Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Apollo Global Management, Inc. | erex9914q16.htm |
| 8-K - 8-K - Apollo Global Management, Inc. | a8-kforq416earningsrelease.htm |
Apollo Global Management, LLC
Fourth Quarter and Full Year 2016
Earnings
Exhibit 99.2
February 3, 2017
▪ Declared 4Q'16 distribution of $0.45 per Class A share and equivalent (payout ratio of 82%), bringing FY'16
distributions to $1.42 per Class A share (payout ratio of 91%)
GAAP
Results
Assets Under
Management
Apollo 4Q'16 and Full Year Financial Results Highlights
Business
Drivers
▪ Total Assets Under Management (“AUM”) of $191.7 billion
▪ Fee-Generating AUM (“FGAUM”) of $150.8 billion
▪ Carry-Eligible AUM (“CEAUM”) of $88.9 billion and Carry-Generating AUM (“CGAUM”) of $55.6 billion
▪ Dry Powder of $25.9 billion available for investment
▪ Inflows: $6.6 billion of capital inflows ($34.8 billion FY’16)
▪ Deployment: $3.5 billion invested ($15.9 billion FY’16)
▪ Realizations: $1.7 billion of capital returned to investors ($5.4 billion FY’16)
▪ Performance: Private Equity Fund Appreciation 5.9% (13.5% FY’16)
Credit Gross Return(2) 2.1% (11.2% FY’16)
Note: This presentation contains non-GAAP financial information and defined terms which are described on pages 31 to 35. The non-GAAP financial information contained herein is reconciled to GAAP financial information on pages 5
and 22-24.
(1) Shares are based on end of period Distributable Earnings Shares Outstanding
(2) Represents total Credit gross return, excluding assets managed by Athene Asset Management, L.P. (“AAM”) that are not directly invested in Apollo funds or sub-advised by Apollo. Total Credit net return was 1.8% for 4Q'16 and 9.9%
for FY’16.
1
($ in millions, except per share data) 4Q’16 Per Share FY’16 Per Share
▪ Net Income $394.3 N/A $970.3 N/A
▪ Net Income Attributable to Apollo Global Management, LLC $167.0 $0.87 $402.9 $2.11
($ in millions, except per share data) 4Q’16 Per Share FY’16 Per Share
▪ Economic Net Income (“ENI”) $394.1 $0.98 $946.7 $2.36
▪ Fee Related Earnings (“FRE”) (410.0 million shares(1)) $131.5 N/A $529.9 N/A
▪ Distributable Earnings (“DE”) After Taxes and Related Payables $225.9 $0.55 $638.3 $1.56
Non-GAAP
Measures
& Distribution
▪ Net Income was $394.3 million for the quarter; Net Income Attributable to Apollo Global Management, LLC (Class A
shares) was $167.0 million for the quarter
($ in thousands, except share data) 4Q'15 3Q'16 4Q'16 FY'15 FY'16
Revenues:
Management fees from related parties $236,158 $274,313 $268,342 $930,194 $1,043,513
Advisory and transaction fees from related parties, net (20,083) 29,801 43,966 14,186 146,665
Carried interest income (loss) from related parties (22,424) 199,617 373,072 97,290 780,206
Total Revenues 193,651 503,731 685,380 1,041,670 1,970,384
Expenses:
Compensation and benefits:
Salary, bonus and benefits 84,507 92,591 99,117 354,524 389,130
Equity-based compensation 23,890 26,163 28,780 97,676 102,983
Profit sharing expense (4,706) 90,152 177,307 85,229 357,074
Total Compensation and Benefits 103,691 208,906 305,204 537,429 849,187
Interest expense 7,617 12,832 12,977 30,071 43,482
General, administrative and other 73,609 58,566 59,715 255,061 247,000
Placement fees 2,612 1,953 20,468 8,414 26,249
Total Expenses 187,529 282,257 398,364 830,975 1,165,918
Other Income:
Net gains from investment activities 14,231 17,746 89,434 121,723 139,721
Net gains from investment activities of consolidated variable interest entities 11,011 800 2,198 19,050 5,015
Income (loss) from equity method investments (3,224) 23,213 38,822 14,855 103,178
Interest income 829 1,192 999 3,232 4,072
Other income (loss), net 931 (40) 4,077 7,673 4,562
Total Other Income 23,778 42,911 135,530 166,533 256,548
Income before income tax provision 29,900 264,385 422,546 377,228 1,061,014
Income tax provision (5,536) (29,667) (28,199) (26,733) (90,707)
Net Income 24,364 234,718 394,347 350,495 970,307
Net income attributable to Non-Controlling Interests (18,273) (140,099) (227,380) (215,998) (567,457)
Net Income Attributable to Apollo Global Management, LLC $6,091 $94,619 $166,967 $134,497 $402,850
Distributions Declared and Paid per Class A Share $0.35 $0.37 $0.35 $1.96 $1.25
Net Income Per Class A Share:
Net Income Available to Class A Share – Basic $0.02 $0.50 $0.87 $0.61 $2.11
Net Income Available to Class A Share – Diluted $0.02 $0.50 $0.87 $0.61 $2.11
Weighted Average Number of Class A Shares Outstanding – Basic 180,370,747 184,438,515 185,146,949 173,271,666 183,998,080
Weighted Average Number of Class A Shares Outstanding – Diluted 180,370,747 184,438,515 185,146,949 173,271,666 183,998,080
GAAP Consolidated Statements of Operations (Unaudited)
2
($ in thousands, except share data) As of December 31, 2016
As of
December 31, 2015
Assets:
Cash and cash equivalents $806,329 $612,505
Cash and cash equivalents held at consolidated funds 7,335 4,817
Restricted cash 4,680 5,700
Investments 1,494,744 1,154,749
Assets of consolidated variable interest entities 1,001,811 1,030,772
Carried interest receivable 1,257,105 643,907
Due from related parties 254,853 247,835
Deferred tax assets 572,263 646,207
Other assets 118,860 95,844
Goodwill 88,852 88,852
Intangible assets, net 22,721 28,620
Total Assets $5,629,553 $4,559,808
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $57,465 $92,012
Accrued compensation and benefits 52,754 54,836
Deferred revenue 174,893 177,875
Due to related parties 638,126 594,536
Profit sharing payable 550,148 295,674
Debt 1,352,447 1,025,255
Liabilities of consolidated variable interest entities 854,579 887,252
Other liabilities 81,613 43,387
Total Liabilities 3,762,025 3,170,827
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Class A shares, no par value, unlimited shares authorized, 185,460,294 and 181,078,937 shares issued and outstanding at December 31, 2016 and
December 31, 2015, respectively — —
Class B shares, no par value, unlimited shares authorized, 1 share issued and outstanding at December 31, 2016 and December 31, 2015 — —
Additional paid in capital 1,830,025 2,005,509
Accumulated deficit (986,186) (1,348,384)
Accumulated other comprehensive loss (8,723) (7,620)
Total Apollo Global Management, LLC shareholders’ equity 835,116 649,505
Non-Controlling Interests in consolidated entities 90,063 86,561
Non-Controlling Interests in Apollo Operating Group 942,349 652,915
Total Shareholders’ Equity 1,867,528 1,388,981
Total Liabilities and Shareholders’ Equity $5,629,553 $4,559,808
GAAP Consolidated Statements of Financial Condition (Unaudited)
▪ Total assets were $5.6 billion as of December 31, 2016, an increase of $1.1 billion, or 23%, compared to
December 31, 2015
3
($ in thousands, except per share data) 4Q'15 3Q'16 4Q'16 FY'15 FY'16
Management Fees $233,149 $258,485 $246,598 $911,893 $977,649
Advisory and Transaction Fees from Related Parties, net (20,083) 30,251 43,966 14,186 147,115
Carried Interest Income (Loss) from Related Parties (22,424) 203,327 375,042 97,290 785,886
Total Revenues 190,642 492,063 665,606 1,023,369 1,910,650
Salary, Bonus and Benefits 84,577 86,804 93,194 355,922 366,890
Equity-Based Compensation 16,772 16,154 15,872 62,184 64,468
Profit Sharing Expense (5,680) 76,791 148,619 86,031 316,650
Other Expenses 69,016 53,006 72,548 230,745 242,923
Total Expenses 164,685 232,755 330,233 734,882 990,931
Other Income Net of Non-Controlling Interests 4,904 23,340 117,002 107,170 192,548
Economic Income $30,861 $282,648 $452,375 $395,657 $1,112,267
Taxes 2,027 (51,896) (58,269) (10,518) (165,522)
Economic Net Income $32,888 $230,752 $394,106 $385,139 $946,745
Per Share $0.08 $0.58 $0.98 $0.96 $2.36
Fee Related Earnings $113,349 $146,483 $131,465 $422,047 $529,874
Distributable Earnings $130,612 $152,636 $226,226 $622,821 $647,932
Taxes and Related Payables (3,425) (4,105) (289) (9,715) (9,635)
Distributable Earnings After Taxes and Related Payables $127,187 $148,531 $225,937 $613,106 $638,297
Per Share of Common & Equivalent(1) $0.31 $0.36 $0.55 $1.50 $1.56
Net Distribution per Share of Common & Equivalent(1) $0.28 $0.35 $0.45 $1.38 $1.42
Payout Ratio 90% 97% 82% 92% 91%
Summary of Non-GAAP Measures
4
(1) Per share calculations are based on end of period Distributable Earnings Shares Outstanding, which consist of total Class A shares outstanding and RSUs that participate in distributions (collectively referred to as “common &
equivalents”). See page 25 for the share reconciliation.
