Attached files
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| 8-K - 8-K - Apollo Global Management, Inc. | a8-kforq115earningsrelease.htm |
| EX-99.1 - EXHIBIT 99.1 - Apollo Global Management, Inc. | agmearningsrelease1q15.htm |
Apollo Global Management, LLC First Quarter 2015 Earnings May 7, 2015 Exhibit 99.2
Apollo 1Q’15 Financial Results Highlights 1 GAAP & Economic Earnings Distributable Earnings Assets Under Management Business Drivers Fundraising: $4.9 billion of gross inflows ($20.5 billion LTM) Deployment: $2.2 billion invested ($9.5 billion LTM) across the platform Realizations: $1.4 billion of capital returned to investors ($13.4 billion LTM) Performance: Traditional Private Equity Fund Appreciation +2.3% (+5.6% LTM) Total Credit Gross Return(1) +2.0% (+5.4% LTM) GAAP Net Income of $30.9 million ($0.09/share) Economic Net Income (“ENI”) of $93.5 million ($0.23/share) Management Business (“MB”) Economic Income (“EI”) of $91.6 million ($0.23/share) Incentive Business (“IB”) Economic Income of $10.5 million ($0.03/share) Distributable Earnings (“DE”) After Taxes and Related Payables of $143.9 million ($0.35/share) Management Business DE of $107.2 million ($0.26/share) Incentive Business DE of $38.8 million ($0.09/share) Declared distribution of $0.33 per Class A share (payout ratio of 94%) Total Assets Under Management (“AUM”) of $162.9 billion, up 2% year-over-year Fee-Generating AUM (“FGAUM”) of $131.3 billion, up 2% year-over-year Carry-Eligible AUM (“CEAUM”) of $79.5 billion and Carry-Generating AUM (“CGAUM”) of $34.8 billion Dry powder of $28.5 billion available for investment (1) Represents total Credit Gross Return, excluding assets managed by Athene Asset Management, L.P. (“AAM”) that are not directly invested in Apollo funds or sub-advised by Apollo. Total Credit Net Return was 1.7% for 1Q ‘15 (4.2% LTM). Note: This presentation contains non-GAAP financial information and definitions which are set forth on pages 26to 29.
Economic Earnings Summary 2 $ in thousands, except per share data 1Q'14 4Q'14 1Q'15 Management Fees $223,830 $220,643 $224,713 Advisory and Transaction Fees from Affiliates, net (1) 116,065 67,909 9,543 Carried Interest Income from Affiliates 8,464 10,620 10,774 Management Business Revenues 348,359 299,172 245,030 Salary, Bonus and Benefits 80,531 77,661 87,552 Equity-Based Compensation (2) 58,137 19,149 15,831 Other Expenses 57,700 61,483 51,934 Management Business Expenses 196,368 158,293 155,317 Other Income (3) 2,059 30,582 1,846 Management Business Economic Income (4)(5) $154,050 $171,461 $91,559 Per Share $0.39 $0.43 $0.23 Carried Interest Income (Loss) $160,795 ($5,088) $57,819 Profit Sharing Expense 98,438 11,500 40,832 Other Income (Loss) 58,365 (12,256) (6,477) Incentive Business Economic Income (Loss)(4)(5) $120,722 ($28,844) $10,510 Per Share $0.30 ($0.07) $0.03 Economic Income (“EI”)(4)(5) $274,772 $142,617 $102,069 Per Share $0.69 $0.36 $0.26 Taxes (51,110) (36,498) (8,520) Economic Net Income (“ENI”)(4)(5) $223,662 $106,119 $93,549 Per Share $0.56 $0.26 $0.23 M a n a g e m e n t B u s i n e s s I n c e n t i v e B u s i n e s s (1) Includes monitoring fees from Athene Holding Ltd. (“Athene Holding” and together with its subsidiaries, “Athene”) of $58.7 million and $58.6 million for 1Q’14 and 4Q’14, respectively. (2) Included in 1Q’14 is $45.6 million in connection with the departure of an executive officer. (3) Includes $32.2 million for 4Q’14 related to a gain from the reduction of the tax receivable agreement liability. (4) Management Business EI (previously referred to as management business ENI) has been redefined to exclude interest income and interest expense. Calculated under the prior methodology, the 1Q’15 MB EI would have been $6.7 million lower and Incentive Business EI (previously referred to as incentive business ENI) would have been $6.7 million higher. (5) Additionally, EI (previously referred to as ENI) has been redefined to exclude transaction-related charges. Calculated under the prior methodology, the 1Q’15 MB EI and IB EI would have been $0.9 million and $7.9 million lower, respectively, and ENI (previously referred to as ENI After Taxes) would have been $8.5 million lower.
Distributable Earnings Summary 3 $ in thousands except per share data 1Q'14 4Q'14 1Q'15 Management Business Economic Income $154,050 $171,461 $91,559 Less: Non-Cash Revenues (1) (59,093) (91,648) (2,784) Add Back: Equity-Based Compensation 58,137 19,149 15,831 Add Back: Depreciation & Amortization 2,609 2,497 2,610 Management Business Distributable Earnings $155,703 $101,459 $107,216 Per Share $0.39 $0.25 $0.26 Incentive Business Economic Income (Loss) $120,722 ($28,844) $10,510 Less: Non-Cash Carried Interest Income (2) - - (29,900) Less: Net Unrealized Carried Interest Loss 197,181 265,637 58,148 Less: Unrealized Investment & Other (Income) Loss (35,563) 32,664 45 Incentive Business Distributable Earnings $282,340 $269,457 $38,803 Per Share $0.70 $0.66 $0.09 Distributable Earnings ("DE") $438,043 $370,916 $146,019 Taxes and Related Payables (3) (25,900) 3,209 (2,110) DE After Taxes and Related Payables $412,143 $374,125 $143,909 DE per Share of Common & Equivalent (4) $0.94 $0.91 $0.35 Distribution per Share of Common & Equivalent $0.84 $0.86 $0.33 Payout Ratio 89% 95% 94% M a n a g e m e n t B u s i n e s s I n c e n t i v e B u s i n e s s (1) Includes monitoring fees paid by Athene and gains resulting from reductions of the tax receivable agreement liability. (2) Represents realized carried interest income settled by receipt of securities. (3) Represents estimated current corporate, local and non-U.S. taxes as well as the payable under Apollo’s tax receivable agreement. (4) Calculation is based on end of period Class A shares outstanding and restricted share units (“RSUs”) that participate in distributions (collectively referred to as common and equivalents).
