Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Apollo Global Management, Inc. | erex9911q17.htm |
| 8-K - 8-K - Apollo Global Management, Inc. | a8-kforq117earningsrelease.htm |
Apollo Global Management, LLC
First Quarter 2017 Earnings
Exhibit 99.2
April 28, 2017
▪ Economic Net Income (“ENI”) of $331.6 million ($0.82/share)
▪ Fee Related Earnings (“FRE”) of $134.5 million (409.2 million shares(1))
▪ Distributable Earnings (“DE”) After Taxes and Related Payables of $233.3 million ($0.57/share)
▪ Declared 1Q'17 distribution of $0.49 per Class A share and equivalent (payout ratio of 86%)
GAAP
Results
Assets Under
Management
Apollo 1Q'17 Financial Results Highlights
Business
Drivers
▪ Total Assets Under Management (“AUM”) of $197.5 billion
▪ Fee-Generating AUM (“FGAUM”) of $154.2 billion
▪ Carry-Eligible AUM (“CEAUM”) of $89.8 billion and Carry-Generating AUM (“CGAUM”) of $52.6 billion
▪ Dry Powder of $24.2 billion available for investment
▪ Inflows: $5.3 billion of capital inflows ($35.5 billion LTM(2))
▪ Deployment: $3.4 billion invested ($17.2 billion LTM)
▪ Realizations: $1.7 billion of capital returned to investors ($6.0 billion LTM)
▪ Performance: Private Equity Fund Appreciation 8.0% (22.0% LTM)
Credit Gross Return(3) 1.9% (12.1% LTM)
Note: This presentation contains non-GAAP financial information and defined terms which are described on pages 32 to 36. The non-GAAP financial information contained herein is reconciled to GAAP financial information on pages 5
and 23-25.
(1) Shares are based on end of period Distributable Earnings Shares Outstanding, which consist of total Class A shares outstanding and restricted share units (“RSUs”) that participate in distributions.
(2) “LTM” refers to the last twelve months ended March 31, 2017.
(3) 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 1.6% for 1Q'17 and
10.7% for LTM. 1
Non-GAAP
Measures
& Distribution
▪ Net Income of $355.0 million
▪ Net Income Attributable to Apollo Global Management, LLC $145.2 million ($0.75/share)
▪ Net Income was $355.0 million for the quarter; Net Income Attributable to Apollo Global Management, LLC (Class A
shares) was $145.2 million for the quarter
($ in thousands, except share data) 1Q'16 4Q'16 1Q'17
Revenues:
Management fees from related parties $233,795 $268,342 $269,543
Advisory and transaction fees from related parties, net 7,999 43,966 15,067
Carried interest income (loss) from related parties (120,968) 373,072 358,941
Total Revenues 120,826 685,380 643,551
Expenses:
Compensation and benefits:
Salary, bonus and benefits 97,234 99,117 101,613
Equity-based compensation 14,002 28,780 23,107
Profit sharing expense (37,605) 177,307 144,324
Total Compensation and Benefits 73,631 305,204 269,044
Interest expense 7,873 12,977 12,999
General, administrative and other 58,631 59,715 62,040
Placement fees 1,764 20,468 1,905
Total Expenses 141,899 398,364 345,988
Other Income:
Net gains (losses) from investment activities (56,469) 89,434 34,517
Net gains from investment activities of consolidated variable interest entities 1,319 2,198 4,108
Income (loss) from equity method investments (3,817) 38,822 38,553
Interest income 585 999 803
Other income (loss), net (253) 4,077 18,647
Total Other Income (Loss) (58,635) 135,530 96,628
Income (loss) before income tax (provision) benefit (79,708) 422,546 394,191
Income tax (provision) benefit 5,147 (28,199) (39,161)
Net Income (Loss) (74,561) 394,347 355,030
Net (income) loss attributable to Non-Controlling Interests 41,733 (227,380) (209,834)
Net Income (Loss) Attributable to Apollo Global Management, LLC ($32,828) $166,967 $145,196
Distributions Declared and Paid per Class A Share $0.28 $0.35 $0.45
Net Income (Loss) Per Class A Share:
Net Income (Loss) Available to Class A Share – Basic ($0.19) $0.87 $0.75
Net Income (Loss) Available to Class A Share – Diluted ($0.19) $0.87 $0.75
Weighted Average Number of Class A Shares Outstanding – Basic 182,665,330 185,146,949 186,537,367
Weighted Average Number of Class A Shares Outstanding – Diluted 182,665,330 185,146,949 186,537,367
GAAP Consolidated Statements of Operations (Unaudited)
2
($ in thousands, except share data) As of March 31, 2017
As of
December 31, 2016
Assets:
Cash and cash equivalents $1,084,218 $806,329
Cash and cash equivalents held at consolidated funds 7,880 7,335
Restricted cash 4,946 4,680
Investments 1,575,687 1,494,744
Assets of consolidated variable interest entities 1,106,407 1,001,811
Carried interest receivable 1,420,860 1,257,105
Due from related parties 249,881 254,853
Deferred tax assets 561,524 572,263
Other assets 140,302 118,860
Goodwill 88,852 88,852
Intangible assets, net 21,006 22,721
Total Assets $6,261,563 $5,629,553
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $72,170 $57,465
Accrued compensation and benefits 54,257 52,754
Deferred revenue 171,267 174,893
Due to related parties 598,975 638,126
Profit sharing payable 634,668 550,148
Debt 1,353,572 1,352,447
Liabilities of consolidated variable interest entities 925,008 854,579
Other liabilities 103,855 81,613
Total Liabilities 3,913,772 3,762,025
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Preferred shares 264,683 —
Class A shares, no par value, unlimited shares authorized, 187,644,092 and 185,460,294 shares issued and outstanding at March 31, 2017 and
December 31, 2016, respectively — —
Class B shares, no par value, unlimited shares authorized, 1 share issued and outstanding at March 31, 2017 and December 31, 2016 — —
Additional paid in capital 1,763,146 1,830,025
Accumulated deficit (838,686) (986,186)
Accumulated other comprehensive loss (11,803) (8,723)
Total Apollo Global Management, LLC shareholders’ equity 1,177,340 835,116
Non-Controlling Interests in consolidated entities 120,891 90,063
Non-Controlling Interests in Apollo Operating Group 1,049,560 942,349
Total Shareholders’ Equity 2,347,791 1,867,528
Total Liabilities and Shareholders’ Equity $6,261,563 $5,629,553
GAAP Consolidated Statements of Financial Condition (Unaudited)
▪ Total assets were $6.3 billion as of March 31, 2017, an increase of $0.6 billion, or 11%, compared to December 31,
2016
3
($ in thousands, except per share data) 1Q'16 4Q'16 1Q'17 1Q’16 LTM 1Q’17 LTM
Management Fees $230,933 $246,598 $252,053 $918,113 $998,769
Advisory and Transaction Fees from Related Parties, net 7,999 43,966 15,067 12,642 154,183
Carried Interest Income (Loss) from Related Parties (120,968) 375,042 359,006 (92,271) 1,265,860
Total Revenues 117,964 665,606 626,126 838,484 2,418,812
Salary, Bonus and Benefits 92,370 93,194 94,721 360,740 369,241
Equity-Based Compensation 16,720 15,872 16,745 63,073 64,493
Profit Sharing Expense (33,493) 148,619 148,275 11,706 498,418
Other Expenses 54,062 72,548 55,836 232,873 244,697
Total Expenses 129,659 330,233 315,577 668,392 1,176,849
Other Income Net of Non-Controlling Interests (70,195) 117,002 79,446 41,606 342,189
Economic Income (Loss)(1) ($81,890) $452,375 $389,995 $211,698 $1,584,152
Taxes 8,926 (58,269) (58,372) 6,928 (232,820)
Economic Net Income (Loss) ($72,964) $394,106 $331,623 $218,626 $1,351,332
Per Share ($0.18) $0.98 $0.82 $0.54 $3.36
Fee Related Earnings $98,804 $131,465 $134,475 $413,461 $565,545
Distributable Earnings $104,755 $226,226 $239,605 $581,557 $782,782
Taxes and Related Payables (2,273) (289) (6,348) (9,878) (13,710)
Distributable Earnings After Taxes and Related Payables $102,482 $225,937 $233,257 $571,679 $769,072
Per Share of Common & Equivalent(2) $0.25 $0.55 $0.57 $1.40 $1.88
Net Distribution per Share of Common & Equivalent(2) $0.25 $0.45 $0.49 $1.30 $1.66
Payout Ratio 100% 82% 86% 93% 88%
Summary of Non-GAAP Measures
4
(1) 1Q’17 and 1Q’17 LTM includes $17.5 million in insurance proceeds received in connection with fees and expenses relating to a legal proceeding, which was recorded in Other income (loss). 1Q‘16 LTM includes impact of reserve of $45
million accrued in connection with an SEC regulatory matter previously disclosed in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 principally concerning the acceleration of fees from fund portfolio companies.
