Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Apollo Global Management, Inc. | a8-kforq216earningsrelease.htm |
| EX-99.1 - EXHIBIT 99.1 - Apollo Global Management, Inc. | erex9912q16.htm |
Apollo Global Management, LLC
Second Quarter 2016 Earnings
Exhibit 99.2
August 3, 2016
GAAP &
Economic
Earnings
Distributable
Earnings
Assets Under
Management
Apollo 2Q'16 Financial Results Highlights
Business
Drivers
▪ GAAP Net Income of $415.8 million, and GAAP Net Income Attributable to Apollo Global Management,
LLC of $174.1 million ($0.91/share)
▪ Economic Net Income (“ENI”) of $394.9 million ($0.98/share)
▪ Management Business (“MB”) Economic Income (“EI”) of $137.4 million ($0.34/share)
▪ Incentive Business (“IB”) Economic Income of $321.7 million ($0.80/share), of which $160.9 million ($0.40/
share) related to an increase in the fair value of Athene
▪ Distributable Earnings (“DE”) After Taxes and Related Payables of $161.3 million ($0.40/share)
▪ Management Business DE of $154.8 million ($0.38/share)
▪ Incentive Business DE of $9.5 million ($0.02/share)
▪ Declared distribution of $0.37 per Class A share (payout ratio of 93%)
▪ Total Assets Under Management (“AUM”) of $186.3 billion
▪ Fee-Generating AUM (“FGAUM”) of $145.4 billion
▪ Carry-Eligible AUM (“CEAUM”) of $84.4 billion and Carry-Generating AUM (“CGAUM”) of $43.2
billion
▪ Dry powder of $24.9 billion available for investment
▪ Inflows: $16.4 billion of capital inflows ($36.5 billion LTM(1))
▪ Deployment: $5.9 billion invested ($16.1 billion LTM)
▪ Realizations: $1.3 billion of capital returned to investors ($6.3 billion LTM)
▪ Performance: Traditional Private Equity Fund Appreciation 3.1% (-0.6% LTM)
Total Credit Gross Return(2) 3.7% (+2.8% LTM)
Note: This presentation contains non-GAAP financial information and defined terms which are described on pages 31 to 35.
(1) “LTM” refers to the last twelve months ended June 30, 2016.
(2) 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 3.3% for 2Q'16 and
1.8% for 2Q’16 LTM. 1
▪ GAAP Net Income was $415.8 million for the quarter, up 181% year-over-year; GAAP Net Income Attributable to
Apollo Global Management, LLC was $174.1 million
($ in thousands, except per share data) 2Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Revenues:
Advisory and transaction fees from affiliates, net $15,450 $7,999 $64,899 $24,993 $72,898
Management fees from affiliates 230,584 233,795 267,063 455,473 500,858
Carried interest income (loss) from affiliates 105,693 (120,968) 328,485 174,285 207,517
Total Revenues 351,727 120,826 660,447 654,751 781,273
Expenses:
Compensation and benefits:
Salary, bonus and benefits 88,870 97,234 100,188 176,503 197,422
Equity-based compensation 22,279 14,002 34,038 42,382 48,040
Profit sharing expense 61,635 (37,605) 127,220 110,264 89,615
Total Compensation and Benefits 172,784 73,631 261,446 329,149 335,077
Interest expense 7,485 7,873 9,800 14,925 17,673
General, administrative and other 21,556 27,744 32,823 44,327 60,567
Professional fees 19,725 16,434 22,705 34,689 39,139
Occupancy 10,131 9,822 9,698 20,089 19,520
Placement fees 1,665 1,764 2,064 3,185 3,828
Depreciation and amortization 11,193 4,631 4,862 22,171 9,493
Total Expenses 244,539 141,899 343,398 468,535 485,297
Other Income (Loss):
Net gains (losses) from investment activities 24,424 (56,469) 89,010 26,542 32,541
Net gains from investment activities of consolidated variable interest entities 5,800 1,319 698 7,128 2,017
Income (Loss) from equity method investments 17,119 (3,817) 44,960 16,058 41,143
Interest income 860 585 1,296 1,585 1,881
Other income (loss), net 1,775 (253) 778 6,649 525
Total Other Income (Loss) 49,978 (58,635) 136,742 57,962 78,107
Income (loss) before income tax (provision) benefit 157,166 (79,708) 453,791 244,178 374,083
Income tax (provision) benefit (9,092) 5,147 (37,988) (14,606) (32,841)
Net Income (Loss) 148,074 (74,561) 415,803 229,572 341,242
Net (income) loss attributable to Non-Controlling Interests (91,646) 41,733 (241,711) (142,217) (199,978)
Net Income (Loss) Attributable to Apollo Global Management, LLC $56,428 ($32,828) $174,092 $87,355 $141,264
Distributions Declared per Class A Share $0.33 $0.28 $0.25 $1.19 $0.53
Net Income (Loss) Per Class A Share:
Net Income (Loss) Available to Class A Share – Basic $0.30 ($0.19) $0.91 $0.40 $0.74
Net Income (Loss) Available to Class A Share – Diluted $0.30 ($0.19) $0.91 $0.40 $0.74
Weighted Average Number of Class A Shares Outstanding – Basic 170,431,430 182,665,330 183,695,920 168,190,114 183,180,625
Weighted Average Number of Class A Shares Outstanding – Diluted 170,431,430 182,665,330 183,695,920 168,190,114 183,180,625
Condensed Consolidated Statements of Operations (Unaudited)
2
Condensed Consolidated Statements of Financial Condition (Unaudited)
3
▪ Total assets were $5.2 billion as of June 30, 2016, an increase of $602.4 million, or 13%, compared to
December 31, 2015
($ in thousands, except per share data) As of June 30, 2016 As of December 31,2015
Assets:
Cash and cash equivalents $859,005 $612,505
Cash and cash equivalents held at consolidated funds 4,991 4,817
Restricted cash 5,269 5,700
Investments 1,324,552 1,154,749
Assets of consolidated variable interest entities 1,021,954 1,030,772
Carried interest receivable 815,751 643,907
Due from affiliates 292,562 247,835
Deferred tax assets 622,209 646,207
Other assets 100,714 95,844
Goodwill 88,852 88,852
Intangible assets, net 26,372 28,620
Total Assets $5,162,231 $4,559,808
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $116,814 $92,012
Accrued compensation and benefits 90,399 54,836
Deferred revenue 158,461 177,875
Due to affiliates 629,140 594,536
Profit sharing payable 378,599 295,674
Debt 1,355,521 1,025,255
Liabilities of consolidated variable interest entities 868,254 887,252
Other liabilities 50,332 43,387
Total Liabilities 3,647,520 3,170,827
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Class A shares, no par value, unlimited shares authorized, 184,104,686 and 181,078,937 shares issued and outstanding at June 30, 2016 and
December 31, 2015, respectively — —
Class B shares, no par value, unlimited shares authorized, 1 share issued and outstanding at June 30, 2016 and December 31, 2015 — —
Additional paid in capital 1,928,962 2,005,509
Accumulated deficit (1,236,677) (1,348,384)
Accumulated other comprehensive loss (6,975) (7,620)
Total Apollo Global Management, LLC shareholders’ equity 685,310 649,505
Non-Controlling Interests in consolidated entities 95,625 86,561
Non-Controlling Interests in Apollo Operating Group 733,776 652,915
Total Shareholders’ Equity 1,514,711 1,388,981
Total Liabilities and Shareholders’ Equity $5,162,231 $4,559,808
($ in thousands, except per share data) 2Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Management Busines
s
Management Fees $227,273 $230,933 $241,633 $451,986 $472,566
Advisory and Transaction Fees from Affiliates, net 15,450 7,999 64,899 24,993 72,898
Carried Interest Income from Affiliates 10,815 8,917 6,292 21,589 15,209
Management Business Revenues 253,538 247,849 312,824 498,568 560,673
Salary, Bonus and Benefits 89,683 92,370 94,522 177,235 186,892
Equity-Based Compensation 14,643 16,720 15,722 30,474 32,442
Other Expenses 55,383 54,062 63,307 107,317 117,369
Management Business Expenses 159,709 163,152 173,551 315,026 336,703
Other Income (Loss) (1,382) (2,613) (1,873) 464 (4,486)
Management Business Economic Income $92,447 $82,084 $137,400 $184,006 $219,484
Per Share $0.23 $0.20 $0.34 $0.46 $0.55
Incentiv
e
Busines
s
Carried Interest Income (Loss) $94,877 ($129,885) $322,193 $152,696 $192,308
Profit Sharing Expense 62,872 (33,493) 124,733 103,704 91,240
Other Income (Loss) 33,081 (67,582) 124,274 26,604 56,692
Incentive Business Economic Income (Loss) $65,086 ($163,974) $321,734 $75,596 $157,760
Per Share $0.16 ($0.41) $0.80 $0.19 $0.39
Economic Income (Loss) $157,533 ($81,890) $459,134 $259,602 $377,244
Per Share $0.39 ($0.21) $1.14 $0.65 $0.94
Taxes (2,869) 8,926 (64,283) (11,389) (55,357)
Economic Net Income (Loss) $154,664 ($72,964) $394,851 $248,213 $321,887
Per Share $0.38 ($0.18) $0.98 $0.62 $0.80
Economic Earnings Summary
4
($ in thousands, except per share data) 2Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Managemen
t
Busines
s
Management Business Economic Income $92,447 $82,084 $137,400 $184,006 $219,484
Less: Non-Cash Revenues (843) (842) (843) (3,627) (1,685)
Add Back: Equity-Based Compensation 14,643 16,720 15,722 30,474 32,442
Add Back: Depreciation, Amortization and Other 2,691 2,581 2,516 5,301 5,097
Management Business Distributable Earnings $108,938 $100,543 $154,795 $216,154 $255,338
Per Share $0.27 $0.25 $0.38 $0.53 $0.63
Incentive Busines
s Incentive Business Economic Income (Loss) $65,086 ($163,974) $321,734 $75,596 $157,760
Less: Non-Cash Carried Interest Income(1) — — — (29,900) —
Less: Net Unrealized Carried Interest (Income) Loss 53,023 103,209 (185,669) 111,171 (82,460)
Less: Unrealized Investment & Other (Income) Loss (25,436) 64,977 (126,545) (25,391) (61,568)
Incentive Business Distributable Earnings $92,673 $4,212 $9,520 $131,476 $13,732
Per Share $0.23 $0.01 $0.02 $0.32 $0.03
Distributable Earnings $201,611 $104,755 $164,315 $347,630 $269,070
Taxes and Related Payables(2) (2,153) (2,273) (2,968) (4,263) (5,241)
DE After Taxes and Related Payables $199,458 $102,482 $161,347 $343,367 $263,829
DE per Share of Common & Equivalent(3) $0.48 $0.25 $0.40 $0.83 $0.65
Distribution per Share of Common & Equivalent $0.42 $0.25 $0.37 $0.75 $0.62
Payout Ratio 88% 100% 93% 90% 95%
Distributable Earnings Summary
(1) Represents realized carried interest income settled by receipt of securities.
