Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Apollo Global Management, Inc. | a8-kfor4q17earningsrelease.htm |
| EX-99.1 - EXHIBIT 99.1 - Apollo Global Management, Inc. | erex9914q17.htm |
Apollo Global Management, LLC
Fourth Quarter and Full Year 2017
Earnings
Exhibit 99.2
February 1, 2018
Assets Under
Management
Apollo 4Q'17 Financial Results Highlights
Business
Drivers
▪ Total Assets Under Management (“AUM”) of $248.9 billion
▪ Fee-Generating AUM (“FGAUM”) of $169.0 billion
▪ Carry-Eligible AUM (“CEAUM”) of $118.1 billion and Carry-Generating AUM (“CGAUM”) of $53.3 billion
▪ Dry Powder of $47.6 billion available for investment
▪ Inflows: $7.6 billion of capital inflows ($56.5 billion FY'17)
▪ Deployment: $5.5 billion invested ($14.8 billion FY'17)
▪ Realizations: $4.7 billion of capital returned to investors ($10.7 billion FY'17)
▪ Performance: Private Equity Fund Appreciation 9.1% (28.9% FY'17)
Credit Gross Return(1) 2.2% (8.3% FY'17)
Note: This presentation contains non-GAAP financial information and defined terms which are described on pages 32 to 36. The non-GAAP financial information contained herein is reconciled to GAAP financial information on pages 5,
18 and 23.
(1) Represents total Credit gross return, excluding assets managed by Athene Asset Management, L.P. (“AAM”) that are not directly invested in Apollo funds or sub-advised by Apollo. Total Credit net return was 1.9% for 4Q'17 and 7.2%
for FY'17.
1
($ in millions, except per share data) 4Q’17 Per Share FY’17 Per Share
▪ Net Income $461.3 N/A $1,443.6 N/A
▪ Net Income Attributable to Apollo Global Management, LLC
Class A Shareholders $184.9 $0.92 $615.6 $3.12
Non-GAAP
Measures
& Distribution
GAAP
Results
($ in millions, except per share data) 4Q’17 Per Share FY’17 Per Share
▪ Economic Net Income (“ENI”) $490.3 $1.22 $1,437.1 $3.57
▪ Fee Related Earnings (“FRE”) $187.3 $0.46 $624.4 $1.53
▪ Distributable Earnings (“DE”) After Taxes and Related Payables $317.2 $0.77 $970.1 $2.37
▪ Declared 4Q'17 distribution of $0.66 per Class A share and equivalent (payout ratio of 86%), bringing FY'17
distributions to $2.06 per Class A share (payout ratio of 87%)
($ in thousands, except share data) 4Q'16 3Q'17 4Q'17 FY'16 FY'17
Revenues:
Management fees from related parties $268,342 $301,443 $302,634 $1,043,513 $1,154,925
Advisory and transaction fees from related parties, net 43,966 16,209 62,719 146,665 117,624
Carried interest income from related parties 373,072 346,580 504,165 780,206 1,337,624
Total Revenues 685,380 664,232 869,518 1,970,384 2,610,173
Expenses:
Compensation and benefits:
Salary, bonus and benefits 99,117 108,853 112,871 389,130 428,882
Equity-based compensation 28,780 24,485 21,118 102,983 91,450
Profit sharing expense 177,307 137,296 175,394 357,074 515,073
Total Compensation and Benefits 305,204 270,634 309,383 849,187 1,035,405
Interest expense 12,977 13,303 13,376 43,482 52,873
General, administrative and other 59,715 68,149 67,940 247,000 257,858
Placement fees 20,468 5,397 1,353 26,249 13,913
Total Expenses 398,364 357,483 392,052 1,165,918 1,360,049
Other Income:
Net gains (losses) from investment activities 89,434 68,932 (7,832) 139,721 95,104
Net gains (losses) from investment activities of consolidated variable interest entities 2,198 845 (420) 5,015 10,665
Income from equity method investments 38,822 47,488 58,753 103,178 161,630
Interest income 999 1,504 3,492 4,072 6,421
Other income, net 4,077 25,387 200,864 4,562 245,640
Total Other Income 135,530 144,156 254,857 256,548 519,460
Income before income tax provision 422,546 450,905 732,323 1,061,014 1,769,584
Income tax provision (28,199) (16,542) (271,019) (90,707) (325,945)
Net Income 394,347 434,363 461,304 970,307 1,443,639
Net income attributable to Non-Controlling Interests (227,380) (231,411) (272,028) (567,457) (814,535)
Net Income Attributable to Apollo Global Management, LLC 166,967 202,952 189,276 402,850 629,104
Net income attributable to Preferred Shareholders — (4,383) (4,383) — (13,538)
Net Income Attributable to Apollo Global Management, LLC Class A
Shareholders $166,967 $198,569 $184,893 $402,850 $615,566
Distributions Declared and Paid per Class A Share $0.35 $0.52 $0.39 $1.25 $1.85
Net Income Per Class A Share:
Net Income Available to Class A Share – Basic $0.87 $1.00 $0.92 $2.11 $3.12
Net Income Available to Class A Share – Diluted $0.87 $1.00 $0.92 $2.11 $3.10
Weighted Average Number of Class A Shares Outstanding – Basic 185,146,949 192,882,082 193,609,614 183,998,080 190,931,743
Weighted Average Number of Class A Shares Outstanding – Diluted 185,146,949 192,882,082 193,609,614 183,998,080 192,581,693
▪ Net Income was $461.3 million and $1.4 billion for the quarter and full year ended December 31, 2017, respectively. Recent legislative
reforms in the Tax Cuts & Jobs Act (“TCJA”) drove an increase in Apollo’s income tax provision of $254.3 million, mostly offset by a
related increase in other income of $200.2 million primarily due to the remeasurement of the tax receivable agreement liability.
GAAP Consolidated Statements of Operations (Unaudited)
2
($ in thousands, except share data) As of December 31, 2017
As of
December 31, 2016
Assets:
Cash and cash equivalents $751,252 $806,329
Cash and cash equivalents held at consolidated funds 21 7,335
Restricted cash 3,875 4,680
U.S. Treasury securities, at fair value 364,649 —
Investments 1,730,904 1,494,744
Assets of consolidated variable interest entities 1,328,586 1,001,811
Carried interest receivable 1,872,106 1,257,105
Due from related parties 262,588 254,853
Deferred tax assets 337,638 572,263
Other assets 231,757 118,860
Goodwill 88,852 88,852
Intangible assets, net 18,842 22,721
Total Assets $6,991,070 $5,629,553
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $68,873 $57,465
Accrued compensation and benefits 62,474 52,754
Deferred revenue 128,146 174,893
Due to related parties 428,013 638,126
Profit sharing payable 752,276 550,148
Debt 1,362,402 1,352,447
Liabilities of consolidated variable interest entities 1,117,721 854,579
Other liabilities 173,369 81,613
Total Liabilities 4,093,274 3,762,025
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Preferred shares (11,000,000 and 0 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively) 264,398 —
Class A shares, no par value, unlimited shares authorized, 195,267,669 and 185,460,294 shares issued and outstanding at December 31, 2017 and
December 31, 2016, respectively — —
Class B shares, no par value, unlimited shares authorized, 1 share issued and outstanding at December 31, 2017 and December 31, 2016 — —
Additional paid in capital 1,579,797 1,830,025
Accumulated deficit (379,460) (986,186)
Accumulated other comprehensive loss (1,809) (8,723)
Total Apollo Global Management, LLC shareholders’ equity 1,462,926 835,116
Non-Controlling Interests in consolidated entities 140,086 90,063
Non-Controlling Interests in Apollo Operating Group 1,294,784 942,349
Total Shareholders’ Equity 2,897,796 1,867,528
Total Liabilities and Shareholders’ Equity $6,991,070 $5,629,553
GAAP Consolidated Statements of Financial Condition (Unaudited)
▪ Total assets were $7.0 billion as of December 31, 2017, an increase of $1.4 billion, or 24%, compared to
December 31, 2016
3
($ in thousands, except per share data) 4Q'16 3Q'17 4Q'17 FY'16 FY'17
Management Fees $246,598 $282,434 $280,920 $977,649 $1,082,315
Advisory and Transaction Fees from Related Parties, net 43,966 16,209 62,719 147,115 117,624
Carried Interest Income from Related Parties 375,042 346,574 503,744 785,886 1,337,590
Total Segment Revenues 665,606 645,217 847,383 1,910,650 2,537,529
Salary, Bonus and Benefits 93,194 101,007 99,867 366,890 394,155
Equity-Based Compensation 15,872 17,058 16,505 64,468 67,874
Profit Sharing Expense 148,619 131,445 171,496 316,650 509,217
Other Expenses 72,548 66,325 61,398 242,923 242,492
Total Segment Expenses 330,233 315,835 349,266 990,931 1,213,738
Segment Other Income Net of Non-Controlling Interests 117,002 128,989 40,749 192,548 254,158
Economic Income(1) $452,375 $458,371 $538,866 $1,112,267 $1,577,949
Taxes (58,269) (22,356) (44,155) (165,522) (127,280)
Preferred Distributions — (4,383) (4,383) — (13,538)
Economic Net Income $394,106 $431,632 $490,328 $946,745 $1,437,131
Per Share $0.98 $1.07 $1.22 $2.36 $3.57
Fee Related Earnings $131,465 $162,189 $187,285 $529,874 $624,413
Per Share(2) $0.32 $0.40 $0.46 $1.29 $1.53
Distributable Earnings $226,226 $185,131 $327,560 $647,932 $1,010,002
Taxes and Related Payables (289) (7,272) (5,993) (9,635) (26,337)
Preferred Distributions — (4,383) (4,383) — (13,538)
Distributable Earnings After Taxes and Related Payables $225,937 $173,476 $317,184 $638,297 $970,127
Per Share of Common & Equivalent(2) $0.55 $0.42 $0.77 $1.56 $2.37
Net Distribution per Share of Common & Equivalent(2) $0.45 $0.39 $0.66 $1.42 $2.06
Payout Ratio 82% 93% 86% 91% 87%
Summary of Non-GAAP Measures
4
(1) 3Q’17 and FY’17 includes $19.0 million in proceeds received in connection with the Company’s early termination of a lease and FY’17 includes $17.5 million in insurance proceeds received in connection with fees and expenses
relating to a legal proceeding. The lease termination and insurance proceeds were recorded in Other income (loss).