($ in thousands) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
GAAP Net Income (Loss) Attributable to
Apollo Global Management, LLC $6,091 ($32,828) $174,092 $94,619 $166,967 $134,497 $402,850
Net (income) loss attributable to Non-Controlling
Interests in consolidated entities and Appropriated
Partners' Capital
10,146 2,035 2,078 (222) 1,898 21,364 5,789
Net (income) loss attributable to Non-Controlling
Interests in the Apollo Operating Group 8,127 (43,768) 239,633 140,321 225,482 194,634 561,668
GAAP Net Income (Loss) $24,364 ($74,561) $415,803 $234,718 $394,347 $350,495 $970,307
Income tax provision (benefit) 5,536 (5,147) 37,988 29,667 28,199 26,733 90,707
GAAP Income (Loss) Before Income Tax
(Provision) Benefit $29,900 ($79,708) $453,791 $264,385 $422,546 $377,228 $1,061,014
Transaction related charges and equity-based
compensation(1) 11,107 (147) 7,421 18,041 31,727 39,793 57,042
Net (income) loss attributable to Non-Controlling
Interests in consolidated entities and Appropriated
Partners' Capital
(10,146) (2,035) (2,078) 222 (1,898) (21,364) (5,789)
Economic Income (Loss) $30,861 ($81,890) $459,134 $282,648 $452,375 $395,657 $1,112,267
Income tax (provision) benefit on Economic
Income (Loss) 2,027 8,926 (64,283) (51,896) (58,269) (10,518) (165,522)
Economic Net Income (Loss) $32,888 ($72,964) $394,851 $230,752 $394,106 $385,139 $946,745
Income tax provision (benefit) (2,027) (8,926) 64,283 51,896 58,269 10,518 165,522
Carried interest (income) loss from related parties 32,175 129,885 (322,193) (201,020) (369,617) (56,665) (762,945)
Total profit sharing expense (5,680) (33,493) 124,733 76,791 148,619 86,031 316,650
Equity-based compensation 16,772 16,720 15,722 16,154 15,872 62,184 64,468
Investment (income) loss and other 39,221 67,582 (124,274) (28,090) (115,784) (65,160) (200,566)
Fee Related Earnings $113,349 $98,804 $153,122 $146,483 $131,465 $422,047 $529,874
Net realized carried interest income 13,994 6,817 11,791 13,220 83,325 221,522 115,153
Non-cash revenues (842) (842) (843) (842) (842) (35,211) (3,369)
Investment (income) loss and other 1,542 (2,605) (2,271) (8,660) 9,882 3,987 (3,654)
Depreciation and amortization 2,569 2,581 2,516 2,435 2,396 10,476 9,928
Distributable Earnings $130,612 $104,755 $164,315 $152,636 $226,226 $622,821 $647,932
Taxes and related payables (3,425) (2,273) (2,968) (4,105) (289) (9,715) (9,635)
Distributable Earnings After Taxes and Related
Payables $127,187 $102,482 $161,347 $148,531 $225,937 $613,106 $638,297
(1) Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions. Equity-based compensation adjustment
represents non-cash revenues and expenses related to equity awards granted by unconsolidated related parties to employees of Apollo.
Reconciliation of GAAP to Non-GAAP Measures
5
($ in thousands, except per share data) 4Q'15 3Q'16 4Q'16 FY'15 FY'16
Distributable Earnings $130,612 $152,636 $226,226 $622,821 $647,932
Taxes and Related Payables (3,425) (4,105) (289) (9,715) (9,635)
DE After Taxes and Related Payables $127,187 $148,531 $225,937 $613,106 $638,297
Add Back: Taxes & Related Payables Attributable to Common &
Equivalents (75) 3 101 12 110
DE Before Certain Payables(1) 127,112 148,534 226,038 613,118 638,407
Percent to Common & Equivalents 47% 47% 47% 47% 47%
DE Before Other Payables Attributable to Common & Equivalents 59,908 69,821 107,246 290,420 302,899
Less: Taxes & Related Payables Attributable to Common &
Equivalents 75 (3) (101) (12) (110)
DE Attributable to Common & Equivalents $59,983 $69,818 $107,145 $290,408 $302,789
Per Share of Common & Equivalent(2) $0.31 $0.36 $0.55 $1.50 $1.56
Retained Capital per Share of Common & Equivalent(2)(3) (0.03) (0.01) (0.10) (0.12) (0.14)
Net Distribution per Share of Common & Equivalent(2) $0.28 $0.35 $0.45 $1.38 $1.42
Payout Ratio 90% 97% 82% 92% 91%
Shareholder Distribution
▪ Generated $0.55 of Distributable Earnings After Taxes and Related Payables per Share of Common & Equivalent
during the quarter
▪ Apollo declared a quarterly distribution of $0.45 per Class A share to holders of record as of February 21, 2017,
which is payable on February 28, 2017
(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 Distributable Earnings Shares Outstanding, which consist of total Class A shares outstanding and RSUs that participate in distributions (collectively referred to as “common &
equivalents”). See page 25 for the share reconciliation.
(3) Retained capital is withheld pro-rata from common and equivalent holders and Apollo Operating Group (“AOG”) unitholders.
6
Supplemental Information
Invested
AUM
$27bn
Dry Powder
$14bn
Private Equity
$44 billion AUM
Committed
$2bn(2)
Business Drivers
4Q'16 FY’16
Inflows $722mm $5.7bn
Deployment $1.4bn $9.6bn
Realizations $609mm $1.1bn
Performance(1) 5.9% 13.5%
Traditional PE Funds Fund VIII
PE Portfolio
Public Equity Holding Fund Shares Held (mm)
Norwegian (NCLH)(5) Fund VI & VII 36.1
EP Energy (EPE) Fund VII & ANRP 62.6
Caesars Acquisition (CACQ)(5)(6) Fund VI 28.0
Welspun Corp (WLCO IN) Fund VII & ANRP 52.2
Welspun Enterprises (WEL IN) Fund VII & ANRP 34.8
Hostess (TWNK) Fund VII 21.5
Ladbrokes (LCL) Fund VI & VII 130.9
Inception-to-date Gross /
Net IRR 39% / 25%
67% Committed or
Deployed(7)
79% Private / 21% Public(8)
Financial Results Summary
Commentary
▪ Robust Economic Income driven by strong net carried interest income
primarily generated by traditional and natural resources private equity
funds, as well as higher Fee Related Earnings
▪ Private Equity fund appreciation during the quarter of 5.9%(1) was driven
by appreciation in private and public portfolio company holdings
▪ Inflows driven by co-investment capital and the final close of the second
natural resources fund, bringing total commitments to $3.5 billion
▪ Committed or deployed $1.9 billion of capital during the quarter, $0.5
billion of which is not yet deployed; total committed but not yet deployed
capital(2) at quarter end was $2.5 billion (including co-investments)
▪ Commenced fundraising for the ninth vintage of our flagship private
equity fund strategy
▪ At quarter-end, Fund VIII was 67% committed or deployed(7)
(1) Represents 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 December 31, 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
$3 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) Represents AUM related to co-investment vehicles. (5) Includes shares held by Athene in associated co-investment vehicles. (6) Does not include shares of Caesars Entertainment (CZR) held by Fund VI and Athene in associated co-
investment vehicles. (7) Represents capital actually invested, committed to invest or used for fees and expenses, divided by aggregate committed capital. (8) Excludes Athene shares held by AAA. 7
Co-Investments
$5bn(4)
Other
$3bn(3)
($ in thousands) 4Q'15 3Q'16 4Q'16
Management fees $75,094 $91,545 $79,014
Advisory and transaction fees (24,975) 26,601 41,060
Carried interest income (loss) (45,367) 84,863 304,460
Total Revenues 4,752 203,009 424,534
Compensation and benefits 23,494 65,677 156,782
Other expenses 31,136 18,448 16,811
Total Expenses 54,630 84,125 173,593
Other Income (Loss) (628) 11,490 30,818
Economic Income (Loss) ($50,506) $130,374 $281,759
Fee Related Earnings $35,367 $67,269 $75,161
Business Drivers
4Q'16 FY’16
Inflows $5.1bn $26.2bn
Deployment $1.0bn $3.7bn
Realizations $601mm $1.8bn
Performance(1) 2.1% 11.2%
Supplemental Information
Credit
($ in billions) $137 billion AUM
Category AUM FGAUM
CE
AUM
CG
AUM
4Q’16
Gross
Return(1)
FY’16
Gross
Return(1)
Liquid/Performing $36 $32 $20 $16 1.6% 9.6%
Drawdown(2) $24 $14 $22 $8 3.1% 16.5%
Permanent Capital Vehicles
Permanent Capital Vehicles
ex Athene Non-Sub-
Advised(3)
$12 $11 $10 $9 2.8% 9.6%
Athene Non-Sub-Advised(3) $55 $55 — —
Advisory(4) $10 — — —
Total Credit $137 $112 $52 $33 2.1% 11.2%
Financial Results Summary
Commentary
(1) 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 4Q’16 net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 1.5%, 2.6%, 2.0%, 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. The FY’16 net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex AAM were 9.0%, 14.1%, 5.9%, respectively, and 9.9% 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 16.3% and 12.6%, respectively, as of December 31,
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 $70.8
billion less $15.7 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 $4.4 billion of Athene AUM for which AAME provides investment advisory
services. (4) Advisory refers to certain assets advised by AAME.