Highlights Business Drivers Financial Results Summary Key Stats Private Equity 4 Economic Income up 48% quarter-over-quarter, driven by rising net carried interest income offsetting a lower contribution from the MB Traditional Private Equity fund appreciation(1) during the quarter of 2.3% was driven by publicly traded equity holdings Realization activity includes the final disposition of Sprouts (10.3x fully realized MOIC) and a distribution from Hostess Announced sales of Great Wolf Resorts and Brit Insurance Commenced fundraising for second natural resources fund with a first close expected this summer Deployment of $1.0 billion across 11 transactions during the quarter; $2.0 billion committed not yet deployed(2) at quarter end Committed $2bn(2) Invested AUM $19bn Other $3bn(3) Dry Powder $19bn $41 billion AUM Fundraising 1Q’15 LTM Deployment Realizations $53mm $3.3bn $1.0bn $2.6bn $611mm $9.0bn Performance(1) 2.3% 5.6% (1) Represents traditional private equity fund appreciation as defined in the non-GAAP financial information and definitions section of this presentation. (2) Represents capital committed to investments as of March 31, 2015 by Apollo’s private equity funds, which have not yet closed and may be subject to a variety of closing conditions or other contractual provisions which could result in such capital not ultimately being invested. (3) Other represents approximately $3 billion of uncalled commitments which can be called for fund fees and expenses only and is not available for investment or reinvestment subject to the provisions of the applicable fund limited partnership agreements or other governing agreements. PE Portfolio 39% Public / 61% Private Fund VIII 20% Committed or Deployed Fund VI 104% of Cost $110mm net carried interest receivable held in escrow Traditional PE Funds Inception-to-date Gross / Net IRR 39% / 25% ($ in thousands) 1Q'14 4Q'14 1Q'15 Management Business Revenues $117,057 $80,257 $78,438 Management Business Expenses 64,136 51,474 50,041 Other Income 1,565 11,651 1,459 MB Economic Income 54,486 40,434 29,856 Carried Interest Income 103,251 20,561 54,926 Profit Sharing Expense 66,095 15,654 28,799 Other Income (Loss) 19,275 (5,376) 3,096 IB Economic Income (Loss) 56,431 (469) 29,223 Economic Income $110,917 $39,965 $59,079
Highlights Business Drivers Financial Results Summary Key Stats Credit 5 Economic Income up 10% quarter-over-quarter when excluding the $59 million non-cash Athene monitoring fee in 4Q’14 1Q’15 total credit gross and net return(2) of 2.0% and 1.7% driven by income and gains across the portfolio, with some offset by unrealized losses in energy, commodity-related and shipping Significant drawdown funds and SIAs(3) had inception-to-date (“ITD”) gross and net IRRs of 18.0% and 14.2%, respectively, as of March 31, 2015 Strong fundraising driven by MidCap and managed accounts Realizations driven by drawdown funds and returns to CLO investors Deployed $760 million during the quarter in a variety of credit investment opportunities Fundraising 1Q’15 LTM Deployment Realizations $4.4bn $15.1bn $760mm $4.2bn $342mm $2.9bn Category AUM FGAUM CE AUM CG AUM 1Q’15 Gross Return(2) LTM Gross Return(2) Liquid / Performing $36 $30 $20 $12 2.3% 4.1% Drawdown 18 11 15 6 1.3% 7.0% Permanent Capital Vehicles ex AAM 12 7 7 3 1.7% 10.5% Athene Asset Management (AAM)(4) 47 47 - - Total Credit $113 $95 $42 $21 2.0% 5.4% Total Permanent Capital Vehicles $75 $69 $11 $5 ($ in billions) $113 billion AUM (1) Represents total credit gross return, excluding assets managed by AAM that are not directly invested in Apollo funds or sub-advised by Apollo. (2) Represents gross and net return as defined in the non-GAAP financial information and definitions section of this presentation with the exception of CLO assets in Liquid/Performing which are calculated based on gross return on invested assets, which excludes cash. The 1Q’15 net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 2.2%, 0.7%, 0.6%, respectively, and 1.7% for Total Credit excluding assets managed by AAM that are not directly invested in Apollo funds or sub-advised by Apollo. The LTM net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 3.8%, 4.8%, 5.1%, respectively, and 4.2% for Total Credit excluding assets managed by AAM that are not directly invested in Apollo funds or sub-advised by Apollo. (3) Significant drawdown funds and strategic investment accounts (“SIAs”) include funds and SIAs with AUM greater than $200 million that did not predominantly invest in other Apollo funds or SIAs. (4) AUM amounts presented for AAM exclude $13.5 billion of assets that were either sub-advised by Apollo or invested in funds and investment vehicles managed by Apollo. ($ in thousands) 1Q'14 4Q'14 1Q'15 Management Business Revenues $217,573 $206,987 $155,578 Management Business Expenses 113,849 89,840 91,555 Other Income 3,345 18,836 2,804 Non-Controlling Interest (3,256) (3,134) (2,846) MB Economic Income 103,813 132,849 63,981 Carried Interest Income (Loss) 57,888 (33,562) 502 Profit Sharing Expense 32,945 (7,956) 10,217 Other Income (Loss) 38,632 (7,523) (9,118) IB Economic Income (Loss) 63,575 (33,129) (18,833) Economic Income $167,388 $99,720 $45,148 Performance(1) 2.0% 5.4%
Highlights Business Drivers Financial Results Summary Key Stats Real Estate 6 Modest Economic Loss driven by lower net carried interest income U.S. Real Estate Fund I ITD Gross IRR of 18% and Net IRR of 14% as of March 31, 2015 Commercial mortgage REIT (ARI) increased its quarterly dividend on its common stock by 10% to $0.44 per share, representing a 10.2% dividend yield as of March 31, 2015 close price Realization activity driven by both equity and debt funds Fundraising for second U.S. RE equity fund is underway, with a second close expected later this year Deployment activity driven by RE debt funds and managed accounts, as well as initial investments made by our second U.S. RE equity fund Debt $7.0bn Equity $2.5bn ($ in thousands) 1Q'14 4Q'14 1Q'15 Management Business Revenues $13,729 $11,928 $11,014 Management Business Expenses 18,383 16,979 13,721 Other Income 405 3,229 429 MB Economic Loss (4,249) (1,822) (2,278) Carried Interest Income (Loss) (344) 7,913 2,391 Profit Sharing Expense (602) 3,802 1,816 Other Income (Loss) 458 643 (455) IB Economic Income 716 4,754 120 Economic Income (Loss) ($3,533) $2,932 ($2,158) Fundraising 1Q’15 LTM Deployment Realizations $461mm $2.1bn $465mm $2.7bn $426mm $1.6bn $9.5 billion AUM (1) Represents gross return for U.S. Real Estate Fund I including co-investment capital. 1Q’15 and LTM net returns for U.S. Real Estate Fund I were 1.4% and 10.6%, respectively. Performance(1) 1.6% 12.8%
f Total AUM & Fee-Generating AUM 7 1Q’15 Total AUM Rollforward(1) LTM Total AUM Rollforward(1) 1Q’15 Fee-Generating AUM Rollforward(1) LTM Fee-Generating AUM Rollforward(1) Private Equity Credit Real Estate Total 1Q'14(2) $48,336 $101,941 $9,049 $159,326 Inflows 3,319 15,069 2,074 20,462 Outflows(3) (2,596) (1,504) (156) (4,256) Net Flows 723 13,565 1,918 16,206 Realizations (8,961) (2,857) (1,573) (13,391) Market Activity 435 270 102 807 1Q'15 $40,533 $112,919 $9,496 $162,948 Private Equity Credit Real Estate Total 4Q'14(2) $41,299 $108,960 $ 9,538 $159,797 Inflows 53 4,386 461 4,900 Outflows(3) (470) (27) (21) (518) Net Flows (417) 4,359 440 4,382 Realizations (611) (342) (426) (1,379) Market Activity 262 (58) (56) 148 1Q'15 $40,533 $112,919 $9,496 $162,948 Private Equity Credit Real Estate Total 1Q'14(2) $34,207 $88,404 $5,926 $128,537 Inflows 131 10,347 1,759 12,237 Outflows(3) (1,925) (1,543) (141) (3,609) Net Flows (1,794) 8,804 1,618 8,628 Realizations (2,215) (1,819) (1,278) (5,312) Market Activity 1 (531) (71) (601) 1Q'15 $30,199 $94,858 $6,195 $131,252 Private Equity Credit Real Estate Total 4Q'14(2) $30,285 $92,192 $6,237 $128,714 Inflows - 3,300 322 3,622 Outflows(3) (23) (306) (111) (440) Net Flows (23) 2,994 211 3,182 Realizations (62) (305) (222) (589) Market Activity (1) (23) (31) (55) 1Q'15 $30,199 $94,858 $6,195 $131,252 Fee-Generating AUM Highlights ($ in millions) ($ in millions) ($ in millions) ($ in millions) Private Equity Credit Total AUM Highlights Outflows: Modest leverage reduction Realizations: Driven by Sprouts disposition Private Equity Credit Real Estate Inflows: MidCap ($2.1 billion which includes $505 million in net segment transfers) and SIAs ($337 million) Realizations: returns to CLO investors ($80 million) and Public Vehicles ($57 million) Inflows: Net segment transfers ($279 million) and public offering proceeds from ARI ($44 million) Realizations: RE equity ($114 million) and RE debt ($108 million) Inflows: MidCap ($2.7 billion which includes $673 million in segment transfers), Energy Opportunity Fund ($425 million); SIAs ($555 million) Realizations: Drawdown Funds ($135 million); returns to CLO investors ($80 million); Public Vehicles ($57 million) Market Activity: Includes foreign exchange translation loss on AUM due to Euro depreciation Inflows: Public offering proceeds from ARI ($194 million) and net segment transfers ($103 million) Realizations: RE equity ($274 million) and RE debt ($152 million) Real Estate Outflows: represents transfer to other Apollo segments Realizations: Fund VI ($487 million) driven by Sprouts disposition Market Activity: Traditional private equity fund appreciation of 2% (1) At the individual segment level, inflows include new subscriptions, commitments, capital raised, other increases in available capital, purchases and acquisitions. Outflows represent redemptions and other decreases in available capital. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income. (2) Prior period amounts were recast for individual segments to conform to the current presentation. (3) Included in outflows during 1Q’15 for Total AUM and FG AUM is $47 million and $27 million of redemptions, respectively. Included in outflows during LTM for Total AUM and FG AUM is $593 million and $347 million of redemptions, respectively.