(2) Per share calculations are based on end of period Distributable Earnings Shares Outstanding, which consist of total Class A shares outstanding, Apollo Operating Group Units and RSUs that participate in distributions (collectively
referred to as “common & equivalents”). See page 25 for details regarding the shareholder distribution and page 26 for the share reconciliation.
($ in thousands) 4Q'16 3Q'17 4Q'17 FY'16 FY'17
GAAP Net Income Attributable to Apollo Global Management, LLC Class A
Shareholders $166,967 $198,569 $184,893 $402,850 $615,566
Preferred distributions — 4,383 4,383 — 13,538
Net income (loss) attributable to Non-Controlling Interests in consolidated entities 1,898 1,048 (76) 5,789 8,891
Net income attributable to Non-Controlling Interests in the Apollo Operating Group 225,482 230,363 272,104 561,668 805,644
GAAP Net Income $394,347 $434,363 $461,304 $970,307 $1,443,639
Income tax provision 28,199 16,542 271,019 90,707 325,945
GAAP Income Before Income Tax Provision $422,546 $450,905 $732,323 $1,061,014 $1,769,584
Transaction related charges and equity-based compensation(1) 31,727 8,514 6,707 57,042 17,496
Gain from remeasurement of tax receivable agreement liability — — (200,240) — (200,240)
Net (income) loss attributable to Non-Controlling Interests in consolidated entities (1,898) (1,048) 76 (5,789) (8,891)
Economic Income $452,375 $458,371 $538,866 $1,112,267 $1,577,949
Income tax provision on Economic Income (58,269) (22,356) (44,155) (165,522) (127,280)
Preferred distributions — (4,383) (4,383) — (13,538)
Economic Net Income $394,106 $431,632 $490,328 $946,745 $1,437,131
Preferred distributions — 4,383 4,383 — 13,538
Income tax provision on Economic Income 58,269 22,356 44,155 165,522 127,280
Carried interest income from related parties(2) (369,617) (340,401) (498,714) (762,945) (1,319,924)
Profit sharing expense 148,619 131,445 171,496 316,650 509,217
Equity-based compensation 15,872 17,058 16,505 64,468 67,874
Income from equity method investments (38,815) (48,014) (58,504) (102,581) (162,951)
Net (gains) losses from investment activities (89,247) (68,529) 7,846 (138,608) (94,774)
Net interest loss 11,714 11,509 9,420 39,019 44,984
Other 564 750 370 1,604 2,038
Fee Related Earnings $131,465 $162,189 $187,285 $529,874 $624,413
Net realized carried interest income 83,325 19,129 122,409 115,153 352,521
Non-cash revenues (842) (842) (842) (3,369) (3,369)
Realized income from equity method investments 22,173 10,339 25,809 37,180 68,242
Net interest loss (11,714) (11,509) (9,420) (39,019) (44,984)
Depreciation and amortization 2,396 5,825 2,319 9,928 13,179
Other (577) — — (1,815) —
Distributable Earnings $226,226 $185,131 $327,560 $647,932 $1,010,002
Taxes and related payables (289) (7,272) (5,993) (9,635) (26,337)
Preferred distributions — (4,383) (4,383) — (13,538)
Distributable Earnings After Taxes and Related Payables $225,937 $173,476 $317,184 $638,297 $970,127
(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
Traditional PE Funds
Inception-to-date Gross / Net IRR
PE Portfolio Composition:
Public Equity Holdings Fund Shares Held (mm)
Caesars Entertainment (CZR)(5) Fund VI 45.5
EP Energy (EPE) Fund VII & ANRP I 62.6
Exela Technologies (XELA) Fund VII 28.6
Norwegian (NCLH)(5) Fund VI & VII 25.5
Parsley Energy (PE) ANRP I & ANRP II 10.9
Presidio (PSDO) Fund VIII 57.8
Vistra Energy (VST) Fund VII & ANRP II 30.0
Warrior Met Coal (HCC) Fund VIII & ANRP I 5.3
Welspun Corp (WLCO IN) Fund VII & ANRP I 42.2
80% Private / 20% Public(6)(7)
Supplemental Information
Invested
AUM
$34bn
Dry Powder
$34bn
Private Equity
$72 billion AUM
Committed
$3bn(2)
Business Drivers
4Q'17 FY'17
Inflows $531mm $25.2bn
Deployment $1.6bn $5.0bn
Realizations $1.8bn $4.6bn
Performance(1) 9.1% 28.9%
39% / 25%
Financial Results Summary
Commentary
▪ Economic Income driven by substantial carried interest and investment
income derived from robust investment performance
▪ Private Equity fund appreciation during the quarter of 9.1%(1), primarily
driven by appreciation in private portfolio company holdings of Fund VIII
▪ Strong Fee Related Earnings driven by elevated advisory and transaction fees
▪ Realization activity driven by the sale of CH2M, share sales of Presidio, NCL
and Ladbrokes, as well as several dividends
▪ Deployed $1.6 billion and committed to invest an additional $0.7 billion
during the quarter; total committed but not yet deployed capital(2) at quarter
end was $2.6 billion (excluding co-investments) of which $1.7 billion related
to energy asset build-ups expected to be deployed over time
▪ Inflows primarily driven by co-investment capital
(1) Represents private equity fund appreciation (depreciation) as defined in the non-GAAP financial information and definitions section of this presentation. (2) Represents capital committed to investments as of December 31, 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
$4 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) Excludes Athene shares held by AAA. (7) Does not include shares of ADT, Inc. (“ADT”) or PlayAGS,
Inc. (“AGS”) held by Fund VIII. ADT and AGS completed their initial public offerings (“IPOs”) on January 18, 2018 and January 25, 2018, respectively. Fund VIII holds 277.6 million and 23.2 million shares of ADT and AGS, respectively. 6
Co-Investments
$7bn(4)
Other
$4bn(3)
($ in thousands) 4Q'16 3Q'17 4Q'17
Management fees $79,014 $76,079 $75,982
Advisory and transaction fees 41,060 10,572 42,417
Carried interest income 304,460 308,448 410,456
Total Revenues 424,534 395,099 528,855
Compensation and benefits 156,782 152,996 177,898
Other expenses 16,811 21,956 14,879
Total Expenses 173,593 174,952 192,777
Other Income 30,818 50,804 45,561
Economic Income $281,759 $270,951 $381,639
Fee Related Earnings $75,161 $40,574 $74,043
Realized
Value
$0.6bn
Unrealized Value
$1.1bn
Dry
Powder
$2.4bn
Supplemental Private Equity Fund Information(1)
Fund VI
Select Private Investments(3)
(in order of size as measured by fair value)
Momentive Performance Materials
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) Additional fund performance information is set forth in the investment records on slides 28-31 of this presentation. (2) For Escrow Ratio definition and related information, please refer to footnote (1) on page 14. (3) Investments selected based on
non-performance criteria. (4) Represents the sum of capital actually invested, committed to invest or used for fees and expenses, divided by aggregate committed capital. 7
Vintage:
Fund Size: $10.1bn
Total Invested: $12.5bn
Realized Value: $18.6bn
Unrealized Value: $2.6bn
Total Value: $21.2bn
Gross / Net IRR:
Escrow Ratio(2): 95%
Fund VII
Select Private Investments(3)
(in order of size as measured by fair value)
McGraw Hill Education
Aurum
Endemol Shine
Talos Energy
Pinnacle
Vintage:
Fund Size: $14.7bn
Total Invested: $16.2bn
Realized Value: $30.2bn
Unrealized Value: $3.4bn
Total Value: $33.6bn
Gross / Net IRR:
Escrow Ratio(2): 98%
Fund VIII
Unrealized Value by Sector
Vintage:
Fund Size: $18.4bn
Committed to Date: $15.4bn
Total Invested: $13.1bn
Realized Value: $3.5bn
Total Value: $20.7bn
% Committed(4): 84%
Gross / Net IRR:
ANRP II
Select Private Investments(3)
(in order of size as measured by fair value)
Chisholm
Double Eagle III
Pegasus
Vintage:
Fund Size: $3.5bn
Committed to Date: $2.2bn
Total Invested: $1.1bn
Realized Value:
Total Value: $1.7bn
% Committed(4):
Gross / Net IRR:
$2.6 billion Unrealized Value
Investment Mix
$3.4 billion Unrealized Value
Investment Mix
$17.2 billion Unrealized Value
by Investment Year
ANRP II
Portfolio
Consumer Services 32%
Media/Telcom/Technology 14%
Business Services 12%
Leisure 12%
Manufacturing and Industrial 11%
Natural Resources 10%
Financial Services 5%
Chemicals 3%
Consumer & Retail 1%
Private
Investments
31%
CZR 19%
NCLH
44%
Public Debt /
Other 6%
XELA
4%
Private
Investments
66%
Public Debt /
Other 10%
EPE 4%
VST
16%
2013-14
$1.7bn
2015
$5.9bn
2016
$6.4bn2017
$3.2bn
Unrealized
MOIC:
2.5xUnrealized
MOIC:
1.1x
Unrealized
MOIC:
1.5x
Average Life of Investment: 2 yrs
Public
Investments:
34%
Public
Investments:
69%
Unrealized
MOIC:
1.1x
Parsley
Energy (PE)
14%
12% / 9%
2006 2008
34% / 26%
2013
33% / 23%
2016
$574mm
54% / 31%
64%
Business Drivers
4Q'17 FY'17
Inflows $6.9bn $28.2bn
Deployment(1) $2.7bn $6.3bn
Realizations $1.9bn $4.0bn
Performance(2) 2.2% 8.3%
Supplemental Information
Credit
($ in billions) $164 billion AUM
Financial Results Summary
Commentary
(1) Reflects capital deployment activity from Drawdown fund strategies and SIAs that have a defined maturity date and excludes deployment from Liquid/Performing funds, Permanent Capital Vehicles and Advisory. (2) Represents gross return as
defined in the non-GAAP financial information and definitions section of this presentation with the exception of CLO assets in Liquid/Performing which are calculated based on gross return on invested assets, which excludes cash. The 4Q'17 net
returns for Liquid/Performing, Drawdown, MidCap, AINV, AFT, AIF combined and total Credit excluding Athene Non-Sub-Advised were 1.3%, 4.1%, 1.3%, and 1.9%, respectively. The FY'17 net returns for Liquid/Performing, Drawdown, MidCap,
AINV, AFT, AIF combined and total Credit excluding Athene Non-Sub-Advised were 5.9%, 11.1%, 7.3% and 7.2%, respectively. (3) 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 December 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. (4) Athora
Holding Ltd. (“Athora”) currently is the holding company of Athene’s German group companies. Athora has received subscriptions representing €2.2 billion from Athene and a number of global institutional investors for a capital raise conducted
through a private placement. Athene Non-Sub-Advised and Athora Non Sub-Advised reflects total combined AUM of $84.8 billion less $18.4 billion of assets that were either sub-advised by Apollo or invested in funds and investment vehicles managed
by Apollo included within other asset categories. (5) Advisory refers to certain assets advised by AAME.
