ) (1,122 ) (1,036 )
Leverage (3,415 ) 2,305   (6,538 ) 4,955  
End of Period $ 112,687   (1) $ 109,702   (1) $ 112,687   (1) $ 109,702   (1)
Change in Private Equity AUM:
Beginning of Period $ 40,213 $ 38,228 $ 37,832 $ 35,384
Income 4,131 2,017 8,646 5,765
Subscriptions/Capital raised 3,332 247 9,170 275
Distributions (4,210 ) (1,438 ) (11,781 ) (3,016 )
Redemptions (19 )
Net segment transfers 56 110 1,118 267
Leverage (755 ) (181 ) (2,199 ) 308  
End of Period $ 42,767   $ 38,983   $ 42,767   $ 38,983  
Change in Credit AUM:
Beginning of Period $ 62,212 $ 56,108 $ 64,406 $ 31,867
Income 991 1,346 2,887 2,281
Subscriptions/Capital raised 690 1,207 1,990 4,335
Other inflows/Acquisitions 19,928
Distributions (1,568 ) (633 ) (4,209 ) (1,878 )
Redemptions (104 ) (283 ) (813 ) (763 )
Net segment transfers (184 ) (99 ) (679 ) (738 )
Leverage (2,678 ) 2,461   (4,223 ) 5,075  
End of Period $ 59,359   $ 60,107   $ 59,359   $ 60,107  
Change in Real Estate AUM:
Beginning of Period $ 9,473 $ 7,861 $ 8,800 $ 7,971
Income 197 253 116 407
Subscriptions/Capital raised 84 988 473
Distributions (477 ) (296 ) (847 ) (1,056 )
Redemptions (2) (290 ) (273 )
Net segment transfers 128 202 688 1,035
Leverage 18   25   (116 ) (428 )
End of Period $ 9,339   $ 8,129   $ 9,339   $ 8,129  

(1) As of September 30, 2013 and 2012, June 30, 2013 and 2012, and December 31, 2012 includes $1.2 billion, $2.5 billion, $1.2 billion, $2.7 billion, and $2.3 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within our three segments.

(2) 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 our segments for the three and nine months ended September 30, 2013 and 2012:
   
For the
Three Months Ended
September 30,
For the
Nine Months Ended
September 30,
2013   2012 2013   2012
(in millions) (in millions)
Change in Total Fee-Generating AUM:
Beginning of Period $ 79,290 $ 77,449 $ 81,934 $ 58,121
Income 956 352 1,989 641
Subscriptions/Capital raised 10,240 1,328 12,403 4,351
Other inflows/Acquisitions 17,576
Distributions (1,865 ) (966 ) (5,017 ) (2,420 )
Redemptions (27 ) (278 ) (737 ) (738 )
Net movements between Fee-Generating and Non-Fee Generating (7,229 ) 72 (6,808 ) (546 )
Leverage (2,022 ) (281 ) (4,421 ) 691  
End of Period $ 79,343   $ 77,676   $ 79,343   $ 77,676  
Change in Private Equity Fee-Generating AUM:
Beginning of Period $ 26,014 $ 27,754 $ 27,932 $ 28,031
Income 274 (2 ) 348 132
Subscriptions/Capital raised 9,586 240 9,629 268
Distributions (788 ) (365 ) (2,026 ) (716 )
Redemptions (19 )
Net segment transfers 50 246
Net movements between Fee-Generating and Non-Fee Generating (7,333 ) 121 (7,523 ) 360
Leverage (744 ) 398   (1,528 ) 71  
End of Period $ 27,059   $ 28,146   $ 27,059   $ 28,146  
Change in Credit Fee-Generating AUM:
Beginning of Period $ 47,507 $ 45,509 $ 49,518 $ 26,553
Income 618 320 1,603 449
Subscriptions/Capital raised 654 1,028 1,858 3,809
Other inflows/Acquisitions 17,576
Distributions (749 ) (418 ) (2,378 ) (1,322 )
Redemptions (27 ) (278 ) (718 ) (738 )
Net segment transfers (178 ) (129 ) (884 ) (718 )
Net movements between Fee-Generating and Non-Fee Generating 78 (51 ) 519 (927 )
Leverage (1,278 ) (679 ) (2,893 ) 620  
End of Period $ 46,625   $ 45,302   $ 46,625   $ 45,302  
Change in Real Estate Fee-Generating AUM:
Beginning of Period $ 5,769 $ 4,186 $ 4,484 $ 3,537
Income 64 34 38 60
Subscriptions/Capital raised 60 916 274
Distributions (328 ) (183 ) (613 ) (382 )
Net segment transfers 128 129 638 718
Net movements between Fee-Generating and Non-Fee Generating 26   2   196   21  
End of Period $ 5,659   $ 4,228   $ 5,659   $ 4,228  