Carry-Eligible & Carry-Generating AUM 8 Carry-Eligible AUM Carry-Generating AUM Q1'15 Carry-Generating to Carry-Eligible AUM Reconciliation Segment Q1’14 (1) Q4’14 (1) Q1’15 Private Equity $43,943 $36,376 $35,302 Credit 37,026 39,013 42,207 Real Estate 3,286 2,614 2,030 Total $84,255 $78,003 $79,539 ($ in millions) Segment Q1’14 (1) Q4’14 (1) Q1’15 Private Equity $22,857 $14,463 $13,507 Credit 25,758 16,218 20,594 Real Estate 1,004 828 672 Total $49,619 $31,509 $34,773 Private Equity Credit Real Estate Total Carry-Generating AUM $13,507 $20,594 $672 $34,773 + Uninvested CE AUM 18,695 9,562 550 28,807 + Invested AUM Not Currently Generating Carry 3,100 12,051 808 15,959 Carry-Eligible AUM $35,302 $42,207 $2,030 $79,539 $80 billion Carry-Eligible AUM ($ in millions) ($ in millions) (1) Prior period amounts were recast for individual segments to conform to the current presentation. (2) Represents invested AUM not currently generating carry for funds that have commenced investing capital for more than 24 months as of March 31, 2015. (3) Represents the percentage of additional appreciation required to reach the preferred return or high watermark and generate carried interest for funds whose investment period is greater than 24 months. $ in billions Category / Fund Invested AUM Not Currently Generating Carry Investment Period Active> 24 Months(2) Appreciation Required to Achieve Carry(3) Fund VIII $2.2 $ - NM Other PE 0.9 - NM Private Equity 3.1 - NM Drawdown 2.9 1.5 4% Liquid / Performing 7.0 0.2 1.2 1.5 < 250bps 250-500bps > 500bps Permanent Capital Vehicles ex AAM 2.2 - NM Credit 12.1 4.4 6% Real Estate 0.8 0.7 >500bps Total $16.0 $5.1 ($ in billions) Currently Generating Carry $34.8bn Not Currently Generating Carry $16.0bn Uninvested Carry- Eligible AUM $28.8bn
Drawdown $8.0 Permanent Capital Vehicles ex AAM $0.6 Fund VIII $15.8 PE Other $3.4 $0.6 Capital Deployment & Dry Powder Capital deployed across the platform totaled $2.2 billion for the quarter and $9.5 billion over the last twelve months. The pending investment commitments in private equity that have not yet been funded totaled $2.0 billion as of March 31, 2015. Dry Powder of $28.5 billion at the end of the quarter, of which $9.1 billion was eligible to receive management fees in the future. 9 Capital Deployment Segment 1Q’15 LTM Private Equity $1,016 $2,622 Credit 760 4,206 Real Estate 465 2,657 Total $2,241 $9,485 Credit $8.7 Private Equity $19.2 Real Estate $0.6 $28.5bn of Dry Powder ($ in millions) ($ in billions) Private Equity Credit Real Estate Includes investments in Presidio (IT Services), Leighton Services (Construction Services), Express Energy Services (Oil & Gas Services) and Tranquilidade (Insurance) Primarily comprised of investments in life settlements, energy lending, CLO debt and equity, non-performing loans in Europe, and general acquisitions of loans and securities in Europe Primarily comprised of commercial real estate debt investments (mortgages, subordinated loans, and commercial mortgage backed securities) made by ARI and debt funds/managed accounts as well as investments made by our second U.S. RE equity fund 1 Q ’ 1 5 H i g h l i g h t s Liquid / Performing $0.1
Shareholder Distribution Generated $0.35 of DE per share of common and equivalent during the quarter, driven by Management Business earnings and realized carried interest Apollo declared a quarterly distribution of $0.33 per Class A share to holders of record as of May 20, 2015 which is payable on May 29, 2015 10 ($ in thousands, except per share data) 1Q'14 4Q'14 1Q'15 DE After Taxes and Related Payables $412,143 $374,125 $143,909 Add Back: Taxes & Related Payables Attributable to Common & Equivalents 22,578 (1,748) 60 DE Before Certain Payables (1) 434,721 372,377 143,969 Percent to Common & Equivalents 43% 45% 45% DE Before Other Payables Attributable to Common & Equivalents 186,820 167,622 65,282 Less: Taxes & Related Payables Attributable to Common & Equivalents (22,578) 1,748 (60) DE Attributable to Common & Equivalents $164,242 $169,370 $65,222 Per Share of Common & Equivalent (2) $0.94 $0.91 $0.35 Retained Capital per Share of Common & Equivalent (2)(3) (0.10) (0.05) (0.02) Net Distribution per Share of Common & Equivalent (2) $0.84 $0.86 $0.33 Payout Ratio 89% 95% 94% (1) DE before certain payables represents distributable earnings before the deduction for estimated current corporate taxes and the payable under Apollo’s tax receivable agreement. (2) Per share calculations are based on end of period total Class A shares outstanding and RSUs that participate in distributions (see page 25 for the share rollforward), collectively referred to as common and equivalents. (3) Retained capital is withheld pro-rata from common and equivalent holders and AOG unitholders.
Balance Sheet Highlights At March 31, 2015, Apollo had $929 million in total cash, $926 million of investments, and $483 million of net carried interest receivable for a total net value of $2.3 billion, or $5.71 per DE share outstanding. Long-term debt of $1.0 billion, includes $500 million in senior notes due 2024 and $500 million of term loan due 2019. Apollo has a $500 million revolving credit facility expiring in 2019 that remained undrawn as of March 31, 2015. Unfunded future commitments totaled $666 million as of March 31, 2015, of which $357 million related to Fund VIII. 11 S&P and Fitch A / A- rated Undrawn Credit Facility $500 million ($ in millions) 1Q’15 Cash $929 Investments(1) 926 Carry Receivable(1) 946 Profit Sharing Payable (463) Total Net Value $2,338 Debt $1,030 Unfunded Future Commitments $666 ($ in millions) 1Q’15 Athene/AAA $397 GP Co-Investments / Other Investments(2) 529 Total Investments $926 Summary Balance Sheet (1) Investments and Carry Receivable are presented on an unconsolidated basis. (2) Represents realized gains from our general partner investments in the funds we manage and other balance sheet investments.
Carried Interest Receivable & Income (Loss) Detail 12 Note: The above table presents an analysis of Apollo's (i) carried interest receivable on an unconsolidated basis and (ii) realized and unrealized carried interest income (loss) for Apollo's combined segments. As of March 31, 2015 ($ in thousands) Carried Interest Receivable on an Unconsolidated Basis Unrealized Carried Interest Income (Loss) Realized Carried Interest Income Total Carried Interest Income (Loss) Private Equity Funds Fund VII $338,711 $50,529 $14,902 $65,431 Fund VI 183,545 (1) (30,470) 30,593 123 Fund V - (4) (7,373) - (7,373) Fund IV 2,668 (2,968) 640 (2,328) AAA/Other(2)(3) 160,885 (30,827) 29,900 (927) Total Private Equity Funds $685,809 ($21,109) $76,035 $54,926 Total Private Equity Funds, net of profit share 422,418 (25,576) 51,703 26,127 Credit Funds Drawdown 148,601 (4) (58,275) 39,577 (18,698) Liquid/Performing 81,798 12,504 6,696 19,200 Permanent Capital Vehicles ex AAM 9,402 - 10,774 10,774 Total Credit Funds $239,801 ($45,771) $57,047 $11,276 Total Credit Funds, net of profit share 48,561 (32,538) 33,597 1,059 Real Estate Funds CPI Funds 1,194 (479) 2,082 1,603 AGRE U.S. Real Estate Fund, L.P. 11,537 (115) 203 88 Other 7,781 568 132 700 Total Real Estate Funds $20,512 ($26) $2,417 $2,391 Total Real Estate Funds, net of profit share 11,733 (35) 610 575 Total $946,122 ($66,906) $135,499 $68,593 Total, net of profit share $482,712 (5) ($58,149) $85,910 $27,761 For the Three Months Ended March 31, 2015 (1) Fund VI's remaining investments and escrow cash were valued at 104% of the funds unreturned capital, which was below a specified return ratio of 115%. As a result, Fund VI is required to place in escrow current and future carried interest income distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation of Fund VI. As of March 31, 2015, Fund VI carried interest receivable includes $166.3 million of carried interest income in escrow. (2) Includes certain SIAs. (3) Includes $122.6 million of carried interest receivable from AAA Investments, L.P. (“AAA Investments”) which will be paid in common shares of Athene Holding (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding (unless such payment in shares would violate Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended), or paid in cash if AAA sells the shares of Athene Holding. (4) As of March 31, 2015, Fund V, ACLF and certain SIAs within the Credit segment had $4.2 million, $4.4 million and $27.0 million, respectively, in general partner obligations to return previously distributed carried interest income. The fair value gain on investments and income at the fund level needed to reverse the general partner obligations in Fund V, ACLF and certain SIAs within the Credit segment was $28.0 million, $10.6 million and $30.7 million, respectively, as of March 31, 2015. (5) There was a corresponding profit sharing payable of $463.4 million as of March 31, 2015, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $99.0 million.