▪ Economic Income for the quarter driven by Fee Related Earnings and strong carried
interest income resulting from solid investment performance, partially offset by
modest depreciation of Athene (NYSE:ATH)
▪ Total Credit AUM rose 4% quarter-over-quarter and 20% year-over-year to $164
billion and includes approximately $100 billion in Permanent Capital Vehicles
▪ Diversified capital inflows were generated across fund categories including
Permanent Capital Vehicles (Athene and MidCap), Drawdown funds (SCRF and
FCI), Liquid/Performing funds (including CLOs and Total Return), as well as
Advisory Assets
▪ Credit gross returns(2) of 2.2% and 8.3% for the quarter and full year, respectively,
resulting from positive returns across fund categories, with particular strength in
Drawdown funds and Permanent Capital Vehicles
▪ Capital deployment activity driven by investments in longevity assets, structured
credit investments and opportunistic investments
8
($ in thousands) 4Q'16 3Q'17 4Q'17
Management fees $151,560 $187,885 $186,108
Advisory and transaction fees 2,475 4,219 20,249
Carried interest income 60,885 36,310 90,590
Total Revenues 214,920 228,414 296,947
Compensation and benefits 89,620 86,379 95,619
Other expenses 50,380 38,849 41,117
Total Expenses 140,000 125,228 136,736
Other Income (Loss) 87,761 79,138 (3,655)
Non-Controlling Interest (2,394) (1,751) (1,135)
Economic Income $160,287 $180,573 $155,421
Fee Related Earnings $51,929 $115,716 $111,211
Category AUM FGAUM
CE
AUM
CG
AUM
Gross Return(1)
4Q'17 FY'17
Liquid/Performing $43 $37 $21 $8 1.4% 6.3%
Drawdown(3) $28 $17 $23 $9 4.6% 13.2%
Permanent Capital Vehicles
MidCap, AINV, AFT, AIF $13 $12 $11 $9 2.2% 11.2%
Athene Non-Sub-Advised(4) $60 $60 — —
Athora Non-Sub-Advised(4) $7 $4 — —
Advisory(5) $13 $— — —
Total Credit $164 $130 $55 $26 2.2% 8.3%
$12 billion AUM
Equity
$2.4bn
Debt
$10.0bn
Supplemental Information
Business Drivers
Real Assets
4Q'17 FY'17
Inflows $164mm $3.1bn
Deployment $1.2bn $3.5bn
Realizations $960mm $2.1bn
Performance(1) 1.0% 14.6%
▪ Economic Income driven by Fee Related Earnings and carried interest income
resulting from steady investment performance
▪ Full year Fee Related Earnings rising year-over-year as prior launches of real
estate equity funds in the U.S. and Asia complement growth in the real estate
debt business to drive increasing profitability
▪ U.S. real estate equity funds combined gross return(1) of 1.0% in the fourth
quarter, contributing to a strong full year gross return of 14.6% driven by
appreciation in leisure and industrial assets
▪ Deployment for the quarter driven by an increase in capital investment for
the real estate debt managed accounts, U.S. and Asia equity funds and the
commercial mortgage REIT (NYSE: ARI)
▪ Realization activity for the quarter driven by residential properties in Europe
and Asia, and the liquidation of the legacy CPI Europe funds
Financial Results Summary
Commentary
(1) Represents combined gross return for U.S. Real Estate Fund I and U.S. Real Estate Fund II including co-investment capital. The 4Q'17 and FY'17 combined net returns for U.S. Real Estate Fund I and U.S. Real Estate Fund II were
0.5% and 11.9%, respectively. U.S. Real Estate Fund I and U.S. Real Estate Fund II’s combined inception-to-date gross and net IRRs were 16.7% and 13.2%, respectively, as of December 31, 2017.
9
($ in thousands) 4Q'16 3Q'17 4Q'17
Management fees $16,024 $18,470 $18,830
Advisory and transaction fees 431 1,418 53
Carried interest income 9,697 1,816 2,698
Total Revenues 26,152 21,704 21,581
Compensation and benefits 11,283 10,135 14,351
Other expenses 5,357 5,520 5,402
Total Expenses 16,640 15,655 19,753
Other Income (Loss) 817 798 (22)
Economic Income $10,329 $6,847 $1,806
Fee Related Earnings $4,375 $5,899 $2,031
($ in millions)
Private Equity Credit Real Assets Total
4Q'16 $30,722 $111,781 $8,295 $150,798
Inflows 428 23,469 2,249 26,146
Outflows(2) (590) (6,503) (417) (7,510)
Net Flows (162) 16,966 1,832 18,636
Realizations (874) (1,946) (1,328) (4,148)
Market Activity 106 3,349 224 3,679
4Q'17 $29,792 $130,150 $9,023 $168,965
($ in millions)
Private Equity Credit Real Assets Total
3Q'17 $30,067 $126,907 $9,284 $166,258
Inflows 124 5,275 168 5,567
Outflows(2) (33) (1,902) (54) (1,989)
Net Flows 91 3,373 114 3,578
Realizations (370) (766) (438) (1,574)
Market Activity 4 636 63 703
4Q'17 $29,792 $130,150 $9,023 $168,965
($ in millions)
Private Equity Credit Real Assets Total
4Q'16 $43,628 $136,607 $11,453 $191,688
Inflows 25,179 28,242 3,099 56,520
Outflows(2) (83) (3,730) (489) (4,302)
Net Flows 25,096 24,512 2,610 52,218
Realizations (4,568) (4,048) (2,075) (10,691)
Market Activity 8,276 7,042 395 15,713
4Q'17 $72,432 $164,113 $12,383 $248,928
f
Total AUM & Fee-Generating AUM
($ in millions)
Private Equity Credit Real Assets Total
3Q'17 $70,469 $157,925 $13,171 $241,565
Inflows 531 6,928 164 7,623
Outflows(2) (9) (428) (101) (538)
Net Flows 522 6,500 63 7,085
Realizations (1,774) (1,923) (960) (4,657)
Market Activity 3,215 1,611 109 4,935
4Q'17 $72,432 $164,113 $12,383 $248,928
Private
Equity
Credit
Real Assets
Total AUM Highlights Fee-Generating AUM Highlights
FY'17 Total AUM Rollforward(1) FY'17 Fee-Generating AUM Rollforward(1)
4Q'17 Fee-Generating AUM Rollforward(1)4Q'17 Total AUM Rollforward(1)
Inflows: Capital raised for co-investment ($330 million); and net segment
transfers ($150 million) Realizations: Fund VIII ($1.0 billion); Fund VII
($299 million); and Fund VI ($282 million) Market Activity: Appreciation
driven by Fund VIII ($2.0 billion); and co-investment vehicles ($917 million)
Inflows: Athene ($2.9 billion); Liquid/Performing funds ($1.4 billion); FCI
III ($990 million); and SCRF IV ($852 million) Outflows: Redemptions ($362
million) Realizations: SCRF III ($865 million); EPF II ($529 million); and
Liquid/Performing funds ($245 million) Market activity: Drawdown funds
($779 million); Liquid/Performing funds ($477 million); and Advisory assets
($196 million)
Inflows: Net leverage increase ($164 million) Outflows: Net segment transfers
($101 million) Realizations: Real estate equity ($901 million) Market
Activity: Real estate debt appreciation ($80 million)
Private
Equity
Credit
Real Assets
Inflows: Fee-generating capital deployment ($124 million)
Realizations: Fund VII ($168 million); and Fund VI ($165 million)
Inflows: Athene ($2.9 billion); Liquid/Performing funds ($910 million);
Drawdown funds ($521 million); and fee-generating capital deployment
($262 million) Outflows: Net change in fee basis ($1.6 billion)
Realizations: EPF II ($267 million); and Liquid/Performing funds ($235
million) Market activity: Liquid/Performing funds ($454 million)
Inflows: Fee-generating capital deployment ($167 million) Outflows: Net
segment transfers ($53 million) Realizations: Real estate equity ($380
million) Market Activity: Real estate debt appreciation ($63 million)
(1) Inflows at the individual segment level represent subscriptions, commitments, and other increases in available capital, such as acquisitions or leverage, net of inter-segment transfers. Outflows represent redemptions and other decreases in
available capital. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income.