▪ Strong Economic Income driven by an increase in the fair value of
Athene and solid investment performance across the platform,
partially offset by lower FRE due to increased fund placement fees
▪ Credit gross and net returns(1) of 2.1% and 1.8%, respectively, for the
quarter due to strong appreciation across fund categories
▪ Inflows primarily driven by the first closing of the third European
Principal Finance fund, Advisory assets, as well as a variety of Liquid/
Performing strategies, including Total Return and CLOs
▪ Capital deployment activity driven by structured credit, opportunistic
investments, and insurance linked securities
▪ Athene completed its initial public offering during the quarter and
began trading on the New York Stock Exchange on December 9, 2016
8
($ in thousands) 4Q'15 3Q'16 4Q'16
Management fees $143,451 $151,386 $151,560
Advisory and transaction fees 3,333 2,612 2,475
Carried interest income 17,618 112,002 60,885
Total Revenues 164,402 266,000 214,920
Compensation and benefits 61,895 99,774 89,620
Other expenses 32,253 29,884 50,380
Total Expenses 94,148 129,658 140,000
Other Income 8,459 13,058 87,761
Non-Controlling Interest (2,918) (510) (2,394)
Economic Income $75,795 $148,890 $160,287
Fee Related Earnings $75,633 $76,454 $51,929
$11 billion AUM
Equity
$2.8bn
Debt
$8.6bn
Supplemental Information
Business Drivers
Real Estate
4Q'16 FY’16
Inflows $822mm $2.9bn
Deployment $1.1bn $2.6bn
Realizations $516mm $2.5bn
Performance(1) 5.3% 16.1%
▪ Strong Economic Income driven by rising net carried interest income
and Fee Related Earnings
▪ Year-over-year growth in management fees driven by both the real estate
equity and debt businesses
▪ Real estate U.S. equity fund combined gross return(1) of 5.3% for the
quarter due to strong operating results and valuation increases throughout
the portfolio
▪ Inflows and Deployment for the quarter driven by capital raised and
invested for the commercial mortgage REIT (ARI) managed by Apollo
along with investment activity for the AGRE Debt Fund and managed
accounts
▪ Realization activity for the quarter driven by both debt and equity funds
Financial Results Summary
Commentary
(1) Represents combined gross return for U.S. Real Estate Fund I and U.S. Real Estate Fund II including co-investment capital. The 4Q’16 and FY’16 combined net returns for U.S. Real Estate Fund I and U.S. Real Estate Fund II were
4.4% and 12.8%, respectively. U.S. Real Estate Fund I and U.S. Real Estate Fund II’s combined inception-to-date gross and net IRRs were 17.1% and 13.8%, respectively, as of December 31, 2016.
9
($ in thousands) 4Q'15 3Q'16 4Q'16
Management fees $14,604 $15,554 $16,024
Advisory and transaction fees 1,559 1,038 431
Carried interest income 5,325 6,462 9,697
Total Revenues 21,488 23,054 26,152
Compensation and benefits 10,280 14,298 11,283
Other expenses 5,627 4,674 5,357
Total Expenses 15,907 18,972 16,640
Other Income (Loss) (9) (698) 817
Economic Income $5,572 $3,384 $10,329
Fee Related Earnings $2,349 $2,760 $4,375
($ in millions)
Private Equity Credit Real Estate Total
4Q'15 $29,258 $101,522 $7,317 $138,097
Inflows 2,298 18,327 2,609 23,234
Outflows(2) (416) (8,013) (51) (8,480)
Net Flows 1,882 10,314 2,558 14,754
Realizations (404) (1,071) (1,611) (3,086)
Market Activity (14) 1,016 31 1,033
4Q'16 $30,722 $111,781 $8,295 $150,798
($ in millions)
Private Equity Credit Real Estate Total
3Q'16 $30,630 $110,123 $7,916 $148,669
Inflows 384 6,485 811 7,680
Outflows(2) — (4,424) (5) (4,429)
Net Flows 384 2,061 806 3,251
Realizations (327) (308) (420) (1,055)
Market Activity 35 (95) (7) (67)
4Q'16 $30,722 $111,781 $8,295 $150,798
($ in millions)
Private Equity Credit Real Estate Total
4Q'15 $37,502 $121,361 $11,260 $170,123
Inflows 5,727 26,170 2,870 34,767
Outflows(2) (1,148) (11,405) (505) (13,058)
Net Flows 4,579 14,765 2,365 21,709
Realizations (1,121) (1,827) (2,472) (5,420)
Market Activity 2,668 2,308 300 5,276
4Q'16 $43,628 $136,607 $11,453 $191,688
f
Total AUM & Fee-Generating AUM
($ in millions)
Private Equity Credit Real Estate Total
3Q'16 $42,181 $135,396 $11,059 $188,636
Inflows 722 5,101 822 6,645
Outflows(2) (48) (2,787) — (2,835)
Net Flows 674 2,314 822 3,810
Realizations (609) (601) (516) (1,726)
Market Activity 1,382 (502) 88 968
4Q'16 $43,628 $136,607 $11,453 $191,688
Private
Equity
Credit
Real Estate
Total AUM Highlights Fee-Generating AUM Highlights
FY’16 Total AUM Rollforward(1) FY’16 Fee-Generating AUM Rollforward(1)
4Q'16 Fee-Generating AUM Rollforward(1)4Q'16 Total AUM Rollforward(1)
Inflows: Capital raised for co-investment ($589 million) and net segment transfers
($133 million) Realizations: Fund VII ($469 million) driven by Hostess Brands
and various debt securities; Fund VI ($46 million); and ANRP II ($44 million)
Market Activity: Appreciation driven by traditional private equity funds and natural
resources funds
Inflows: EPF III ($2.2 billion); Advisory assets ($1.0 billion); Liquid/Performing
funds ($738 million); managed accounts ($663); and MidCap ($540 million)
Outflows: Net leverage reduction ($1.2 billion); redemptions ($641 million); net
decrease in Athene assets ($581 million); and net segment transfers ($352 million)
Realizations: Drawdown funds ($335 million) and Liquid/Performing funds ($179
million)
Inflows: Net leverage increase ($315 million); real estate debt funds ($288 million);
and net segment transfers ($219 million)
Realizations: real estate debt ($398 million) and real estate equity ($118 million)
Private
Equity
Credit
Real Estate
Inflows: Fee-generating capital deployment ($236 million) and net segment
transfers ($148 million) Realizations: Primarily reflects disposition activity from
Funds VI and VII (due to semi-annual fee basis reset)
Inflows: EPF III ($2.1 billion); net increase in Athene assets ($1.1 billion) driven
by $1.8 billion of 3Q’16 assets no longer subject to full fee rebate; fee-generating
capital deployment ($875 million); Liquid/Performing funds ($671 million); and
MidCap ($540 million) Outflows: Net leverage reduction ($1.5 billion); EPF II
post investment period fee basis adjustment ($787 million); net segment transfers
($645 million); and redemptions ($553 million) Realizations: Liquid/Performing
funds ($179 million)
Inflows: Net segment transfers ($497 million); real estate debt funds ($283
million)
Realizations: real estate debt ($382 million) and real estate equity ($38 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 4Q'16 outflows for Total AUM and FGAUM are $641.2 million and $553.0 million of redemptions, respectively. Included in the FY’16 outflows for Total AUM and FGAUM are $1,832.1 million and $1,497.6 million of redemptions,
respectively. 10
Carry-Eligible & Carry-Generating AUM
($ in millions)
Segment 4Q'15 3Q'16 4Q'16
Private Equity $32,782 $34,233 $35,144
Credit 47,207 48,049 51,644
Real Estate 2,440 2,457 2,117
Total $82,429 $84,739 $88,905
($ in millions)
Segment 4Q'15 3Q'16 4Q'16
Private Equity $9,461 $19,063 $21,521
Credit 16,923 31,648 33,306
Real Estate 516 697 776
Total $26,900 $51,408 $55,603
($ in millions)
Private Equity Credit Real Estate Total
Carry-Generating AUM $21,521 $33,306 $776 $55,603
+ Uninvested CE AUM 13,136 11,119 976 25,231
+ Invested AUM Not
Currently Generating
Carry
487 7,219 365 8,071
Carry-Eligible AUM $35,144 $51,644 $2,117 $88,905
$89 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)
Private Equity $0.5 $0.3 32%
Drawdown 3.7 3.7 30%
Liquid/Performing
1.9 < 250bps
3.5 — 250-500bps
0.8 > 500bps
Credit 7.2 6.4 20%
Real Estate 0.4 0.3 > 500bps
Total $8.1 $7.0
($ in billions)
4Q'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 December 31, 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. 11
Uninvested
Carry-
Eligible
AUM
$25.2bn
Currently