(2) Per share calculations are based on end of period Distributable Earnings Shares Outstanding, which consist of total Class A shares outstanding and RSUs that participate in distributions (collectively referred to as “common & equivalents”).
See page 26 for the share reconciliation.
($ in thousands) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
GAAP Net Income (Loss) Attributable to Apollo Global Management, LLC ($32,828) $174,092 $94,619 $166,967 $145,196
Net income (loss) attributable to Non-Controlling Interests in consolidated entities 2,035 2,078 (222) 1,898 3,384
Net income (loss) attributable to Non-Controlling Interests in the Apollo Operating Group (43,768) 239,633 140,321 225,482 206,450
GAAP Net Income (Loss) ($74,561) $415,803 $234,718 $394,347 $355,030
Income tax provision (benefit) (5,147) 37,988 29,667 28,199 39,161
GAAP Income (Loss) Before Income Tax (Provision) Benefit ($79,708) $453,791 $264,385 $422,546 $394,191
Transaction related charges and equity-based compensation(1) (147) 7,421 18,041 31,727 (812)
Net (income) loss attributable to Non-Controlling Interests in consolidated entities (2,035) (2,078) 222 (1,898) (3,384)
Economic Income (Loss) ($81,890) $459,134 $282,648 $452,375 $389,995
Income tax (provision) benefit on Economic Income (Loss) 8,926 (64,283) (51,896) (58,269) (58,372)
Economic Net Income (Loss) ($72,964) $394,851 $230,752 $394,106 $331,623
Income tax provision (benefit) on Economic Income (Loss) (8,926) 64,283 51,896 58,269 58,372
Carried interest (income) loss from related parties(2) 129,885 (322,193) (201,020) (369,617) (358,280)
Profit sharing expense (33,493) 124,733 76,791 148,619 148,275
Equity-based compensation 16,720 15,722 16,154 15,872 16,745
(Income) loss from equity method investments 3,859 (44,706) (22,919) (38,815) (39,214)
Net (gains) losses from investment activities 56,499 (88,498) (17,362) (89,247) (34,490)
Net interest loss 6,891 8,886 11,528 11,714 11,988
Other 333 44 663 564 (544)
Fee Related Earnings $98,804 $153,122 $146,483 $131,465 $134,475
Net realized carried interest income 6,817 11,791 13,220 83,325 97,012
Non-cash revenues (842) (843) (842) (842) (843)
Realized income from equity method investments 4,349 6,891 3,767 22,173 18,436
Net interest loss (6,891) (8,886) (11,528) (11,714) (11,988)
Depreciation and amortization 2,581 2,516 2,435 2,396 2,513
Other (63) (276) (899) (577) —
Distributable Earnings $104,755 $164,315 $152,636 $226,226 $239,605
Taxes and related payables (2,273) (2,968) (4,105) (289) (6,348)
Distributable Earnings After Taxes and Related Payables $102,482 $161,347 $148,531 $225,937 $233,257
(1) Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions. Equity-based compensation adjustment
represents non-cash revenues and expenses related to equity awards granted by unconsolidated related parties to employees of Apollo.
(2) Excludes carried interest income from a publicly traded business development company we manage.
Reconciliation of GAAP to Non-GAAP Measures
5
($ in thousands, except per share data) 1Q'16 4Q'16 1Q'17
Distributable Earnings $104,755 $226,226 $239,605
Taxes and Related Payables (2,273) (289) (6,348)
DE After Taxes and Related Payables $102,482 $225,937 $233,257
Add Back: Taxes & Related Payables Attributable to Common &
Equivalents 2 101 4,560
DE Before Certain Payables(1) 102,484 226,038 237,817
Percent to Common & Equivalents 47% 47% 47%
DE Before Other Payables Attributable to Common & Equivalents 48,085 107,246 112,874
Less: Taxes & Related Payables Attributable to Common &
Equivalents (2) (101) (4,560)
DE Attributable to Common & Equivalents $48,083 $107,145 $108,314
Per Share of Common & Equivalent(2) $0.25 $0.55 $0.57
Retained Capital per Share of Common & Equivalent(2)(3) — (0.10) (0.08)
Net Distribution per Share of Common & Equivalent(2) $0.25 $0.45 $0.49
Payout Ratio 100% 82% 86%
Shareholder Distribution
▪ Generated $0.57 of Distributable Earnings After Taxes and Related Payables per Share of Common & Equivalent
during the quarter
▪ Apollo declared a quarterly distribution of $0.49 per Class A share to holders of record as of May 19, 2017,
which is payable on May 31, 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 26 for the share reconciliation.
(3) Retained capital is withheld pro-rata from common and equivalent holders and Apollo Operating Group (“AOG”) unitholders.
6
76% Private / 24% Public(8)
Traditional PE Funds
Inception-to-date Gross / Net IRR
PE Portfolio Composition:
Public Equity Holdings Fund Shares Held (mm)
Ladbrokes (LCL) Fund VI & VII 130.9
Presidio (PSDO) Fund VIII 67.0
EP Energy (EPE) Fund VII & ANRP 62.6
Welspun Corp (WLCO IN) Fund VII & ANRP 51.2
Norwegian (NCLH)(5) Fund VI & VII 36.1
Caesars Acquisition (CACQ)(5)(6) Fund VI 28.0
Hostess (TWNK) Fund VII 21.5
Welspun Enterprises (WEL IN) Fund VII & ANRP 8.7
Supplemental Information
Invested
AUM
$29bn
Dry Powder
$12bn
Private Equity
$45 billion AUM
Committed
$2bn(2)
Business Drivers
1Q'17 LTM
Inflows $297mm $5.5bn
Deployment $1.6bn $10.6bn
Realizations $1.1bn $2.2bn
Performance(1) 8.0% 22.0%
39% / 25%
Financial Results Summary
Commentary
▪ Robust Economic Income driven by strong net carried interest income and
balance sheet gains generated by both traditional and natural resources private
equity funds
▪ Private Equity fund appreciation during the quarter of 8.0%(1) was driven by
appreciation in private and public portfolio company holdings
▪ Realization activity driven by distribution activity from a co-investment and
Fund VIII portfolio companies including Verallia, ADT and Vectra
▪ Deployed $1.6 billion and committed $1.2 billion during the quarter; total
committed but not yet deployed capital(2) at quarter end was $2.3 billion of
which $1.7 billion related to energy asset build-ups expected to be deployed
over time
▪ Currently fundraising for the ninth vintage of our flagship traditional private
equity fund strategy
▪ At quarter-end, Fund VIII was 71% 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 March 31, 2017 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 the sum of 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) 1Q'16 4Q'16 1Q'17
Management fees $74,918 $79,014 $77,398
Advisory and transaction fees 2,713 41,060 11,772
Carried interest income (loss) (146,335) 304,460 319,080
Total Revenues (68,704) 424,534 408,250
Compensation and benefits (17,915) 156,782 168,832
Other expenses 16,725 16,811 17,494
Total Expenses (1,190) 173,593 186,326
Other Income (Loss) (12,141) 30,818 48,672
Economic Income (Loss) ($79,655) $281,759 $270,596
Fee Related Earnings $28,708 $75,161 $58,001
Supplemental Private Equity Fund Information
Fund VI
Select Private Investments(3)
(in order of size as measured by fair value)
Momentive Performance Materials
Claire’s Stores
Note: Refer to the definitions of Vintage Year (Vintage), Total Invested Capital (Total Invested), Realized Value, Unrealized Value, Gross IRR, Net IRR, and Unrealized MOIC in the non-GAAP financial information & definitions section of this
presentation. (1) For Escrow Ratio definition and related information, please refer to page 15. (2) ANRP II 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 not deemed meaningful. (3) Investments selected based on non-performance criteria. 8
Vintage: 2006
Fund Size: $10.1bn
Total Invested: $12.5bn
Realized Value: $18.1bn
Unrealized Value: $2.9bn
Total Value: $21.0bn
Gross / Net IRR: 12% / 9%
Escrow Ratio(1): 86%
Fund VII
Select Private Investments(3)
(in order of size as measured by fair value)
McGraw Hill Education
Aurum
Talos Energy
Endemol Shine
Vistra Energy
Novitex
Pinnacle
Vintage: 2008
Fund Size: $14.7bn
Total Invested: $16.1bn
Realized Value: $29.4bn
Unrealized Value: $4.2bn
Total Value: $33.6bn
Gross / Net IRR: 35% / 26%
Escrow Ratio(1): 107%
Fund VIII
Unrealized Value by Sector
Vintage: 2013
Fund Size: $18.4bn
Committed to Date: $13.0bn
Total Invested: $10.9bn
Realized Value: $1.7bn
Total Value: $14.3bn
% Committed: 71%
Gross / Net IRR: 27% / 16%
ANRP I and ANRP II
Select Private Investments(3)
(in order of size as measured by fair value)
Double Eagle I and II
Chisholm
Talos Energy
Jupiter Resources
Apex Energy
Vintages: 2012 / 2016
Fund Series Size: $4.8bn