(2) Included in the 4Q'17 outflows for Total AUM and FGAUM are $362.2 million and $269.7 million of redemptions, respectively. Included in the FY'17 outflows for Total AUM and FGAUM are $1.1 billion and $840.0 million of redemptions,
respectively. 10
Carry-Eligible & Carry-Generating AUM
($ in millions)
Segment 4Q'16 3Q'17 4Q'17
Private Equity $35,144 $59,995 $60,681
Credit 51,644 54,283 55,322
Real Assets 2,117 2,479 2,054
Total $88,905 $116,757 $118,057
($ in millions)
Segment 4Q'16 3Q'17 4Q'17
Private Equity $21,521 $25,213 $26,775
Credit 33,306 26,634 25,814
Real Assets 776 803 694
Total $55,603 $52,650 $53,283
($ in millions)
Private Equity Credit Real Assets Total
Carry-Generating AUM $26,775 $25,814 $694 $53,283
+ Uninvested CE AUM 33,412 11,607 923 45,942
+ Invested AUM Not
Currently Generating
Carry
494 17,901 437 18,832
Carry-Eligible AUM $60,681 $55,322 $2,054 $118,057
$118 billion
Carry-Eligible AUM
$ in billions
Category / Fund
Invested AUM
Not Currently
Generating Carry
Investment
Period Active
>24 Months(1)
Appreciation
Required to
Achieve Carry(2)(3)
Private Equity $0.5 $0.5 12%
Drawdown 4.3 3.7 32%
Liquid/Performing
8.6 < 250bps
12.8 — 250-500bps
0.4 > 500bps
MidCap, AINV, AFT,
AIF 0.8 0.8 < 250bps
Credit 17.9 13.5 10%
Real Assets 0.4 0.2 > 250bps
Total $18.8 $14.2
($ in billions)
4Q'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 December 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. 11
Uninvested
Carry-
Eligible
AUM
$45.9bn
Currently
Generating
Carry
$53.3bn
Not
Currently
Generating
Carry
$18.8bn
Fund IX
$24.7
Other PE
$4.0
Drawdown
$11.7
▪ Driven by investments in longevity assets, structured credit
investments, opportunistic investments in the healthcare,
consumer, industrial and energy sectors, and European
commercial real estate
Capital Deployment
Capital Deployment & Dry Powder
$48 billion Dry Powder
($ in billions)
Private
Equity
Credit
Real Assets
4Q'1
7 Highlight
s
($ in millions)
Segment 4Q'17 FY'17
Private Equity $1,613 $5,029
Credit(1) 2,700 6,279
Real Assets 1,181 3,505
Total $5,494 $14,813
Real Assets
$1.0
Private Equity
$34.5
Credit
$12.1
Liquid/
Performing
$0.2
▪ Capital deployed in drawdown style funds and accounts across Apollo’s global integrated investment platform
totaled $5.5 billion for the quarter and $14.8 billion for the year ended December 31, 2017
▪ Pending investment commitments in Private Equity that have not yet been funded (excluding co-investments)
totaled $2.6 billion as of December 31, 2017
▪ Dry Powder of $47.6 billion at the end of the quarter, including $36.4 billion of AUM with future management
fee potential primarily comprised by Private Equity Fund IX
▪ Driven by acquisition of West Corporation (call center,
conference call and data services), and various
investments across our natural resources strategies
▪ Driven by commercial mortgage lending activity across
several strategies and investments made by our U.S. and
Asia equity funds
Permanent
Capital Vehicles
$0.2
12
Fund VIII
$5.8
(1) Reflects capital deployment activity from Drawdown fund strategies and SIAs that have a defined maturity date and excludes deployment from Liquid/Performing funds, Permanent Capital Vehicles and Advisory.
Segment Balance Sheet Highlights
Summary Balance Sheet
($ in millions) 4Q'17
Athene/AAA(3) $829
GP Investments /
Other Investments(4) 977
Total Investments $1,806
($ and share amounts in millions) Through4Q'17
Open Market Share
Repurchases 1.2
Reduction of Shares
Issued to Employees(5) 4.0
Total Shares Purchased 5.2
Total Capital Used for
Share Purchases(6) $92
Share Repurchase Plan
Authorization(7) $250
Average Price Paid Per
Share(8) $17.70
Investments Detail Share Repurchase Activity1Q’16 through 4Q'17(7)
(1) Unfunded general partner commitments related to Fund IX are subject to future syndication to Apollo employees. (2) Investments and net carried interest receivable are presented on an unconsolidated basis. Investments and net carried interest
receivable presented in the condensed consolidated statement of financial condition include eliminations related to investments in consolidated funds and VIEs. Net Carried Interest Receivable excludes profit sharing expected to be settled in the form
of equity-based awards. (3) Investment in Athene/AAA primarily comprises Apollo’s direct investment of 16.1 million shares (subject to a discount due to a lack of marketability, as applicable) of Athene valued at a weighted average of $49.77 per share
and 1.6 million shares of AAA valued at NAV. (4) Represents Apollo’s general partner investments in the funds it manages (excluding AAA) and other balance sheet investments. (5) 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”). (6) With respect to the reduction of 4.0 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. (7) 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. (8) Average price paid per share reflects total capital used for share repurchases to date divided by the number of shares purchased.
▪ At December 31, 2017, Apollo had $751 million in cash and cash equivalents, $365 million in U.S. Treasury securities, at
fair value, $1.8 billion of investments, and $1.1 billion of net carried interest receivable for a total net value of $4.0 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 $1.8 billion at December 31, 2017, of which $823 million related to Fund
IX(1)
▪ Aggregate share repurchases under previously announced plan totaled $92 million through December 31, 2017, with $158
million remaining authorized under the plan
13
($ in millions) 4Q'17
Cash and cash equivalents $751
U.S. Treasury securities, at fair
value 365
Investments(2) 1,806
Net Carried Interest Receivable
(2) 1,122
Total Net Value $4,044
Debt ($1,362)
Unfunded Future Commitments $1,780
(1) As of December 31, 2017, the remaining investments and escrow cash of Fund VII and Fund VI were valued at 98% and 95% of the fund’s unreturned capital, respectively, which were below the required escrow ratio of 115%. As a result, these funds
are required to place in escrow current and future carried interest income distributions to the general partner until the specified return ratio of 115% is met (at the time of a future distribution) or upon liquidation. As of December 31, 2017, Fund VI
had $167.6 million of gross carried interest income, or $112.4 million net of profit sharing, in escrow. As of December 31, 2017, Fund VII had $106.5 million of gross carried interest income, or $60.6 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 $178.6 million of carried interest receivable, or $129.6 million net of profit sharing, from AAA Investments, L.P. which Apollo may elect to receive in cash or in common shares of Athene Holding (valued at the then fair market
value); and if Apollo elects to receive payment of such carried interest in cash, then common shares of Athene Holding shall be distributed to Apollo and immediately sold by Apollo to pay for such carried interest in cash.
(3) As of December 31, 2017, certain credit funds and certain private equity funds had $56.1 million and $30.1 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 $330.2 million and $131.4 million, respectively, as of December 31, 2017.
(4) There was a corresponding profit sharing payable of $752.3 million as of December 31, 2017, including profit sharing payable related to amounts in escrow and contingent consideration obligations of $92.6 million.
(5) Other includes certain SIAs.
Carried Interest Receivable & Income (Loss) Detail
As of
December 31, 2017 4Q'17 FY'17
($ 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
Unrealized
Carried
Interest
Income (Loss)
Realized
Carried
Interest
Income
Total Carried
Interest Income
(Loss) from
Related Parties
Private Equity
Fund VIII $1,017,000 $259,249 $106,765 $366,014 $693,772 $206,393 $900,165
Fund VII 70,499 (1) 17,765 — 17,765 (4,156) 19,817 15,661
Fund VI 38,758 (1) (9,170) — (9,170) 80,996 — 80,996
Fund IV and V — (3) (696) — (696) (13,775) — (13,775)
ANRP I and II 34,710 (3) 18,906 6,646 25,552 (52,167) 59,519 7,352
AAA / Other(2)(5) 243,809 4,236 6,755 10,991 (62,544) 148,254 85,710
Total Private Equity $1,404,776 $290,290 $120,166 $410,456 $642,126 $433,983 $1,076,109
Total Private Equity, net of profit share 929,220 195,338 74,379 269,717 430,150 242,413 672,563
Credit
Drawdown $323,860 (3) $19,342 $53,908 $73,250 $35,493 $137,786 $173,279
Liquid/Performing 52,803 (10,825) 17,849 7,024 (12,103) 41,521 29,418
Permanent Capital Vehicles 63,588 5,286 5,030 10,316 27,835 17,666 45,501
Total Credit $440,251 $13,803 $76,787 $90,590 $51,225 $196,973 $248,198
Total Credit, net of profit share 174,461 12,943 50,154 63,097 32,957 119,172 152,129
Real Assets
CPI Funds $30 ($300) $277 ($23) ($310) $277 ($33)
U.S. RE Fund I and II 18,311 (1,698) 3,814 2,116 (2,968) 11,925 8,957
Other(5) 10,469 (1,149) 1,754 605 (1,508) 5,867 4,359
Total Real Assets $28,810 ($3,147) $5,845 $2,698 ($4,786) $18,069 $13,283
Total Real Assets, net of profit share 17,882 (2,068) 2,904 836 (859) 8,600 7,741
Total $1,873,837 $300,946 $202,798 $503,744 $688,565 $649,025 $1,337,590
Total, net of profit share $1,121,563 (4) $206,213 $127,437 $333,650 $462,248 $370,185 $832,433
14
Permanent Capital AUM Supplemental Information
Permanent Capital Vehicles
2010 2012 2014 2016 2017
Period Ending
($ in millions, except where noted) 4Q'17
Athene(2) $76,910
MidCap 8,138
Athora(2) 7,910
Apollo Investment Corp (AINV)(3) 4,476
Apollo Commercial Real Estate Finance (ARI)(4) 4,151
Apollo Senior Floating Rate Fund (AFT) 428
Apollo Tactical Income Fund (AIF) 390
Total AUM in Permanent Capital Vehicles $102,403
(1) The investment management arrangements of the Permanent Capital Vehicles that Apollo manages vary in duration and may be terminated under certain circumstances. Refer to page 35 of this presentation for a definition of Permanent
Capital Vehicles and additional information regarding the circumstances under which the investment management arrangements of the Permanent Capital Vehicles may be terminated.