Generating
Carry
$55.6bn
Not
Currently
Generating
Carry
$8.1bn
Fund VIII
$8.3
Natural
Resources
$3.2
Other PE
$2.2
Drawdown
$10.4
▪ Driven by opportunities in the capital goods, materials,
energy and healthcare sectors, and opportunities in
structured credit assets, life assets and distressed
European real estate
Capital Deployment
Capital Deployment & Dry Powder
$26 billion Dry Powder
($ in billions)
Private
Equity
Credit
Real Estate
4Q'1
6 Highlight
s
($ in millions)
Segment 4Q'16 FY’16
Private Equity $1,395 $9,582
Credit(1) 1,027 3,713
Real Estate 1,089 2,638
Total $3,511 $15,933
Real Estate
$1.4
Private Equity
$13.8
Credit
$10.8
Liquid/
Performing
$0.1
▪ Capital deployed across Apollo’s global integrated investment platform totaled $3.5 billion for the quarter and
$15.9 billion year-to-date
▪ Pending investment commitments in private equity that have not yet been funded (including co-investments)
totaled $2.5 billion as of December 31, 2016
▪ Dry Powder of $25.9 billion at the end of the quarter, including $9.1 billion of AUM with future management
fee potential
▪ Driven by acquisition of Rackspace (network hosting
services) and various investments across our natural
resources and special situations strategies
▪ Driven primarily by commercial mortgage lending
activity across several strategies
Permanent
Capital Vehicles
$0.2
12(1) Reflects capital deployment activity from Drawdown fund strategies.
Segment Balance Sheet Highlights
Summary Balance Sheet
($ in millions) 4Q'16
Athene/AAA(2) $729
GP Investments /
Other Investments(3) 838
Total Investments $1,567
($ in millions, except per share
amounts and where noted)
Through
4Q'16
Open Market Share
Repurchases 1.0
Reduction of Shares
Issued to Employees(4) 2.7
Total Shares Purchased 3.7
Total Capital Used for
Share Purchases(5) $54
Share Repurchase Plan
Authorization(6) $250
Average Price Paid Per
Share(7) $14.69
Investments Detail Share Repurchase Activitythrough 4Q'16
(1) Investments are presented on an unconsolidated basis. Investments presented in the condensed consolidated statement of financial condition of $1.495 billion include eliminations related to investments in consolidated funds and VIEs. (2)
Investment in Athene/AAA primarily comprises Apollo’s direct investment of 15.1 million restricted shares of Athene valued at $43.43 per share and 1.6 million shares of AAA valued at NAV. (3) Represents Apollo’s general partner investments
in the funds it manages (excluding AAA) and other balance sheet investments. (4) 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”). (5) With respect to the reduction of 2.7 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. (6) 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. (7) Average price paid per share reflects total capital used for share repurchases to date divided by the number of shares purchased.
▪ At December 31, 2016, Apollo had $806 million in cash, $1.6 billion of investments, and $709 million of net carried
interest receivable for a total net value of $3.1 billion
▪ 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 $608 million at December 31, 2016, of which $184 million
related to Fund VIII
▪ Aggregate share repurchases under previously announced plan totaled $54 million through December 31, 2016, with
$196 million remaining authorized under the plan
13
($ in millions) 4Q'16
Cash $806
Investments(1) 1,567
Carried Interest Receivable 1,259
Profit Sharing Payable (550)
Total Net Value $3,082
Debt ($1,352)
Unfunded Future Commitments $608
(1) As of December 31, 2016, the remaining investments and escrow cash of Fund VII and Fund VI were valued at 103% and 82% 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 December 31, 2016, Fund VI
had $167.6 million of gross carried interest income, or $110.7 million net of profit sharing, in escrow. As of December 31, 2016, Fund VII had $58.6 million of gross carried interest income, or $32.6 million net of profit sharing, in escrow. With respect
to 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 $229.8 million of carried interest receivable, or $149.2 million net of profit sharing, from AAA Investments, L.P. which Apollo may elect to receive in cash or in common shares of Athene Holding (valued at the then fair market value);
and if Apollo elects to receive payment of such carried interest in cash, then common shares of Athene Holding shall be distributed to Apollo and immediately sold by Apollo to pay for such carried interest in cash.
(3) As of December 31, 2016, certain credit funds and certain private equity funds had $60.6 million and $56.0 million, respectively, in general partner obligations to return previously distributed carried interest income. The fair value gain on investments
and income at the fund level needed to reverse the general partner obligations for certain credit funds and certain private equity funds was $332.4 million and $406.6 million, respectively, as of December 31, 2016.
(4) There was a corresponding profit sharing payable of $550.1 million as of December 31, 2016, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $106.3 million.
(5) Other includes certain SIAs.
Carried Interest Receivable & Income (Loss) Detail
As of
December 31, 2016 4Q'16 FY'16
($ in thousands)
Carried Interest
Receivable on an
Unconsolidated Basis
Unrealized
Carried
Interest
Income (Loss)
Realized
Carried
Interest
Income
Total Carried
Interest Income
(Loss) from
Related Parties
Unrealized
Carried
Interest
Income (Loss)
Realized
Carried
Interest
Income
Total Carried
Interest Income
(Loss) from
Related Parties
Private Equity Funds
Fund VIII $333,881 $60,061 $10,653 $70,714 $323,228 $10,653 $333,881
Fund VII 74,655 (1) 64,019 — 64,019 5,922 9,844 15,766
Fund VI — (1)(3) 13,753 — 13,753 (94,798) — (94,798)
Fund IV and V 2,767 (3) (3,450) — (3,450) (6,442) 266 (6,176)
ANRP I and II 80,809 59,856 13,326 73,182 80,924 13,326 94,250
AAA / Other(2)(5) 306,354 (3) 38,039 48,203 86,242 59,973 48,203 108,176
Total Private Equity Funds $798,466 $232,278 $72,182 $304,460 $368,807 $82,292 $451,099
Total Private Equity Funds, net of profit share 530,275 147,037 35,687 182,724 254,163 38,399 292,562
Credit Funds
Drawdown $295,492 (3) $27,564 $12,255 $39,819 $119,925 $65,047 $184,972
Liquid/Performing 90,035 (46,361) 56,651 10,290 (3,197) 92,041 88,844
Permanent Capital Vehicles 42,369 5,351 5,425 10,776 20,546 22,941 43,487
Total Credit Funds $427,896 ($13,446) $74,331 $60,885 $137,274 $180,029 $317,303
Total Credit Funds, net of profit share 159,061 (14,833) 52,381 37,548 74,261 95,315 169,576
Real Estate Funds
CPI Funds $368 ($393) $336 ($57) ($1,026) $1,388 $362
U.S. RE Fund I and II 20,263 4,252 132 4,384 1,268 8,160 9,428
Other(5) 11,894 5,210 160 5,370 4,676 3,018 7,694
Total Real Estate Funds $32,525 $9,069 $628 $9,697 $4,918 $12,566 $17,484
Total Real Estate Funds, net of profit share 19,403 5,468 684 6,152 2,717 4,382 7,099
Total $1,258,887 $227,901 $147,141 $375,042 $510,999 $274,887 $785,886
Total, net of profit share $708,739 (4) $137,672 $88,752 $226,424 $331,141 $138,096 $469,237
14
Permanent Capital AUM Supplemental Information
Permanent Capital Vehicles
2010 2012 2014 2016
Period Ending
10%
22%
45% 45%
% of Total AUM
($ in millions, except where noted) 4Q'16
Athene(2) $70,832
MidCap 7,181
Apollo Investment Corp (AINV)(3) 4,386
Apollo Commercial Real Estate Finance (ARI)(4) 3,434
Apollo Senior Floating Rate Fund (AFT) 431
Apollo Tactical Income Fund (AIF) 386
Total AUM in Permanent Capital Vehicles $86,650
FY’16
Fee Related Revenue from Permanent Capital
Vehicles ($ in thousands) $453,098
% of Total Fee Related Revenue 39%
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 34 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 December 31, 2016.