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
Investment Record
 
Private Equity
 

The following table summarizes the investment record of our private equity funds. All amounts are as of September
30, 2013, unless otherwise noted:

 
            As of
September 30, 2013
    As of
December 31, 2012
     
Vintage

Year

Committed

Capital

Total Invested

Capital

Realized Unrealized(1) Total Value Gross

IRR

Net

IRR

Gross

IRR

Net

IRR

(in millions)
Fund VIII(2)(3) - $ 9,968 $ $ $ $ NM

(3)

NM

(3)

NM

(3)

NM

(3)

AION(2)(3) - 277 17 17 17 NM (3) NM (3) NM (3) NM (3)
ANRP(3) 2012 1,323 348 18 381 399 NM (3) NM (3) NM (3) NM (3)
Fund VII 2008 14,676 14,750 17,038 11,806 28,844 38 % 29 % 35 % 26 %
Fund VI 2006 10,136 11,819 11,390 9,548 20,938 15 12 11 9
Fund V 2001 3,742 5,192 12,339 475 12,814 61 44 61 44
Fund IV 1998 3,600 3,481 6,767 39 6,806 12 9 12 9
Fund III 1995 1,500 1,499 2,692 2,692 18 11 18 11
Fund I, II & MIA(4) 1990/92 2,220   3,773   7,924     7,924   47 37 47 37
Totals $ 47,442   $ 40,879   $ 58,168   $ 22,266   $ 80,434   39 % (5) 26 % (5) 39 % (5) 25 % (5)
 

Current Net Asset

Value as of September

30, 2013

  Total Return  
Vintage Year For the Three Months Ended
September 30, 2013
  For the Nine Months Ended
September 30, 2013
 

For the Year Ended

December 31, 2012

(in millions)
AAA(6) 2006 $1,734.7 19 % 11 % 20 %

(1) Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.

(2) Fund VIII and AION Capital Partners Limited ("AION") were launched during 2013 and 2012, respectively, and a vintage year has not yet been established for these funds.

(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. We do not differentiate between Fund I and Fund II investments for purposes of performance figures because they are not meaningful on a separate basis and do not demonstrate the progression of returns over time. The general partners and managers of Funds I, II and MIA, as well as the general partner of Fund III were excluded assets in connection with the 2007 reorganization of Apollo Global Management, LLC. As a result, Apollo Global Management, LLC did not receive the economics associated with these entities. The investment performance of these funds is presented to illustrate fund performance associated with our managing partners and other investment professionals.

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

(6) AAA completed its initial public offering in June 2006 and is the sole limited partner in AAA Investments, L.P. (“AAA Investments”). AAA was originally designed to give investors in its common units exposure as a limited partner to certain of the strategies that we employ and allowed us to manage the asset allocations to those strategies by investing alongside our private equity funds and directly in our credit funds and certain other opportunistic investments that we sponsor and manage. On October 31, 2012, AAA and AAA Investments consummated a transaction whereby a wholly-owned subsidiary of AAA Investments contributed substantially all of its investments to Athene in exchange for common shares of Athene Holding, Ltd., cash and a short term promissory note (the “AAA Transaction”). After the AAA Transaction, Athene was AAA’s only material investment and as of September 30, 2013, AAA, through its investment in AAA Investments, was the largest shareholder of Athene Holding Ltd. with an approximate 72.5% ownership stake (without giving effect to restricted common shares issued under Athene’s management equity plan). Additional information related to AAA can be found on its website www.apolloalternativeassets.com. The information contained in AAA’s website is not part of this press release.