(2) Represents estimated current corporate, local and non-U.S. taxes as well as amounts payable under Apollo’s tax receivable agreement.
(3) 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 & equivalents”).
5
Supplemental Information
Invested
AUM
$18bn
Other
$8bn
Dry Powder
$15bn
Private Equity
$41 billion AUM
(3)
Committed
$4bn(2)
Business Drivers
2Q'16 YTD LTM
Inflows $3.1bn $3.6bn $5.4bn
Deployment $4.6bn $5.1bn $8.4bn
Realizations $341mm $362mm $2.4bn
Performance(1) 3.1% 1.8% (0.6)%
($ in thousands) 2Q'15 1Q'16 2Q'16
MB Revenues $83,182 $77,631 $134,819
MB Expenses 53,451 56,184 59,965
Other Income (Loss) 327 (124) 341
MB Economic Income 30,058 21,323 75,195
Carried Interest Income (Loss) 81,328 (146,335) 208,111
Profit Sharing Expense 58,041 (57,374) 67,675
Other Income (Loss) 7,811 (12,017) 34,615
IB Economic Income (Loss) 31,098 (100,978) 175,051
Economic Income (Loss) $61,156 ($79,655) $250,246
Traditional PE Funds Fund VIII
PE Portfolio
Public Equity Holding Fund Shares Held (mm)
Norwegian (NCLH)(4) Fund VI & VII 36.1
EP Energy (EPE) Fund VII & ANRP 62.6
Caesars Acquisition (CACQ)(4) Fund VI 28.0
Caesars Entertainment (CZR)(4) Fund VI 26.5
Welspun Corp (WLCO IN) Fund VII & ANRP 58.1
Welspun Enterprises (WEL IN) Fund VII & ANRP 34.8
Inception-to-date Gross /
Net IRR 39% / 25%
56% Committed or
Deployed(5)
78% Private / 22% Public
Financial Results Summary
Commentary
▪ Significant Economic Income driven by an elevated contribution from
the Management Business and a rebounding Incentive Business, which
benefited from strong carried interest income primarily earned from
Fund VIII, AAA/Other and Fund VII
▪ Traditional private equity fund appreciation during the quarter of 3.1%(1)
was driven by private portfolio company holdings and public debt
positions
▪ Inflows driven by co-investment activity as well as a follow-on closing
for the second natural resources fund
▪ Deployed $4.6 billion (including $2.5 billion in co-investments) and
committed $1.8 billion during the quarter; total committed but not yet
deployed capital(2) at quarter end was $3.6 billion (excluding co-
investments)
(1) Represents traditional private equity fund appreciation (depreciation) as defined in the non-GAAP financial information and definitions section of this presentation. (2) Represents capital committed to investments as of June 30, 2016 by Apollo’s
private equity funds. These investments 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
$8 billion of uncalled commitments which can be called for fund fees and expenses only and are not available for investment or reinvestment subject to the provisions of the applicable fund limited partnership agreements or other governing
agreements. (4) Includes shares held by Athene in associated co-investment vehicles. (5) Represents capital actually invested, committed to invest or used for fees and expenses, divided by aggregate committed capital.
6
Business Drivers
2Q'16 YTD LTM
Inflows $12.5bn $16.2bn $28.6bn
Deployment $620mm $2.0bn $5.4bn
Realizations $453mm $774mm $1.8bn
Performance(1) 3.7% 4.9% 2.8%
Supplemental Information
Credit
($ in billions) $134 billion AUM
Category AUM FGAUM
CE
AUM
CG
AUM
2Q’16
Gross
Return(1)
YTD’16
Gross
Return(1)
LTM
Gross
Return(1)
Liquid / Performing $35 $32 $20 $10 3.0% 4.1% 2.5%
Drawdown(2) $21 $12 $19 $7 6.4% 8.1% 3.7%
Permanent Capital Vehicles
Permanent Capital
Vehicles ex Athene Non-
Sub-Advised(3)
$15 $11 $9 $9 1.6% 2.1% 2.5%
Athene Non-Sub-
Advised(3) $54 $54 — —
Advisory(4) $9 — — —
Total Credit $134 $109 $48 $26 3.7% 4.9% 2.8%
($ in thousands) 2Q'15 1Q'16 2Q'16
MB Revenues $155,867 $155,838 $160,580
MB Expenses 89,857 91,365 99,238
Other Income (Loss) 546 (75) (83)
Non-Controlling Interest (3,223) (2,385) (2,175)
MB Economic Income 63,333 62,013 59,084
Carried Interest Income 11,634 15,056 114,151
Profit Sharing Expense 3,897 21,424 57,169
Other Income (Loss) 25,077 (55,533) 90,222
IB Economic Income (Loss) 32,814 (61,901) 147,204
Economic Income $96,147 $112 $206,288
Financial Results Summary
Commentary
(1) Gross return represents gross 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 2Q'16 net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 2.8%, 5.7%, 0.7%, respectively, and 3.3% for total credit excluding assets managed by AAM that are not directly
invested in Apollo funds or sub-advised by Apollo. The YTD net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 3.8%, 7.0%, 0.4%, 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. The LTM net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 2.0%, 2.1%, (0.9)%, respectively, and 1.8% for total credit excluding
assets managed by AAM that are not directly invested in Apollo funds or sub-advised by Apollo. (2) Significant Drawdown funds and strategic investment accounts (“SIAs”) had inception-to-date (“ITD”) gross and net IRRs of 16.4% and 12.6%,
respectively, as of June 30, 2016. Significant Drawdown funds and SIAs include funds and SIAs with AUM greater than $200 million that did not predominantly invest in other Apollo funds or SIAs. (3) Athene Non-Sub-Advised reflects total Athene-
related AUM of $68.1 billion less $14.3 billion of assets that were either sub-advised by Apollo or invested in funds and investment vehicles managed by Apollo. Athene Non-Sub-Advised includes $5.1 billion of Athene AUM for which Apollo Asset
Management Europe, LLP (“AAME”), a subsidiary of Apollo, provides investment advisory services. (4) Advisory refers to certain assets advised by AAME.
▪ Strong Economic Income driven by rebounding Incentive Business results
which benefited from solid investment performance as well as an increase
in the fair value of Athene
▪ Total credit gross and net returns(1) of 3.7% and 3.3%, respectively, due
to broad appreciation across fund categories
▪ Inflows primarily driven by advisory mandates for AAME(4), an increase
in Athene assets, new equity and origination at MidCap, as well as capital
raised for the third Financial Credit Investments drawdown fund
▪ Capital deployment activity driven by non-performing loan opportunities,
longevity assets and opportunistic investments
▪ Fair value of Athene increased 20% from prior quarter reflecting Athene’s
significant business growth and continued progress toward its initial
public offering
7
($ in thousands) 2Q'15 1Q'16 2Q'16
MB Revenues $14,489 $14,380 $17,425
MB Expenses 16,401 15,603 14,348
Other Income (Loss) 968 (29) 44
MB Economic Income (Loss) (944) (1,252) 3,121
Carried Interest Income (Loss) 1,915 1,394 (69)
Profit Sharing Expense 934 2,457 (111)
Other Income (Loss) 193 (32) (563)
IB Economic Income (Loss) 1,174 (1,095) (521)
Economic Income (Loss) $230 ($2,347) $2,600
$11 billion AUM
Equity
$3.3bn
Debt
$7.9bn
Supplemental Information
Business Drivers
Real Estate
2Q'16 YTD LTM
Inflows $795mm $1.2bn $2.5bn
Deployment $649mm $1.0bn $2.4bn
Realizations $547mm $1.3bn $2.0bn
Performance(1) 2.2% 4.5% 14.7%
▪ Economic Income driven by an increased quarter-over-quarter
contribution from the Management Business, which was aided by
heightened transaction activity in the debt business
▪ Inflows during the quarter driven by capital raised for debt and equity-
related strategies
▪ Debt-related inflows driven by the AGRE Debt Fund as well as managed
accounts
▪ Equity-related inflows driven by a follow-on close and co-investment
capital raised for the second U.S. Real Estate Fund as well as a first
close for the Asia-focused real estate fund
▪ Realization activity driven by both debt and equity funds
Financial Results Summary
Commentary
(1) Represents gross return for U.S. Real Estate Fund I including co-investment capital. 2Q'16, YTD and 2Q'16 LTM net returns for U.S. Real Estate Fund I were 1.7%, 3.6% and 10.5%, respectively. U.S. Real Estate Fund I inception-
to-date gross and net IRRs were 17% and 14%, respectively, as of June 30, 2016.