$2 $16 $60 $61 8% 20% 32% 22% 0% 5% 10% 15% 20% 25% 30% 35% $0 $10 $20 $30 $40 $50 $60 $70 2010 2012 2014 3/31/15 % S u b - A d v i s e d A A M A U M ( $ i n b i l l i o n s ) AAM AUM Sub-Advised by Apollo Note: On October 2, 2013, Athene Holding closed its acquisition of the U.S. annuity operations of Aviva plc, which added approximately $44 billion of total and Fee-Generating AUM within Apollo’s credit segment. Athene Asset Management As of March 31, 2015, AAM had $60.8 billion of total AUM in accounts owned by or related to Athene Holding. Of the total AUM, $13.5 billion or 22% of assets was either sub-advised by Apollo or invested in funds and investment vehicles managed by Apollo. At March 31, 2014, these amounts were $9.8 billion and 17%, respectively. Over time, Apollo will continue to seek attractive investment opportunities that are consistent with AAM’s investment objectives on behalf of Athene. 13 AUM & Sub-Advised Percentage Sub-Advised AUM by Asset Category ($ in billions) Sub-Advised AUM 1Q’15 Private Equity $ 1.0 Credit $9.2 Liquid / Performing 8.4 Drawdown 0.8 Real Estate $ 3.3 RE Debt 3.1 RE Equity 0.2 Total $13.5
GAAP Statement of Operations 14 ($ in thousands, except per share data) 1Q'14 4Q'14 1Q'15 Revenues: Advisory and transaction fees from affiliates, net $116,065 $67,665 $8,543 Management fees from affiliates 209,791 206,933 209,207 Carried interest income from affiliates 165,544 798 59,068 Total Revenues 491,400 275,396 276,818 Expenses: Compensation and benefits: Salary, bonus and benefits 80,530 77,285 87,633 Equity-based compensation 58,978 24,644 20,103 Profit sharing expense 103,959 17,257 48,629 Total Compensation and Benefits 243,467 119,186 156,365 Interest expense 3,114 7,366 7,440 General, administrative and other 24,678 24,042 22,919 Professional fees 19,452 24,431 15,233 Occupancy 9,903 10,190 9,958 Placement fees 1,786 1,387 1,520 Depreciation and amortization 11,719 11,085 10,978 Total Expenses 314,119 197,687 224,413 Other Income: Net gains (losses) from investment activities 223,408 (643) 12,686 Net gains from investment activities of consolidated variable interest entities 47,735 30,252 134,703 Income (loss) from equity method investments 22,910 (4,200) (1,314) Interest income 3,328 2,095 725 Other income, net 17,531 30,810 4,874 Total Other Income 314,912 58,314 151,674 Income before income tax provision 492,193 136,023 204,079 Income tax provision (32,549) (50,283) (5,514) Net Income 459,644 85,740 198,565 Net income attributable to Non-Controlling Interests (387,475) (63,558) (167,638) Net Income Attributable to Apollo Global Management, LLC $72,169 $22,182 $30,927 Distributions Declared per Class A Share $1.08 $0.73 $0.86 Net Income Per Class A Share: Net Income Available to Class A Share – Basic $0.32 $0.04 $0.09 Net Income Available to Class A Share –Diluted $0.32 $0.04 $0.09 Weighted Average Number of Class A Shares Outstanding– Basic 147,776,519 162,107,977 165,968,620 Weighted Average Number of Class A Shares Outstanding– Diluted 147,776,519 162,107,977 165,968,620
Appendix 15
Summary of Combined Segments 16 ($ in thousands, except per share data and where noted) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2013 2014 Management fees from affiliates $164,227 $169,277 $165,202 $231,996 $223,830 $228,858 $227,693 $220,643 $224,713 $730,702 $901,024 Advisory and transaction fees from affiliates, net 47,419 65,084 28,962 55,097 116,065 60,787 71,321 67,909 9,543 196,562 316,082 Carried interest income from affiliates 9,051 10,029 9,117 8,725 8,464 10,009 12,106 10,620 10,774 36,922 41,199 Total Management Business Revenues 220,697 244,390 203,281 295,818 348,359 299,654 311,120 299,172 245,030 964,186 1,258,305 Salary, bonus and benefits 73,396 69,282 81,266 70,809 80,531 89,831 91,823 77,661 87,552 294,753 339,846 Equity-based compensation 17,356 16,752 16,577 15,656 58,137 13,583 14,626 19,149 15,831 66,341 105,495 General, administrative and other 22,644 25,815 21,316 27,310 24,361 24,947 23,797 23,380 22,805 97,085 96,485 Professional fees 15,467 21,486 18,430 27,065 19,042 19,882 17,675 24,008 15,229 82,448 80,607 Occupancy 9,805 10,149 9,849 10,143 9,902 10,419 9,979 10,211 10,026 39,946 40,511 Placement fees 9,358 3,120 3,184 26,762 1,786 3,489 8,760 1,387 1,264 42,424 15,422 Depreciation and amortization 2,874 2,892 2,642 2,638 2,609 2,520 2,556 2,497 2,610 11,046 10,182 Total Non-Compensation Expenses 60,148 63,462 55,421 93,918 57,700 61,257 62,767 61,483 51,934 272,949 243,207 Total Management Business Expenses 150,900 149,496 153,264 180,383 196,368 164,671 169,216 158,293 155,317 634,043 688,548 Other Income (Loss) 5,778 3,873 20,703 7,525 5,315 3,119 (347) 33,716 4,692 37,879 41,803 Non-Controlling Interest (3,464) (3,254) (2,744) (4,523) (3,256) (3,124) (3,174) (3,134) (2,846) (13,985) (12,688) Management Business Economic Income $72,111 $95,513 $67,976 $118,437 $154,050 $134,978 $138,383 $171,461 $91,559 $354,037 $598,872 Per Share $0.18 $0.24 $0.17 $0.30 $0.39 $0.34 $0.35 $0.43 $0.23 $0.90 $1.55 Unrealized gains (losses) 771,459 (574,949) 311,218 (104,893) (301,831) 37,768 (560,271) (523,452) (66,905) 402,835 (1,347,786) Realized gains 345,210 840,543 638,896 631,755 462,626 241,827 490,291 518,364 124,724 2,456,404 1,713,108 Total Carried Interest Income (Loss) 1,116,669 265,594 950,114 526,862 160,795 279,595 (69,980) (5,088) 57,819 2,859,239 365,322 Profit sharing expense: - - Unrealized profit sharing expense 258,982 (216,319) 127,644 (36,457) (104,650) 66,679 (221,522) (257,815) (8,757) 133,850 (517,308) Realized profit sharing expense 150,845 346,813 259,295 221,003 203,088 94,829 214,984 269,315 49,589 977,956 782,216 Total Profit Sharing Expense 409,827 130,494 386,939 184,546 98,438 161,508 (6,538) 11,500 40,832 1,111,806 264,908 Net interest expense (6,071) (6,268) (5,206) (5,646) (1,983) (3,416) (7,076) (6,623) (6,692) (23,191) (19,098) Other income (loss), net - 284 2,403 7,516 14,040 - (1,479) (1,665) (348) 10,203 10,896 Net gains (losses) from investment activities 4,030 (5,752) (7,114) (3,757) 18,013 (9,180) 116 113 1,761 (12,593) 9,062 Income (Loss) from equity method investments 29,359 19,270 31,253 33,329 28,295 25,866 4,825 (4,081) (1,198) 113,211 54,905 Other Income (Loss) 27,318 7,534 21,336 31,442 58,365 13,270 (3,614) (12,256) (6,477) 87,630 55,765 Incentive Business Economic Income (Loss) $734,160 $142,634 $584,511 $373,758 $120,722 $131,357 ($67,056) ($28,844) $10,510 $1,835,063 $156,179 Per Share $1.87 $0.36 $1.48 $0.95 $0.30 $0.33 ($0.17) ($0.07) $0.03 $4.66 $0.40 Economic Income $806,271 $238,147 $652,487 $492,195 $274,772 $266,335 $71,327 $142,617 $102,069 $2,189,100 $755,051 Income Tax Provision (34,317) (19,900) (79,141) (40,321) (51,110) (59,077) (38,902) (36,498) (8,520) (173,679) (185,587) Economic Net Income $771,954 $218,247 $573,346 $451,874 $223,662 $207,258 $32,425 $106,119 $93,549 $2,015,421 $569,464 Per Share $1.97 $0.55 $1.45 $1.14 $0.56 $0.52 $0.08 $0.26 $0.23 $5.12 $1.47 AUM ($ in millions) 114,269 113,116 112,687 161,177 159,326 167,496 163,900 159,797 162,948 161,177 159,797 Fee-Generating AUM ($ in millions) 81,633 79,290 79,343 128,368 128,537 130,329 129,577 128,714 131,252 128,368 128,714 Full Year Note: The prior period financial data was recast to conform to the current presentation.