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)

Credit
 

The following table summarizes the investment record for certain funds and strategic investment accounts (“SIAs”) with a defined maturity
date and internal rate of return since inception, which is computed for the purposes of this table based on the actual dates of capital
contributions, distributions and ending limited partners’ capital as of the specified date. Apollo also manages collateralized loan
obligations (“CLOs”) within our credit segment, which had total AUM of approximately $9.8 billion as of September 30, 2013. Such CLO
performance information is not included in the following credit investment record tables. All amounts are as of September 30, 2013,
unless otherwise noted:

 
             

As of September

30, 2013

   

As of December

31, 2012

     
Strategy Vintage

Year

Committed

Capital

Total

Invested

Capital

Realized Unrealized(1) Total Value Gross

IRR

Net

IRR

Gross

IRR

Net

IRR

   
(in millions)  
ACRF II(2) Structured Credit 2012 $ 104.4 $ 160.6 $ 2.6 $ 118.6 $ 121.2 NM

(4)

NM (4) NM (4) NM (4)
EPF II(3)(5) Non-Performing Loans 2012 3,644.6 566.5 96.8 566.1 662.9 NM (4) NM (4) NM (4) NM (4)
FCI(3) Structured Credit 2012 558.8 443.2 15.0 592.0 607.0 NM (4) NM (4) NM (4) NM (4)
AESI(3)(5) European Credit 2011 480.9 701.3 436.7 340.9 777.6 NM (4) NM (4) NM (4) NM (4)
AEC(3) European Credit 2012 292.5 432.8 246.7 195.4 442.1 NM (4) NM (4) NM (4) NM (4)
AIE II(5) European Credit 2008 279.3 881.9 1,171.3 188.8 1,360.1 19.1 % 15.6 % 19.4 % 15.6 %
COF I U.S. Performing Credit 2008 1,484.9 1,611.3 3,317.5 1,020.7 4,338.2 30.4 27.4 30.7 27.6
COF II U.S. Performing Credit 2008 1,583.0 2,176.4 2,575.0 537.9 3,112.9 13.8 11.2 14.3 11.7
EPF I(5) Non-Performing Loans 2007 1,751.7 2,225.6 1,993.9 1,253.4 3,247.3 20.6 14.2 18.6 11.6
ACLF U.S. Performing Credit 2007 984.0 1,448.5 2,262.5 119.3 2,381.8 13.0 11.2 13.0 11.2
Artus U.S. Performing Credit 2007 106.6   190.1   225.9     225.9   7.0 6.8 7.0 6.8
Totals $ 11,270.7   $ 10,838.2   $ 12,343.9   $ 4,933.1   $ 17,277.0  

(1) Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.

(2) As part of the acquisition of Stone Tower Capital, LLC (“Stone Tower”), Apollo acquired the manager of Apollo Structured Credit Recovery Master Fund II, Ltd. (“ACRF II”). Apollo became the manager of this fund upon completing the acquisition on April 2, 2012.

(3) Apollo European Strategic Investment, L.P. (“AESI”) was launched during 2011 and established its vintage year in the fourth quarter of 2011. Apollo European Principal Finance Fund II, L.P. (“EPF II”), Apollo European Credit Master Fund, L.P, ("AEC"), and Financial Credit Investment I, L.P. (“FCI”) deployed capital prior to their vintage year and had their final capital raises in 2012, establishing their vintage year.

(4) Returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful.

(5) Funds are denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.35 as of September 30, 2013.

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
 

The following table summarizes the investment record for certain funds and SIAs with no maturity date. All amounts are
as of September 30, 2013, unless otherwise noted:

     
Net Return  
Strategy Vintage Year

Net Asset

Value as of September

30, 2013

Since

Inception to

September

30, 2013

For the Nine Months Ended
September 30, 2013
For the Nine Months Ended
September 30, 2012

Since

Inception

to

December 31, 2012

For the Year

Ended

December 31,

2012

 
(in millions)
ACSP(1) Opportunistic Credit 2012 232.9 NM (2) NM (2) NM (2) NM (2) NM (2)
ACSF(3) Opportunistic Credit 2011 210.1 NM (3) NM (3) NM (3) NM (3) NM (3)
STCS(3) Opportunistic Credit 2010 36.1 NM (3) NM (3) NM (3) NM (3) NM (3)
SOMA(4) Opportunistic Credit 2007 642.3 55.2 7.1 14.1 % 44.9 % 15.1 %
ACF(3) U.S. Performing Credit 2005 2,206.6 NM (3) NM (3) NM (3) NM (3) NM (3)
Value Funds(5) Opportunistic Credit 2003/2006 353.1   75.0 5.3 10.1 66.2 10.8
Totals $ 3,681.1  

(1) Apollo Centre Street Partnership, L.P. (“ACSP”) is a strategic investment account with $615.0 million of committed capital. Net asset value is presented for the primary mandate and excludes investments in other Apollo funds.

(2) Returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful.