8
f
Total AUM & Fee-Generating AUM
($ in millions)
Private Equity Credit Real Estate Total
2Q'15 $39,264 $112,680 $10,554 $162,498
Inflows 5,446 28,621 2,459 36,526
Outflows(2) (641) (6,511) (51) (7,203)
Net Flows 4,805 22,110 2,408 29,323
Realizations (2,448) (1,823) (1,989) (6,260)
Market Activity (440) 917 228 705
2Q'16 $41,181 $133,884 $11,201 $186,266
($ in millions)
Private Equity Credit Real Estate Total
1Q'16 $37,702 $123,854 $10,957 $172,513
Inflows 3,075 12,493 795 16,363
Outflows(2) (143) (2,952) — (3,095)
Net Flows 2,932 9,541 795 13,268
Realizations (341) (453) (547) (1,341)
Market Activity 888 942 (4) 1,826
2Q'16 $41,181 $133,884 $11,201 $186,266
($ in millions)
Private Equity Credit Real Estate Total
2Q'15 $28,468 $92,667 $7,154 $128,289
Inflows 3,302 19,897 1,713 24,912
Outflows(2) (1,010) (3,128) (184) (4,322)
Net Flows 2,292 16,769 1,529 20,590
Realizations (1,183) (1,146) (1,557) (3,886)
Market Activity (47) 484 (2) 435
2Q'16 $29,530 $108,774 $7,124 $145,428
($ in millions)
Private Equity Credit Real Estate Total
1Q'16 $29,325 $104,904 $6,844 $141,073
Inflows 413 4,730 696 5,839
Outflows(2) (91) (766) — (857)
Net Flows 322 3,964 696 4,982
Realizations (77) (257) (394) (728)
Market Activity (40) 163 (22) 101
2Q'16 $29,530 $108,774 $7,124 $145,428
Private
Equity
Credit
Real Estate
Total AUM Highlights Fee-Generating AUM Highlights
LTM Total AUM Rollforward(1) LTM Fee-Generating AUM Rollforward(1)
2Q'16 Fee-Generating AUM Rollforward(1)2Q'16 Total AUM Rollforward(1)
Inflows: Capital raised for co-investments ($2.5 billion); net segment transfers
($334 million); and ANRP II ($253 million) Outflows: Net leverage reduction
($143 million) Realizations: Fund VII ($214 million) and co-investments ($114
million) Market Activity: 3.1% appreciation in traditional private equity funds
Inflows: Advisory mandates related to AAME ($7.9 billion); net increase in Athene
assets ($2.2 billion); Liquid/ Performing funds ($885 million); new equity and
origination at MidCap ($779 million); FCI III ($415 million) Outflows: Net leverage
reduction ($1.6 billion); net segment transfers ($757 million); and redemptions
($518 million) Realizations: Drawdown funds ($207 million) and Liquid/
Performing funds ($157 million) Market activity: Positive fund performance across
product categories
Inflows: Net segment transfers ($422 million); debt funds and managed accounts
($156 million); and US and Asia equity real estate funds ($140 million)
Realizations: RE debt ($385 million) and RE equity ($162 million)
Private
Equity
Credit
Real Estate
Inflows: ANRP II ($232 million) and fee-generating capital deployment ($175
million) Realizations: Fund VII disposition activity from 1Q’16 to 2Q’16 (due
to semi-annual fee basis reset)
Inflows: Net increase in Athene’s assets ($2.2 billion); non-traded private BDC
($921 million); Liquid/Performing ($872 million); MidCap ($465 million); and
fee-generating capital deployment ($284 million) Outflows: Net segment
transfers ($299 million) and redemptions ($295 million) Realizations: Liquid/
Performing ($153 million) Market activity: Positive fund performance in
strategies with NAV-based fee arrangements
Inflows: Debt funds and managed accounts ($366 million) and net segment
transfers ($295 million) Realizations: RE debt ($330 million) and RE equity
($63 million)
(1) Inflows at the individual segment level represent subscriptions, commitments, and other increases in available capital, such as acquisitions or leverage, net of inter-segment transfers. 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) Included in the 2Q'16 outflows for Total AUM and FGAUM is $518.3 million and $294.6 million of redemptions, respectively. Included in the LTM outflows for Total AUM and FGAUM is $1,630.7 million and $768.9 million of redemptions,
respectively. 9
Uninvested
Carry-
Eligible
AUM
$25.0bn
Currently
Generating
Carry
$43.2bn
Not
Currently
Generating
Carry
$16.2bn
Carry-Eligible & Carry-Generating AUM
($ in millions)
Segment 2Q'15 1Q'16 2Q'16
Private Equity $34,211 $32,751 $33,554
Credit 44,262 48,216 48,435
Real Estate 2,511 2,273 2,381
Total $80,984 $83,240 $84,370
($ in millions)
Segment 2Q'15 1Q'16 2Q'16
Private Equity $12,487 $9,008 $16,778
Credit 23,257 22,985 25,945
Real Estate 697 510 494
Total $36,441 $32,503 $43,217
($ in millions)
Private Equity Credit Real Estate Total
Carry-Generating AUM $16,778 $25,945 $494 $43,217
+ Uninvested CE AUM 15,079 8,704 1,207 24,990
+ Invested AUM Not
Currently Generating
Carry
1,697 13,786 680 16,163
Carry-Eligible AUM $33,554 $48,435 $2,381 $84,370
$84 billion
Carry-Eligible AUM
$ in billions
Category / Fund
Invested AUM
Not Currently
Generating Carry
Investment
Period Active
>24 Months(1)
Appreciation
Required to
Achieve Carry(2)(3)
Other PE $1.7 $1.6 12%
Private Equity 1.7 1.6 12%
Drawdown 5.1 4.4 26%
Liquid / Performing
1.5 < 250bps
8.7 0.1 250-500bps
1.3 > 500bps
Credit 13.8 7.3 19%
Real Estate 0.7 0.4 > 500bps
Total $16.2 $9.3
($ in billions)
2Q'16 Carry-Generating to Carry-Eligible AUM Reconciliation
Carry-Eligible AUM
Carry-Generating AUM
(1) Represents invested AUM not currently generating carry for funds that have been investing capital for more than 24 months as of June 30, 2016.
(2) Represents the percentage of additional appreciation required to reach the preferred return or high watermark and generate carried interest for funds with an investment period greater than 24 months.
(3) All investors in a given fund are considered in aggregate when calculating the appreciation required to achieve carry presented above. Appreciation required to achieve carry may vary by individual investor. 10
Fund VIII
$10.6
PE Other
$4.4
Drawdown
$8.1
Capital Deployment
Capital Deployment & Dry Powder
$25 billion Dry Powder
($ in billions)
Private
Equity
Credit
Real Estate
2Q'1
6 Highlight
s
($ in millions)
Segment 2Q'16 YTD LTM
Private Equity $4,638 $5,139 $8,372
Credit 620 1,957 5,373
Real Estate 649 983 2,353
Total $5,907 $8,079 $16,098
Real Estate
$1.3
Private Equity
$15.0
Credit
$8.6
Liquid /
Performing
$0.1
▪ Capital deployed across the platform totaled $5.9 billion for the quarter and $8.1 billion year-to-date. The
pending investment commitments in private equity that have not yet been funded (excluding co-investments)
totaled $3.6 billion as of June 30, 2016
▪ Dry Powder of $24.9 billion at the end of the quarter, including $10.0 billion of AUM with future management
fee potential
▪ Driven by various acquisitions including ADT (Alarm
services), The Fresh Market (Grocery stores), Nova
KBM (Financial services) and RegionalCare’s
acquisition of Capella (Healthcare)
▪ Driven by opportunities in German commercial real
estate non-performing loans, life assets, and
opportunistic investments in the materials, energy and
media sectors
▪ Driven by commercial mortgage lending activity across
several strategies
11
Permanent
Capital Vehicles
$0.4 billion
Shareholder Distribution
($ in thousands, except per share data) 2Q'15 1Q'16 2Q'16 YTD'15 YTD'16
DE After Taxes and Related Payables $199,458 $102,482 $161,347 $343,367 $263,829
Add Back: Taxes & Related Payables Attributable to Common &
Equivalents — 2 4 60 6
DE Before Certain Payables(1) 199,458 102,484 161,351 343,427 263,835
Percent to Common & Equivalents 45% 47% 47% 45% 47%
DE Before Other Payables Attributable to Common & Equivalents 90,015 48,085 75,770 157,509 123,871
Less: Taxes & Related Payables Attributable to Common &
Equivalents — (2) (4) (60) (6)
DE Attributable to Common & Equivalents $90,015 $48,083 $75,766 $157,449 $123,865
Per Share of Common & Equivalent(2) $0.48 $0.25 $0.40 $0.83 $0.65
Retained Capital per Share of Common & Equivalent(2)(3) (0.06) — (0.03) (0.08) (0.03)
Net Distribution per Share of Common & Equivalent(2) $0.42 $0.25 $0.37 $0.75 $0.62
Payout Ratio 88% 100% 93% 90% 95%
▪ Generated $0.40 of DE per share of common and equivalent during the quarter, driven by strong Management
Business earnings
▪ Apollo declared a quarterly distribution of $0.37 per Class A share to holders of record as of August 22, 2016,
which is payable on August 31, 2016
(1) DE Before Certain Payables represents Distributable Earnings before the deduction for estimated current corporate taxes and the amounts payable under Apollo’s tax receivable agreement.
(2) Per share calculations are based on end of period total Class A shares outstanding and RSUs that participate in distributions (see page 25 for the share rollforward), (collectively referred to as “common & equivalents”).
(3) Retained capital is withheld pro-rata from common and equivalent holders and Apollo Operating Group (“AOG”) unitholders.