Private Equity 17 ($ in thousands, except per share data and where noted) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2013 2014 Management fees from affiliates $66,272 $65,684 $64,801 $88,076 $79,421 $82,045 $76,848 $76,755 $74,597 $284,833 $315,069 Advisory and transaction fees from affiliates, net 24,617 41,663 5,646 6,445 37,636 5,178 11,925 3,502 3,841 78,371 58,241 Total Management Business Revenues 90,889 107,347 70,447 94,521 117,057 87,223 88,773 80,257 78,438 363,204 373,310 Salary, bonus and benefits 27,374 25,731 27,919 28,737 22,269 26,713 23,792 23,915 25,800 109,761 96,689 Equity-based compensation 8,373 7,485 7,505 8,604 24,449 6,957 8,028 10,092 9,056 31,967 49,526 Other expenses 18,950 23,702 18,331 39,913 17,418 18,801 16,600 17,467 15,185 100,896 70,286 Total Management Business Expenses 54,697 56,918 53,755 77,254 64,136 52,471 48,420 51,474 50,041 242,624 216,501 Other Income (Loss) 1,458 632 6,369 3,620 1,565 786 (1,592) 11,651 1,459 12,079 12,410 Management Business Economic Income $37,650 $51,061 $23,061 $20,887 $54,486 $35,538 $38,761 $40,434 $29,856 $132,659 $169,219 Per Share $0.10 $0.13 $0.06 $0.05 $0.14 $0.09 $0.10 $0.10 $0.07 $0.34 $0.44 Carried interest income (loss): Unrealized gains (losses) 697,614 (509,667) 318,237 (51,462) (293,589) (10,394) (449,506) (442,604) (21,109) 454,722 (1,196,093) Realized gains 293,379 738,257 534,068 496,821 396,840 198,103 369,968 463,165 76,035 2,062,525 1,428,076 Total Carried Interest Income (Loss) 990,993 228,590 852,305 445,359 103,251 187,709 (79,538) 20,561 54,926 2,517,247 231,983 Profit sharing expense: Unrealized profit sharing expense 255,962 (199,573) 128,998 (37,712) (115,911) 33,756 (186,444) (234,348) 4,467 147,675 (502,947) Realized profit sharing expense 131,859 312,895 229,027 208,948 182,006 82,138 167,174 250,002 24,332 882,729 681,320 Total Profit Sharing Expense 387,821 113,322 358,025 171,236 66,095 115,894 (19,270) 15,654 28,799 1,030,404 178,373 Net interest expense (2,842) (2,831) (2,414) (2,614) (1,124) (1,601) (2,634) (2,524) (2,549) (10,701) (7,883) Other income, net - - - 1,695 1,599 - - 18 162 1,695 1,617 Income (Loss) from equity method investments 22,551 12,170 23,574 20,516 18,800 13,419 1,069 (2,870) 5,483 78,811 30,418 Other Income (Loss) 19,709 9,339 21,160 19,597 19,275 11,818 (1,565) (5,376) 3,096 69,805 24,152 Incentive Business Economic Income (Loss) $622,881 $124,607 $515,440 $293,720 $56,431 $83,633 ($61,833) ($469) $29,223 $1,556,648 $77,762 Per Share $1.59 $0.32 $1.31 $0.74 $0.14 $0.21 ($0.15) $0.00 $0.07 $3.95 $0.20 Economic Income (Loss) $660,531 $175,668 $538,501 $314,607 $110,917 $119,171 ($23,072) $39,965 $59,079 $1,689,307 $246,981 AUM ($ in millions) 40,435 40,592 43,146 50,158 48,336 51,836 46,423 41,299 40,533 50,158 41,299 Fee-Generating AUM ($ in millions) 27,868 26,014 27,059 34,173 34,207 33,554 32,104 30,285 30,199 34,173 30,285 Full Year Note: The prior period financial data was recast to conform to the current presentation.
Credit 18 ($ in thousands, except per share data and where noted) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2013 2014 Management fees from affiliates $84,364 $90,387 $87,023 $130,659 $131,629 $134,605 $139,645 $132,863 $139,452 $392,433 $538,742 Advisory and transaction fees from affiliates, net 21,677 22,148 23,280 47,538 77,480 55,609 58,593 63,504 5,352 114,643 255,186 Carried interest income from affiliates: 9,051 10,029 9,117 8,725 8,464 10,009 12,106 10,620 10,774 36,922 41,199 Total Management Business Revenues 115,092 122,564 119,420 186,922 217,573 200,223 210,344 206,987 155,578 543,998 835,127 Salary, bonus and benefits 38,830 36,401 43,992 33,833 50,744 55,770 60,422 43,610 53,679 153,056 210,546 Equity-based compensation 6,526 7,024 5,922 4,695 28,251 5,533 5,590 7,746 5,756 24,167 47,120 Other expenses 34,617 34,503 30,748 47,657 34,854 37,335 40,579 38,484 32,120 147,525 151,252 Total Management Business Expenses 79,973 77,928 80,662 86,185 113,849 98,638 106,591 89,840 91,555 324,748 408,918 Other Income 3,347 3,028 13,583 3,727 3,345 2,213 1,590 18,836 2,804 23,685 25,984 Non-Controlling Interest (3,464) (3,254) (2,744) (4,523) (3,256) (3,124) (3,174) (3,134) (2,846) (13,985) (12,688) Management Business Economic Income $35,002 $44,410 $49,597 $99,941 $103,813 $100,674 $102,169 $132,849 $63,981 $228,950 $439,505 Per Share $0.09 $0.11 $0.13 $0.25 $0.26 $0.25 $0.26 $0.33 $0.16 $0.58 $1.14 Carried interest income (loss): Unrealized gains (losses) 73,247 (58,843) (10,325) (60,647) (7,898) 47,174 (107,159) (88,761) (45,770) (56,568) (156,644) Realized gains 51,477 102,128 104,827 134,906 65,786 39,726 120,323 55,199 46,272 393,338 281,034 Total Carried Interest Income (Loss) 124,724 43,285 94,502 74,259 57,888 86,900 13,164 (33,562) 502 336,770 124,390 Profit sharing expense: Unrealized profit sharing expense 2,745 (12,299) (3,125) (855) 11,863 31,741 (31,616) (27,347) (13,233) (13,534) (15,359) Realized profit sharing expense 18,805 33,935 30,218 11,855 21,082 11,056 47,618 19,391 23,450 94,813 99,147 Total Profit Sharing Expense 21,550 21,636 27,093 11,000 32,945 42,797 16,002 (7,956) 10,217 81,279 83,788 Net interest expense (2,599) (2,707) (2,043) (2,337) (570) (1,397) (3,776) (3,531) (3,462) (9,686) (9,274) Other income (loss), net - 207 2,480 5,821 12,441 - (1,479) (1,683) (510) 8,508 9,279 Net gains (losses) from investment activities 4,030 (5,752) (7,114) (3,757) 18,013 (9,180) 116 113 1,761 (12,593) 9,062 Income (Loss) from equity method investments 6,932 6,358 6,755 10,633 8,748 9,371 3,115 (2,422) (6,907) 30,678 18,812 Other Income (Loss) 8,363 (1,894) 78 10,360 38,632 (1,206) (2,024) (7,523) (9,118) 16,907 27,879 Incentive Business Economic Income (Loss) $111,537 $19,755 $67,487 $73,619 $63,575 $42,897 ($4,862) ($33,129) ($18,833) $272,398 $68,481 Per Share $0.28 $0.05 $0.17 $0.19 $0.16 $0.11 ($0.01) ($0.08) ($0.05) $0.69 $0.18 Economic Income $146,539 $64,165 $117,084 $173,560 $167,388 $143,571 $97,307 $99,720 $45,148 $501,348 $507,986 AUM ($ in millions) 64,222 62,901 60,052 101,580 101,941 106,454 108,282 108,960 112,919 101,580 108,960 Fee-Generating AUM ($ in millions) 48,488 47,507 46,625 88,249 88,404 90,780 91,614 92,192 94,858 88,249 92,192 Full Year Note: The prior period financial data was recast to conform to the current presentation.
Real Estate 19 ($ in thousands, except per share data and where noted) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 2013 2014 Management fees from affiliates $13,591 $13,206 $13,378 $13,261 $12,780 $12,208 $11,200 $11,025 $10,664 $53,436 $47,213 Advisory and transaction fees from affiliates, net 1,125 1,273 36 1,114 949 - 803 903 350 3,548 2,655 Total Management Business Revenues 14,716 14,479 13,414 14,375 13,729 12,208 12,003 11,928 11,014 56,984 49,868 Salary, bonus and benefits 7,192 7,151 9,355 8,238 7,518 7,348 7,610 10,135 8,073 31,936 32,611 Equity-based compensation 2,457 2,243 3,150 2,357 5,437 1,093 1,007 1,312 1,019 10,207 8,849 Other expenses 6,581 5,257 6,342 6,348 5,428 5,121 5,588 5,532 4,629 24,528 21,669 Total Management Business Expenses 16,230 14,651 18,847 16,943 18,383 13,562 14,205 16,979 13,721 66,671 63,129 Other Income (Loss) 973 213 751 178 405 120 (345) 3,229 429 2,115 3,409 Management Business Economic Income (Loss) ($541) $41 ($4,682) ($2,390) ($4,249) ($1,234) ($2,547) ($1,822) ($2,278) ($7,572) ($9,852) Carried interest income (loss): Unrealized gains (losses) 598 (6,439) 3,306 7,216 (344) 988 (3,606) 7,913 (26) 4,681 4,951 Realized gains 354 158 1 28 - 3,998 - - 2,417 541 3,998 Total Carried Interest Income (Loss) 952 (6,281) 3,307 7,244 (344) 4,986 (3,606) 7,913 2,391 5,222 8,949 Profit sharing expense: Unrealized profit sharing expense 275 (4,447) 1,771 2,110 (602) 1,182 (3,462) 3,880 9 (291) 998 Realized profit sharing expense 181 (17) 50 200 - 1,635 192 (78) 1,807 414 1,749 Total Profit Sharing Expense 456 (4,464) 1,821 2,310 (602) 2,817 (3,270) 3,802 1,816 123 2,747 Net interest expense (630) (730) (749) (695) (289) (418) (666) (568) (681) (2,804) (1,941) Income (Loss) from equity method investments (124) 819 847 2,180 747 3,076 641 1,211 226 3,722 5,675 Other Income (Loss) (754) 89 98 1,485 458 2,658 (25) 643 (455) 918 3,734 Incentive Business Economic Income (Loss) ($258) ($1,728) $1,584 $6,419 $716 $4,827 ($361) $4,754 $120 $6,017 $9,936 Economic Income (Loss) ($799) ($1,687) ($3,098) $4,029 ($3,533) $3,593 ($2,908) $2,932 ($2,158) ($1,555) $84 AUM ($ in millions) 9,612 9,623 9,489 9,439 9,049 9,205 9,195 9,538 9,496 9,439 9,538 Fee-Generating AUM ($ in millions) 5,277 5,769 5,659 5,946 5,926 5,995 5,859 6,237 6,195 5,946 6,237 Full Year Note: The prior period financial data was recast to conform to the current presentation.