(3) As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Credit Strategies Master Fund Ltd. (“ACSF”), Stone Tower Credit Solutions Master Fund Ltd. (“STCS”), and Apollo Credit Master Fund Ltd. (“ACF”). As of September 30, 2013, the net returns from inception for ACSF, ACF and STCS were 34.1%, 0.8%, and 40.6% respectively. These returns were primarily achieved during a period in which Apollo did not make the initial investment decisions. Apollo became the manager of these funds upon completing the acquisition on April 2, 2012.

(4) Net asset value and returns are for the primary mandate and excludes Apollo Special Opportunities Managed Account, L.P.’s (“SOMA”) investments in other Apollo funds.

(5) Value Funds consist of Apollo Strategic Value Master Fund, L.P., together with its feeder funds, and Apollo Value Investment Master Fund, L.P., together with its feeder funds.

The following table summarizes the investment record for our publicly traded vehicles in our credit segment as of September 30, 2013:

          Net Returns    
Strategy

IPO Year(1)

Raised Capital(2) Gross Assets Current Net Asset Value

Since Inception to

September 30, 2013

For the Nine Months Ended
September 30, 2013
 
(in millions)
AIF(3) U.S. Performing Credit 2013 $ 275.7 $ 414.9 $ 276.9 NM (4) NM (4)
AFT(3) U.S. Performing Credit 2011 294.6 448.2 294.8 18.4 % 6.2 %
AMTG(5) Structured Credit 2011 790.7 3,771.1 765.0 NM (4) NM (4)
AINV(6) Opportunistic Credit 2004 2,977.7 3,153.7 1,833.2 54.7 5.3
$ 4,338.7   $ 7,787.9   $ 3,169.9  

(1) An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. AIF, AFT, and AMTG are publicly traded vehicles traded on the New York Stock Exchange ("NYSE"). AINV is a public investment company traded on the National Association of Securities Dealers Automated Quotation ("NASDAQ").

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

(3) The Apollo Senior Floating Rate Fund Inc. (“AFT”) and Apollo Tactical Income Fund Inc. (“AIF”) completed their initial public offerings during the first quarter of 2011 and 2013, respectively. Gross Assets represents total managed assets of these closed-end funds. Refer to www.agmfunds.com for the most recent financial information on AFT and AIF. The information contained in AFT’s and AIF’s websites is not part of this press release.

(4) Returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful.

(5) Refer to www.apolloresidentialmortgage.com for the most recent financial information on AMTG. The information contained in AMTG’s website is not part of this press release.

(6) Net return for AINV represents net asset value return including reinvested dividends. Refer to www.apolloic.com for the most recent public financial information on AINV. The information contained in AINV’s website is not part of this press release. All amounts are as of June 30, 2013.

APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
Real Estate
 

The following table summarizes the investment record for certain funds and SIAs with a defined maturity date and internal rate of return since
inception, which for the purposes of this table is computed based on the actual dates of capital contributions, distributions and ending limited
partners’ capital as of the specified date. All amounts are as of September 30, 2013, unless otherwise noted:

     
As of
September 30, 2013
  As of
December 31, 2012
 
Vintage

Year

Committed

Capital

Current

Net Asset

Value

Total

Invested

Capital

Realized

Unrealized(1)

Total

Value

Gross

IRR

Net

IRR

Gross

IRR

Net

IRR

(in millions)
AGRE U.S. Real Estate Fund, L.P(3) 2012 $ 793.4 $ 429.7 $ 393.9 $ 3.9 $   422.8 $ 426.7 NM (2) NM (2) NM (2) NM (2)
AGRE Debt Fund I, LP 2011 716.1 733.7 712.2 54.9 728.8 783.7 13.0 % 10.8 % NM (2) NM (2)
2011 A4 Fund, L.P. 2011 234.7 214.5 930.8 928.5 928.5 14.6 12.7 NM (2) NM (2)
AGRE CMBS Fund, L.P. 2009 418.8 87.6 1,572.9 399.6 399.6 13.6 11.4 14.1 % 11.8 %
CPI Capital Partners North America 2006 600.0 64.9 452.5 315.9 58.8 374.7 16.8 (4) 11.9 (4) NM (4) NM (4)
CPI Capital Partners Asia Pacific 2006 1,291.6 448.5 1,156.4 1,108.8 463.9 1,572.7 32.9 (4) 29.3 (4) NM (4) NM (4)
CPI Capital Partners Europe(5) 2006 1,571.8 582.2 1,037.2 171.7 554.0 725.7 3.0 (4) 1.2 (4) NM (4) NM (4)
CPI Other(6) Various 2,383.5   867.6   N/A (6) N/A (6) N/A (6) N/A (6) NM (6) NM (6) NM (6) NM (6)
Totals $ 8,009.9   $ 3,428.7   $ 6,255.9   $ 1,655.2   $   3,556.4   $ 5,211.6  

(1) Figures include estimated fair value of unrealized investments.