12
Unconsolidated Balance Sheet Highlights
Summary Balance Sheet
($ in millions) 2Q'16
Athene/AAA $615
GP Investments /
Other Investments(2) 781
Total Investments $1,396
($ in millions) 2Q'16
Cash $859
Investments(1) 1,396
Carried Interest Receivable 816
Profit Sharing Payable (379)
Total Net Value $2,692
Debt ($1,356)
Unfunded Future Commitments $559
($ in millions, except per share
amounts and where noted)
Through
2Q'16
Open Market Share
Repurchases 1.0
Reduction of Shares
Issued to Employees(3) 2.1
Total Shares Purchased 3.1
Total Capital Used for
Share Purchases(4) $43
Share Repurchase Plan
Authorization(5) $250
Average Price Paid Per
Share(6) $13.95
Investments Detail Share Repurchase Activitythrough 2Q’16
(1) Investments are presented on an unconsolidated basis. Investments presented in the condensed consolidated statement of financial condition of $1.325 billion include eliminations related to investments in consolidated funds and VIEs. (2)
Represents Apollo’s general partner investments in the funds it manages (excluding AAA) and other balance sheet investments. (3) Represents a reduction in Class A shares to be issued to employees to satisfy associated tax obligations in
connection with the settlement of equity-based awards granted under the Company’s 2007 Omnibus Equity Incentive Plan (the “Plan”). (4) With respect to the reduction of 2.1 million Class A shares to be issued to employees under the Plan,
amounts represent the cash used by the Company to satisfy the applicable withholding obligations in respect of certain equity-based awards granted under the Plan. (5) In February 2016, the Company announced a plan to repurchase up to
$250 million in the aggregate of its Class A shares, which includes up to $150 million through a share repurchase program and up to $100 million through a reduction of Class A shares to be issued to employees to satisfy associated tax
obligations in connection with the settlement of equity-based awards granted under the Plan. (6) Average price paid per share reflects total capital used for share repurchases to date divided by the number of shares purchased.
▪ At June 30, 2016, Apollo had $859 million in cash, $1.4 billion of investments, and $437 million of net carried interest receivable
for a total net value of $2.7 billion, or $6.61 DE per share outstanding
▪ Long-term debt of $1.4 billion (with maturities in 2021, 2024 and 2026) and an undrawn $500 million revolving credit facility
(expiring in 2021)
▪ Unfunded future general partner commitments totaled $559 million at June 30, 2016, of which $230 million related to Fund
VIII
▪ Aggregate share repurchases under previously announced plan totaled $43 million through June 30, 2016, with $207 million
remaining authorized under the plan
13
(1) As of June 30, 2016, the remaining investments and escrow cash of Fund VIII, Fund VII and Fund VI were valued at 111%, 107% and 83% of the fund’s unreturned capital, respectively, which were below the required escrow ratio of 115%. As a result, these funds are
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. As of June 30, 2016, Fund VI had $167.6 million of gross
carried interest income, or $110.7 million net of profit sharing, in escrow. As of June 30, 2016, Fund VII had $5.3 million of gross carried interest income, or $2.9 million net of profit sharing, in escrow. As of June 30, 2016, Fund VIII had no carried interest held in
escrow. With respect to Fund VIII, Fund VII and Fund VI, realized carried interest income currently distributed to the general partner is limited to potential tax distributions per the fund’s partnership agreement.
(2) AAA includes $202.4 million of carried interest receivable, or $133.5 million net of profit sharing, 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. In addition, Other includes certain SIAs.
(3) As of June 30, 2016, Fund V, Fund VI, APC, ANRP, ACLF, and certain SIAs within the credit segment had $11.2 million, $36.9 million, $2.1 million, $3.4 million, $22.9 million, and $36.4 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, Fund VI, APC, ANRP, ACLF, and certain SIAs within the credit segment was $74.4 million, $274.9 million,
$12.0 million, $154.8 million, $55.9 million, and $253.0 million, respectively, as of June 30, 2016.
(4) There was a corresponding profit sharing payable of $378.6 million as of June 30, 2016, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $71.0 million.
Carried Interest Receivable & Income (Loss) Detail
As of
June 30, 2016
For the Three Months Ended
June 30, 2016
For the Six Months Ended
June 30, 2016
($ in thousands)
Carried Interest
Receivable on an
Unconsolidated Basis
Unrealized
Carried
Interest
Income (Loss)
Realized
Carried
Interest
Income
Total Carried
Interest
Income (Loss)
Unrealized
Carried
Interest
Income (Loss)
Realized
Carried
Interest
Income
Total Carried
Interest
Income (Loss)
Private Equity Funds
Fund VIII $136,580 (1) $134,603 $— $134,603 $136,581 $— $136,581
Fund VII 61,780 (1) 43,098 — 43,098 (6,953) — (6,953)
Fund VI — (1)(3) (55,926) — (55,926) (89,442) — (89,442)
Fund V — (3) (1,984) — (1,984) (400) — (400)
Fund IV 5,485 (1,827) 266 (1,561) (711) 266 (445)
AAA / Other(2) 268,817 (3) 89,881 — 89,881 22,435 — 22,435
Total Private Equity Funds $472,662 $207,845 $266 $208,111 $61,510 $266 $61,776
Total Private Equity Funds, net of profit share 320,599 140,302 134 140,436 51,341 134 51,475
Credit Funds
Drawdown $209,984 (3) $61,160 $23,426 $84,586 $42,184 $43,425 $85,609
Liquid / Performing 73,424 14,961 10,328 25,289 9,949 26,564 36,513
Permanent Capital Vehicles 35,718 4,276 6,292 10,568 7,085 15,209 22,294
Total Credit Funds $319,126 $80,397 $40,046 $120,443 $59,218 $85,198 $144,416
Total Credit Funds, net of profit share 103,602 46,443 16,831 63,274 34,401 31,422 65,823
Real Estate Funds
CPI Funds $1,853 ($85) $— ($85) $503 $— $503
U.S. RE Fund I 17,022 1,048 40 1,088 (1,973) 3,581 1,608
U.S. RE Fund II 224 (359) — (359) 224 — 224
Other 4,864 (2,341) 1,628 (713) (3,868) 2,858 (1,010)
Total Real Estate Funds $23,963 ($1,737) $1,668 ($69) ($5,114) $6,439 $1,325
Total Real Estate Funds, net of profit share 12,951 (1,076) 1,118 42 (3,282) 2,261 (1,021)
Total $815,751 $286,505 $41,980 $328,485 $115,614 $91,903 $207,517
Total, net of profit share $437,152 (4) $185,669 $18,083 $203,752 $82,460 $33,817 $116,277
14
Permanent Capital AUM Supplemental Information
Permanent Capital Vehicles
2010 2012 2014 2Q'16
Period Ending
10%
22%
45% 47%
% of Total AUM
($ in millions, except where noted) 2Q'16
Athene(2) $68,133
MidCap 6,682
Apollo Investment Corp (AINV)(3) 5,090
Apollo Residential Mortgage (AMTG)(4) 3,282
Apollo Commercial Real Estate Finance (ARI) 2,987
Apollo Senior Floating Rate Fund (AFT) 423
Apollo Tactical Income Fund (AIF) 372
Total Permanent Capital AUM $86,969
LTM
Management Business Revenues from Permanent
Capital Vehicles ($ in thousands) $458,021
% of Total Management Business Revenue 45%Permanent Capital AUM
(1) The investment management arrangements of the Permanent Capital Vehicles that Apollo manages vary in duration and may be terminated under certain circumstances. Refer to page 35 of this presentation for a definition of Permanent Capital Vehicles and
additional information regarding the circumstances under which the investment management arrangements of the Permanent Capital Vehicles may be terminated.
(2) See page 16 for additional information regarding assets for which Apollo manages or provides investment advisory services through accounts owned by or related to Athene as of June 30, 2016.
(3) Amounts are as of March 31, 2016. 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. Includes $1.4 billion of AUM related to a non-traded business
development company.
(4) Amounts are as of March 31, 2016. Refer to www.apolloresidentialmortgage.com for the most recent financial information on AMTG. The information contained on AMTG’s website is not part of this presentation.
▪ As of June 30, 2016, Apollo had $87.0 billion of AUM across seven Permanent Capital Vehicles(1)
▪ Apollo generated $458.0 million of Management Business revenues from Permanent Capital Vehicles during the last
twelve months, representing 45% of total Management Business revenues during the last twelve months
▪ The compound annualized growth rate (“CAGR”) of permanent capital AUM since 2010 is 58%. Apollo will continue to
seek to grow its base of permanent capital opportunistically
15
$25
$72
$7
$87 ($ in billions)
Athene AUM Sub-Advised AUM by Asset Category
A
Athene
2010 2012 2014 2Q'16
Period Ending
$2
$16
$60
$68 ($ in billions) 2Q'16
Private Equity $0.9
Credit $9.4
Liquid / Performing 8.5
Drawdown 0.9
Real Estate $4.0
RE Debt 3.6
RE Equity 0.4
Total $14.3
Note: As of June 30, 2016, the Apollo subsidiaries providing investment management or advisory services to Athene included Athene Asset Management, L.P. ($63.0 billion) and Apollo Asset Management Europe, LLP ($5.1 billion).