(2) See page 16 for additional information regarding assets for which Apollo manages or provides investment advisory services through accounts owned by or related to Athene and Athora as of December 31, 2017.
(3) Amounts are as of September 30, 2017. 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 $1.8 billion of AUM related to a
non-traded business development company.
(4) Amounts are as of September 30, 2017. Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained on ARI’s website is not part of this presentation.
▪ As of December 31, 2017, Apollo had $102.4 billion of AUM across seven Permanent Capital Vehicles(1)
▪ Apollo generated $486.0 million of fee related revenue from Permanent Capital Vehicles during the year ended
December 31, 2017, representing 40% of total fee related revenue
▪ The compound annualized growth rate (“CAGR”) of permanent capital AUM since 2010 was 47% as of December 31,
2017. Apollo will continue to seek to grow its base of permanent capital opportunistically
$25
$72
$7
$102
($ in billions)
15
$87
2010 2012 2014 2016 2017
$5
$8
Athene and Athora AUM Sub-Advised AUM by Asset Category
Athene and Athora
($ in billions) 4Q'17
Private Equity $1.1
Credit $12.3
Liquid/Performing 11.0
Drawdown 1.3
Real Assets $5.0
Real Estate Debt 4.5
Real Estate Equity 0.5
Total $18.4
▪ Through its subsidiaries, Apollo managed or advised $84.8 billion of combined AUM in accounts owned by or related to
Athene and Athora(1) as of December 31, 2017
▪ Of the total Athene and Athora AUM, $18.4 billion, or 22%, was either sub-advised by Apollo or invested in funds and
investment vehicles managed by Apollo
▪ During the quarter, $1.2 billion of Athene and Athora AUM moved from non-sub-advised to sub-advised by Apollo, bringing
the total amount of new sub-advised AUM for the year ended December 31, 2017 to $4.0 billion
▪ Apollo will continue to seek attractive investment opportunities that are consistent with Athene’s investment objectives
($ in billions)
16
Athene AUM
$77
$66
$60
$16 $2
Athora AUM
(1) References to AGER Bermuda Holding Ltd. (“AGER”) in past presentations have been renamed Athora. As of December 31, 2017, AUM relating to Athora is comprised of $5.3 billion of AUM of Athene's German group companies, for
which Athora is the holding company, and $2.6 billion of AUM in connection with its capital raise. On January 1, 2018, Athora announced its deconsolidation from Athene. For purposes of this presentation, AUM related to Athene
does not include AUM related to Athora.
Appendix
($ in thousands) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Total Revenues (GAAP) $685,380 $643,551 $432,872 $664,232 $869,518 $1,970,384 $2,610,173
Equity awards granted by unconsolidated related
parties and reimbursable expenses (22,638) (18,223) (15,179) (19,832) (22,706) (73,913) (75,940)
Adjustments related to consolidated funds and
VIEs 2,677 798 1,110 817 571 5,477 3,296
Other 187 — — — — 8,702 —
Total Segment Revenues(1) $665,606 $626,126 $418,803 $645,217 $847,383 $1,910,650 $2,537,529
Total Expenses (GAAP) $398,364 $345,988 $264,526 $357,483 $392,052 $1,165,918 $1,360,049
Equity awards granted by unconsolidated related
parties and reimbursable expenses (22,673) (18,223) (15,179) (19,832) (22,706) (75,653) (75,940)
Transaction-related compensation charges (29,494) 2,683 (1,549) (7,543) (5,760) (46,293) (12,169)
Reclassification of interest expense(1) (12,977) (12,999) (13,195) (13,302) (13,377) (43,482) (52,873)
Amortization of transaction-related intangibles (2,199) (1,872) (1,538) (971) (946) (8,807) (5,327)
Other (788) — (5) — 3 (752) (2)
Total Segment Expenses(1) $330,233 $315,577 $233,060 $315,835 $349,266 $990,931 $1,213,738
Total Other Income, net (GAAP) $135,530 $96,628 $23,819 $144,156 $254,857 $256,548 $519,460
Reclassification of interest expense(2) (12,977) (12,999) (13,195) (13,302) (13,377) (43,482) (52,873)
Adjustments related to consolidated funds and
VIEs (1,905) (3,316) (4,890) (227) 657 (3,982) (7,776)
Gain from remeasurement of tax receivable
agreement liability — — — — (200,240) — (200,240)
Other (1,252) 67 (201) 113 (13) (9,072) (34)
Total Segment Other Income(1) $119,396 $80,380 $5,533 $130,740 $41,884 $200,012 $258,537
(1) For details of Total Segment Revenues, Total Segment Expenses and Total Segment Other Income, refer to slide 19.
(2) For EI presentation purposes, interest income is presented net of interest expense as a component of other income
Reconciliation of GAAP to Non-GAAP Measures
18
($ in thousands) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Total Segment Revenues:
Management fees from related parties $246,598 $252,053 $266,908 $282,434 $280,920 $977,649 $1,082,315
Advisory and transaction fees from related parties, net 43,966 15,067 23,629 16,209 62,719 147,115 117,624
Carried interest income (loss) from related parties:
Unrealized 227,901 172,545 (70,525) 285,599 300,946 510,999 688,565
Realized 147,141 186,461 198,791 60,975 202,798 274,887 649,025
Total Carried Interest Income from Related Parties 375,042 359,006 128,266 346,574 503,744 785,886 1,337,590
Total Segment Revenues $665,606 $626,126 $418,803 $645,217 $847,383 $1,910,650 $2,537,529
Non-GAAP Measures
19
($ in thousands) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Total Segment Expenses:
Salary, bonus and benefits $93,194 $94,721 $98,560 $101,007 $99,867 $366,890 $394,155
Equity-based compensation 15,872 16,745 17,566 17,058 16,505 64,468 67,874
Profit sharing expense:
Unrealized 90,228 59,265 (22,126) 94,446 94,734 179,857 226,319
Realized 58,391 88,723 79,083 35,673 75,359 136,793 278,838
Realized: Equity-based — 287 1,044 1,326 1,403 — 4,060
Total Profit Sharing Expense 148,619 148,275 58,001 131,445 171,496 316,650 509,217
Non-compensation expenses:
General, administrative and other 52,658 53,932 53,674 60,928 60,045 218,490 228,579
Placement fees 19,890 1,904 5,259 5,397 1,353 24,433 13,913
Total Non-Compensation Expenses 72,548 55,836 58,933 66,325 61,398 242,923 242,492
Total Segment Expenses $330,233 $315,577 $233,060 $315,835 $349,266 $990,931 $1,213,738
($ in thousands) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Total Segment Other Income:
Income from equity method investments $38,815 $39,214 $17,219 $48,014 $58,504 $102,581 $162,951
Net gains (losses) from investment activities 89,247 34,490 (399) 68,529 (7,846) 138,608 94,774
Net interest loss (11,714) (11,988) (12,067) (11,509) (9,420) (39,019) (44,984)
Other income (loss), net 3,048 18,664 780 25,706 646 (2,158) 45,796
Total Segment Other Income $119,396 $80,380 $5,533 $130,740 $41,884 $200,012 $258,537
▪ The following table sets forth our total segment revenues for the combined segments
▪ The following table sets forth our total segment expenses for the combined segments
▪ The following table sets forth our total segment other income for the combined segments
($ in thousands, except where noted) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Management fees from related parties $79,014 $77,398 $77,275 $76,079 $75,982 $321,995 $306,734
Advisory and transaction fees from related parties, net 41,060 11,772 19,302 10,572 42,417 128,675 84,063
Carried interest income (loss) from related parties:
Unrealized 232,278 163,619 (98,372) 286,589 290,290 368,807 642,126
Realized 72,182 155,461 136,497 21,859 120,166 82,292 433,983
Total Carried Interest Income from Related Parties 304,460 319,080 38,125 308,448 410,456 451,099 1,076,109
Total Revenues 424,534 408,250 134,702 395,099 528,855 901,769 1,466,906
Salary, bonus and benefits 28,293 31,469 30,294 31,467 29,865 124,463 123,095
Equity-based compensation 6,754 7,095 7,704 6,335 6,382 27,549 27,516
Profit sharing expense:
Unrealized 85,240 55,016 (34,983) 96,992 94,951 114,643 211,976
Realized 36,495 75,252 53,137 17,394 45,786 43,893 191,569
Realized: Equity-based — — 462 808 914 — 2,184
Total Profit Sharing Expense 121,735 130,268 18,616 115,194 141,651 158,536 405,729
Non-compensation expenses:
General, administrative and other 16,923 17,360 16,617 19,699 14,828 71,323 68,504
Placement fees (112) 134 1,341 2,257 51 2,297 3,783
Total Non-Compensation Expenses 16,811 17,494 17,958 21,956 14,879 73,620 72,287
Total Expenses 173,593 186,326 74,572 174,952 192,777 384,168 628,627
Income from equity method investments 25,970 31,728 10,348 39,875 50,425 66,281 132,376
Net gains (losses) from investment activities 7,837 3,396 (100) 7,959 (1,603) 11,379 9,652
Net interest loss (4,319) (4,242) (4,336) (4,374) (3,645) (14,187) (16,597)
Other income, net 1,330 17,790 781 7,344 384 1,650 26,299
Other Income 30,818 48,672 6,693 50,804 45,561 65,123 151,730
Economic Income(1) $281,759 $270,596 $66,823 $270,951 $381,639 $582,724 $990,009
Fee Related Earnings $75,161 $58,001 $49,095 $40,574 $74,043 $253,098 $221,713
AUM ($ in millions) 43,628 44,573 67,798 70,469 72,432 43,628 72,432
Fee-Generating AUM ($ in millions) 30,722 30,774 30,011 30,067 29,792 30,722 29,792
Private Equity
(1) FY’17 includes $17.5 million in insurance proceeds received in connection with fees and expenses incurred relating to a legal proceeding, which was recorded in Other income (loss).