(2) Returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful.

(3) AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund that intends to make real estate-related investments principally located in the United States, held closings in January 2011, June 2011 and April 2012 for a total of $263.2 million in base capital commitments and $450 million in additional capital commitments. Additionally, there was $80.2 million of co-invest commitments raised, which is included in the figures in the table above.

(4) 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 September 30, 2013 were (7.4)%, 6.4% and (10.0)% 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.

(5) CPI Capital Partners Europe is denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.35 as of September 30, 2013.

(6) CPI Other consists of funds or individual investments of which we are not the general partner or manager and only receive fees pursuant to either a sub-advisory agreement or an investment management and administrative agreement. CPI Other fund performance is a result of invested capital prior to Apollo’s management of these funds. Return and certain other performance data are therefore not considered meaningful as we perform primarily an administrative role.

The following table summarizes the investment record for Apollo Commercial Real Estate Finance, Inc. (“ARI”) as of September 30, 2013:

  IPO Year   Raised Capital   Gross Assets   Current Net Asset Value
(in millions)
ARI(1) 2009 $714.6 $952.8 $682.9

(1) ARI is a public company traded on the NYSE. Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained in ARI’s website is not part of this press release.

APOLLO GLOBAL MANAGEMENT, LLC
SUPPLEMENTAL SEGMENT INFORMATION (UNAUDITED)
 
Athene and SIAs
 

As of September 30, 2013, Athene Asset Management LLC had $16.4 billion of total AUM in accounts
owned by or related to Athene, of which approximately $7.1 billion, was either sub-advised by
Apollo or invested in Apollo funds and investment vehicles. Of the approximately $7.1 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.

 

In addition to certain funds and SIAs included in the investment record tables and capital
deployed from certain SIAs across our private equity, credit and real estate funds, we also
managed an additional approximate $6.7 billion of total AUM in SIAs as of September 30, 2013.
The above investment record tables exclude certain funds and SIAs with an aggregate AUM of
approximately $5.0 billion as of September 30, 2013, which were excluded because management
deemed them to be immaterial.

 
Supplemental Segment Information
 
Private Equity Dollars Invested and Uncalled Commitments
 

The following table summarizes the private equity dollars invested during the specified
reporting periods:

 
For the Three Months
Ended
September 30,
For the Nine Months
Ended
September 30,
2013   2012 2013   2012
(in millions)
Private equity dollars invested $ 120 $ 78 $ 1,488 $ 2,719

The following table summarizes the uncalled private equity commitments as of September 30, 2013 and 2012, and December 31, 2012:

 

As of September

30,
2013

  As of
December 31, 2012
 

As of September

30,
2012

(in millions)
Uncalled private equity commitments $ 16,125 $ 7,464 $ 7,105

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:
 

As of
September 30,

2013

(1)

As of
September 30,

2012

As of
December 31,

2012

(1)
(in millions)
Private Equity:
Cost $ 14,548 $ 16,386 $ 16,927
Fair Value 24,002 25,353 25,867
Credit:
Cost $ 15,416 (3) $ 15,978 $ 15,097 (2)
Fair Value 15,865 (3) 17,460 16,287 (2)
Real Estate:
Cost $ 4,515 $ 3,883 $ 3,848 (2)
Fair Value 4,402 3,550 3,680 (2)

(1) Cost and fair value amounts are presented for investments of the funds that are listed in the investment record tables.

(2) AMTG and ARI amounts are as of September 30, 2012.

(3) AINV amounts are as of June 30, 2013.

As of September 30, 2013, approximately 73% 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 27% 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 September 30, 2013 was 62%, 86% and 50%, 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 and (ii) realized and
unrealized carried interest income (loss) for our combined segments’ Incentive Business as of and for
the three and nine months ended September 30, 2013:

 

As of
September

30, 2013

For the Three Months Ended
September 30, 2013
For the Nine Months Ended
September 30, 2013
Carried