▪ Through its subsidiaries, Apollo managed or advised $68.1 billion of AUM in accounts owned by or related to Athene as of June 30,
2016
▪ Of the total AUM, $14.3 billion, or 21%, was either sub-advised by Apollo or invested in funds and investment vehicles managed by
Apollo
▪ During the quarter, $545 million of Athene assets under management moved from non-sub-advised to sub-advised by Apollo, bringing
the total amount of new sub-advised AUM over the last twelve months ended June 30, 2016 to $1.8 billion
▪ Apollo will continue to seek attractive investment opportunities that are consistent with Athene’s investment objectives
16
($ in billions)
Appendix
Summary of Combined Economic Income (Loss)
($ in thousands, except per share data and where noted) 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Management fees from affiliates $227,273 $226,758 $233,149 $230,933 $241,633 $451,986 $472,566
Advisory and transaction fees from affiliates, net 15,450 9,276 (20,083) 7,999 64,899 24,993 72,898
Carried interest income from affiliates 10,815 9,285 9,751 8,917 6,292 21,589 15,209
Total Management Business Revenues 253,538 245,319 222,817 247,849 312,824 498,568 560,673
Salary, bonus and benefits 89,683 94,110 84,577 92,370 94,522 177,235 186,892
Equity-based compensation 14,643 14,938 16,772 16,720 15,722 30,474 32,442
General, administrative and other 21,575 21,731 36,401 23,417 26,961 44,380 50,378
Professional fees 19,599 17,294 16,233 16,485 22,286 34,828 38,771
Occupancy 10,191 10,196 10,050 9,878 9,755 20,217 19,633
Placement fees 1,327 2,585 3,763 1,701 1,789 2,591 3,490
Depreciation and amortization 2,691 2,606 2,569 2,581 2,516 5,301 5,097
Total Non-Compensation Expenses 55,383 54,412 69,016 54,062 63,307 107,317 117,369
Total Management Business Expenses 159,709 163,460 170,365 163,152 173,551 315,026 336,703
Other Income (Loss) 1,841 118 1,043 (228) 302 6,533 74
Non-Controlling Interest (3,223) (2,697) (2,918) (2,385) (2,175) (6,069) (4,560)
Management Business Economic Income $92,447 $79,280 $50,577 $82,084 $137,400 $184,006 $219,484
Per Share $0.23 $0.20 $0.13 $0.20 $0.34 $0.46 $0.55
Carried interest income (loss):
Unrealized gains (losses) (82,930) (179,086) (58,620) (170,891) 286,505 (149,835) 115,614
Realized gains 177,807 115,230 26,445 41,006 35,688 302,531 76,694
Total Carried Interest Income (Loss) 94,877 (63,856) (32,175) (129,885) 322,193 152,696 192,308
Profit sharing expense:
Unrealized profit sharing expense (29,907) (79,858) (18,131) (67,682) 100,836 (38,664) 33,154
Realized profit sharing expense 92,779 67,865 12,451 34,189 23,897 142,368 58,086
Total Profit Sharing Expense 62,872 (11,993) (5,680) (33,493) 124,733 103,704 91,240
Net interest expense (6,824) (6,187) (6,830) (6,891) (8,886) (13,516) (15,777)
Other income (loss), net 229 (305) 907 (333) (44) (119) (377)
Net gains (losses) from investment activities 23,286 81,244 14,841 (56,499) 88,498 25,047 31,999
Income (Loss) from equity method investments 16,390 3,025 (2,139) (3,859) 44,706 15,192 40,847
Other Income (Loss) 33,081 77,777 6,779 (67,582) 124,274 26,604 56,692
Incentive Business Economic Income (Loss) $65,086 $25,914 ($19,716) ($163,974) $321,734 $75,596 $157,760
Per Share $0.16 $0.06 ($0.05) ($0.41) $0.80 $0.19 $0.39
Economic Income (Loss) $157,533 $105,194 $30,861 ($81,890) $459,134 $259,602 $377,244
Income tax (provision) benefit (2,869) (1,156) 2,027 8,926 (64,283) (11,389) (55,357)
Economic Net Income (Loss) $154,664 $104,038 $32,888 ($72,964) $394,851 $248,213 $321,887
Per Share $0.38 $0.26 $0.08 ($0.18) $0.98 $0.62 $0.80
AUM ($ in millions) 162,498 161,819 170,123 172,513 186,266 162,498 186,266
Fee-Generating AUM ($ in millions) 128,289 131,068 138,097 141,073 145,428 128,289 145,428 18
($ in thousands, except per share data and where noted) 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Management fees from affiliates $74,269 $71,876 $75,094 $74,918 $76,518 $148,866 $151,436
Advisory and transaction fees from affiliates, net 8,913 4,736 (24,975) 2,713 58,301 12,754 61,014
Total Management Business Revenues 83,182 76,612 50,119 77,631 134,819 161,620 212,450
Salary, bonus and benefits 29,552 32,957 29,861 32,074 31,564 60,835 63,638
Equity-based compensation 7,437 6,974 7,857 7,385 6,765 16,493 14,150
Other expenses 16,462 17,326 31,136 16,725 21,636 31,647 38,361
Total Management Business Expenses 53,451 57,257 68,854 56,184 59,965 108,975 116,149
Other income (loss) 327 (43) 245 (124) 341 1,786 217
Management Business Economic Income (Loss)(1) $30,058 $19,312 ($18,490) $21,323 $75,195 $54,431 $96,518
Per Share $0.07 $0.05 ($0.05) $0.05 $0.19 $0.13 $0.24
Carried interest income (loss):
Unrealized gains (losses) (76,674) (167,364) (49,014) (146,335) 207,845 (97,783) 61,510
Realized gains 158,002 102,138 3,647 — 266 234,037 266
Total Carried Interest Income (Loss) 81,328 (65,226) (45,367) (146,335) 208,111 136,254 61,776
Profit sharing expense:
Unrealized profit sharing expense (28,023) (86,536) (19,166) (57,374) 67,543 (23,556) 10,169
Realized profit sharing expense 86,064 60,492 4,942 — 132 110,396 132
Total Profit Sharing Expense 58,041 (26,044) (14,224) (57,374) 67,675 86,840 10,301
Net interest expense (2,465) (2,425) (2,439) (2,428) (3,252) (5,014) (5,680)
Other income, net 998 — — — — 1,160 —
Net gains (losses) from investment activities — 5,904 1,029 (4,106) 6,457 — 2,351
Income (Loss) from equity method investments 9,278 3,827 537 (5,483) 31,410 14,761 25,927
Other Income (Loss) 7,811 7,306 (873) (12,017) 34,615 10,907 22,598
Incentive Business Economic Income (Loss) $31,098 ($31,876) ($32,016) ($100,978) $175,051 $60,321 $74,073
Per Share $0.08 ($0.08) ($0.08) ($0.25) $0.44 $0.15 $0.18
Economic Income (Loss) $61,156 ($12,564) ($50,506) ($79,655) $250,246 $114,752 $170,591
AUM ($ in millions) 39,264 38,256 37,502 37,702 41,181 39,264 41,181
Fee-Generating AUM ($ in millions) 28,468 29,300 29,258 29,325 29,530 28,468 29,530
Private Equity
(1) 4Q‘15 excludes impact of reserve of $45 million accrued in connection with an ongoing SEC regulatory matter previously disclosed in our 2015 Annual Report on Form 10-K principally concerning the acceleration of fees from fund
portfolio companies.
19
Credit
($ in thousands, except per share data and where noted) 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Management fees from affiliates $140,632 $141,706 $143,451 $142,511 $151,252 $280,084 $293,763
Advisory and transaction fees from affiliates, net 4,420 4,141 3,333 4,410 3,036 9,772 7,446
Carried interest income from affiliates 10,815 9,285 9,751 8,917 6,292 21,589 15,209
Total Management Business Revenues 155,867 155,132 156,535 155,838 160,580 311,445 316,418
Salary, bonus and benefits 51,654 52,647 46,475 51,612 54,709 100,910 106,321
Equity-based compensation 6,142 6,896 7,889 8,560 8,300 11,898 16,860
Other expenses 32,061 31,333 32,253 31,193 36,229 64,181 67,422
Total Management Business Expenses 89,857 90,876 86,617 91,365 99,238 176,989 190,603
Other income (loss) 546 157 744 (75) (83) 3,350 (158)
Non-Controlling Interest (3,223) (2,697) (2,918) (2,385) (2,175) (6,069) (4,560)
Management Business Economic Income $63,333 $61,716 $67,744 $62,013 $59,084 $131,737 $121,097
Per Share $0.16 $0.15 $0.17 $0.15 $0.15 $0.33 $0.30
Carried interest income (loss):
Unrealized gains (losses) (6,922) (15,056) (12,786) (21,179) 80,397 (52,692) 59,218
Realized gains 18,556 13,046 20,653 36,235 33,754 64,828 69,989
Total Carried Interest Income (Loss) 11,634 (2,010) 7,867 15,056 114,151 12,136 129,207
Profit sharing expense:
Unrealized profit sharing expense (2,050) 5,384 (464) (9,137) 33,954 (15,283) 24,817
Realized profit sharing expense 5,947 7,355 7,995 30,561 23,215 29,397 53,776
Total Profit Sharing Expense 3,897 12,739 7,531 21,424 57,169 14,114 78,593
Net interest expense (3,642) (3,003) (3,633) (3,655) (4,715) (7,104) (8,370)
Other income (loss), net (769) (305) 907 (333) (44) (1,279) (377)
Net gains (losses) from investment activities 23,286 75,340 13,812 (52,393) 82,041 25,047 29,648
Income (Loss) from equity method investments 6,202 (1,949) (3,371) 848 12,940 (705) 13,788
Other Income (Loss) 25,077 70,083 7,715 (55,533) 90,222 15,959 34,689
Incentive Business Economic Income (Loss) $32,814 $55,334 $8,051 ($61,901) $147,204 $13,981 $85,303
Per Share $0.08 $0.14 $0.02 ($0.15) $0.37 $0.03 $0.21
Economic Income $96,147 $117,050 $75,795 $112 $206,288 $145,718 $206,400
AUM ($ in millions) 112,680 112,781 121,361 123,854 133,884 112,680 133,884
Fee-Generating AUM ($ in millions) 92,667 94,666 101,522 104,904 108,774 92,667 108,774
20
($ in thousands, except where noted) 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Management fees from affiliates $12,372 $13,176 $14,604 $13,504 $13,863 $23,036 $27,367