20
($ in thousands, except where noted) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Management fees from related parties $151,560 $158,342 $169,856 $187,885 $186,108 $596,709 $702,191
Advisory and transaction fees from related parties, net 2,475 2,556 3,709 4,219 20,249 12,533 30,733
Carried interest income (loss) from related parties:
Unrealized (13,446) 6,322 26,921 4,179 13,803 137,274 51,225
Realized 74,331 30,936 57,119 32,131 76,787 180,029 196,973
Total Carried Interest Income from Related Parties 60,885 37,258 84,040 36,310 90,590 317,303 248,198
Total Revenues 214,920 198,156 257,605 228,414 296,947 926,545 981,122
Salary, bonus and benefits 57,792 54,882 59,244 59,027 58,439 209,256 231,592
Equity-based compensation 8,491 9,102 9,228 9,925 9,198 34,185 37,453
Profit sharing expense:
Unrealized 1,386 2,215 12,927 2,266 860 63,012 18,268
Realized 21,951 13,445 23,080 14,643 26,633 84,715 77,801
Realized: Equity-based — 287 582 518 489 — 1,876
Total Profit Sharing Expense 23,337 15,947 36,589 17,427 27,982 147,727 97,945
Non-compensation expenses:
General, administrative and other 30,446 32,090 31,760 35,709 39,815 125,639 139,374
Placement fees 19,934 1,770 3,918 3,140 1,302 22,047 10,130
Total Non-Compensation Expenses 50,380 33,860 35,678 38,849 41,117 147,686 149,504
Total Expenses 140,000 113,791 140,739 125,228 136,736 538,854 516,494
Income from equity method investments 11,466 6,483 5,856 8,222 7,157 33,290 27,718
Net gains (losses) from investment activities 81,410 31,094 (299) 60,570 (6,230) 127,229 85,135
Net interest loss (6,127) (6,522) (6,484) (5,972) (4,731) (20,669) (23,709)
Other income (loss), net 1,012 811 (241) 16,318 149 (4,500) 17,037
Other Income (Loss) 87,761 31,866 (1,168) 79,138 (3,655) 135,350 106,181
Non-Controlling Interest (2,394) (934) (559) (1,751) (1,135) (7,464) (4,379)
Economic Income(1) $160,287 $115,297 $115,139 $180,573 $155,421 $515,577 $566,430
Fee Related Earnings $51,929 $72,212 $85,052 $115,716 $111,211 $266,340 $384,191
AUM ($ in millions) 136,607 140,932 151,033 157,925 164,113 136,607 164,113
Fee-Generating AUM ($ in millions) 111,781 114,914 121,271 126,907 130,150 111,781 130,150
Credit
21
(1) FY’16 includes a $7.7 million reversal of previously accrued carried interest income.
($ in thousands, except where noted) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Management fees from related parties $16,024 $16,313 $19,777 $18,470 $18,830 $58,945 $73,390
Advisory and transaction fees from related parties, net 431 739 618 1,418 53 5,907 2,828
Carried interest income (loss) from related parties:
Unrealized 9,069 2,604 926 (5,169) (3,147) 4,918 (4,786)
Realized 628 64 5,175 6,985 5,845 12,566 18,069
Total Carried Interest Income from Related Parties 9,697 2,668 6,101 1,816 2,698 17,484 13,283
Total Revenues 26,152 19,720 26,496 21,704 21,581 82,336 89,501
Salary, bonus and benefits 7,109 8,370 9,022 10,513 11,563 33,171 39,468
Equity-based compensation 627 548 634 798 925 2,734 2,905
Profit sharing expense:
Unrealized 3,602 2,034 (70) (4,812) (1,077) 2,202 (3,925)
Realized (55) 26 2,866 3,636 2,940 8,185 9,468
Total Profit Sharing Expense 3,547 2,060 2,796 (1,176) 1,863 10,387 5,543
Non-compensation expenses:
General, administrative and other 5,289 4,482 5,297 5,520 5,402 21,528 20,701
Placement fees 68 — — — — 89 —
Total Non-Compensation Expenses 5,357 4,482 5,297 5,520 5,402 21,617 20,701
Total Expenses 16,640 15,460 17,749 15,655 19,753 67,909 68,617
Income (loss) from equity method investments 1,379 1,003 1,015 (83) 922 3,010 2,857
Net losses from investment activities — — — — (13) — (13)
Net interest loss (1,268) (1,224) (1,247) (1,163) (1,044) (4,163) (4,678)
Other income, net 706 63 240 2,044 113 692 2,460
Other Income (Loss) 817 (158) 8 798 (22) (461) 626
Economic Income $10,329 $4,102 $8,755 $6,847 $1,806 $13,966 $21,510
Fee Related Earnings $4,375 $4,262 $6,317 $5,899 $2,031 $10,436 $18,509
AUM ($ in millions) 11,453 11,961 13,009 13,171 12,383 11,453 12,383
Fee-Generating AUM ($ in millions) 8,295 8,466 9,672 9,284 9,023 8,295 9,023
Real Assets
22
($ in thousands, except share data) 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Net Income Attributable to Apollo Global Management, LLC Class A
Shareholders $166,967 $145,196 $86,908 $198,569 $184,893 $402,850 $615,566
Distributions declared on Class A shares (64,911) (84,215) (94,451) (100,641) (75,571) (230,713) (354,878)
Distribution on participating securities (2,103) (2,859) (3,295) (3,265) (2,403) (8,396) (11,822)
Earnings allocable to participating securities (3,337) (2,264) — (3,218) (3,599) (6,430) (8,828)
Undistributed income (loss) attributable to Class A shareholders: Basic $96,616 $55,858 ($10,838) $91,445 $103,320 $157,311 $240,038
GAAP weighted average number of Class A shares outstanding: Basic 185,146,949 186,537,367 190,591,756 192,882,082 193,609,614 183,998,080 190,931,743
GAAP Net Income per Class A Share under the Two-Class Method: Basic $0.87 $0.75 $0.44 $1.00 $0.92 $2.11 $3.12
Distributed Income $0.35 $0.45 $0.49 $0.52 $0.39 $1.25 $1.85
Undistributed Income (Loss) $0.52 $0.30 ($0.05) $0.48 $0.53 $0.86 $1.27
Net Income Attributable to Apollo Global Management, LLC Class A
Shareholders $166,967 $145,196 $86,908 $198,569 $184,893 $402,850 $615,566
Net Income Attributable to Apollo Global Management, LLC Class A
Shareholders to Income Before Income Tax Provision Differences(1) 255,579 248,995 105,257 252,336 547,430 658,164 1,154,018
Income Before Income Tax Provision $422,546 $394,191 $192,165 $450,905 $732,323 $1,061,014 $1,769,584
Income Before Income Tax Provision to Economic Income Differences(1) 29,829 (4,196) (1,448) 7,466 (193,457) 51,253 (191,635)
Economic Income $452,375 $389,995 $190,717 $458,371 $538,866 $1,112,267 $1,577,949
Income tax provision on Economic Income (58,269) (58,372) (2,397) (22,356) (44,155) (165,522) (127,280)
Preferred distributions — — (4,772) (4,383) (4,383) — (13,538)
Economic Net Income $394,106 $331,623 $183,548 $431,632 $490,328 $946,745 $1,437,131
Weighted Average Economic Net Income Shares Outstanding(2) 401,371,668 403,132,323 402,955,548 403,015,923 403,097,024 401,464,645 403,048,568
Economic Net Income per Share $0.98 $0.82 $0.46 $1.07 $1.22 $2.36 $3.57
Economic Net Income to Fee Related Earnings Differences(1) (262,641) (197,148) (43,084) (269,443) (303,043) (416,871) (812,718)
Fee Related Earnings $131,465 $134,475 $140,464 $162,189 $187,285 $529,874 $624,413
Distributable Earnings Shares Outstanding 409,974,049 409,150,111 409,441,046 409,232,208 409,373,371 409,974,049 409,373,371
Fee Related Earnings per Share $0.32 $0.33 $0.34 $0.40 $0.46 $1.29 $1.53
Fee Related Earnings to Distributable Earnings Differences(1) 94,761 105,130 117,242 22,942 140,275 118,058 385,589
Distributable Earnings $226,226 $239,605 $257,706 $185,131 $327,560 $647,932 $1,010,002
Taxes and Related Payables (289) (6,348) (6,724) (7,272) (5,993) (9,635) (26,337)
Preferred distributions — — (4,772) (4,383) (4,383) — (13,538)
Distributable Earnings After Taxes and Related Payables $225,937 $233,257 $246,210 $173,476 $317,184 $638,297 $970,127
Distributable Earnings Shares Outstanding(2) 409,974,049 409,150,111 409,441,046 409,232,208 409,373,371 409,974,049 409,373,371
Distributable Earnings per Share of Common & Equivalent $0.55 $0.57 $0.60 $0.42 $0.77 $1.56 $2.37
(1) See page 5 for reconciliation of Net Income Attributable to Apollo Global Management, LLC Class A Shareholders, Income Before Income Tax (Provision) Benefit, Economic Net Income, Fee Related Earnings 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
(1) Represents carried interest income from a publicly traded business development company we manage.