Committed to Date: $2.6bn
Total Invested: $1.8bn
Realized Value: $0.4bn
Unrealized Value: $2.5bn
Total Value: $2.9bn
Gross / Net IRR (ANRP I)(2): 18% / 12%
$2.9 billion Unrealized Value
Investment Mix
$4.2 billion Unrealized Value
Investment Mix
$12.6 billion Unrealized Value
by Investment Year
ANRP I and ANRP II
Portfolio
Consumer Services 31%
Business Services 18%
Natural Resources 14%
Leisure 13%
Manufacturing and Industrial 7%
Financial Services 7%
Media/Telcom/Technology 5%
Consumer & Retail 3%
Chemicals 2%
Private
Investments
35%
CACQ
13%
NCLH
52%
Private
Investments
73%
TWNK
10%
EPE
7%
LCL
6%
Other
4%
2013-14
$2.0
2015
$4.6
2016
$5.0
2017
$1.0
Unrealized
MOIC:
1.6xUnrealized
MOIC:
1.3x
Unrealized
MOIC:
1.1x
Average Life of Investment: 1.5 yrs
Public
Equity Holdings:
27% Realized
Value
$0.4bn
Unrealized Value
$2.5bn
Dry
Powder
$2.9bn
Public
Equity Holdings:
65%
Unrealized
MOIC:
1.0x
Business Drivers
1Q'17 LTM
Inflows $4.4bn $26.9bn
Deployment $1.0bn $3.4bn
Realizations $365mm $1.9bn
Performance(1) 1.9% 12.1%
Supplemental Information
Credit
($ in billions) $141 billion AUM
Category AUM FGAUM
CE
AUM
CG
AUM
1Q’17
Gross
Return(1)
LTM
Gross
Return(1)
Liquid/Performing $37 $33 $20 $11 1.9% 10.5%
Drawdown(2) $24 $14 $21 $8 1.6% 16.5%
Permanent Capital Vehicles
Permanent Capital Vehicles
ex Athene Non-Sub-
Advised(3)
$12 $11 $10 $9 2.7% 12.2%
Athene Non-Sub-Advised(3) $57 $57 — —
Advisory(4) $11 — — —
Total Credit $141 $115 $51 $28 1.9% 12.1%
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 1Q'17 net returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex Athene Non-Sub-Advised were 1.8%, 1.2%, 1.8%, respectively, and 1.6% for total Credit excluding Athene Non-Sub-Advised. The LTM net
returns for Liquid/Performing, Drawdown and Permanent Capital Vehicles ex Athene Non-Sub-Advised were 9.9%, 14.1%, 8.3%, respectively, and 10.7% for total Credit excluding Athene Non-Sub-Advised. (2) Significant Drawdown funds and
strategic investment accounts (“SIAs”) had inception-to-date (“ITD”) gross and net IRRs of 16.1% and 12.3%, respectively, as of March 31, 2017. 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 $73.1 billion less $16.4 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 higher Fee Related Earnings quarter-
over-quarter, an increase in the fair value of Athene, and solid carried
interest income
▪ FRE growth driven by rising management fees and lower placement fees
▪ Credit gross and net returns(1) of 1.9% and 1.6%, respectively, for the
quarter resulting from income and appreciation across fund categories
▪ Inflows primarily driven by an increase in Athene-related AUM to more
than $73 billion (+12% year-over-year), as well as a variety of Liquid/
Performing strategies
▪ Capital deployment activity driven by opportunistic investments,
insurance-linked securities, structured credit, and European real estate
▪ Fair value of Athene increased 5% from the prior quarter
9
($ in thousands) 1Q'16 4Q'16 1Q'17
Management fees $142,511 $151,560 $158,342
Advisory and transaction fees 4,410 2,475 2,556
Carried interest income 23,973 60,885 37,258
Total Revenues 170,894 214,920 198,156
Compensation and benefits 81,596 89,620 79,931
Other expenses 31,193 50,380 33,860
Total Expenses 112,789 140,000 113,791
Other Income (Loss) (55,608) 87,761 31,866
Non-Controlling Interest (2,385) (2,394) (934)
Economic Income $112 $160,287 $115,297
Fee Related Earnings $70,573 $51,929 $72,212
$12 billion AUM
Equity
$3.1bn
Debt
$8.9bn
Supplemental Information
Business Drivers
Real Estate
1Q'17 LTM
Inflows $631mm $3.1bn
Deployment $867mm $3.2bn
Realizations $265mm $1.9bn
Performance(1) 3.8% 17.1%
▪ Economic Income driven by Fee Related Earnings
▪ Four consecutive quarters of positive Fee Related Earnings as the
launch of new equity products in the U.S and Asia complements
growth in the debt business to drive increasing profitability
▪ Real estate U.S. equity funds combined gross return(1) of 3.8%
▪ Inflows and Deployment for the quarter driven by an increase in
capital investment for the AGRE Debt Fund, an increase in leverage
and capital invested for the commercial mortgage REIT (ARI)
managed by Apollo, as well as capital raised related to co-investment
transactions in the U.S. and Asia
▪ Realization activity for the quarter driven primarily by the debt funds
Financial Results Summary
Commentary
(1) Represents combined gross return for U.S. Real Estate Fund I and U.S. Real Estate Fund II including co-investment capital. The 1Q'17 and LTM combined net returns for U.S. Real Estate Fund I and U.S. Real Estate Fund II were
3.2% and 13.7%, respectively. U.S. Real Estate Fund I and U.S. Real Estate Fund II’s combined inception-to-date gross and net IRRs were 17.1% and 13.8%, respectively, as of March 31, 2017.
10
($ in thousands) 1Q'16 4Q'16 1Q'17
Management fees $13,504 $16,024 $16,313
Advisory and transaction fees 876 431 739
Carried interest income 1,394 9,697 2,668
Total Revenues 15,774 26,152 19,720
Compensation and benefits 11,916 11,283 10,978
Other expenses 6,144 5,357 4,482
Total Expenses 18,060 16,640 15,460
Other Income (Loss) (61) 817 (158)
Economic Income (Loss) ($2,347) $10,329 $4,102
Fee Related Earnings ($477) $4,375 $4,262
($ in millions)
Private Equity Credit Real Estate Total
1Q'16 $29,325 $104,904 $6,844 $141,073
Inflows 2,049 18,037 2,839 22,925
Outflows(2) (203) (8,390) (5) (8,598)
Net Flows 1,846 9,647 2,834 14,327
Realizations (404) (1,126) (1,308) (2,838)
Market Activity 7 1,489 96 1,592
1Q'17 $30,774 $114,914 $8,466 $154,154
($ in millions)
Private Equity Credit Real Estate Total
4Q'16 $30,722 $111,781 $8,295 $150,798
Inflows 31 3,602 347 3,980
Outflows(2) — (984) — (984)
Net Flows 31 2,618 347 2,996
Realizations — (236) (245) (481)
Market Activity 21 751 69 841
1Q'17 $30,774 $114,914 $8,466 $154,154
($ in millions)
Private Equity Credit Real Estate Total
1Q'16 $37,702 $123,854 $10,957 $172,513
Inflows 5,543 26,893 3,069 35,505
Outflows(2) (912) (10,729) (505) (12,146)
Net Flows 4,631 16,164 2,564 23,359
Realizations (2,150) (1,872) (1,938) (5,960)
Market Activity 4,390 2,786 378 7,554
1Q'17 $44,573 $140,932 $11,961 $197,466
f
Total AUM & Fee-Generating AUM
($ in millions)
Private Equity Credit Real Estate Total
4Q'16 $43,628 $136,607 $11,453 $191,688
Inflows 297 4,385 631 5,313
Outflows(2) (71) (698) — (769)
Net Flows 226 3,687 631 4,544
Realizations (1,050) (365) (265) (1,680)
Market Activity 1,769 1,003 142 2,914
1Q'17 $44,573 $140,932 $11,961 $197,466
Private
Equity
Credit
Real Estate
Total AUM Highlights Fee-Generating AUM Highlights
LTM Total AUM Rollforward(1) LTM Fee-Generating AUM Rollforward(1)
1Q'17 Fee-Generating AUM Rollforward(1)1Q'17 Total AUM Rollforward(1)
Inflows: Capital raised for co-investments ($226 million) and net segment transfers
($69 million) Realizations: Fund VIII portfolio company distributions ($517
million) from ADT, Verallia, and Vectra; Co-Investment ($297 million) Market
Activity: Appreciation driven by traditional private equity funds, primarily Fund
VIII, as well as natural resources funds
Inflows: Net increase in Athene assets ($1.9 billion); Advisory assets ($1.1 billion);
and Liquid/Performing funds ($1.0 billion) Outflows: Redemptions ($298 million);
net leverage reduction ($222 million); and net segment transfers ($158 million)
Realizations: Drawdown funds ($145 million) and Liquid/Performing funds ($136
million) Market activity: Liquid/Performing funds ($546 million) and Drawdown
funds ($206 million)
Inflows: Capital raised for AGRE Debt Fund I ($205 million); net leverage increase
($169 million); and capital raised for co-investments ($167 million)
Realizations: Real estate debt ($255 million)
Private
Equity
Credit
Real Estate
Inflows: Fee-generating capital deployment ($28 million)
Inflows: Net increase in Athene assets ($1.9 billion); Liquid/Performing funds
($842 million); Fee-generating capital deployment ($399 million); A private
BDC ($147 million); and Drawdown funds ($110 million) Outflows: Net change
in fee basis ($331 million); Net leverage reduction ($311 million) and
redemptions ($277 million) Realizations: Liquid/Performing funds ($118
million) and Permanent Capital Vehicles ($85 million) Market activity: Liquid/