Advisory and transaction fees from affiliates, net 2,117 399 1,559 876 3,562 2,467 4,438
Total Management Business Revenues 14,489 13,575 16,163 14,380 17,425 25,503 31,805
Salary, bonus and benefits 8,477 8,506 8,241 8,684 8,249 15,490 16,933
Equity-based compensation 1,064 1,068 1,026 775 657 2,083 1,432
Other expenses 6,860 5,753 5,627 6,144 5,442 11,489 11,586
Total Management Business Expenses 16,401 15,327 14,894 15,603 14,348 29,062 29,951
Other income (loss) 968 4 54 (29) 44 1,397 15
Management Business Economic Income (Loss) ($944) ($1,748) $1,323 ($1,252) $3,121 ($2,162) $1,869
Carried interest income (loss):
Unrealized gains (losses) 666 3,334 3,180 (3,377) (1,737) 640 (5,114)
Realized gains 1,249 46 2,145 4,771 1,668 3,666 6,439
Total Carried Interest Income (Loss) 1,915 3,380 5,325 1,394 (69) 4,306 1,325
Profit sharing expense:
Unrealized profit sharing expense 166 1,294 1,499 (1,171) (661) 175 (1,832)
Realized profit sharing expense 768 18 (486) 3,628 550 2,575 4,178
Total Profit Sharing Expense 934 1,312 1,013 2,457 (111) 2,750 2,346
Net interest expense (717) (759) (758) (808) (919) (1,398) (1,727)
Income from equity method investments 910 1,147 695 776 356 1,136 1,132
Other Income (Loss) 193 388 (63) (32) (563) (262) (595)
Incentive Business Economic Income (Loss) $1,174 $2,456 $4,249 ($1,095) ($521) $1,294 ($1,616)
Economic Income (Loss) $230 $708 $5,572 ($2,347) $2,600 ($868) $253
AUM ($ in millions) 10,554 10,782 11,260 10,957 11,201 10,554 11,201
Fee-Generating AUM ($ in millions) 7,154 7,102 7,317 6,844 7,124 7,154 7,124
Real Estate
21
Reconciliation of Non-GAAP Measures to GAAP
($ in thousands) 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Distributable Earnings $201,611 $144,579 $130,612 $104,755 $164,315 $347,630 $269,070
Net unrealized carried interest income (loss) (53,023) (99,228) (40,489) (103,209) 185,669 (111,171) 82,460
Unrealized investment and other income (loss) 25,436 76,545 5,237 (64,977) 126,545 25,391 61,568
Add back: Non-cash revenues 843 842 842 842 843 33,527 1,685
Less: Equity-based compensation (14,643) (14,938) (16,772) (16,720) (15,722) (30,474) (32,442)
Less: Depreciation, amortization and other (2,691) (2,606) (48,569) (2,581) (2,516) (5,301) (5,097)
Economic Income (Loss) $157,533 $105,194 $30,861 ($81,890) $459,134 $259,602 $377,244
Income tax (provision) benefit on economic
income (2,869) (1,156) 2,027 8,926 (64,283) (11,389) (55,357)
Economic Net Income (Loss) $154,664 $104,038 $32,888 ($72,964) $394,851 $248,213 $321,887
Income tax provision (benefit) on economic
income 2,869 1,156 (2,027) (8,926) 64,283 11,389 55,357
Net income attributable to Non-Controlling
Interests in consolidated entities and Appropriated
Partners' Capital
8,497 161 10,146 2,035 2,078 11,057 4,113
Transaction related charges and equity-based
compensation(1) (8,864) (2,205) (11,107) 147 (7,421) (26,481) (7,274)
Income (Loss) Before Income Tax (Provision)
Benefit $157,166 $103,150 $29,900 ($79,708) $453,791 $244,178 $374,083
Income tax (provision) benefit (9,092) (6,591) (5,536) 5,147 (37,988) (14,606) (32,841)
Net (income) loss attributable to Non-Controlling
Interests in the Apollo Operating Group (83,149) (55,347) (8,127) 43,768 (239,633) (131,160) (195,865)
Net income attributable to Non-Controlling
Interests in consolidated entities and Appropriated
Partners' Capital
(8,497) (161) (10,146) (2,035) (2,078) (11,057) (4,113)
Net Income (Loss) Attributable to
Apollo Global Management, LLC $56,428 $41,051 $6,091 ($32,828) $174,092 $87,355 $141,264
(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 Apollo.
22
Reconciliation of Non-GAAP Per Share Measures to GAAP Net Income Per Class A Share
Amounts in thousands except share and per share data 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
DE per Share of Common & Equivalent $0.48 $0.36 $0.31 $0.25 $0.40 $0.83 $0.65
Distributable Earnings Shares Outstanding(2) 408,503,856 407,658,456 409,775,021 407,447,658 407,343,429 408,503,856 407,343,429
DE After Taxes and Related Payables $199,458 $142,552 $127,187 $102,482 $161,347 $343,367 $263,829
Taxes and Related Payables 2,153 2,027 3,425 2,273 2,968 4,263 5,241
Distributable Earnings $201,611 $144,579 $130,612 $104,755 $164,315 $347,630 $269,070
Distributable Earnings to Economic Income (Loss) Differences (1) (44,078) (39,385) (99,751) (186,645) 294,819 (88,028) 108,174
Economic Income (Loss) $157,533 $105,194 $30,861 ($81,890) $459,134 $259,602 $377,244
Income tax (provision) benefit on economic income (2,869) (1,156) 2,027 8,926 (64,283) (11,389) (55,357)
Economic Net Income (Loss) $154,664 $104,038 $32,888 ($72,964) $394,851 $248,213 $321,887
Non-GAAP Weighted Average Diluted Shares Outstanding(2) 403,623,562 402,902,853 401,988,092 402,077,109 401,185,464 403,408,949 401,631,287
Economic Income (Loss) per share $0.39 $0.26 $0.08 ($0.21) $1.14 $0.65 $0.94
Economic Net Income (Loss) per share $0.38 $0.26 $0.08 ($0.18) $0.98 $0.62 $0.80
Income tax provision (benefit) on economic income 2,869 1,156 (2,027) (8,926) 64,283 11,389 55,357
Net income attributable to Non-Controlling Interests in
consolidated entities and Appropriated Partners’ Capital 8,497 161 10,146 2,035 2,078 11,057 4,113
Transaction-related charges and equity-based compensation (8,864) (2,205) (11,107) 147 (7,421) (26,481) (7,274)
Income (Loss) Before Income Tax (Provision) Benefit $157,166 $103,150 $29,900 ($79,708) $453,791 $244,178 $374,083
Income tax provision (benefit) (9,092) (6,591) (5,536) 5,147 (37,988) (14,606) (32,841)
Net income (loss) attributable to Non-Controlling Interests in the
Apollo Operating Group (83,149) (55,347) (8,127) 43,768 (239,633) (131,160) (195,865)
Net income attributable to Non-Controlling Interests in
consolidated entities and Appropriated Partners’ Capital (8,497) (161) (10,146) (2,035) (2,078) (11,057) (4,113)
Net Income (Loss) Attributable to Apollo Global Management,
LLC $56,428 $41,051 $6,091 ($32,828) $174,092 $87,355 $141,264
Distributions declared on Class A shares (56,815) (74,812) (63,377) (51,432) (46,014) (201,209) (97,446)
Distribution on participating securities (4,971) (5,113) (3,146) (2,123) (1,766) (20,234) (3,889)
Earnings allocable to participating securities — — — — (4,959) — (1,766)
Undistributed loss attributable to Class A shareholders: Basic ($5,358) ($38,874) ($60,432) ($86,383) $121,353 ($134,088) $38,163
GAAP weighted average number of Class A shares outstanding:
Basic 170,431,430 176,169,986 180,370,747 182,665,330 183,695,920 168,190,114 183,180,625
GAAP Net Income (Loss) per Class A Share under the Two-
Class Method: Basic $0.30 $0.20 $0.02 ($0.19) $0.91 $0.40 $0.74
Distributed Income $0.33 $0.42 $0.35 $0.28 $0.25 $1.20 $0.53
Undistributed Income (Loss) ($0.03) ($0.22) ($0.33) ($0.47) $0.66 ($0.80) $0.21
(1) See page 22 for reconciliation of Distributable Earnings and Economic Income (Loss).
(2) See page 25 for reconciliation of GAAP Class A shares outstanding to non-GAAP shares outstanding.
23
($ in thousands)
2Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Total Management Business Revenues $253,538 $247,849 $312,824 $498,568 $560,673
Total Incentive Business Revenues 94,877 (129,885) 322,193 152,696 192,308
Total Revenues 348,415 117,964 635,017 651,264 752,981
Equity awards granted by unconsolidated affiliates and reimbursable expenses 5,698 4,966 28,092 8,287 33,058
Adjustments related to consolidated funds and VIEs (909) (652) (1,211) (1,823) (1,863)
Other (1,477) (1,452) (1,451) (2,977) (2,903)
Total Revenues (GAAP) $351,727 $120,826 $660,447 $654,751 $781,273
Total Management Business Expenses $159,709 $163,152 $173,551 $315,026 $336,703
Total Incentive Business Expenses 62,872 (33,493) 124,733 103,704 91,240
Total Expenses 222,581 129,659 298,284 418,730 427,943
Equity awards granted by unconsolidated affiliates and reimbursable expenses 5,869 5,083 28,209 8,937 33,292
Transaction-related compensation charges 91 (2,373) 4,896 8,842 2,523
Reclassification of interest expense(1) 7,485 7,873 9,800 14,925 17,673
Amortization of transaction-related intangibles 8,503 2,050 2,346 16,870 4,396
Other 10 (393) (137) 231 (530)
Total Expenses (GAAP) $244,539 $141,899 $343,398 $468,535 $485,297
Total Management Business Other Income (Loss) ($1,382) ($2,613) ($1,873) $464 ($4,486)
Total Incentive Business Other Income (Loss) 33,081 (67,582) 124,274 26,604 56,692
Total Other Income (Loss) 31,699 (70,195) 122,401 27,068 52,206
Reclassification of interest expense(1) 7,485 7,873 9,800 14,925 17,673
Adjustments related to consolidated funds and VIEs 5,728 638 904 6,375 1,542
Other 5,066 3,049 3,637 9,594 6,686
Total Other Income (Loss), net (GAAP) $49,978 ($58,635) $136,742 $57,962 $78,107
(1) For EI presentation purposes interest income is presented net of interest expense as a component of other income.