(3) Amounts are as of September 30, 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 $1.5 billion of AUM related to a
non-traded business development company.
(4) Amounts are as of September 30, 2016. Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained on ARI’s website is not part of this presentation.
▪ As of December 31, 2016, Apollo had $86.7 billion of AUM across six Permanent Capital Vehicles(1)
▪ Apollo generated $453.1 million of fee related revenue from Permanent Capital Vehicles during the full year 2016,
representing 39% of total fee related revenue during the year ended December 31, 2016
▪ The compound annualized growth rate (“CAGR”) of permanent capital AUM since 2010 was 52% as of December 31,
2016. Apollo will continue to seek to grow its base of permanent capital opportunistically
$25
$72
$7
$87 ($ in billions)
15
Athene AUM Sub-Advised AUM by Asset Category
A
Athene
2010 2012 2014 2016
Period Ending
$2
$16
$60
$71 ($ in billions) 4Q'16
Private Equity $1.1
Credit $10.5
Liquid/Performing 9.4
Drawdown 1.1
Real Estate $4.1
Debt 3.7
Equity 0.4
Total $15.7
Note: As of December 31, 2016, the Apollo subsidiaries providing investment management or advisory services to Athene included Athene Asset Management, L.P. ($66.1 billion) and AAME ($4.7 billion).
▪ Through its subsidiaries, Apollo managed or advised $70.8 billion of AUM in accounts owned by or related to Athene as of
December 31, 2016
▪ Of the total AUM, $15.7 billion, or 22%, was either sub-advised by Apollo or invested in funds and investment vehicles
managed by Apollo
▪ During the quarter, $719 million of Athene AUM moved from non-sub-advised to sub-advised by Apollo, bringing the total
amount of new sub-advised AUM for the year ended December 31, 2016 to $2.2 billion
▪ Apollo will continue to seek attractive investment opportunities that are consistent with Athene’s investment objectives
($ in billions)
16
Appendix
($ in thousands, except per share data and where noted) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Management fees from related parties $233,149 $230,933 $241,633 $258,485 $246,598 $911,893 $977,649
Advisory and transaction fees from related parties, net (20,083) 7,999 64,899 30,251 43,966 14,186 147,115
Carried interest income (loss) from related parties:
Unrealized (58,620) (170,891) 286,505 167,484 227,901 (387,541) 510,999
Realized 36,196 49,923 41,980 35,843 147,141 484,831 274,887
Total Carried Interest Income (Loss) from Related Parties (22,424) (120,968) 328,485 203,327 375,042 97,290 785,886
Total Revenues 190,642 117,964 635,017 492,063 665,606 1,023,369 1,910,650
Salary, bonus and benefits 84,577 92,370 94,522 86,804 93,194 355,922 366,890
Equity-based compensation 16,772 16,720 15,722 16,154 15,872 62,184 64,468
Profit sharing expense:
Unrealized (18,131) (67,682) 100,836 56,475 90,228 (136,653) 179,857
Realized 12,451 34,189 23,897 20,316 58,391 222,684 136,793
Total Profit Sharing Expense (5,680) (33,493) 124,733 76,791 148,619 86,031 316,650
Non-compensation expenses:
General, administrative and other 65,253 52,361 61,518 51,953 52,658 221,806 218,490
Placement fees 3,763 1,701 1,789 1,053 19,890 8,939 24,433
Total Non-Compensation Expenses 69,016 54,062 63,307 53,006 72,548 230,745 242,923
Total Expenses 164,685 129,659 298,284 232,755 330,233 734,882 990,931
Income (loss) from equity method investments (2,139) (3,859) 44,706 22,919 38,815 16,078 102,581
Net gains (losses) from investment activities 14,841 (56,499) 88,498 17,362 89,247 121,132 138,608
Net interest loss (6,830) (6,891) (8,886) (11,528) (11,714) (26,533) (39,019)
Other income (loss), net 1,950 (561) 258 (4,903) 3,048 8,177 (2,158)
Other Income (Loss) 7,822 (67,810) 124,576 23,850 119,396 118,854 200,012
Non-Controlling Interest (2,918) (2,385) (2,175) (510) (2,394) (11,684) (7,464)
Economic Income (Loss) $30,861 ($81,890) $459,134 $282,648 $452,375 $395,657 $1,112,267
Income tax (provision) benefit 2,027 8,926 (64,283) (51,896) (58,269) (10,518) (165,522)
Economic Net Income (Loss) $32,888 ($72,964) $394,851 $230,752 $394,106 $385,139 $946,745
Per Share $0.08 ($0.18) $0.98 $0.58 $0.98 $0.96 $2.36
Fee Related Earnings $113,349 $98,804 $153,122 $146,483 $131,465 $422,047 $529,874
Distributable Earnings $130,612 $104,755 $164,315 $152,636 $226,226 $622,821 $647,932
AUM ($ in millions) 170,123 172,513 186,266 188,636 191,688 170,123 191,688
Fee-Generating AUM ($ in millions) 138,097 141,073 145,428 148,669 150,798 138,097 150,798
18
Summary of Combined Economic Income (Loss)
($ in thousands, except where noted) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Management fees from related parties $75,094 $74,918 $76,518 $91,545 $79,014 $295,836 $321,995
Advisory and transaction fees from related parties, net (24,975) 2,713 58,301 26,601 41,060 (7,485) 128,675
Carried interest income (loss) from related parties:
Unrealized (49,014) (146,335) 207,845 75,019 232,278 (314,161) 368,807
Realized 3,647 — 266 9,844 72,182 339,822 82,292
Total Carried Interest Income (Loss) from Related Parties (45,367) (146,335) 208,111 84,863 304,460 25,661 451,099
Total Revenues 4,752 (68,704) 342,930 203,009 424,534 314,012 901,769
Salary, bonus and benefits 29,861 32,074 31,564 32,532 28,293 123,653 124,463
Equity-based compensation 7,857 7,385 6,765 6,645 6,754 31,324 27,549
Profit sharing expense:
Unrealized (19,166) (57,374) 67,543 19,234 85,240 (129,258) 114,643
Realized 4,942 — 132 7,266 36,495 175,830 43,893
Total Profit Sharing Expense (14,224) (57,374) 67,675 26,500 121,735 46,572 158,536
Non-compensation expenses:
General, administrative and other 28,154 15,731 20,551 18,118 16,923 75,559 71,323
Placement fees 2,982 994 1,085 330 (112) 4,550 2,297
Total Non-Compensation Expenses 31,136 16,725 21,636 18,448 16,811 80,109 73,620
Total Expenses 54,630 (1,190) 127,640 84,125 173,593 281,658 384,168
Income (loss) from equity method investments 537 (5,483) 31,410 14,384 25,970 19,125 66,281
Net gains (losses) from investment activities 1,029 (4,106) 6,457 1,191 7,837 6,933 11,379
Net interest loss (2,439) (2,428) (3,252) (4,188) (4,319) (9,878) (14,187)
Other income (loss), net 245 (124) 341 103 1,330 3,148 1,650
Other Income (Loss) (628) (12,141) 34,956 11,490 30,818 19,328 65,123
Economic Income (Loss)(1) ($50,506) ($79,655) $250,246 $130,374 $281,759 $51,682 $582,724
Fee Related Earnings $35,367 $28,708 $81,960 $67,269 $75,161 $132,577 $253,098
AUM ($ in millions) 37,502 37,702 41,181 42,181 43,628 37,502 43,628
Fee-Generating AUM ($ in millions) 29,258 29,325 29,530 30,630 30,722 29,258 30,722
Private Equity
(1) 4Q‘15 and FY’15 includes impact of reserve of $45 million accrued in connection with an SEC regulatory matter previously disclosed in our 2015 Annual Report on Form 10-K principally concerning the acceleration of fees from fund
portfolio companies.