Performing funds ($569 million)
Inflows: Capital raised for AGRE Debt Fund I ($205 million); co-investment
($72 million); and net segment transfers ($61 million)
Realizations: Real estate debt ($238 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 1Q'17 outflows for Total AUM and FGAUM are $297.9 million and $277.3 million of redemptions, respectively. Included in the LTM outflows for Total AUM and FGAUM are $1,782.6 million and $1,484.9 million of redemptions,
respectively. 11
Carry-Eligible & Carry-Generating AUM
($ in millions)
Segment 1Q'16 4Q'16 1Q'17
Private Equity $32,751 $35,144 $36,134
Credit 48,216 51,644 51,425
Real Estate 2,273 2,117 2,282
Total $83,240 $88,905 $89,841
($ in millions)
Segment 1Q'16 4Q'16 1Q'17
Private Equity $9,008 $21,521 $23,964
Credit 22,985 33,306 27,752
Real Estate 510 776 837
Total $32,503 $55,603 $52,553
($ in millions)
Private Equity Credit Real Estate Total
Carry-Generating AUM $23,964 $27,752 $837 $52,553
+ Uninvested CE AUM 11,906 10,737 1,090 23,733
+ Invested AUM Not
Currently Generating
Carry
264 12,936 355 13,555
Carry-Eligible AUM $36,134 $51,425 $2,282 $89,841
$90 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 $0.3 $0.3 40%
Drawdown 4.1 4.0 29%
Liquid/Performing
6.8 < 250bps
8.2 — 250-500bps
0.5 > 500bps
Permanent Capital
Vehicles ex Athene
Non-Sub-Advised
0.6 0.6 < 250bps
Credit 12.9 11.9 11%
Real Estate 0.4 0.3 > 250bps
Total $13.6 $12.5
($ in billions)
1Q'17 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 March 31, 2017.
(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. 12
Uninvested
Carry-
Eligible
AUM
$23.7bn
Currently
Generating
Carry
$52.6bn
Not
Currently
Generating
Carry
$13.6bn
Fund VIII
$7.4
Natural
Resources
$2.9
Other PE
$2.2
Drawdown
$9.8
▪ Driven by investments in the consumer discretionary,
energy, financial services, technology and industrial
sectors in the US and Asia as well as investments in
longevity assets, structured credit and European real estate
Capital Deployment
Capital Deployment & Dry Powder
$24 billion Dry Powder
($ in billions)
Private
Equity
Credit
Real Estate
1Q'1
7 Highlight
s
($ in millions)
Segment 1Q'17 LTM
Private Equity $1,564 $10,645
Credit(1) 992 3,368
Real Estate 867 3,171
Total $3,423 $17,184
Real Estate
$1.3
Private Equity
$12.5
Credit
$10.5
Liquid/
Performing
$0.5
▪ Capital deployed across Apollo’s global integrated investment platform totaled $3.4 billion for the quarter and
$17.2 billion over the twelve months ended March 31, 2017
▪ Pending investment commitments in private equity that have not yet been funded (including co-investments)
totaled $2.3 billion as of March 31, 2017
▪ Dry Powder of $24.2 billion at the end of the quarter, including $9.3 billion of AUM with future management
fee potential
▪ Driven by acquisition of Apollo Education (for-profit
education), investment in Chisholm Oil & Gas (natural
resources) and various investments across our natural
resources strategies
▪ Driven primarily by commercial mortgage lending
activity across several strategies
Permanent
Capital Vehicles
$0.2
13(1) Reflects capital deployment activity from Drawdown fund strategies.
Segment Balance Sheet Highlights
Summary Balance Sheet
($ in millions) 1Q'17
Athene/AAA(2) $767
GP Investments /
Other Investments(3) 874
Total Investments $1,641
($ in millions, except per share
amounts and where noted)
Through
1Q'17
Open Market Share
Repurchases 1.0
Reduction of Shares
Issued to Employees(4) 3.6
Total Shares Purchased 4.6
Total Capital Used for
Share Purchases(5) $74
Share Repurchase Plan
Authorization(6) $250
Average Price Paid Per
Share(7) $16.18
Investments Detail Share Repurchase Activitythrough 1Q'17
(1) Investments and carried interest receivable are presented on an unconsolidated basis. Investments and carried interest receivable presented in the condensed consolidated statement of financial condition include eliminations related to investments
in consolidated funds and VIEs. (2) Investment in Athene/AAA primarily comprises Apollo’s direct investment of 15.4 million shares (subject to a discount due to a lack of marketability, as applicable) of Athene valued at a weighted average of $45.77
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 3.6 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 March 31, 2017, Apollo had $1.1 billion in cash, $1.6 billion of investments, and $0.8 billion of net carried interest
receivable for a total net value of $3.5 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 general partner commitments totaled $589 million at March 31, 2017, of which $164 million related to
Fund VIII
▪ Aggregate share repurchases under previously announced plan totaled $74 million through March 31, 2017, with
$176 million remaining authorized under the plan
14
($ in millions) 1Q'17
Cash $1,084
Investments(1) 1,641
Carried Interest Receivable(1) 1,423
Profit Sharing Payable (635)
Total Net Value $3,513
Debt ($1,354)
Unfunded Future Commitments $589
(1) As of March 31, 2017, the remaining investments and escrow cash of Fund VII and Fund VI were valued at 107% and 86% 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 March 31, 2017, Fund VI had $167.6
million of gross carried interest income, or $110.7 million net of profit sharing, in escrow. As of March 31, 2017, 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/Other includes $249.3 million of carried interest receivable, or $177.8 million net of profit sharing, from AAA Investments, L.P. as of March 31, 2017. Following a transaction that settled on April 3rd, the receivable balance declined to $204.2
million, or $145.6 million net of profit sharing, reflecting receipt of the carried interest amount that was presented within realized carried interest income for 1Q’17. If Apollo receives payment of any remaining 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 March 31, 2017, certain credit funds and certain private equity funds had $60.4 million and $23.9 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 $328.3 million and $164.5 million, respectively, as of March 31, 2017.
(4) There was a corresponding profit sharing payable of $634.7 million as of March 31, 2017, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $87.7 million.
(5) Other includes certain SIAs.
Carried Interest Receivable & Income (Loss) Detail
As of
March 31, 2017 1Q'17
($ 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
Private Equity Funds
Fund VIII $421,260 $98,033 $57,812 $155,845
Fund VII 95,197 (1) 20,542 19,817 40,359
Fund VI — (1)(3) 35,443 — 35,443
Fund IV and V 310 (3) (5,794) — (5,794)
ANRP I and II 133,131 55,647 372 56,019
AAA / Other(2)(5) 343,560 (40,252) 77,460 37,208
Total Private Equity Funds $993,458 $163,619 $155,461 $319,080
Total Private Equity Funds, net of profit share 634,696 108,603 80,209 188,812
Credit Funds
Drawdown $294,950 (3) ($8,401) $26,659 $18,258
Liquid/Performing 55,582 6,534 3,551 10,085
Permanent Capital Vehicles 43,592 8,189 726 8,915
Total Credit Funds $394,124 $6,322 $30,936 $37,258
Total Credit Funds, net of profit share 133,327 4,107 17,204 21,311
Real Estate Funds
CPI Funds $304 ($59) $— ($59)
U.S. RE Fund I and II 22,512 2,249 64 2,313
Other(5) 12,309 414 — 414
Total Real Estate Funds $35,125 $2,604 $64 $2,668
Total Real Estate Funds, net of profit share 20,016 570 38 608
Total $1,422,707 $172,545 $186,461 $359,006
Total, net of profit share $788,039 (4) $113,280 $97,451 $210,731
15
Permanent Capital AUM Supplemental Information
Permanent Capital Vehicles
2010 2012 2014 2016 1Q'17
Period Ending
10%
22%
45% 45% 45%
% of Total AUM
($ in millions, except where noted) 1Q'17
Athene(2) $73,109
MidCap 7,249
Apollo Investment Corp (AINV)(3) 4,331
Apollo Commercial Real Estate Finance (ARI)(4) 3,932
Apollo Senior Floating Rate Fund (AFT) 432
Apollo Tactical Income Fund (AIF) 390
Total AUM in Permanent Capital Vehicles $89,443
LTM
Fee Related Revenue from Permanent Capital
Vehicles ($ in thousands) $452,436
% 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 35 of this presentation for a definition of Permanent
Capital Vehicles and additional information regarding the circumstances under which the investment management arrangements of the Permanent Capital Vehicles may be terminated.