Reconciliation of Non-GAAP Measures to GAAP
24
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 YTD'15 YTD'16
Weighted average number of Class A shares
outstanding: Basic 170,431,430 176,169,986 180,370,747 182,665,330 183,695,920 168,190,114 183,180,625
Non-GAAP Adjustments:
Restricted shares 106,951 101,717 104,244 99,134 90,130 78,790 94,633
AOG Units 221,387,378 218,272,537 216,181,813 216,169,856 216,065,719 221,963,228 216,117,787
RSUs 11,697,803 8,358,613 5,331,288 3,142,789 1,333,695 13,176,817 2,238,242
Non-GAAP Weighted Average Diluted Shares
Outstanding 403,623,562 402,902,853 401,988,092 402,077,109 401,185,464 403,408,949 401,631,287
2Q'15 3Q'15 4Q'15 1Q'16 2Q'16
Total GAAP Class A Shares Outstanding 172,188,169 179,008,102 181,078,937 183,401,191 184,104,686
Non-GAAP Adjustments:
AOG Units 220,637,976 216,197,356 216,169,856 216,169,856 216,000,633
Vested RSUs 10,968,849 7,640,612 6,294,053 1,809,730 1,327,326
Non-GAAP Diluted Shares Outstanding 403,794,994 402,846,070 403,542,846 401,380,777 401,432,645
Unvested RSUs Eligible for Distribution Equivalents 4,708,862 4,812,386 6,232,175 6,066,881 5,910,784
Distributable Earnings Shares Outstanding 408,503,856 407,658,456 409,775,021 407,447,658 407,343,429
Share Reconciliation
25
Unaudited Supplemental Presentation of Statement of Financial Condition
26
As of June 30, 2016
($ in thousands, except per share data)
Apollo Global
Management, LLC and
Consolidated Subsidiaries(1)
Consolidated Funds and
VIEs Eliminations Consolidated
Assets:
Cash and cash equivalents $859,005 $— $— $859,005
Cash and cash equivalents held at consolidated funds — 4,991 — 4,991
Restricted cash 5,269 — — 5,269
Investments 1,396,200 27,139 (98,787) 1,324,552
Assets of consolidated variable interest entities — 1,022,253 (299) 1,021,954
Carried interest receivable 815,751 — — 815,751
Due from affiliates 293,706 — (1,144) 292,562
Deferred tax assets 622,209 — — 622,209
Other assets 95,271 5,670 (227) 100,714
Goodwill 88,852 — — 88,852
Intangible assets, net 26,372 — — 26,372
Total Assets $4,202,635 $1,060,053 ($100,457) $5,162,231
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $116,814 $— $— $116,814
Accrued compensation and benefits 90,399 — — 90,399
Deferred revenue 158,461 — — 158,461
Due to affiliates 629,140 — — 629,140
Profit sharing payable 378,599 — — 378,599
Debt 1,355,521 — — 1,355,521
Liabilities of consolidated variable interest entities — 912,401 (44,147) 868,254
Other liabilities 45,009 5,323 — 50,332
Total Liabilities 2,773,943 917,724 (44,147) 3,647,520
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Additional paid in capital 1,928,962 — — 1,928,962
Accumulated deficit (1,236,679) 35,420 (35,418) (1,236,677)
Accumulated other comprehensive income (loss) (5,024) (1,992) 41 (6,975)
Total Apollo Global Management, LLC shareholders’ equity 687,259 33,428 (35,377) 685,310
Non-Controlling Interests in consolidated entities 7,657 108,901 (20,933) 95,625
Non-Controlling Interests in Apollo Operating Group 733,776 — — 733,776
Total Shareholders’ Equity 1,428,692 142,329 (56,310) 1,514,711
Total Liabilities and Shareholders’ Equity $4,202,635 $1,060,053 ($100,457) $5,162,231
(1) Represents amounts of the total combined segments
Investment Records as of June 30, 2016
Note: The Drawdown funds included in the investment record table above have greater than $500 million of AUM and/or form part of a flagship series of funds. The SIAs included in the investment record table above have greater than
$200 million of AUM and do not predominantly invest in other Apollo funds or SIAs. Footnotes to the above table appear on page 28.
As of June 30, 2016
($ in millions)
Vintage Year Total AUM CommittedCapital
Total Invested
Capital(1)
Realized
Value(1)
Remaining
Cost(1)
Unrealized
Value(1)
Total
Value(1) Gross IRR
(1) Net IRR(1)
Private Equity:
Fund VIII 2013 $19,380 $18,377 $7,098 $302 $6,843 $8,230 $8,532 25 % 10 %
Fund VII 2008 7,429 14,677 15,883 28,729 3,826 4,315 33,044 35 27
Fund VI 2006 3,546 10,136 12,457 17,955 3,551 2,808 20,763 12 9
Fund V 2001 370 3,742 5,192 12,681 154 112 12,793 61 44
Funds I, II, III, IV & MIA(3) Various 42 7,320 8,753 17,400 — 28 17,428 39 26
Traditional Private Equity Funds(4) $30,767 $54,252 $49,383 $77,067 $14,374 $15,493 $92,560 39 % 25 %
AION 2013 742 826 226 93 166 162 255 9 % (6)%
ANRP I 2012 1,294 1,323 960 216 815 886 1,102 7 2
ANRP II(5) — 2,241 2,207 407 64 364 411 475 NM(2) NM(2)
Total Private Equity(10) $35,044 $58,608 $50,976 $77,440 $15,719 $16,952 $94,392
Credit:
Credit Opportunity Funds
COF III 2014 $3,076 $3,426 $3,768 $1,062 $2,638 $2,184 $3,246 (9)% (10)%
COF I & II 2008 447 3,068 3,787 7,359 146 166 7,525 23 20
European Principal Finance Funds
EPF II(6) 2012 4,040 3,431 3,436 1,294 2,141 3,080 4,374 20 11
EPF I(6) 2007 318 1,438 1,890 3,092 3 85 3,177 23 17
Structured Credit Funds
FCI II 2013 2,315 1,555 1,824 451 1,587 1,960 2,411 20 15
FCI 2012 1,016 559 1,158 728 776 827 1,555 16 12
SCRF III(13) 2015 1,093 1,238 1,132 266 742 1,028 1,294 13 10
SCRF I & II(13) Various 12 222 707 872 8 12 884 27 21
Other Drawdown Funds & SIAs(7) Various 6,659 8,176 6,737 6,640 2,071 1,807 8,447 9 6
Total Credit(11) $18,976 $23,113 $24,439 $21,764 $10,112 $11,149 $32,913
Real Estate:
U.S. RE Fund II(5)(8) — $603 $592 $372 $18 $369 $381 $399 NM(2) NM(2)
U.S. RE Fund I(8) 2012 556 653 628 529 293 374 903 17 % 14 %
AGRE Debt Fund I 2011 652 1,633 1,545 1,146 614 562 1,708 8 6
CPI Funds(9) Various 881 4,971 2,515 2,557 363 114 2,671 16 12
Total Real Estate(12) $2,692 $7,849 $5,060 $4,250 $1,639 $1,431 $5,681
Drawdown
27
Investment Records – Notes
(1) Refer to the definitions of Total Invested Capital, Realized Value, Remaining Cost, Unrealized Value, Total Value, Gross IRR and Net IRR in the non-GAAP financial information &
definitions section of 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) 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, combined with Fund IV, 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) ANRP II and U.S. RE Fund II were launched prior to June 30, 2016 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 $1.11 as of June 30, 2016.
(7) Amounts presented have been aggregated for (i) Drawdown funds with AUM greater than $500 million that do not form part of a flagship series of funds and (ii) SIAs with AUM greater
than $200 million that do 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 $1.11 as of June 30, 2016. Additionally, certain SIAs totaling $1.8 billion of AUM have been excluded from Total Invested Capital, Realized Value, Remaining
Cost, Unrealized Value and Total Value. These SIAs have an open ended life and a significant turnover in their portfolio assets due to the ability to recycle capital. These SIAs had $8.8
billion of Total Invested Capital through June 30, 2016.
(8) U.S. RE Fund I and U.S. RE Fund II, closed-end private investment funds, had $150 million and $162 million of co-investment commitments raised as of June 30, 2016, respectively,
which are included in the figures in the table. A co-invest entity within U.S. RE Fund I is denominated in GBP and translated into U.S. dollars at an exchange rate of £1.00 to $1.33
as of June 30, 2016.
(9) As part of the acquisition of Citi Property Investors (“CPI”), Apollo acquired general partner interests in fully invested funds. CPI Funds refers to CPI Capital Partners North America,
CPI Capital Partners Asia Pacific, CPI Capital Partners Europe and other CPI 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. For CPI Capital Partners North America, CPI Capital Partners Asia
Pacific and CPI Capital Partners Europe, the gross and net IRRs are presented in the investment record table since acquisition on November 12, 2010. The aggregate net IRR for these
funds from their inception to June 30, 2016 was (1)%. This net IRR was 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) Certain private equity co-investment vehicles and funds with AUM less than $500 million have been excluded. These co-investment vehicles and funds had $6.1 billion of aggregate
AUM as of June 30, 2016.