Reconciliation of Non-GAAP Measures to GAAP 20 ($ in thousands) 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Distributable Earnings $280,242 $609,899 $453,409 $527,575 $438,043 $248,598 $372,223 $370,916 $146,019 Net unrealized carried interest income 512,477 (358,630) 183,574 (68,436) (197,181) (28,911) (338,749) (265,637) (58,148) Unrealized investment and other income 13,699 (15,294) (996) 5,798 35,563 10,958 (2,944) (32,664) (45) Add back: Non-cash revenues 20,083 21,816 35,719 45,552 59,093 51,793 57,979 91,648 32,684 Less: Equity-based compensation (17,356) (16,752) (16,577) (15,656) (58,137) (13,583) (14,626) (19,149) (15,831) Less: Depreciation and amortization (2,874) (2,892) (2,642) (2,638) (2,609) (2,520) (2,556) (2,497) (2,610) Economic Income $806,271 $238,147 $652,487 $492,195 $274,772 $266,335 $71,327 $142,617 $102,069 Income tax provision (18,579) (18,139) (47,204) (23,647) (32,549) (35,037) (29,376) (50,283) (5,514) Net income attributable to Non-Controlling Interests in Apollo Operating Group (485,246) (126,483) (360,782) (285,139) (155,100) (151,995) (42,955) (54,632) (48,012) Transaction related charges and equity-based compensation (1) (53,468) (34,788) (51,985) (24,249) (14,954) (7,635) 3,214 (15,520) (17,616) Net Income Attributable to Apollo Global Management, LLC $248,978 $58,737 $192,516 $159,160 $72,169 $71,668 $2,210 $22,182 $30,927 (1) Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions. Equity-based compensation adjustment represents non- cash revenues and expenses related to equity awards granted by unconsolidated affiliates to employees of the Company.
($ in millions) Vintage Year Committed Capital Total Invested Capital (1) Realized Value(1) Unrealized Value (1) Total Value(1) Gross IRR (1) Net IRR (1) Private Equity: Fund VIII 2013 $18,377 $2,090 - $2,300 $2,300 NM (2) NM (2) Fund VII 2008 14,677 15,243 $26,085 6,536 32,621 37% 28% Fund VI 2006 10,136 12,457 16,826 4,624 21,450 13 10 Fund V 2001 3,742 5,192 12,666 172 12,838 61 44 Fund IV 1998 3,600 3,481 6,779 13 6,792 12 9 Fund III 1995 1,500 1,499 2,695 - 2,695 18 11 Fund I, II & MIA (3) 1990/1992 2,220 3,773 7,924 - 7,924 47 37 Traditional Private Equity Funds $54,252 $43,735 $72,975 $13,645 $86,620 39% (4) 25% (4) AION 2013 825 134 9 162 171 NM (2) NM (2) ANRP 2012 1,323 755 196 738 934 16% 8% Total Private Equity $56,400 $44,624 $73,180 $14,545 $87,725 Credit AEOF (5) — $425 - - - - NM (2) NM (2) SCRF III (5) — 497 $307 $69 $320 $389 NM (2) NM (2) COF III 2014 3,426 1,759 380 1,187 1,567 NM (2) NM (2) FCI II 2013 1,555 943 143 945 1,088 NM (2) NM (2) EPF II(6) 2012 3,397 2,475 655 2,355 3,010 23% 11% FCI 2012 559 981 489 750 1,239 15 10 AEC 2012 292 693 562 171 733 11 6 COF I 2008 1,485 1,611 4,287 120 4,407 30 27 COF II 2008 1,583 2,176 2,994 148 3,142 14 11 EPF I(6) 2007 1,390 1,826 2,625 427 3,052 23 17 ACLF 2007 984 1,449 2,451 128 2,579 12 11 SIAs (7) 2008-2015 3,586 2,599 2,328 733 3,061 10 7 Total Credit $19,179 $16,819 $16,983 $7,284 $24,267 Real Estate Apollo U.S. Real Estate Fund II, L.P. (5) — $158 $73 - $73 $73 NM (2) NM (2) AGRE U.S. Real Estate Fund, L.P(8) 2012 640 612 $321 484 805 18% 14% AGRE Debt Fund I, LP 2011 1,190 1,185 314 994 1,308 7 6 CPI Capital Partners North America (9) 2006 600 453 350 25 375 15 10 CPI Capital Partners Asia Pacific (9) 2006 1,292 1,193 1,470 226 1,696 33 28 CPI Capital Partners Europe(6)(9) 2006 1,247 823 472 169 641 6 4 CPI Other(10) Various 1,841 N/A (10) N/A (10) N/A (10) N/A (10) NM (10) NM (10) Total Real Estate $6,968 $4,339 $2,927 $1,971 $4,898 As of March 31, 2015 Investment Records as of March 31, 2015 Drawdown 21 Note: The above table summarizes the investment record by segment of Apollo's significant multi-year drawdown, commitment based funds and SIAs as defined in the non-GAAP financial information & definitions section of this presentation. The significant funds and SIAs included in the investment record table above have greater than $200 million of AUM that did not predominantly invest in other Apollo funds or SIAs.
Investment Records – Notes 22 (1) Refer to the definitions of Total Invested Capital, Realized Value, Unrealized Value, Total Value, Gross IRR and Net IRR in the non-GAAP financial information & definitions section in this presentation. (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) Fund I and Fund II were structured such that investments were made from either fund depending on which fund had available capital. Apollo does not differentiate between Fund I and Fund II investments for purposes of performance figures because they are not meaningful on a separate basis and do not demonstrate the progression of returns over time. The general partners and managers of Funds I, II and MIA, as well as the general partner of Fund III, were excluded assets in connection with the 2007 Reorganization. As a result, Apollo did not receive the economics associated with these entities. The investment performance of these funds is presented to illustrate fund performance associated with Apollo's Managing Partners and other investment professionals. (4) Total IRR is calculated based on total cash flows for all funds presented. (5) AEOF, SCRF III and Apollo U.S. Real Estate Fund II, L.P. were launched prior to March 31, 2015 and have not established their vintage year. (6) Funds are denominated in Euros and historical figures are translated into U.S. dollars at an exchange rate of €1.00 to $1.07 as of March 31, 2015. (7) Amounts presented have been aggregated for significant SIAs with AUM greater than $200 million that did not predominantly invest in other Apollo funds or SIAs. Certain SIAs, historical figures are denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.07 as of March 31, 2015. Additionally, certain SIAs, amounts for Total Invested Capital, Realized Value, Unrealized Value and Total Value were not included in the table as they were deemed not meaningful. (8) AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund, has $146 million of co-investment commitments raised, which are included in the figures in the table. A co- invest entity within AGRE U.S. Real Estate Fund, L.P. is denominated in GBP and translated into U.S. dollars at an exchange rate of £1.00 to $1.48 as of March 31, 2015. (9) As part of the acquisition of Citi Property Investors (“CPI”), Apollo acquired general partner interests in fully invested funds. The gross and net IRRs are presented in the investment record table since acquisition on November 12, 2010. The net IRRs from the inception of the respective fund to March 31, 2015 were (7)%, 7% and (7)% for the CPI Capital Partners North America, Asia Pacific and Europe funds, respectively. These net IRRs were primarily achieved during a period in which Apollo did not make the initial investment decisions and Apollo only became the general partner or manager of these funds upon completing the acquisition on November 12, 2010. (10) CPI Other consists of funds or individual investments of which Apollo is not the general partner or manager and only receives fees pursuant to either a sub-advisory agreement or an investment management and administrative agreement. CPI Other fund performance is a result of invested capital prior to Apollo’s management of these funds. Return and certain other performance data are therefore not considered meaningful as Apollo performs primarily an administrative role.