(2) See page 17 for additional information regarding assets for which Apollo manages or provides investment advisory services through accounts owned by or related to Athene as of March 31, 2017.
(3) Amounts are as of December 31, 2016. Refer to www.apolloic.com for the most recent financial information on AINV. The information contained on AINV’s website is not part of this presentation. Includes $1.5 billion of AUM related to a
non-traded business development company.
(4) Amounts are as of December 31, 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 March 31, 2017, Apollo had $89.4 billion of AUM across six Permanent Capital Vehicles(1)
▪ Apollo generated $452.4 million of Fee Related Revenue from Permanent Capital Vehicles during the twelve months
ended March 31, 2017, representing 39% of total fee related revenue
▪ The compound annualized growth rate (“CAGR”) of permanent capital AUM since 2010 was 50% as of March 31,
2017. Apollo will continue to seek to grow its base of permanent capital opportunistically
$25
$72
$7
$89 ($ in billions)
16
$87
Athene AUM Sub-Advised AUM by Asset Category
A
Athene
($ in billions) 1Q'17
Private Equity $1.1
Credit $11.2
Liquid/Performing 10.1
Drawdown 1.1
Real Estate $4.1
Debt 3.7
Equity 0.4
Total $16.4
Note: As of March 31, 2017, the Apollo subsidiaries providing investment management or advisory services to Athene included Athene Asset Management, L.P. ($68.2 billion) and AAME ($4.9 billion).
▪ Through its subsidiaries, Apollo managed or advised $73.1 billion of AUM in accounts owned by or related to Athene as of
March 31, 2017
▪ Of the total AUM, $16.4 billion, or 22%, was either sub-advised by Apollo or invested in funds and investment vehicles
managed by Apollo
▪ During the quarter, $571 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 last twelve months ended March 31, 2017 to $2.6 billion
▪ Apollo will continue to seek attractive investment opportunities that are consistent with Athene’s investment objectives
($ in billions)
17
2010 2012 2014 2016 1Q'17
Period Ending
$2
$16
$60
$71 $73
Appendix
($ in thousands, except per share data and where noted) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 1Q’16 LTM 1Q’17 LTM
Management fees from related parties $230,933 $241,633 $258,485 $246,598 $252,053 $918,113 $998,769
Advisory and transaction fees from related parties, net 7,999 64,899 30,251 43,966 15,067 12,642 154,183
Carried interest income (loss) from related parties:
Unrealized (170,891) 286,505 167,484 227,901 172,545 (491,527) 854,435
Realized 49,923 41,980 35,843 147,141 186,461 399,256 411,425
Total Carried Interest Income (Loss) from Related Parties (120,968) 328,485 203,327 375,042 359,006 (92,271) 1,265,860
Total Revenues 117,964 635,017 492,063 665,606 626,126 838,484 2,418,812
Salary, bonus and benefits 92,370 94,522 86,804 93,194 94,721 360,740 369,241
Equity-based compensation 16,720 15,722 16,154 15,872 16,745 63,073 64,493
Profit sharing expense:
Unrealized (67,682) 100,836 56,475 90,228 59,265 (195,578) 306,804
Realized 34,189 23,897 20,316 58,391 88,723 207,284 191,327
Realized: Equity-based — — — — 287 — 287
Total Profit Sharing Expense (33,493) 124,733 76,791 148,619 148,275 11,706 498,418
Non-compensation expenses:
General, administrative and other 52,361 61,518 51,953 52,658 53,932 223,497 220,061
Placement fees 1,701 1,789 1,053 19,890 1,904 9,376 24,636
Total Non-Compensation Expenses 54,062 63,307 53,006 72,548 55,836 232,873 244,697
Total Expenses 129,659 298,284 232,755 330,233 315,577 668,392 1,176,849
Income (loss) from equity method investments (3,859) 44,706 22,919 38,815 39,214 13,417 145,654
Net gains (losses) from investment activities (56,499) 88,498 17,362 89,247 34,490 62,872 229,597
Net interest loss (6,891) (8,886) (11,528) (11,714) (11,988) (26,732) (44,116)
Other income (loss), net (561) 258 (4,903) 3,048 18,664 3,272 17,067
Other Income (Loss) (67,810) 124,576 23,850 119,396 80,380 52,829 348,202
Non-Controlling Interest (2,385) (2,175) (510) (2,394) (934) (11,223) (6,013)
Economic Income (Loss) ($81,890) $459,134 $282,648 $452,375 $389,995 $211,698 $1,584,152
Income tax (provision) benefit 8,926 (64,283) (51,896) (58,269) (58,372) 6,928 (232,820)
Economic Net Income (Loss) ($72,964) $394,851 $230,752 $394,106 $331,623 $218,626 $1,351,332
Per Share ($0.18) $0.98 $0.58 $0.98 $0.82 $0.54 $3.36
Fee Related Earnings $98,804 $153,122 $146,483 $131,465 $134,475 $413,461 $565,545
Distributable Earnings $104,755 $164,315 $152,636 $226,226 $239,605 $581,557 $782,782
AUM ($ in millions) 172,513 186,266 188,636 191,688 197,466 172,513 197,466
Fee-Generating AUM ($ in millions) 141,073 145,428 148,669 150,798 154,154 141,073 154,154
19
Summary of Combined Economic Income (Loss)
($ in thousands, except where noted) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 1Q’16 LTM 1Q’17 LTM
Management fees from related parties $74,918 $76,518 $91,545 $79,014 $77,398 $296,157 $324,475
Advisory and transaction fees from related parties, net 2,713 58,301 26,601 41,060 11,772 (8,613) 137,734
Carried interest income (loss) from related parties:
Unrealized (146,335) 207,845 75,019 232,278 163,619 (439,387) 678,761
Realized — 266 9,844 72,182 155,461 263,787 237,753
Total Carried Interest Income (Loss) from Related Parties (146,335) 208,111 84,863 304,460 319,080 (175,600) 916,514
Total Revenues (68,704) 342,930 203,009 424,534 408,250 111,944 1,378,723
Salary, bonus and benefits 32,074 31,564 32,532 28,293 31,469 124,444 123,858
Equity-based compensation 7,385 6,765 6,645 6,754 7,095 29,653 27,259
Profit sharing expense:
Unrealized (57,374) 67,543 19,234 85,240 55,016 (191,099) 227,033
Realized — 132 7,266 36,495 75,252 151,498 119,145
Total Profit Sharing Expense (57,374) 67,675 26,500 121,735 130,268 (39,601) 346,178
Non-compensation expenses:
General, administrative and other 15,731 20,551 18,118 16,923 17,360 76,189 72,952
Placement fees 994 1,085 330 (112) 134 5,460 1,437
Total Non-Compensation Expenses 16,725 21,636 18,448 16,811 17,494 81,649 74,389
Total Expenses (1,190) 127,640 84,125 173,593 186,326 196,145 571,684
Income (loss) from equity method investments (5,483) 31,410 14,384 25,970 31,728 8,159 103,492
Net gains (losses) from investment activities (4,106) 6,457 1,191 7,837 3,396 2,827 18,881
Net interest loss (2,428) (3,252) (4,188) (4,319) (4,242) (9,757) (16,001)
Other income (loss), net (124) 341 103 1,330 17,790 1,403 19,564
Other Income (Loss) (12,141) 34,956 11,490 30,818 48,672 2,632 125,936
Economic Income (Loss)(1) ($79,655) $250,246 $130,374 $281,759 $270,596 ($81,569) $932,975
Fee Related Earnings $28,708 $81,960 $67,269 $75,161 $58,001 $127,856 $282,391
AUM ($ in millions) 37,702 41,181 42,181 43,628 44,573 37,702 44,573
Fee-Generating AUM ($ in millions) 29,325 29,530 30,630 30,722 30,774 29,325 30,774
Private Equity
(1) 1Q’17 and 1Q’17 LTM includes $17.5 million in insurance proceeds received in connection with fees and expenses incurred relating to a legal proceeding, which was recorded in Other income (loss). 1Q‘16 LTM includes impact of
reserve of $45 million accrued in connection with an SEC regulatory matter previously disclosed in our Annual Report on Form 10-K filed with the SEC on February 29, 2016 principally concerning the acceleration of fees from fund
portfolio companies.