(11) Certain credit funds and SIAs with AUM less than $500 million and $200 million, respectively, have been excluded. These funds and SIAs had $1.8 billion of aggregate AUM as of
June 30, 2016.
(12) Certain accounts owned by or related to Athene, certain co-investment vehicles and certain funds with AUM less than $500 million have been excluded. These accounts, co-investment
vehicles and funds had $5.5 billion of aggregate AUM as of June 30, 2016.
(13) Remaining cost for certain of our credit funds may include physical cash called, invested or reserved for certain levered investments.
28
Investment Records as of June 30, 2016
Permanent Capital Vehicles ex Athene Non-Sub-Advised
Total Returns(3)
($ in millions)
IPO Year(4) Total AUM
For the Three
Months Ended
June 30, 2016
For the Six
Months Ended
June 30, 2016
For the Three
Months Ended
June 30, 2015
For the Six
Months Ended
June 30, 2015
For the Year
Ended December
31, 2015
Credit:
MidCap(5) N/A $6,682 NM(6) NM(6) NM(6) NM(6) NM(6)
AIF 2013 372 9 % 9 % (1)% 3 % (4)%
AFT 2011 423 6 8 1 10 (2)
AMTG(7) 2011 3,282 3 20 (5) (1) (13)
AINV(8) 2004 5,090 3 14 (5) 1 (20)
Real Estate:
ARI 2009 2,987 1 % (1)% (2)% 6 % 17 %
Total $18,836
Liquid / Performing
Net Returns
($ in millions)
Vintage Year Total AUM
For the Three
Months Ended
June 30, 2016
For the Six
Months Ended
June 30, 2016
For the Three
Months Ended
June 30, 2015
For the Six
Months Ended
June 30, 2015
For the Year
Ended December
31, 2015
Credit:
Hedge Funds(1) Various $5,686 3% 5% 1% 3% —
CLOs(2) Various 13,840 2 4 1 3 2%
SIAs / Other Various 15,942 3 3 1 3 1
Total $35,468
Note: The above table summarizes the investment record for our Liquid/Performing and Permanent Capital Vehicles excluding AAM/AAA as defined in the non-GAAP financial information & definitions section of this presentation. All
amounts are as of June 30, 2016, unless otherwise noted. Footnotes to the above tables appear on page 30. 29
Investment Records – Notes
(1) Hedge funds includes Apollo Credit Strategies Master Fund Ltd., Apollo Credit Master Fund Ltd., Apollo Credit Short Opportunities Fund and Apollo Value Strategic Fund, L.P.
(2) CLO returns are calculated based on gross return on invested assets, which excludes cash.
(3) 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.
(4) An initial public offering (“IPO”) year represents the year in which the vehicle commenced trading on a national securities exchange.
(5) MidCap is not a publicly traded vehicle and therefore IPO year is not applicable.
(6) Returns have not been presented as the Permanent Capital Vehicle commenced investing capital less than 24 months prior to the period indicated and therefore such return
information was deemed not meaningful.
(7) All amounts are as of March 31, 2016 except for total returns. Refer to www.apolloresidentialmortgage.com for the most recent financial information on AMTG. The information
contained on AMTG’s website is not part of this presentation.
(8) All amounts are as of March 31, 2016 except for total returns. 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. Includes $1.4 billion of AUM related to a non-traded business development company sub-advised by Apollo. Net returns exclude
performance of the non-traded business development company.
30
Non-GAAP Financial Information & Definitions
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 Income”, or “EI”, as well as “Economic Net Income”, or “ENI”, are key performance measures used by management in evaluating the performance of Apollo’s private
equity, credit and real estate segments. 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.
▪ 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, compensation and administrative related
expense reimbursements, 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.
▪ “Distributable Earnings”, or “DE”, as well as “DE After Taxes and Related Payables” are derived from Apollo’s segment reported results, and are supplemental measures to assess
performance and amount of earnings 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.
31
Non-GAAP Financial Information & Definitions Cont’d
▪ “Management Business” refers to the portion of the Company’s business that primarily generates non-incentive based components of EI including fees earned as manager of our funds
and associated operating expenses. The Management Business is generally characterized by the predictability of its financial metrics.
▪ “Management Business EI”, which is a component of total EI, is the sum of (i) management fees, (ii) advisory and transaction fees, net and (iii) carried interest income earned from a
publicly traded business development company we manage, less (x) salary, bonus, and benefits, (y) equity-based compensation, and (z) other associated operating expenses.
▪ “Management Business DE”, which is a component of total DE, includes all the components of Management Business EI except for those which are non-cash in nature, such as equity-
based compensation as well as depreciation and amortization.
• The Company uses Management Business EI and Management Business DE to evaluate operating financial performance, including whether fee-related revenues are sufficient
to adequately cover recurring operating expenses. The Company believes that Management Business EI and Management Business DE provide investors with additional insight
into the operations of the Company as these measures provide a meaningful indication of the components of EI and DE that are generally steady and predictable in nature.
▪ “Incentive Business” refers to the portion of the Company’s business that primarily generates incentive-based components of EI, including carried interest income and profit sharing
expenses, as well as other revenue and expense items pertaining to the Company’s investments and debt.
▪ “Incentive Business EI”, which is a component of total EI, is the sum of (i) carried interest income (excluding carried interest income earned from a publicly traded business development
company we manage), (ii) profit sharing expense, and (iii) other income (which includes items such as net gains from investment activities, income from equity method investments and
net interest expense).
▪ “Incentive Business DE”, which is a component of total DE, includes all the components of Incentive Business EI except for those which are non-cash in nature, such as unrealized
carried interest income, associated non-cash profit sharing expense, unrealized investment income and other income.
• The Company uses Incentive Business EI and Incentive Business DE to evaluate incentive-based and investment-related financial performance. The Company believes that
Incentive Business EI and Incentive Business DE provide investors with additional insight into the operations of the Company as these measures provide a meaningful indication
of the components of EI and DE that are generally less predictable and more volatile in nature.
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Non-GAAP Financial Information & Definitions Cont’d
▪ “Assets Under Management”, or “AUM”, refers to the assets we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory 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 or advise 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 or advisory 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 or advise, 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 or advise; and
v) the fair value of any other assets that we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory 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. In addition our AUM measure includes certain assets for which we do not have investment
discretion. 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. Our calculation also differs from the
manner in which our affiliates registered with the SEC report “Regulatory Assets Under Management” on Form ADV and Form PF in various ways.
We use AUM, Capital Deployed and Dry Powder as performance measurements of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure
needs.
• “AUM with Future Management Fee Potential” refers to the committed uninvested capital portion of total AUM not currently earning management fees. The amount depends on the
specific terms and conditions of each fund.
• “Fee-Generating AUM” consists of assets we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory 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 or advise.
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 or advise, 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”, which refers to invested capital of the funds, partnerships and accounts we manage or advise, that is currently above its hurdle rate or preferred return, and
profit of such funds, partnerships and accounts is being allocated to the general partner in accordance with the applicable limited partnership agreements or other governing agreements;
▪ “AUM Not Currently Generating Carry”, which refers to invested capital of the funds, partnerships and accounts we manage or advise that is currently below its hurdle rate or preferred
return; and
▪ “Uninvested Carry-Eligible AUM”, which refers to capital of the funds, partnerships and accounts we manage or advise that is available for investment or reinvestment subject to the
provisions of applicable limited partnership agreements or other governing agreements, which capital is not currently part of the NAV or fair value of investments that may eventually
produce carried interest income allocable to the general partner.
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Non-GAAP Financial Information & Definitions Cont’d
▪ “Advisory” refers to certain assets advised by Apollo Asset Management Europe, LLP (“AAME”), a subsidiary of Apollo.
▪ “Capital deployed” or “Deployment” is the aggregate amount of capital that has been invested during a given period (which may, in certain cases, include leverage) by (i) our drawdown
funds (ii) SIAs that have a defined maturity date and (iii) funds and SIAs in our real estate debt strategy.
▪ “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 SIAs and deliver capital
when called as investment opportunities become available. It includes assets of Athene Holding Ltd. (“Athene Holding”) and its subsidiaries (collectively “Athene”) managed by Athene
Asset Management, L.P. (“Athene Asset Management”) that are invested in commitment-based funds.
▪ “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.
▪ “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.
▪ 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 June 30, 2016 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.
▪ 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.
▪ 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 June 30, 2016 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.
▪ 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.
▪ “Inflows” represents (i) at the individual segment level, subscriptions, commitments, and other increases in available capital, such as acquisitions or leverage, net of inter-segment transfers,
and (ii) on an aggregate basis, the sum of Inflows across the private equity, credit and real estate segments.
▪ “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. Certain commitment-based SIAs are included as the underlying assets are liquid.
▪ “Multiple of Invested Capital” or “MOIC” is calculated as Total Value divided by Total Invested Capital.
▪ 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.
▪ 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. 34
Non-GAAP Financial Information & Definitions Cont’d
▪ 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 June 30, 2016 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.
▪ 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.
▪ “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.
▪ “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.
▪ “Permanent Capital Vehicles” (a) assets that are owned by or related to Athene, (b) assets that are owned by or related to MidCap FinCo Limited (“MidCap”) and managed by Apollo
Capital Management, L.P., (c) assets of publicly traded vehicles managed by Apollo such as 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 and (d) a non-traded business development
company sub-advised by Apollo. 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 and Apollo Capital Management, L.P. and Athene and Athene Asset Management, may also be terminated under certain circumstances.
▪ “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.
▪ “Remaining Cost” represents the initial investment of the general partner and limited partner investors in a fund, reduced for any return of capital distributed to date, excluding management
fees, expenses, and any accrued preferred return.
▪ “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.
▪ “Total Value” represents the sum of the total Realized Value and Unrealized Value of investments.
▪ 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.
▪ “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.
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Forward Looking Statements
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
Securities and Exchange Commission (“SEC”) on February 29, 2016, 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.
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