19
($ in thousands, except where noted) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Management fees from related parties $143,451 $142,511 $151,252 $151,386 $151,560 $565,241 $596,709
Advisory and transaction fees from related parties, net 3,333 4,410 3,036 2,612 2,475 17,246 12,533
Carried interest income (loss) from related parties:
Unrealized (12,786) (21,179) 80,397 91,502 (13,446) (80,534) 137,274
Realized 30,404 45,152 40,046 20,500 74,331 139,152 180,029
Total Carried Interest Income (Loss) from Related Parties 17,618 23,973 120,443 112,002 60,885 58,618 317,303
Total Revenues 164,402 170,894 274,731 266,000 214,920 641,105 926,545
Salary, bonus and benefits 46,475 51,612 54,709 45,143 57,792 200,032 209,256
Equity-based compensation 7,889 8,560 8,300 8,834 8,491 26,683 34,185
Profit sharing expense:
Unrealized (464) (9,137) 33,954 36,809 1,386 (10,363) 63,012
Realized 7,995 30,561 23,215 8,988 21,951 44,747 84,715
Total Profit Sharing Expense 7,531 21,424 57,169 45,797 23,337 34,384 147,727
Non-compensation expenses:
General, administrative and other 31,472 30,486 35,546 29,161 30,446 123,378 125,639
Placement fees 781 707 683 723 19,934 4,389 22,047
Total Non-Compensation Expenses 32,253 31,193 36,229 29,884 50,380 127,767 147,686
Total Expenses 94,148 112,789 156,407 129,658 140,000 388,866 538,854
Income (loss) from equity method investments (3,371) 848 12,940 8,036 11,466 (6,025) 33,290
Net gains (losses) from investment activities 13,812 (52,393) 82,041 16,171 81,410 114,199 127,229
Net interest loss (3,633) (3,655) (4,715) (6,172) (6,127) (13,740) (20,669)
Other income (loss), net 1,651 (408) (127) (4,977) 1,012 3,574 (4,500)
Other Income (Loss) 8,459 (55,608) 90,139 13,058 87,761 98,008 135,350
Non-Controlling Interest (2,918) (2,385) (2,175) (510) (2,394) (11,684) (7,464)
Economic Income(1) $75,795 $112 $206,288 $148,890 $160,287 $338,563 $515,577
Fee Related Earnings $75,633 $70,573 $67,384 $76,454 $51,929 $287,880 $266,340
AUM ($ in millions) 121,361 123,854 133,884 135,396 136,607 121,361 136,607
Fee-Generating AUM ($ in millions) 101,522 104,904 108,774 110,123 111,781 101,522 111,781
Credit
(1) 3Q’16 and FY’16 include a $7.7 million reversal of previously accrued carried interest income.
20
($ in thousands, except where noted) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Management fees from related parties $14,604 $13,504 $13,863 $15,554 $16,024 $50,816 $58,945
Advisory and transaction fees from related parties, net 1,559 876 3,562 1,038 431 4,425 5,907
Carried interest income (loss) from related parties:
Unrealized 3,180 (3,377) (1,737) 963 9,069 7,154 4,918
Realized 2,145 4,771 1,668 5,499 628 5,857 12,566
Total Carried Interest Income (Loss) from Related Parties 5,325 1,394 (69) 6,462 9,697 13,011 17,484
Total Revenues 21,488 15,774 17,356 23,054 26,152 68,252 82,336
Salary, bonus and benefits 8,241 8,684 8,249 9,129 7,109 32,237 33,171
Equity-based compensation 1,026 775 657 675 627 4,177 2,734
Profit sharing expense:
Unrealized 1,499 (1,171) (661) 432 3,602 2,968 2,202
Realized (486) 3,628 550 4,062 (55) 2,107 8,185
Total Profit Sharing Expense 1,013 2,457 (111) 4,494 3,547 5,075 10,387
Non-compensation expenses:
General, administrative and other 5,627 6,144 5,421 4,674 5,289 22,869 21,528
Placement fees — — 21 — 68 — 89
Total Non-Compensation Expenses 5,627 6,144 5,442 4,674 5,357 22,869 21,617
Total Expenses 15,907 18,060 14,237 18,972 16,640 64,358 67,909
Income from equity method investments 695 776 356 499 1,379 2,978 3,010
Net interest loss (758) (808) (919) (1,168) (1,268) (2,915) (4,163)
Other income (loss), net 54 (29) 44 (29) 706 1,455 692
Other Income (Loss) (9) (61) (519) (698) 817 1,518 (461)
Economic Income (Loss) $5,572 ($2,347) $2,600 $3,384 $10,329 $5,412 $13,966
Fee Related Earnings $2,349 ($477) $3,778 $2,760 $4,375 $1,590 $10,436
AUM ($ in millions) 11,260 10,957 11,201 11,059 11,453 11,260 11,453
Fee-Generating AUM ($ in millions) 7,317 6,844 7,124 7,916 8,295 7,317 8,295
Real Estate
21
($ in thousands, except share data) 4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Net Income (Loss) Attributable to Apollo Global Management,
LLC $6,091 ($32,828) $174,092 $94,619 $166,967 $134,497 $402,850
Distributions declared on Class A shares (63,377) (51,432) (46,014) (68,356) (64,911) (339,397) (230,713)
Distribution on participating securities (3,146) (2,123) (1,766) (2,404) (2,103) (28,497) (8,396)
Earnings allocable to participating securities — — (4,959) (849) (3,337) — (6,430)
Undistributed income (loss) attributable to Class A shareholders:
Basic ($60,432) ($86,383) $121,353 $23,010 $96,616 ($233,397) $157,311
GAAP weighted average number of Class A shares outstanding:
Basic 180,370,747 182,665,330 183,695,920 184,438,515 185,146,949 173,271,666 183,998,080
GAAP Net Income (Loss) per Class A Share under the Two-Class
Method: Basic $0.02 ($0.19) $0.91 $0.50 $0.87 $0.61 $2.11
Distributed Income $0.35 $0.28 $0.25 $0.37 $0.35 $1.96 $1.25
Undistributed Income (Loss) ($0.33) ($0.47) $0.66 $0.13 $0.52 ($1.35) $0.86
Net Income (Loss) Attributable to Apollo Global Management,
LLC $6,091 ($32,828) $174,092 $94,619 $166,967 $134,497 $402,850
Net Income (Loss) Attributable to Apollo Global Management,
LLC to Income (Loss) Before Income Tax (Provision) Benefit
Differences(1) 23,809 (46,880) 279,699 169,766 255,579 242,731 658,164
Income (Loss) Before Income Tax (Provision) Benefit $29,900 ($79,708) $453,791 $264,385 $422,546 $377,228 $1,061,014
Income (Loss) Before Income Tax (Provision) Benefit to
Economic Income (Loss) Differences(1) 961 (2,182) 5,343 18,263 29,829 18,429 51,253
Economic Income (Loss) $30,861 ($81,890) $459,134 $282,648 $452,375 $395,657 $1,112,267
Income tax (provision) benefit on Economic Income 2,027 8,926 (64,283) (51,896) (58,269) (10,518) (165,522)
Economic Net Income (Loss) $32,888 ($72,964) $394,851 $230,752 $394,106 $385,139 $946,745
Weighted Average Economic Net Income Shares Outstanding(2) 401,988,092 402,077,109 401,185,464 401,248,755 401,371,668 402,923,251 401,464,645
Economic Net Income (Loss) per Share $0.08 ($0.18) $0.98 $0.58 $0.98 $0.96 $2.36
Economic Net Income to Distributable Earnings Differences(1) 97,724 177,719 (230,536) (78,116) (167,880) 237,682 (298,813)
Distributable Earnings $130,612 $104,755 $164,315 $152,636 $226,226 $622,821 $647,932
Taxes and Related Payables (3,425) (2,273) (2,968) (4,105) (289) (9,715) (9,635)
Distributable Earnings After Taxes and Related Payables $127,187 $102,482 $161,347 $148,531 $225,937 $613,106 $638,297
Distributable Earnings Shares Outstanding(2) 409,775,021 407,447,658 407,343,429 407,212,090 409,974,049 409,775,021 409,974,049
Distributable Earnings per Share of Common & Equivalent $0.31 $0.25 $0.40 $0.36 $0.55 $1.50 $1.56
(1) See page 5 for reconciliation of Net Income (Loss) Attributable to Apollo Global Management, LLC, Income (Loss) Before Income Tax (Provision) Benefit, Economic Net Income (Loss) and Distributable Earnings.