20
($ in thousands, except where noted) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 1Q’16 LTM 1Q’17 LTM
Management fees from related parties $142,511 $151,252 $151,386 $151,560 $158,342 $568,300 $612,540
Advisory and transaction fees from related parties, net 4,410 3,036 2,612 2,475 2,556 16,304 10,679
Carried interest income from related parties:
Unrealized (21,179) 80,397 91,502 (13,446) 6,322 (55,943) 164,775
Realized 45,152 40,046 20,500 74,331 30,936 127,258 165,813
Total Carried Interest Income from Related Parties 23,973 120,443 112,002 60,885 37,258 71,315 330,588
Total Revenues 170,894 274,731 266,000 214,920 198,156 655,919 953,807
Salary, bonus and benefits 51,612 54,709 45,143 57,792 54,882 202,388 212,526
Equity-based compensation 8,560 8,300 8,834 8,491 9,102 29,487 34,727
Profit sharing expense:
Unrealized (9,137) 33,954 36,809 1,386 2,215 (6,267) 74,364
Realized 30,561 23,215 8,988 21,951 13,445 51,858 67,599
Realized: Equity-based — — — — 287 — 287
Total Profit Sharing Expense 21,424 57,169 45,797 23,337 15,947 45,591 142,250
Non-compensation expenses:
General, administrative and other 30,486 35,546 29,161 30,446 32,090 122,924 127,243
Placement fees 707 683 723 19,934 1,770 3,916 23,110
Total Non-Compensation Expenses 31,193 36,229 29,884 50,380 33,860 126,840 150,353
Total Expenses 112,789 156,407 129,658 140,000 113,791 404,306 539,856
Income from equity method investments 848 12,940 8,036 11,466 6,483 1,730 38,925
Net gains (losses) from investment activities (52,393) 82,041 16,171 81,410 31,094 60,045 210,716
Net interest loss (3,655) (4,715) (6,172) (6,127) (6,522) (13,933) (23,536)
Other income (loss), net (408) (127) (4,977) 1,012 811 872 (3,281)
Other Income (Loss) (55,608) 90,139 13,058 87,761 31,866 48,714 222,824
Non-Controlling Interest (2,385) (2,175) (510) (2,394) (934) (11,223) (6,013)
Economic Income $112 $206,288 $148,890 $160,287 $115,297 $289,104 $630,762
Fee Related Earnings $70,573 $67,384 $76,454 $51,929 $72,212 $284,293 $267,979
AUM ($ in millions) 123,854 133,884 135,396 136,607 140,932 123,854 140,932
Fee-Generating AUM ($ in millions) 104,904 108,774 110,123 111,781 114,914 104,904 114,914
Credit
21
($ in thousands, except where noted) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 1Q’16 LTM 1Q’17 LTM
Management fees from related parties $13,504 $13,863 $15,554 $16,024 $16,313 $53,656 $61,754
Advisory and transaction fees from related parties, net 876 3,562 1,038 431 739 4,951 5,770
Carried interest income (loss) from related parties:
Unrealized (3,377) (1,737) 963 9,069 2,604 3,803 10,899
Realized 4,771 1,668 5,499 628 64 8,211 7,859
Total Carried Interest Income (Loss) from Related Parties 1,394 (69) 6,462 9,697 2,668 12,014 18,758
Total Revenues 15,774 17,356 23,054 26,152 19,720 70,621 86,282
Salary, bonus and benefits 8,684 8,249 9,129 7,109 8,370 33,908 32,857
Equity-based compensation 775 657 675 627 548 3,933 2,507
Profit sharing expense:
Unrealized (1,171) (661) 432 3,602 2,034 1,788 5,407
Realized 3,628 550 4,062 (55) 26 3,928 4,583
Total Profit Sharing Expense 2,457 (111) 4,494 3,547 2,060 5,716 9,990
Non-compensation expenses:
General, administrative and other 6,144 5,421 4,674 5,289 4,482 24,384 19,866
Placement fees — 21 — 68 — — 89
Total Non-Compensation Expenses 6,144 5,442 4,674 5,357 4,482 24,384 19,955
Total Expenses 18,060 14,237 18,972 16,640 15,460 67,941 65,309
Income from equity method investments 776 356 499 1,379 1,003 3,528 3,237
Net interest loss (808) (919) (1,168) (1,268) (1,224) (3,042) (4,579)
Other income (loss), net (29) 44 (29) 706 63 997 784
Other Income (Loss) (61) (519) (698) 817 (158) 1,483 (558)
Economic Income (Loss) ($2,347) $2,600 $3,384 $10,329 $4,102 $4,163 $20,415
Fee Related Earnings ($477) $3,778 $2,760 $4,375 $4,262 $1,312 $15,175
AUM ($ in millions) 10,957 11,201 11,059 11,453 11,961 10,957 11,961
Fee-Generating AUM ($ in millions) 6,844 7,124 7,916 8,295 8,466 6,844 8,466
Real Estate
22
($ in thousands, except share data) 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
Net Income (Loss) Attributable to Apollo Global Management,
LLC ($32,828) $174,092 $94,619 $166,967 $145,196
Distributions declared on Class A shares (51,432) (46,014) (68,356) (64,911) (84,215)
Distribution on participating securities (2,123) (1,766) (2,404) (2,103) (2,859)
Earnings allocable to participating securities — (4,959) (849) (3,337) (2,264)
Undistributed income (loss) attributable to Class A shareholders:
Basic ($86,383) $121,353 $23,010 $96,616 $55,858
GAAP weighted average number of Class A shares outstanding:
Basic 182,665,330 183,695,920 184,438,515 185,146,949 186,537,367
GAAP Net Income (Loss) per Class A Share under the Two-Class
Method: Basic ($0.19) $0.91 $0.50 $0.87 $0.75
Distributed Income $0.28 $0.25 $0.37 $0.35 $0.45
Undistributed Income (Loss) ($0.47) $0.66 $0.13 $0.52 $0.30
Net Income (Loss) Attributable to Apollo Global Management,
LLC ($32,828) $174,092 $94,619 $166,967 $145,196
Net Income (Loss) Attributable to Apollo Global Management,
LLC to Income (Loss) Before Income Tax (Provision) Benefit
Differences(1) (46,880) 279,699 169,766 255,579 248,995
Income (Loss) Before Income Tax (Provision) Benefit ($79,708) $453,791 $264,385 $422,546 $394,191
Income (Loss) Before Income Tax (Provision) Benefit to
Economic Income (Loss) Differences(1) (2,182) 5,343 18,263 29,829 (4,196)
Economic Income (Loss) ($81,890) $459,134 $282,648 $452,375 $389,995
Income tax (provision) benefit on Economic Income 8,926 (64,283) (51,896) (58,269) (58,372)
Economic Net Income (Loss) ($72,964) $394,851 $230,752 $394,106 $331,623
Weighted Average Economic Net Income Shares Outstanding(2) 402,077,109 401,185,464 401,248,755 401,371,668 403,132,323
Economic Net Income (Loss) per Share ($0.18) $0.98 $0.58 $0.98 $0.82
Economic Net Income to Distributable Earnings Differences(1) 177,719 (230,536) (78,116) (167,880) (92,018)
Distributable Earnings $104,755 $164,315 $152,636 $226,226 $239,605
Taxes and Related Payables (2,273) (2,968) (4,105) (289) (6,348)
Distributable Earnings After Taxes and Related Payables $102,482 $161,347 $148,531 $225,937 $233,257
Distributable Earnings Shares Outstanding(2) 407,447,658 407,343,429 407,212,090 409,974,049 409,150,111
Distributable Earnings per Share of Common & Equivalent $0.25 $0.40 $0.36 $0.55 $0.57
(1) See page 5 for reconciliation of Net Income (Loss) Attributable to Apollo Global Management, LLC, Income (Loss) Before Income Tax (Provision) Benefit, Economic Net Income (Loss) and Distributable Earnings.
(2) See page 26 for reconciliation of GAAP Class A shares outstanding to non-GAAP shares outstanding.