(2) FY’17 includes $19.0 million in proceeds received in connection with the Company’s early termination of a lease and $17.5 million in insurance proceeds received in connection with fees and expenses relating to a legal proceeding.
The lease termination and insurance proceeds were recorded in Other income (loss).
4Q'17 YTD’17
($ 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 $280,920 $1,082,315
Advisory and transaction fees from related parties, net 62,719 117,624
Carried interest income from related parties(1) 5,030 17,666
Salary, bonus and benefits (99,867) (394,155)
Non-compensation expenses (61,398) (242,492)
Other income attributable to Fee Related Earnings(2) 1,016 47,834
Non-Controlling Interest (1,135) (4,379)
Fee Related Earnings $187,285 $0.46 $624,413 $1.53
Net realized carried interest income 122,409 352,521
Non-cash revenues (842) (3,369)
Realized income from equity method investments 25,809 68,242
Net interest loss (9,420) (44,984)
Depreciation and amortization 2,319 13,179
Taxes and related payables (5,993) (26,337)
Preferred distributions (4,383) (13,538)
Distributable Earnings After Taxes and Related Payables $317,184 $0.77 $970,127 $2.37
Taxes and related payables 5,993 26,337
Net unrealized carried interest income 206,212 462,246
Non-cash revenues 842 3,369
Unrealized income from equity method investments 32,695 94,709
Unrealized (gains) losses from investment activities (7,846) 94,774
Equity-based compensation (16,505) (67,874)
Equity-based profit sharing expense (1,403) (4,060)
Depreciation and amortization and other (2,689) (15,217)
Income tax provision on Economic Income (44,155) (127,280)
Economic Net Income $490,328 $1.22 $1,437,131 $3.57
Walkdown of Non-GAAP Measures
24
($ in thousands, except per share data) 4Q'16 3Q'17 4Q'17 FY'16 FY'17
Distributable Earnings $226,226 $185,131 $327,560 $647,932 $1,010,002
Taxes and Related Payables (289) (7,272) (5,993) (9,635) (26,337)
Preferred Distributions — (4,383) (4,383) — (13,538)
DE After Taxes and Related Payables $225,937 $173,476 $317,184 $638,297 $970,127
Add Back: Taxes & Related Payables Attributable to Common &
Equivalents 101 4,706 4,122 110 18,213
DE Before Certain Payables(1) 226,038 178,182 321,306 638,407 988,340
Percent to Common & Equivalents 47% 49% 49% 47% 49%
DE Before Other Payables Attributable to Common & Equivalents 107,246 87,078 158,257 302,899 486,799
Less: Taxes & Related Payables Attributable to Common &
Equivalents (101) (4,706) (4,122) (110) (18,213)
DE Attributable to Common & Equivalents $107,145 $82,372 $154,135 $302,789 $468,586
Per Share of Common & Equivalent(2) $0.55 $0.42 $0.77 $1.56 $2.37
Retained Capital per Share of Common & Equivalent(2)(3) (0.10) (0.03) (0.11) (0.14) (0.31)
Net Distribution per Share of Common & Equivalent(2) $0.45 $0.39 $0.66 $1.42 $2.06
Payout Ratio 82% 93% 86% 91% 87%
Shareholder Distribution
▪ Generated $0.77 of Distributable Earnings After Taxes and Related Payables per Share of Common & Equivalent
during the quarter
▪ Apollo declared a quarterly distribution of $0.66 per Class A share to holders of record as of February 21, 2018,
which is payable on February 28, 2018
(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, Apollo Operating Group Units 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.
25
4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 FY'16 FY'17
Total GAAP Weighted-Average Class A Shares
Outstanding: Basic 185,146,949 186,537,367 190,591,756 192,882,082 193,609,614 183,998,080 190,931,743
Non-GAAP Adjustments:
Apollo Operating Group Units 215,569,749 215,286,909 211,895,190 209,522,593 208,827,733 215,917,462 211,360,975
RSUs 581,473 1,233,685 224,100 210,642 180,636 1,466,803 454,929
Restricted shares 73,497 74,362 244,502 400,606 479,041 82,300 300,921
Weighted-Average Economic Net Income Shares
Outstanding 401,371,668 403,132,323 402,955,548 403,015,923 403,097,024 401,464,645 403,048,568
4Q'16 1Q'17 2Q'17 3Q'17 4Q'17
Total GAAP Class A Shares Outstanding 185,460,294 187,644,092 192,756,044 193,540,853 195,267,669
Non-GAAP Adjustments:
Apollo Operating Group Units 215,457,239 214,957,239 210,024,821 209,239,821 207,739,821
Vested RSUs 2,752,455 425,736 415,218 326,344 2,802,277
Economic Net Income Shares Outstanding 403,669,988 403,027,067 403,196,083 403,107,018 405,809,767
Unvested RSUs Eligible for Distribution Equivalents 6,304,061 6,123,044 6,244,963 6,125,190 3,563,604
Distributable Earnings Shares Outstanding 409,974,049 409,150,111 409,441,046 409,232,208 409,373,371
Share Reconciliation
26
Unaudited Supplemental Presentation of Statement of Financial Condition
As of December 31, 2017
($ in thousands)
Apollo Global
Management, LLC and
Consolidated Subsidiaries(1)
Consolidated Funds and
VIEs Eliminations Consolidated
Assets:
Cash and cash equivalents $751,252 $— $— $751,252
Cash and cash equivalents held at consolidated funds — 21 — 21
Restricted cash 3,875 — — 3,875
U.S. Treasury securities, at fair value 364,649 — — 364,649
Investments 1,806,377 854 (76,327) 1,730,904
Assets of consolidated variable interest entities — 1,328,908 (322) 1,328,586
Carried interest receivable 1,873,841 — (1,735) 1,872,106
Due from related parties 263,572 — (984) 262,588
Deferred tax assets 337,638 — — 337,638
Other assets 232,045 5 (293) 231,757
Goodwill 88,852 — — 88,852
Intangible assets, net 18,842 — — 18,842
Total Assets $5,740,943 $1,329,788 ($79,661) $6,991,070
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable and accrued expenses $68,873 $— $— $68,873
Accrued compensation and benefits 62,474 — — 62,474
Deferred revenue 128,146 — — 128,146
Due to related parties 428,013 — — 428,013
Profit sharing payable 752,276 — — 752,276
Debt 1,362,402 — — 1,362,402
Liabilities of consolidated variable interest entities — 1,167,905 (50,184) 1,117,721
Other liabilities 173,369 — — 173,369
Total Liabilities 2,975,553 1,167,905 (50,184) 4,093,274
Shareholders’ Equity:
Apollo Global Management, LLC shareholders’ equity:
Preferred shares 264,398 — — 264,398
Additional paid in capital 1,579,797 — — 1,579,797
Accumulated deficit (379,461) 9,037 (9,036) (379,460)
Accumulated other comprehensive income (loss) (1,878) (381) 450 (1,809)
Total Apollo Global Management, LLC shareholders’ equity 1,462,856 8,656 (8,586) 1,462,926
Non-Controlling Interests in consolidated entities 7,750 153,227 (20,891) 140,086
Non-Controlling Interests in Apollo Operating Group 1,294,784 — — 1,294,784
Total Shareholders’ Equity 2,765,390 161,883 (29,477) 2,897,796
Total Liabilities and Shareholders’ Equity $5,740,943 $1,329,788 ($79,661) $6,991,070
(1) Represents amounts of the total combined segments.
27
Investment Records as of December 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
$200 million of AUM and do not predominantly invest in other Apollo funds or SIAs. Footnotes to the above table appear on page 29.