Interest

Receivable

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 $ 905.4 $ 51.0 $ 286.6 $ 337.6 $ 1.2 $ 871.8 $ 873.0
Fund VI 758.0 197.4 231.1 428.5 487.7 598.0 1,085.7
Fund V 39.3 (28.2 ) 16.4 (11.8 ) (95.0 ) 95.9 0.9
Fund IV 8.0 (2.5 ) (2.5 ) (2.9 ) (2.9 )
AAA/Other (1)(2) 208.9   100.6     100.6   115.2     115.2  
Total Private Equity Funds 1,919.6   318.3   534.1   852.4   506.2   1,565.7   2,071.9  
Credit Funds:
U.S. Performing Credit 146.1 (65.3 ) 95.9 30.6 (101.6 ) 200.8 99.2
Opportunistic Credit 53.1 5.0 5.0 40.8 8.8 49.6
Structured Credit 51.1 7.3 7.1 14.4 26.0 8.2 34.2
European Credit 22.3 5.1 1.8 6.9 9.0 7.6 16.6
Non-Performing Loans 131.8   37.6     37.6   29.9   33.0   62.9  
Total Credit Funds 404.4   (10.3 ) 104.8   94.5   4.1   258.4   262.5  
Real Estate Funds:
CPI Funds 6.6 1.9 1.9 (3.9 ) 0.5 (3.4 )
AGRE U.S. Real Estate Fund, L.P. 1.4   1.4     1.4   1.4     1.4  
Total Real Estate Funds 8.0   3.3     3.3   (2.5 ) 0.5   (2.0 )
Total $ 2,332.0   (3) $ 311.3   $ 638.9   $ 950.2   $ 507.8   $ 1,824.6   $ 2,332.4  

(1) Includes certain strategic investment accounts.

(2) Includes $80.3 million of carried interest receivable from AAA Investments' investment in Athene Holding Ltd., which may be settled in shares of Athene Holding Ltd. (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding Ltd. to the AAA unitholders; in the event there is not a distribution of shares, the receivable will be settled in cash. During the three and the nine months ended September 30, 2013, the Company earned $7.6 million and $11.3 million, respectively from AAA Investments' investment in Athene Holding Ltd.

(3) There was a corresponding profit sharing payable of $1,078.0 million as of September 30, 2013 that resulted in a net carried interest receivable amount of $1,254.0 million as of September 30, 2013. Included within profit sharing payable are contingent consideration obligations of $128.5 million.

APOLLO GLOBAL MANAGEMENT, LLC
SUPPLEMENTAL SHARE INFORMATION (UNAUDITED)
 

The table below presents Non-GAAP weighted average diluted shares outstanding for the three and nine
months ended September 30, 2013 and 2012:

 
For the Three Months Ended
September 30,
  For the Nine Months Ended
September 30,
2013   2012 2013   2012
Total GAAP Weighted Average Outstanding Class A Shares:
Basic 142,829,913 128,980,438 137,165,119 126,909,962
Non-GAAP Adjustments:
AOG units 231,230,636 240,000,000 235,535,012 240,000,000
Vested RSUs(1) 20,728,513   17,966,334   20,838,687   18,623,887
Non-GAAP Weighted Average Diluted Shares Outstanding 394,789,062   386,946,772   393,538,818   385,533,849

(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 September 30, 2013 and 2012:

  As of
September 30,
2013     2012
Total GAAP Outstanding Class A Shares:
Basic 143,700,234 129,874,286
Non-GAAP Adjustments:
AOG units 231,230,636 240,000,000
Vested RSUs(1) 20,290,037   18,354,474
Non-GAAP Diluted Shares Outstanding 395,220,907   388,228,760

(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 4.0 million and 5.3 million unvested RSUs that participate in distributions as of September 30, 2013 and 2012, 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. 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.

APOLLO GLOBAL MANAGEMENT, LLC
NON-GAAP FINANCIAL INFORMATION AND DEFINITIONS (UNAUDITED)

  • 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 231,230,636 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 231,230,636 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 to the extent a fund is within the commitment period in which management fees are calculated based on total commitments to the fund;

(ii) the net asset value of our credit funds, other than certain CLOs, which we measure by using the mark-to-market value of the aggregate principal amount of the underlying collateralized loan obligation) or certain CLO and collateralized debt obligation credit funds that have a fee generating basis other than mark-to-market assets or liabilities, 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.

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.

  • Private equity dollars invested is the aggregate amount of dollars invested by certain of Apollo’s private equity funds 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 private equity commitments represents unfunded capital commitments that certain of Apollo’s private equity funds have received from its limited partners to contribute capital 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 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 September 30, 2013 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 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 an Apollo fund exceeds all requirements detailed within the applicable fund agreement.

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

Source: Apollo Global Management, LLC