Reconciliation of GAAP Net Income Per Class A Share to Non-GAAP Per Share Measures
23
($ in thousands) 1Q'16 4Q'16 1Q'17
Total Revenues (GAAP) $120,826 $685,380 $643,551
Equity awards granted by unconsolidated related parties and reimbursable
expenses (4,966) (22,638) (18,223)
Adjustments related to consolidated funds and VIEs 652 2,677 798
Other 1,452 187 —
Total Segment Revenues $117,964 $665,606 $626,126
Total Expenses (GAAP) $141,899 $398,364 $345,988
Equity awards granted by unconsolidated related parties and reimbursable
expenses (5,083) (22,673) (18,223)
Transaction-related compensation charges 2,373 (29,494) 2,683
Reclassification of interest expense(1) (7,873) (12,977) (12,999)
Amortization of transaction-related intangibles (2,050) (2,199) (1,872)
Other 393 (788) —
Total Segment Expenses $129,659 $330,233 $315,577
Total Other Income (Loss), net (GAAP) ($58,635) $135,530 $96,628
Reclassification of interest expense(1) (7,873) (12,977) (12,999)
Adjustments related to consolidated funds and VIEs (638) (1,905) (3,316)
Other (664) (1,252) 67
Total Segment Other Income (Loss) ($67,810) $119,396 $80,380
(1) For EI presentation purposes, interest income is presented net of interest expense as a component of other income.
Reconciliation of GAAP to Non-GAAP Measures
24
1Q'17 1Q’17 LTM
($ in thousands, except per share data) Results Per Share Results Per Share
Economic Net Incom
e
Distributable Earnings
Afte
r T
axe
s
and Related Payable
s
Fee Related Earning
s
Management fees $252,053 $998,769
Advisory and transaction fees from related parties, net 15,067 154,183
Carried interest income from related parties(1) 726 14,750
Salary, bonus and benefits (94,721) (369,241)
Non-compensation expenses (55,836) (244,697)
Other income attributable to Fee Related Earnings(2) 18,120 17,794
Non-Controlling Interest (934) (6,013)
Fee Related Earnings $134,475 $565,545
Net realized carried interest income 97,012 205,348
Non-cash revenues (843) (3,370)
Realized income from equity method investments 18,436 51,267
Net interest loss (11,988) (44,116)
Depreciation and amortization 2,513 9,860
Other — (1,752)
Taxes and related payables (6,348) (13,710)
Distributable Earnings After Taxes and Related Payables $233,257 $0.57 $769,072 $1.88
Taxes and related payables 6,348 13,710
Net unrealized carried interest income 113,280 547,631
Non-cash revenues 843 3,370
Unrealized income from equity method investments 20,778 94,387
Unrealized gains from investment activities 34,490 229,597
Equity-based compensation (16,745) (64,493)
Equity-based profit sharing expense (287) (287)
Depreciation and amortization and other (1,969) (8,835)
Income tax provision (58,372) (232,820)
Economic Net Income $331,623 $0.82 $1,351,332 $3.36
Walkdown of Non-GAAP Measures
25
(1) Represents carried interest income from a publicly traded business development company we manage.
(2) Includes $17.5 million in insurance proceeds received in connection with fees and expenses incurred relating to a legal proceeding, which was recorded in other income (loss).
1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
Total GAAP Weighted-Average Class A Shares
Outstanding: Basic 182,665,330 183,695,920 184,438,515 185,146,949 186,537,367
Non-GAAP Adjustments:
Apollo Operating Group Units 216,169,856 216,065,719 215,869,166 215,569,749 215,286,909
RSUs 3,142,789 1,333,695 873,973 581,473 1,233,685
Restricted shares 99,134 90,130 67,101 73,497 74,362
Weighted-Average Economic Net Income Shares
Outstanding 402,077,109 401,185,464 401,248,755 401,371,668 403,132,323
1Q'16 2Q'16 3Q'16 4Q'16 1Q'17
Total GAAP Class A Shares Outstanding 183,401,191 184,104,686 184,743,799 185,460,294 187,644,092
Non-GAAP Adjustments:
Apollo Operating Group Units 216,169,856 216,000,633 215,795,633 215,457,239 214,957,239
Vested RSUs 1,809,730 1,327,326 997,519 2,752,455 425,736
Economic Net Income Shares Outstanding 401,380,777 401,432,645 401,536,951 403,669,988 403,027,067
Unvested RSUs Eligible for Distribution Equivalents 6,066,881 5,910,784 5,675,139 6,304,061 6,123,044
Distributable Earnings Shares Outstanding 407,447,658 407,343,429 407,212,090 409,974,049 409,150,111
Share Reconciliation
26
Unaudited Supplemental Presentation of Statement of Financial Condition
As of March 31, 2017
($ in thousands)
Apollo Global
Management, LLC and
Consolidated Subsidiaries(1)
Consolidated Funds and
VIEs Eliminations Consolidated
Assets:
Cash and cash equivalents $1,084,218 $— $— $1,084,218
Cash and cash equivalents held at consolidated funds — 7,880 — 7,880
Restricted cash 4,946 — — 4,946
Investments 1,641,030 9,602 (74,945) 1,575,687
Assets of consolidated variable interest entities — 1,106,693 (286) 1,106,407
Carried interest receivable 1,422,707 — (1,847) 1,420,860
Due from related parties 250,648 — (767) 249,881
Deferred tax assets 561,524 — — 561,524
Other assets 140,110 345 (153) 140,302
Goodwill 88,852 — — 88,852
Intangible assets, net 21,006 — — 21,006
Total Assets $5,215,041 $1,124,520 ($77,998) $6,261,563
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $72,170 $— $— $72,170
Accrued compensation and benefits 54,257 — — 54,257
Deferred revenue 171,267 — — 171,267
Due to related parties 598,975 — — 598,975
Profit sharing payable 634,668 — — 634,668
Debt 1,353,572 — — 1,353,572
Liabilities of consolidated variable interest entities — 969,679 (44,671) 925,008
Other liabilities 97,668 6,187 — 103,855
Total Liabilities 2,982,577 975,866 (44,671) 3,913,772
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Preferred shares 264,683 — — 264,683
Additional paid in capital 1,763,146 — — 1,763,146
Accumulated deficit (838,686) 14,884 (14,884) (838,686)
Accumulated other comprehensive income (loss) (11,970) (2,849) 3,016 (11,803)
Total Apollo Global Management, LLC shareholders’ equity 1,177,173 12,035 (11,868) 1,177,340
Non-Controlling Interests in consolidated entities 5,731 136,619 (21,459) 120,891
Non-Controlling Interests in Apollo Operating Group 1,049,560 — — 1,049,560
Total Shareholders’ Equity 2,232,464 148,654 (33,327) 2,347,791
Total Liabilities and Shareholders’ Equity $5,215,041 $1,124,520 ($77,998) $6,261,563
(1) Represents amounts of the total combined segments.
27
Investment Records as of March 31, 2017
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
$200 million of AUM and do not predominantly invest in other Apollo funds or SIAs. Footnotes to the above table appear on page 29.
As of March 31, 2017
($ 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 $20,598 $18,377 $10,854 $1,684 $9,668 $12,583 $14,267 27 % 16 %
Fund VII 2008 6,559 14,677 16,097 29,423 3,686 4,177 33,600 35 26
Fund VI 2006 3,515 10,136 12,457 18,100 3,407 2,895 20,995 12 9
Fund V 2001 315 3,742 5,192 12,697 138 58 12,755 61 44
Funds I, II, III, IV & MIA(3) Various 17 7,320 8,753 17,400 — 2 17,402 39 26
Traditional Private Equity Funds(4) $31,004 $54,252 $53,353 $79,304 $16,899 $19,715 $99,019 39 % 25 %
ANRP II 2016 3,809 3,454 810 144 734 1,180 1,324 NM(2) NM(2)
ANRP I 2012 1,696 1,323 1,035 241 868 1,361 1,602 18 12
AION 2013 687 826 328 137 216 194 331 5 (7)
Total Private Equity(9) $37,196 $59,855 $55,526 $79,826 $18,717 $22,450 $102,276
Credit:
Credit Opportunity Funds
COF III 2014 $3,131 $3,426 $4,375 $2,174 $2,559 $2,129 $4,303 (2)% (3)%
COF I & II 2008 442 3,068 3,787 7,396 127 159 7,555 23 20
European Principal Finance Funds
EPF II(5) 2012 4,139 3,391 3,547 1,471 2,077 3,265 4,736 18 11
EPF I(5) 2007 262 1,380 1,813 3,013 — 40 3,053 23 17
Structured Credit Funds
FCI II 2013 2,345 1,555 2,022 749 1,596 1,795 2,544 15 11
FCI I 2012 1,030 559 1,265 881 809 824 1,705 15 12
SCRF III(12) 2015 1,033 1,238 1,716 1,125 697 708 1,833 17 14
SCRF I & II(12) Various 2 222 707 885 — — 885 27 21
Other Drawdown Funds & SIAs(6) Various 6,537 8,803 7,741 7,644 2,144 1,979 9,623 9 6
Total Credit(10) $18,921 $23,642 $26,973 $25,338 $10,009 $10,899 $36,237
Real Estate:
U.S. RE Fund II(7) 2016 $826 $771 $408 $75 $384 $441 $516 19 % 17 %
U.S. RE Fund I(7) 2012 517 649 631 584 277 344 928 17 13
AGRE Debt Fund I(13) 2011 1,163 2,148 2,058 1,148 1,135 1,065 2,213 8 6
CPI Funds(8) Various 602 4,794 2,485 2,553 282 84 2,637 15 12
Total Real Estate(11) $3,108 $8,362 $5,582 $4,360 $2,078 $1,934 $6,294
Drawdown
28
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 $1.07 as of March 31, 2017.