Investment Records as of March 31, 2015 Liquid / Performing 23 Note: The above table summarizes the investment record for significant funds in the liquid/performing category within Apollo's credit segment as defined in the non-GAAP financial information & definitions section of this presentation. The significant funds included in the investment record table above for liquid/performing have greater than $200 million of AUM that did not predominantly invest in other Apollo funds or SIAs. Additionally, the table above excludes AUM of $29.0 billion in aggregate for CLOs and other performing credit vehicles, SIAs, sub-advisory managed accounts owned by or related to Athene and other hedge fund style and structured credit funds. All amounts are as of March 31, 2015, unless otherwise noted. (1) Net returns since inception presented are on an annualized basis. Refer to the definition of net returns in the non-GAAP financial information & definitions section of this presentation. (2) TRF returns have not been presented as the fund commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful. (3) As part of the Stone Tower acquisition, Apollo acquired the manager of ACSF and ACF. The net returns are presented in the investment record table above since acquisition on April 2, 2012. As of March 31, 2015, the net returns from inception for ACSF and ACF were 7% and (2)% respectively. These returns were primarily achieved during a period in which Apollo did not make the initial investment decisions. Apollo became the manager of these funds upon completing the acquisition on April 2, 2012. ($ in millions) Vintage Year Net Asset Value as of 3/31/15 Since Inception to 3/31/15(1) For the Three Months Ended 3/31/15 For the Three Months Ended 3/31/14 Since Inception to 12/31/14(1) For the Year Ended 12/31/14 TRF(2) 2014 $426 NM (2) NM (2) NM (2) NM (2) NM (2) ACSF(3) 2011 589 6% (3) 0% (3) NM (3) 7% (3) 1% (3) ACF(3) 2005 2,035 10 (3) 3 (3) NM (3) 9 (3) 5 (3) VIF 2003 172 5 (4) 2 6 (5) Total $3,222 Net Return(1)
Investment Records as of March 31, 2015 Permanent Capital Vehicles ex AAM 24 (1) Total returns are based on the change in closing trading prices during the respective periods presented taking into account dividends and distributions, if any, as if they were reinvested without regard to commission. Inception to date total returns are presented on an annualized basis. (2) An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. (3) Amounts represent raised capital net of offering and issuance costs. (4) AAA is the sole limited partner in AAA Investments. Athene was AAA Investments’ only investment as of March 31, 2015. During the second quarter of 2014, Athene Holding raised $1.2 billion of net equity commitments primarily from third-party institutional investors, certain existing investors in Athene, and employees of Athene and its affiliates (the “Athene Private Placement”). For the period December 31, 2014 through March 31, 2015, AAA Investments' ownership stake in Athene was reduced primarily as a result of the final closing of the Athene Private Placement, resulting in an approximate 47.0% economic ownership stake as of March 31, 2015 (calculated as if the commitments on the Athene Private Placement closed through March 31, 2015 were fully drawn down but without giving effect to (i) restricted common shares issued under Athene’s management equity plan or (ii) common shares to be issued after March 31, 2015 under the services agreement between AAA and Apollo or the transaction advisory services agreement between Athene and Apollo) and effectively 45% of the voting power of Athene. (5) MidCap is not a publicly traded vehicle and therefore IPO year is not applicable. Raised Capital represents total committed capital and Gross Assets represent total average quarterly levered assets. (6) Returns have not been presented as the publicly traded vehicle commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful. (7) Gross assets presented for AFT and AIF represents total managed assets of these closed-end funds. (8) Refer to www.apolloic.com for the most recent financial information on AINV. The information contained on AINV’s website is not part of this presentation. All amounts are as of December 31, 2014 except for total returns. Note: The above table summarizes the investment record for our public vehicles as defined in the non-GAAP financial information & definitions section of this presentation. All amounts are as of March 31, 2015, unless otherwise noted. ($ in millions) IPO Year(2) Raised Capital(3) Gross Assets Since Inception to 3/31/15(1) For the Three Months Ended 3/31/15 For the Three Months Ended 3/31/14 Since Inception to 12/31/14(1) For the Year Ended 12/31/14 Private Equity AAA(4) 2006 $1,823 $2,155 10% 25% 16% 6% 4% Credit: MidCap(5) N/A $1,293 $2,167 NM (6) NM (6) N/A N/A N/A AIF(7) 2013 276 404 (2%) 4% NM (6) NM (6) NM (6) AFT(7) 2011 295 437 4 9 2% 2% (1%) AMTG 2011 791 4,173 6 4 13 5 19 AINV (8) 2004 3,080 3,701 5 6 0 4 (3) Real Estate: ARI 2009 $1,081 $2,022 7% 8% 5% 6% 11% Total $8,639 $15,059 Total Returns(1)
Share Rollforward 25 1Q’14 Q2’14 Q3’14 Q4’14 1Q’15 Total GAAP Weighted Average Outstanding Class A Shares – Basic 147,776,519 152,852,427 158,466,602 162,107,977 165,968,620 Non-GAAP Adjustments: Apollo Operating Group Units ("AOG" Units) 228,954,598 225,725,411 222,736,477 222,698,738 222,545,477 RSUs 21,386,107 21,142,309 19,410,438 16,284,481 14,672,264 Non-GAAP Weighted Average Diluted Shares Outstanding 398,117,224 399,720,147 400,613,517 401,091,196 403,186,361 1Q’14 Q2’14 Q3’14 Q4’14 1Q’15 Total GAAP Outstanding Class A Shares – Basic 148,952,653 156,296,748 159,956,660 163,046,554 167,912,379 Non-GAAP Adjustments: AOG Units 228,954,598 222,736,477 222,736,477 222,680,477 222,455,477 Vested RSUs 21,310,057 21,573,419 18,374,602 17,354,242 13,755,489 Non-GAAP Diluted Shares Outstanding 399,217,308 400,606,644 401,067,739 403,081,273 404,123,345 Unvested RSUs Eligible for Distribution Equivalents 3,963,006 4,293,973 4,192,330 4,988,367 4,681,555 Distributable Earnings Shares Outstanding 403,180,314 404,900,617 405,260,069 408,069,640 408,804,900
Non-GAAP Financial Information & Definitions 26 Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principals in the United States of America (“Non-GAAP”): “Economic Income” (previously referred to as Economic Net Income), or “EI”, as well as “Economic Net Income” (previously referred to as ENI After Taxes), or “ENI”, 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 EI and ENI such as the amount of management fees, advisory and transaction fees and carried interest income are indicative of Apollo’s performance. Management uses these performance measures in making key operating decisions such as the following: • Decisions related to the allocation of resources such as staffing decisions including hiring and locations for deployment of the new hires; • Decisions related to capital deployment such as providing capital to facilitate growth for the business and/or to facilitate expansion into new businesses; and • Decisions related to expenses, such as determining annual discretionary bonuses and equity-based compensation awards to its employees. With respect to compensation, management seeks to align the interests of certain professionals and selected other individuals with those of the investors in the funds and those of Apollo's shareholders by providing such individuals a profit sharing interest in the carried interest income earned in relation to the funds. To achieve that objective, a certain amount of compensation is based on Apollo's performance and growth for the year. These measures of profitability have certain limitations in that they do not take into account certain items included under U.S. GAAP. EI represents segment income (loss) before income tax provision excluding transaction-related charges arising from the 2007 private placement, and any acquisitions. Transaction-related charges includes equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions. In addition, segment data excludes non-cash revenue and expense related to equity awards granted by unconsolidated affiliates to employees of the Company, as well as the assets, liabilities and operating results of the funds and VIEs that are included in the consolidated financial statements. • ENI represents EI adjusted to reflect income tax provision on EI 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 economic assumptions and methodologies that impact the implied income tax provision are similar to those methodologies and certain 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 EI. • “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 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 EI and ENI per share. • “Non-GAAP Diluted Shares Outstanding” is calculated using the GAAP outstanding Class A shares plus non-GAAP adjustments assuming (i) the exchange of all of the AOG Units for Class A shares and (ii) the settlement of the vested RSUs in the form of Class A shares during the period. Management uses this measure, taking into account the unvested RSUs that participate in distributions, in determining our Class A shares eligible for cash distributions. • “Distributable Earnings Shares Outstanding” or “DE Shares Outstanding” represents Non-GAAP Diluted Shares Outstanding and unvested RSUs that participate in distributions. Management uses this measure in determining DE per share as well as DE After Taxes and Related Payables per share described below. • “Distributable Earnings”, or “DE”, as well as “DE After Taxes and Related Payables” are derived from our segment reported results, and are supplemental measures to assess performance and amounts available for distribution to Class A shareholders, holders of RSUs that participate in distributions and holders of AOG Units. DE represents the amount of net realized earnings without the effects of the consolidation of any of the affiliated funds. DE, which is a component of EI, is the sum across all segments of (i) total management fees and advisory and transaction fees, excluding monitoring fees received from Athene based on its capital and surplus (as defined in Apollo's transaction advisory services agreement with Athene), (ii) other income (loss), excluding the gains (losses) arising from the reversal of a portion of the tax receivable agreement liability, (iii) realized carried interest income, and (iv) realized investment income, less (i) compensation expense, excluding the expense related to equity-based awards, (ii) realized profit sharing expense, and (iii) non-compensation expenses, excluding depreciation and amortization expense. DE After Taxes and Related Payables represents DE less estimated current corporate, local and non-U.S. taxes as well as the payable under Apollo's tax receivable agreement.