(2) See page 25 for reconciliation of GAAP Class A shares outstanding to non-GAAP shares outstanding.
Reconciliation of GAAP Net Income Per Class A Share to Non-GAAP Per Share Measures
22
($ in thousands) 4Q'15 3Q'16 4Q'16 FY'15 FY'16
Total Revenues (GAAP) $193,651 $503,731 $685,380 $1,041,670 $1,970,384
Equity awards granted by unconsolidated related parties and reimbursable
expenses (5,390) (18,217) (22,638) (27,949) (73,913)
Adjustments related to consolidated funds and VIEs 928 937 2,677 3,696 5,477
Other 1,453 5,612 187 5,952 8,702
Total Segment Revenues $190,642 $492,063 $665,606 $1,023,369 $1,910,650
Total Expenses (GAAP) $187,529 $282,257 $398,364 $830,975 $1,165,918
Equity awards granted by unconsolidated related parties and reimbursable
expenses (5,177) (19,688) (22,673) (28,658) (75,653)
Transaction-related compensation charges (2,669) (14,276) (29,494) (4,825) (46,293)
Reclassification of interest expense(1) (7,617) (12,832) (12,977) (30,071) (43,482)
Amortization of transaction-related intangibles (8,558) (2,212) (2,199) (33,998) (8,807)
Other 1,177 (494) (788) 1,459 (752)
Total Segment Expenses $164,685 $232,755 $330,233 $734,882 $990,931
Total Other Income, net (GAAP) $23,778 $42,911 $135,530 $166,533 $256,548
Reclassification of interest expense(1) (7,617) (12,832) (12,977) (30,071) (43,482)
Adjustments related to consolidated funds and VIEs (8,269) (533) (1,905) (14,652) (3,982)
Other (70) (5,696) (1,252) (2,956) (9,072)
Total Segment Other Income $7,822 $23,850 $119,396 $118,854 $200,012
(1) For EI presentation purposes, interest income is presented net of interest expense as a component of other income.
Reconciliation of GAAP to Non-GAAP Measures
23
4Q'16 FY'16
($ in thousands, except per share data) Results Per Share Results Per Share
Economic Net Incom
e
Distributable Earnings
Afte
r T
axes and Related Payable
s
Fee Related Earning
s Management fees $246,598 $977,649
Advisory and transaction fees from related parties, net 43,966 147,115
Carried interest income from related parties 5,425 22,941
Salary, bonus and benefits (93,194) (366,890)
Other expenses (72,548) (242,923)
Other income (loss) 1,218 (8,018)
Fee Related Earnings $131,465 $529,874
Net realized carried interest income 83,325 115,153
Non-cash revenues (842) (3,369)
Investment (income) loss and other 9,882 (3,654)
Depreciation, amortization and other 2,396 9,928
Taxes and related payables (289) (9,635)
Distributable Earnings After Taxes and Related Payables $225,937 $0.55 $638,297 $1.56
Taxes and related payables 289 9,635
Net unrealized carried interest income 137,673 331,142
Non-cash revenues 842 3,369
Investment and other income 105,902 204,220
Equity-based compensation (15,872) (64,468)
Depreciation, amortization and other (2,396) (9,928)
Income tax provision (58,269) (165,522)
Economic Net Income $394,106 $0.98 $946,745 $2.36
Walkdown of Non-GAAP Measures
24
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16 FY'15 FY'16
Total GAAP Weighted-Average Class A Shares
Outstanding: Basic 180,370,747 182,665,330 183,695,920 184,438,515 185,146,949 173,271,666 183,998,080
Non-GAAP Adjustments:
Apollo Operating Group Units 216,181,813 216,169,856 216,065,719 215,869,166 215,569,749 219,575,738 215,917,462
RSUs 5,331,288 3,142,789 1,333,695 873,973 581,473 9,984,862 1,466,803
Restricted shares 104,244 99,134 90,130 67,101 73,497 90,985 82,300
Weighted-Average Economic Net Income Shares
Outstanding 401,988,092 402,077,109 401,185,464 401,248,755 401,371,668 402,923,251 401,464,645
4Q'15 1Q'16 2Q'16 3Q'16 4Q'16
Total GAAP Class A Shares Outstanding 181,078,937 183,401,191 184,104,686 184,743,799 185,460,294
Non-GAAP Adjustments:
Apollo Operating Group Units 216,169,856 216,169,856 216,000,633 215,795,633 215,457,239
Vested RSUs 6,294,053 1,809,730 1,327,326 997,519 2,752,455
Economic Net Income Shares Outstanding 403,542,846 401,380,777 401,432,645 401,536,951 403,669,988
Unvested RSUs Eligible for Distribution Equivalents 6,232,175 6,066,881 5,910,784 5,675,139 6,304,061
Distributable Earnings Shares Outstanding 409,775,021 407,447,658 407,343,429 407,212,090 409,974,049
Share Reconciliation
25
Unaudited Supplemental Presentation of Statement of Financial Condition
As of December 31, 2016
($ in thousands)
Apollo Global
Management, LLC and
Consolidated Subsidiaries(1)
Consolidated Funds and
VIEs Eliminations Consolidated
Assets:
Cash and cash equivalents $806,329 $— $— $806,329
Cash and cash equivalents held at consolidated funds — 7,335 — 7,335
Restricted cash 4,680 — — 4,680
Investments 1,567,388 5,378 (78,022) 1,494,744
Assets of consolidated variable interest entities — 1,002,094 (283) 1,001,811
Carried interest receivable 1,258,887 — (1,782) 1,257,105
Due from related parties 255,342 — (489) 254,853
Deferred tax assets 572,263 — — 572,263
Other assets 118,181 768 (89) 118,860
Goodwill 88,852 — — 88,852
Intangible assets, net 22,721 — — 22,721
Total Assets $4,694,643 $1,015,575 ($80,665) $5,629,553
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $57,465 $— $— $57,465
Accrued compensation and benefits 52,754 — — 52,754
Deferred revenue 174,893 — — 174,893
Due to related parties 638,126 — — 638,126
Profit sharing payable 550,148 — — 550,148
Debt 1,352,447 — — 1,352,447
Liabilities of consolidated variable interest entities — 898,248 (43,669) 854,579
Other liabilities 81,568 45 — 81,613
Total Liabilities 2,907,401 898,293 (43,669) 3,762,025
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Additional paid in capital 1,830,025 — — 1,830,025
Accumulated deficit (986,187) 16,131 (16,130) (986,186)
Accumulated other comprehensive income (loss) (5,750) (3,029) 56 (8,723)
Total Apollo Global Management, LLC shareholders’ equity 838,088 13,102 (16,074) 835,116
Non-Controlling Interests in consolidated entities 6,805 104,180 (20,922) 90,063
Non-Controlling Interests in Apollo Operating Group 942,349 — — 942,349
Total Shareholders’ Equity 1,787,242 117,282 (36,996) 1,867,528
Total Liabilities and Shareholders’ Equity $4,694,643 $1,015,575 ($80,665) $5,629,553
(1) Represents amounts of the total combined segments.
26
Investment Records as of December 31, 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
$200 million of AUM and do not predominantly invest in other Apollo funds or SIAs. Footnotes to the above table appear on page 28.