(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 $1.07 as of March 31, 2017. 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 $9.5
billion of Total Invested Capital through March 31, 2017.
(7) U.S. RE Fund I and U.S. RE Fund II, closed-end private investment funds, had $153 million and $298 million of co-investment commitments raised as of March 31, 2017, 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 $1.26
as of March 31, 2017.
(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 March 31, 2017 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 $7.4 billion of aggregate
AUM as of March 31, 2017.
(10) Certain credit funds and SIAs with AUM less than $500 million and $200 million, respectively, have been excluded. These funds and SIAs had $4.9 billion of aggregate AUM as of
March 31, 2017.
(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 $4.8 billion of aggregate AUM as of March 31, 2017.
(12) Remaining cost for certain of our credit funds may include physical cash called, invested or reserved for certain levered investments.
(13) The investors in this U.S. Dollar denominated fund have chosen to make contributions and receive distributions in the local currency of each underlying investment. As a result, Apollo
has not entered into foreign currency hedges for this fund and the returns presented include the impact of foreign currency gains or losses. The investor’s gross and net IRR, before the
impact of foreign currency gains or losses, from the fund’s inception to March 31, 2017 was 10% and 9%, respectively.
29
Investment Records as of March 31, 2017
Permanent Capital Vehicles ex Athene Non-Sub-Advised
Total Returns(3)
($ in millions)
IPO Year(4) Total AUM 1Q'17 1Q'16 FY’16
Credit:
MidCap(5) N/A $7,249 4 % 1 % 10 %
AIF 2013 390 9 1 23
AFT 2011 432 2 2 24
AINV(6) 2004 4,331 14 10 26
Real Estate:
ARI(7) 2009 3,932 16 % (3)% 8 %
Total $16,334
Liquid/Performing
Net Returns
($ in millions)
Vintage Year Total AUM 1Q'17 1Q'16 FY'16
Credit:
Hedge Funds(1) Various $6,389 1% 2% 11%
CLOs(2) Various 12,035 1 2 9
SIAs / Other Various 18,779 2 — 9
Total $37,203
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 March 31,
2017, unless otherwise noted. Footnotes to the above tables appear on page 31. 30
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. The returns presented are a gross return based on NAV. The net returns based on NAV were 2%,
1% and 6% for 1Q’17, 1Q’16 and FY’16, respectively. Gross and net return are defined in the non-GAAP financial information and definitions section of this presentation.
(6) All amounts are as of December 31, 2016 except for total returns. Refer to www.apolloic.com for the most recent financial information on AINV. The information contained on
AINV’s website is not part of this presentation. Includes $1.5 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.
(7) Amounts are as of December 31, 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.
31
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.
32
Non-GAAP Financial Information & Definitions Cont’d
▪ “Assets Under Management”, or “AUM”, refers to the assets we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory services, including,
without limitation, capital that such funds, partnerships and accounts have the right to call from investors pursuant to capital commitments. Our AUM equals the sum of:
i) the fair value of the investments of the private equity funds, partnerships and accounts we manage or advise plus the capital that such funds, partnerships and accounts are entitled to call from
investors pursuant to capital commitments;
ii) the net asset value, or “NAV,” of the credit funds, partnerships and accounts for which we provide investment management or advisory services, other than certain collateralized loan obligations
(“CLOs”) and collateralized debt obligations (“CDOs”), which have a fee-generating basis other than the mark-to-market value of the underlying assets, plus used or available leverage and/or
capital commitments;
iii) the gross asset value or net asset value of the real estate funds, partnerships and accounts we manage, and the structured portfolio company investments of the funds, partnerships and accounts we
manage or advise, which includes the leverage used by such structured portfolio company investments;
iv) the incremental value associated with the reinsurance investments of the portfolio company assets we manage or advise; and
v) the fair value of any other assets that we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory services, plus unused credit facilities,
including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification before investment plus any other capital commitments to such funds,
partnerships and accounts available for investment that are not otherwise included in the clauses above.
Our AUM measure includes Assets Under Management for which we charge either no or nominal fees. In addition our AUM measure includes certain assets for which we do not have investment
discretion. Our definition of AUM is not based on any definition of Assets Under Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider
multiple factors for determining what should be included in our definition of AUM. Such factors include but are not limited to (1) our ability to influence the investment decisions for existing and
available assets; (2) our ability to generate income from the underlying assets in our funds; and (3) the AUM measures that we use internally or believe are used by other investment managers. Given
the differences in the investment strategies and structures among other alternative investment managers, our calculation of AUM may differ from the calculations employed by other investment managers
and, as a result, this measure may not be directly comparable to similar measures presented by other investment managers. Our calculation also differs from the manner in which our affiliates registered
with the SEC report “Regulatory Assets Under Management” on Form ADV and Form PF in various ways.
We use AUM, Capital Deployed and Dry Powder as performance measurements of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs.
• “AUM with Future Management Fee Potential” refers to the committed uninvested capital portion of total AUM not currently earning management fees. The amount depends on the specific
terms and conditions of each fund.
• “Fee-Generating AUM” consists of assets we manage or advise for the funds, partnerships and accounts to which we provide investment management or advisory services and on which we earn
management fees, monitoring fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts we manage or advise. Management
fees are normally based on “net asset value,” “gross assets,” “adjusted par asset value,” “adjusted cost of all unrealized portfolio investments,” “capital commitments,” “adjusted assets,” “stockholders’
equity,” “invested capital” or “capital contributions,” each as defined in the applicable management agreement. Monitoring fees, also referred to as advisory fees, with respect to the structured
portfolio company investments of the funds, partnerships and accounts we manage or advise, are generally based on the total value of such structured portfolio company investments, which normally
includes leverage, less any portion of such total value that is already considered in Fee-Generating AUM.
▪ “Carry-Eligible AUM” refers to the AUM that may eventually produce carried interest income. All funds for which we are entitled to receive a carried interest income allocation are included in
Carry-Eligible AUM, which consists of the following:
▪ “Carry-Generating AUM”, which refers to invested capital of the funds, partnerships and accounts we manage or advise, that is currently above its hurdle rate or preferred return, and profit
of such funds, partnerships and accounts is being allocated to the general partner in accordance with the applicable limited partnership agreements or other governing agreements;
▪ “AUM Not Currently Generating Carry”, which refers to invested capital of the funds, partnerships and accounts we manage or advise that is currently below its hurdle rate or preferred
return; and
▪ “Uninvested Carry-Eligible AUM”, which refers to capital of the funds, partnerships and accounts we manage or advise that is available for investment or reinvestment subject to the provisions
of applicable limited partnership agreements or other governing agreements, which capital is not currently part of the NAV or fair value of investments that may eventually produce carried
interest income allocable to the general partner.
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Non-GAAP Financial Information & Definitions Cont’d
▪ “Advisory” refers to certain assets advised by Apollo Asset Management Europe PC LLP, a wholly-owned 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 United Kingdom.
▪ “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”
or “AAM”) 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. Dry powder excludes uncalled commitments which can only be called for fund fees and expenses.
▪ 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 March 31, 2017 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 will 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 will 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 March 31, 2017 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
will 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, as well as sub-advised managed accounts owned by or related to
Athene. Certain commitment-based SIAs are included as the underlying assets are liquid.
▪ 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. 34
Non-GAAP Financial Information & Definitions Cont’d
▪ Net IRR of a real estate fund represents the cumulative cash flows in the fund (and not any one investor in the fund), on the basis of the actual timing of cash inflows received from and outflows paid to investors
of the fund (assuming the ending net asset value as of March 31, 2017 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” refers to (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, (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 agreements 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 agreements of AINV, AIF and AFT may be
terminated in certain circumstances upon 60 days’ written notice. The investment management agreement of ARI has a one year term and is reviewed annually by ARI’s board of directors and may be terminated
under certain circumstances by an affirmative vote of at least two-thirds of ARI’s independent directors. The investment management or advisory arrangements between MidCap and Apollo and Athene and
Apollo, 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 MOIC” or “Unrealized Multiple of Invested Capital” is calculated as Unrealized Value divided by Remaining Cost;
▪ “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 occurred. 35
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 13, 2017, 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.
36