Non-GAAP Financial Information & Definitions Cont’d 27 “Assets Under Management”, or “AUM”, refers to the assets we manage for the funds, partnerships and accounts to which we provide investment management services, including, without limitation, capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments. Our AUM equals the sum of: i) the fair value of the investments of the private equity funds, partnerships and accounts we manage plus the capital that such funds, partnerships and accounts are entitled to call from investors pursuant to capital commitments; ii) the net asset value, or “NAV,” of the credit funds, partnerships and accounts for which we provide investment management services, other than certain collateralized loan obligations (“CLOs”) and collateralized debt obligations (“CDOs”), which have a fee-generating basis other than the mark-to-market value of the underlying assets, plus used or available leverage and/or capital commitments; iii) the gross asset value or net asset value of the real estate funds, partnerships and accounts we manage, and the structured portfolio company investments of the funds, partnerships and accounts we manage, which includes the leverage used by such structured portfolio company investments; iv) the incremental value associated with the reinsurance investments of the portfolio company assets we manage; and v) the fair value of any other assets that we manage for the funds, partnerships and accounts to which we provide investment management services, plus unused credit facilities, including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification before investment plus any other capital commitments to such funds, partnerships and accounts available for investment that are not otherwise included in the clauses above. Our AUM measure includes Assets Under Management for which we charge either no or nominal fees. Our definition of AUM is not based on any definition of Assets Under Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider multiple factors for determining what should be included in our definition of AUM. Such factors include but are not limited to (1) our ability to influence the investment decisions for existing and available assets; (2) our ability to generate income from the underlying assets in our funds; and (3) the AUM measures that we use internally or believe are used by other investment managers. Given the differences in the investment strategies and structures among other alternative investment managers, our calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented by other investment managers. We use AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs. • “Fee-Generating AUM” consists of assets we manage for the funds, partnerships and accounts to which we provide investment management services and on which we earn management fees, monitoring fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts we manage. Management fees are normally based on “net asset value,” “gross assets,” “adjusted par asset value,” “adjusted cost of all unrealized portfolio investments,” “capital commitments,” “adjusted assets,” “stockholders’ equity,” “invested capital” or “capital contributions,” each as defined in the applicable management agreement. Monitoring fees, also referred to as advisory fees, with respect to the structured portfolio company investments of the funds, partnerships and accounts we manage, are generally based on the total value of such structured portfolio company investments, which normally includes leverage, less any portion of such total value that is already considered in Fee-Generating AUM. “Carry-Eligible AUM” refers to the AUM that may eventually produce carried interest income. All funds for which we are entitled to receive a carried interest income allocation are included in Carry-Eligible AUM, which consists of the following: • “Carry-Generating AUM” refers to funds' invested capital that is currently above its hurdle rate or preferred return, and the funds' profit is allocated to the general partner in accordance with the applicable limited partnership agreements or other governing agreements. • “AUM Not Currently Generating Carry” refers to funds' invested capital that is currently below its hurdle rate or preferred return. • “Uninvested Carry-Eligible AUM” refers to available capital for investment or reinvestment subject to the provisions of applicable limited partnership agreements or other governing agreements that are not currently part of the NAV or fair value of investments that may eventually produce carried interest income, which would be allocated to the general partner.
Non-GAAP Financial Information & Definitions Cont’d 28 “Liquid/Performing” includes CLOs and other performing credit vehicles, hedge fund style credit funds, structured credit funds and SIAs. It also includes sub-advised managed accounts owned by or related to Athene. “Drawdown” refers to commitment-based funds and certain SIAs 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. It includes Athene assets managed by AAM that are invested in commitment-based funds. “Permanent Capital Vehicles” refers to (a) assets that are managed by Athene Asset Management, L.P., (b) assets that are owned by or related to MidCap FinCo Limited and managed by Apollo Capital Management, L.P., and (c) assets of publicly traded vehicles managed by Apollo such as AP Alternative Assets, L.P. (“AAA”), Apollo Investment Corporation (“AINV”), Apollo Commercial Real Estate Finance, Inc. (“ARI”), Apollo Residential Mortgage, Inc. (“AMTG”), Apollo Tactical Income Fund Inc. (“AIF”), and Apollo Senior Floating Rate Fund Inc. (“AFT”), in each case that do not have redemption provisions or a requirement to return capital to investors upon exiting the investments made with such capital, except as required by applicable law. The investment management arrangements of AINV, AIF and AFT have one year terms, are reviewed annually and remain in effect only if approved by the boards of directors of such companies or by the affirmative vote of the holders of a majority of the outstanding voting shares of such companies, including in either case, approval by a majority of the directors who are not “interested persons” as defined in the Investment Company Act of 1940. In addition, the investment management arrangements of AINV, AIF and AFT may be terminated in certain circumstances upon 60 days’ written notice. The investment management arrangements of ARI and AMTG have one year terms and are reviewed annually by each company’s board of directors and may be terminated under certain circumstances by an affirmative vote of at least two-thirds of such company’s independent directors. The investment management arrangements between MidCap FinCo Limited and Apollo Capital Management, L.P. and Athene and Athene Asset Management, L.P. may also be terminated under certain circumstances. “Fundraising” represents gross inflows which includes new subscriptions, commitments, capital raised, other increases in available capital, purchases and acquisitions. “Capital deployed” or “Deployment” is the aggregate amount of capital that has been invested during a given period by (i) our drawdown funds (ii) SIAs that have a defined maturity date and (iii) funds and SIAs in our real estate debt strategy. “Dry Powder” represents the amount of capital available for investment or reinvestment subject to the provisions of the applicable limited partnership agreements or other governing agreements of the funds, partnerships and accounts we manage. “Total Invested Capital” refers to the aggregate cash invested by the relevant Apollo fund and includes capitalized costs relating to investment activities, if any, but does not give effect to cash pending investment or available for reserves. “Realized Value” refers to all cash investment proceeds received by the relevant Apollo fund, including interest and dividends, but does not give effect to management fees, expenses, incentive compensation or carried interest to be paid by such Apollo fund. “Unrealized Value” refers to the fair value consistent with valuations determined in accordance with GAAP, for investments not yet realized and may include pay in kind, accrued interest and dividends receivable, if any. In addition, amounts include committed and funded amounts for certain investments. “Total Value” represents the sum of the total Realized Value and Unrealized Value of investments. “Multiple of Invested Capital” or “MOIC” is calculated as Total Value divided by Total Invested Capital.
Non-GAAP Financial Information & Definitions Cont’d 29 Gross IRR of a private equity fund represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund) on the basis of the actual timing of investment inflows and outflows (for unrealized investments assuming disposition on March 31, 2015 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, including returns for related parties which may not pay fees or carried interest, net of management fees, certain fund expenses (including interest incurred by the fund itself) and realized carried interest all offset to the extent of interest income, and measures returns on amounts that, if distributed, would be paid to investors of the fund. To the extent that an Apollo private equity fund exceeds all requirements detailed within the applicable fund agreement, 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 of the fund, thereby reducing the balance attributable to fund investors. Net IRR does not represent the return to any fund investor. “Traditional private equity fund appreciation (depreciation)” refers to gain (loss) and income for the traditional private equity funds (i.e., Funds I-VIII) for the periods presented on a total return basis before giving effect to fees and expenses. The performance percentage is determined by dividing (a) the change in the fair value of investments over the period presented, minus the change in invested capital over the period presented, plus the realized value for the period presented, by (b) the beginning unrealized value for the period presented plus the change in invested capital for the period presented. Gross IRR of a credit fund represents the annualized return of a fund based on the actual timing of all cumulative fund cash flows before management fees, carried interest income allocated to the general partner and certain other fund expenses. Calculations may include certain investors that do not pay fees. The terminal value is the net asset value as of the reporting date. Non- U.S. dollar denominated (“USD”) fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. Net IRR of a credit fund represents the annualized return of a fund after management fees, carried interest income allocated to the general partner and certain other fund expenses, calculated on investors that pay such fees. The terminal value is the net asset value as of the reporting date. Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. Gross IRR of a real estate fund represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund), on the basis of the actual timing of cash inflows and outflows (for unrealized investments assuming disposition on March 31, 2015 or other date specified) starting on the date that each investment closes, 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. Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. Net IRR of a real estate fund represents the cumulative cash flows in the fund (and not any one investor in the fund), on the basis of the actual timing of cash inflows received from and outflows paid to investors of the fund (assuming the ending net asset value as of March 31, 2015 or other date specified is paid to investors), excluding certain non-fee and non-carry bearing parties, and the return is annualized and compounded after management fees, carried interest, and certain other expenses (including interest incurred by the fund itself) and measures the returns to investors of the fund as a whole. Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. Gross Return of a credit or real estate fund is the monthly or quarterly time-weighted return that is equal to the percentage change in the value of a fund’s portfolio, adjusted for all contributions and withdrawals (cash flows) before the effects of management fees, incentive fees allocated to the general partner, or other fees and expenses. Returns of Athene Sub- advised portfolios and CLOs represent the gross returns on invested assets, which exclude cash. Returns over multiple periods are calculated by geometrically linking each period’s return over time. Net Return of a credit or real estate fund represents the Gross Return after management fees, incentive fees allocated to the general partner, or other fees and expenses. Returns of Athene sub-advised portfolios and CLOs represent the gross or net returns on invested assets, which exclude cash. Returns over multiple periods are calculated by geometrically linking each period’s return over time.
Forward Looking Statements 30 In this presentation, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, LLC, together with its consolidated subsidiaries. This presentation 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 presentation, 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 annual report on Form 10-K filed with the SEC on February 27, 2015, 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 presentation 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 presentation does not constitute an offer of any Apollo fund.