As of December 31, 2016
($ in millions)
Vintage Year(1) 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 $20,336 $18,377 $10,017 $895 $9,281 $11,628 $12,523 25 % 13 %
Fund VII 2008 6,439 14,677 16,033 29,377 3,668 3,945 33,322 35 26
Fund VI 2006 3,349 10,136 12,457 18,001 3,505 2,727 20,728 12 9
Fund V 2001 337 3,742 5,192 12,697 138 80 12,777 61 44
Funds I, II, III, IV & MIA(3) Various 29 7,320 8,753 17,400 — 14 17,414 39 26
Traditional Private Equity Funds(4) $30,490 $54,252 $52,452 $78,370 $16,592 $18,394 $96,764 39 % 25 %
ANRP II 2016 3,673 3,454 581 144 505 788 932 NM(2) NM(2)
ANRP I 2012 1,550 1,323 1,018 236 855 1,191 1,427 15 9
AION 2013 706 826 326 127 236 210 337 3 % (11)%
Total Private Equity(9) $36,419 $59,855 $54,377 $78,877 $18,188 $20,583 $99,460
Credit:
Credit Opportunity Funds
COF III 2014 $3,124 $3,426 $4,182 $1,751 $2,566 $2,127 $3,878 (3)% (4)%
COF I & II 2008 445 3,068 3,787 7,389 127 158 7,547 23 20
European Principal Finance Funds
EPF II(5) 2012 4,099 3,379 3,443 1,393 2,051 3,206 4,599 20 11
EPF I(5) 2007 269 1,362 1,790 2,960 — 46 3,006 23 17
Structured Credit Funds
FCI II 2013 2,507 1,555 1,953 559 1,682 2,056 2,615 17 13
FCI I 2012 1,044 559 1,230 852 793 818 1,670 16 12
SCRF III(12) 2015 986 1,238 1,611 671 739 1,165 1,836 18 14
SCRF I & II(12) Various 12 222 707 872 7 12 884 27 21
Other Drawdown Funds & SIAs(6) Various 6,601 8,792 7,250 7,387 1,941 1,743 9,130 9 6
Total Credit(10) $19,087 $23,601 $25,953 $23,834 $9,906 $11,331 $35,165
Real Estate:
U.S. RE Fund II(7) 2016 $687 $651 $409 $69 $384 $425 $494 17 % 17 %
U.S. RE Fund I(7) 2012 512 648 623 574 271 339 913 17 13
AGRE Debt Fund I(13) 2011 917 1,913 1,850 1,148 923 849 1,997 7 6
CPI Funds(8) Various 605 4,768 2,475 2,529 311 102 2,631 15 12
Total Real Estate(11) $2,721 $7,980 $5,357 $4,320 $1,889 $1,715 $6,035
Drawdown
27
Investment Records – Notes
(1) Refer to the definitions of Vintage Year, 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) Funds are denominated in Euros and historical figures are translated into U.S. dollars at an exchange rate of €1.00 to $1.05 as of December 31, 2016.
(6) 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 $1.05 as of December 31, 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 $9.1 billion
of Total Invested Capital through December 31, 2016.
(7) U.S. RE Fund I and U.S. RE Fund II, closed-end private investment funds, had $150 million and $178 million of co-investment commitments raised as of December 31, 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 $1.23 as of
December 31, 2016.
(8) 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 December 31, 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.
(9) Certain private equity co-investment vehicles and funds with AUM less than $500 million have been excluded. These co-investment vehicles and funds had $7.2 billion of aggregate AUM
as of December 31, 2016.
(10) Certain credit funds and SIAs with AUM less than $500 million and $200 million, respectively, have been excluded. These funds and SIAs had $4.8 billion of aggregate AUM as of
December 31, 2016.
(11) 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 $4.8 billion of aggregate AUM as of December 31, 2016.
(12) Remaining cost for certain of our credit funds may include physical cash called, invested or reserved for certain levered investments.
(13) The investors in this U.S. Dollar denominated fund have chosen to make contributions and receive distributions in the local currency of each underlying investment. As a result, Apollo
has not entered into foreign currency hedges for this fund and the returns presented include the impact of foreign currency gains or losses. The investor’s gross and net IRR, before the
impact of foreign currency gains or losses, from the fund’s inception to December 31, 2016 was 10% and 9%, respectively.
28
Investment Records as of December 31, 2016
Permanent Capital Vehicles ex Athene Non-Sub-Advised
Total Returns(3)
($ in millions)
IPO Year(4) Total AUM 4Q'16 FY'16 4Q'15 FY'15
Credit:
MidCap(5) N/A $7,181 NM(6) NM(6) NM(6) NM(6)
AIF 2013 386 3 % 23 % — (4)%
AFT 2011 431 5 24 (1)% (2)
AINV(7) 2004 4,386 4 26 (1) (20)
Real Estate:
ARI(8) 2009 3,434 4 % 8 % 13 % 17 %
Total $15,818
Liquid/Performing
Net Returns
($ in millions)
Vintage Year Total AUM 4Q'16 FY'16 4Q'15 FY'15
Credit:
Hedge Funds(1) Various $6,035 2% 11% (2)% —%
CLOs(2) Various 12,208 2 9 (1) 2
SIAs / Other Various 17,441 1 9 (1) 1
Total $35,684
Note: The above table summarizes the investment record for our Liquid/Performing and Permanent Capital Vehicles as defined in the non-GAAP financial information & definitions section of this presentation (excluding Athene Non-
Sub-Advised which refers to that portion of Athene’s assets which are managed or advised by Apollo but not sub-advised by Apollo or invested in funds and or investment vehicles managed by Apollo). All amounts are as of December 31,
2016, unless otherwise noted. Footnotes to the above tables appear on page 30. 29
Investment Records – Notes
(1) Hedge funds primarily includes Apollo Credit Strategies Master Fund Ltd., Apollo Credit Master Fund Ltd. and Apollo Credit Short Opportunities Fund.
(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 September 30, 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 $1.5 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.
(8) Amounts are as of September 30, 2016. Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained on ARI’s website is not part of this
presentation.
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 related parties 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.
▪ Fee Related Earnings, or “FRE”, is derived from our segment reported results and refers to a component of EI that is used as a supplemental performance measure to assess whether revenues
that we believe are generally more stable and predictable in nature, primarily consisting of management fees, are sufficient to cover associated operating expenses and generate profits. FRE
is the sum across all segments of (i) management fees, (ii) advisory and transaction fees, (iii) carried interest income earned from a publicly traded business development company we manage
and (iv) other income, net, excluding gains (losses) arising from the reversal of a portion of the tax receivable agreement liability, less (y) salary, bonus and benefits, excluding equity-based
compensation and (z) other associated operating expenses.
▪ “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 related 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
▪ “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 related parties
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 PC LLP, a subsidiary of Apollo Asset Management Europe LLP (collectively, “AAME”). The AAME entities are subsidiaries of
Apollo. Until AAME receives full authorization by the UK Financial Conduct Authority (“FCA”), references to AAME mean AAME and Apollo Management International LLP, an existing FCA authorized and
regulated subsidiary of Apollo in the UK.
▪ “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 (i) for a given investment for the fund or funds which made such investment, and (ii) for a given fund, in the relevant
fund itself (and not any one investor in the fund), in each case, on the basis of the actual timing of investment inflows and outflows (for unrealized investments assuming disposition on December 31, 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. In addition, gross IRRs at the fund level
differ from those at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor.
▪ 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. In addition, gross IRRs at the fund level differ from those at the individual investor level as a result of, among other
factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor.
▪ 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 December 31, 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. In addition, gross IRRs at the fund level differ from
those at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor.
▪ 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 applicable to a fund, including returns for related parties which may not pay fees or carried interest, net of management fees, certain fund expenses (including
interest incurred or earned by the fund itself) and realized carried interest all offset to the extent of interest income, and measures returns at the fund level on amounts that, if distributed, would be paid to investors
of the fund. To the extent that a 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 such fund, thereby reducing the balance attributable to fund investors. In addition, net IRR at the fund level will differ from that at the individual investor level as a result of,
among other factors, timing of investor-level inflows and outflows. 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. In addition, net IRR at
the fund level will differ from that at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Net IRR does not represent the return to any fund investor. 33
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 December 31, 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. In addition, net IRR at the fund level will differ from that at the individual investor level as
a result of, among other factors, timing of investor-level inflows and outflows. Net IRR does not represent the return to any fund investor.
▪ 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 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 arrangement of ARI has a one year term and is reviewed annually
by the company’s board of directors and may be terminated under certain circumstances by an affirmative vote of at least two-thirds of the 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.
▪ Private Equity fund appreciation (depreciation) refers to gain (loss) and income for the traditional private equity funds (i.e., Funds I-VIII), ANRP I & II, Apollo Special Situations Fund, L.P. and AION
Capital Partners Limited (“AION”) 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. Returns over multiple periods are calculated by geometrically linking each period’s return over time;
▪ 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. Returns
over multiple periods are calculated by geometrically linking each period’s return over time;
▪ “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; and
▪ “Vintage Year” refers to the year in which a fund’s final capital raise has occurred. 34
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.
35