As of December 31, 2017
($ 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 IX N/A $24,729 $24,729 $— $— $— $— $— —% —%
Fund VIII 2013 23,293 18,377 13,106 3,466 11,001 17,211 20,677 33 23
Fund VII 2008 5,700 14,677 16,198 30,201 3,390 3,413 33,614 34 26
Fund VI 2006 3,222 10,136 12,457 18,646 2,861 2,598 21,244 12 9
Fund V 2001 292 3,742 5,192 12,711 124 36 12,747 61 44
Funds I, II, III, IV & MIA(3) Various 14 7,320 8,753 17,400 — — 17,400 39 26
Traditional Private Equity Funds(4) $57,250 $78,981 $55,706 $82,424 $17,376 $23,258 $105,682 39% 25%
ANRP II 2016 3,530 3,454 1,139 574 878 1,134 1,708 54 31
ANRP I 2012 1,179 1,323 1,098 674 726 894 1,568 13 9
AION 2013 747 826 407 191 261 341 532 17 6
Total Private Equity(9) $62,706 $84,584 $58,350 $83,863 $19,241 $25,627 $109,490
Credit:
Credit Opportunity Funds
COF III 2014 $3,006 $3,426 $5,007 $3,088 $2,162 $2,000 $5,088 1%
COF I & II(14) 2008 402 3,068 3,787 7,445 95 122 7,567 23 20
European Principal Finance Funds
EPF III(5) 2017 4,527 4,613 337 — 337 344 344 NM(2) NM(2)
EPF I & II(5)(14) Various 3,432 5,065 5,825 6,368 1,861 2,515 8,883 21 14
Structured Credit Funds
FCI III 2017 2,520 1,906 1,562 220 1,434 1,688 1,908 NM(2) NM(2)
FCI I & II(14) Various 3,591 2,114 3,604 2,071 2,544 2,608 4,679 14 10
SCRF IV(12) 2017 1,373 1,587 527 21 405 502 523 NM(2) NM(2)
SCRF I, II & III(12)(14) Various 5 1,460 2,817 3,313 — — 3,313 22 17
Other Drawdown Funds & SIAs(6) Various 6,932 9,514 9,412 9,063 2,527 2,407 11,470 9 7
Total Credit(10) $25,788 $32,753 $32,878 $31,589 $11,365 $12,186 $43,775
Real Assets:
U.S. RE Fund II(7) 2016 $915 $863 $552 $207 $447 $529 $736 20% 18%
U.S. RE Fund I(7) 2012 443 654 636 659 242 282 941 15 12
AGRE Debt Fund I(13) 2011 1,173 2,091 2,087 1,457 871 835 2,292 9 7
CPI Funds(8) Various 409 5,049 2,594 2,663 259 68 2,731 14 11
Asia RE Fund(7) 2017 592 588 244 15 235 256 271 NM(2) NM(2)
Total Real Assets(11) $3,532 $9,245 $6,113 $5,001 $2,054 $1,970 $6,971
Drawdown
28
(1)%
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 $1.20 as of December 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 $1.20 as of December 31, 2017. Additionally, certain SIAs totaling $1.7 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 $10.3 billion of Total Invested
Capital through December 31, 2017.
(7) U.S. RE Fund I, U.S. RE Fund II and Asia RE Fund had $159 million, $390 million and $245 million of co-investment commitments raised as of December 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 $1.35 as of December 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
December 31, 2017 was (2)%. 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) Private equity co-investment vehicles, and funds with AUM less than $500 million have been excluded. These co-investment vehicles and funds had $9.7 billion of aggregate AUM as of December 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 $2.7 billion of aggregate AUM as of December 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 $4.5 billion of aggregate AUM as of December 31, 2017.
(12) Remaining cost for certain of our credit funds may include physical cash called, invested or reserved for certain levered investments.
(13) The investor in this U.S. Dollar denominated fund has chosen to make contributions and receive distributions in the local currency of each underlying investment. As a result, Apollo has not
entered into foreign currency hedges for this fund and the returns presented include the impact of foreign currency gains or losses. The investor’s gross and net IRR, before the impact of foreign
currency gains or losses, from the fund’s inception to December 31, 2017 was 10% and 9%, respectively.
(14) The individual gross and net IRRs for the following funds are: COF I (gross: 30%, net: 27%), COF II (gross: 14%, net: 11%), EPF I (gross: 23%, net: 17%), EPF II (gross: 19%, net: 12%),
FCI I (gross: 15%, net: 11%), FCI II (gross: 13%, net: 9%), SCRF I (gross: 33%, net: 26%), SCRF II (gross: 15%, net: 12%) and SCRF III (gross: 17%, net: 13%).
29
Investment Records as of December 31, 2017
Permanent Capital Vehicles
Total Returns(3)
($ in millions)
IPO Year(4) Total AUM 4Q'17 FY'17 4Q'16 FY'16
Credit:
MidCap(5) N/A $8,138 3 % 12 % 3 % 10 %
AIF 2013 390 (1) 10 3 23
AFT 2011 428 (1) — 5 24
AINV(6) 2004 4,476 (5) (7) 4 26
Real Assets:
ARI(7) 2009 4,151 4 % 22 % 4 % 8 %
Total $17,583
Liquid/Performing
Net Returns
($ in millions)
Vintage Year Total AUM 4Q'17 FY'17 4Q'16 FY'16
Credit:
Hedge Funds(1) Various $6,643 2% 5% 2% 11%
CLOs(2) Various 12,218 1 4 2 9
SIAs / Other Various 24,445 1 7 1 9
Total $43,306
Note: The above tables summarize 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, and Athora Non-Sub-Advised,
which refers to that portion of Athora’s assets which are managed or advised by Apollo but not sub-advised by Apollo or invested in funds and or investment vehicles managed by Apollo). All amounts are as of December 31, 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. and Apollo Credit Master Fund Ltd.
(2) CLO returns are calculated based on gross return on invested assets, which excludes cash. Included within Total AUM of CLOs is $1.3 billion of AUM related to a standalone, self-
managed asset management business established in connection with risk-retention rules, from which Apollo earns investment-related service fees, but for which Apollo does not
provide management or advisory services. CLO returns exclude performance related to this AUM.
(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%,
8%, 2% and 6% for 4Q'17, FY’17, 4Q'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 September 30, 2017 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. Included within Total AUM of AINV is $1.8 billion of AUM related to a non-traded business development company from which Apollo
earns investment-related service fees, but for which Apollo does not provide management or advisory services. Net returns exclude performance related to this AUM.
(7) Amounts are as of September 30, 2017. 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.
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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 assets 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, EI
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. We believe the exclusion of the non-
cash charges related to the 2007 Reorganization for equity-based compensation provides investors with a meaningful indication of our performance because these charges relate to the equity
portion of our capital structure and not our core operating performance.
EI also excludes impacts of the remeasurement of the tax receivable agreement which arises from changes in the associated deferred tax balance, including the impacts related to the Tax Cuts
& Jobs Act enacted on December 22, 2017 (the “TCJA”).
▪ 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. ENI excludes the impacts of the remeasurement of deferred tax assets and liabilities which
arises from changes in estimated future tax rates, including impacts related to the TCJA. 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. ENI is net of
preferred distributions, if any, to Series A Preferred shareholders.
Management believes that excluding the remeasurement of the tax receivable agreement and deferred taxes from EI and ENI, respectively, is meaningful as it increases comparability between
periods. Remeasurement of the tax receivable agreement and deferred taxes are estimates and may change due to changes in interpretations and assumptions based on additional guidance
that may be issued pertaining to the TCJA.
▪ 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, 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, (ii) other income (loss), (iii) realized carried interest income, and (iv) realized investment income, less (x) compensation expense, excluding the expense related
to equity-based awards, (y) realized profit sharing expense, and (z) 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. DE After Taxes and Related Payables is net of preferred
distributions, if any, to Series A Preferred shareholders.
32
Non-GAAP Financial Information & Definitions Cont’d
▪ “Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related 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 assets 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, advisory, or certain other investment-related
services, plus unused credit facilities, including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification or other conditions 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 nominal or zero fees. Our AUM measure also includes assets for which we do not have investment discretion,
including certain assets for which we earn only investment-related service fees, rather than management or advisory fees. Our definition of AUM is not based on any definition of Assets Under
Management contained in our operating agreement or in any of our Apollo fund management agreements. We consider multiple factors for determining what should be included in our definition of
AUM. Such factors include but are not limited to (1) our ability to influence the investment decisions for existing and available assets; (2) our ability to generate income from the underlying assets in
our funds; and (3) the AUM measures that we use internally or believe are used by other investment managers. Given the differences in the investment strategies and structures among other alternative
investment managers, our calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures
presented by other investment managers. 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 of the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related services and on which
we earn management fees, monitoring fees or other investment-related fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts.
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, advise, or to which we provide certain other investment-related services, 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, advise, or to which we provide certain other investment-related
services 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, advise, or to which we provide certain other investment-related services 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. 33
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, FRE 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 December 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 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 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 assets fund represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund), on the basis of the actual timing of cash inflows and outflows
(for unrealized investments assuming disposition on December 31, 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 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 assets 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 assets 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 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 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 assets fund represents the cumulative cash flows in the fund (and not any one investor in the fund), on the basis of the actual timing of cash inflows received from and outflows paid to investors
of the fund (assuming the ending net asset value as of December 31, 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 assets 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 or Athora, (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 from which Apollo earns certain investment-related service fees. 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.
▪ 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;
▪ “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 fund in a portfolio investment, reduced for any return of capital distributed to date on such portfolio investment.
▪ “Total Invested Capital” refers to the aggregate cash invested by the relevant Apollo fund and includes capitalized costs relating to investment activities, if any, but does not give effect to cash pending investment
or available for reserves.
▪ “Total Value” represents the sum of the total Realized Value and Unrealized Value of investments.
▪ Traditional Private Equity fund appreciation (depreciation) refers to gain (loss) and income for the traditional private equity funds (i.e., Funds I-VIII) for the periods presented on a total return basis before
giving effect to fees and expenses. The performance percentage is determined by dividing (a) the change in the fair value of investments over the period presented, minus the change in invested capital over the
period presented, plus the realized value for the period presented, by (b) the beginning unrealized value for the period presented plus the change in invested capital for the period presented. 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, and before the effect of certain taxes. 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, or, for certain funds, the year in which a fund’s investment period commences as per its governing agreements.
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 assets 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