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Apollo Global Management, LLC Reports Second Quarter 2012 Results

Stocks in this article: APO

Combined Segments

Total revenue for Apollo’s Management Business was $235.6 million during the second quarter of 2012, an increase of $79.6 million, or 51%, from the second quarter of 2011. This includes management fee revenues of $156.4 million for the second quarter of 2012, which increased $35.2 million, or 29%, from the second quarter of 2011, and advisory and transaction fee revenue of $70.0 million for the second quarter of 2012, which increased $46.4 million, or 197%, from the second quarter of 2011. The significant increase in advisory and transaction fee revenue during the second quarter of 2012 was primarily driven by net transaction fees earned in connection with the acquisition of EP Energy, a leading North American oil and gas producer, which was acquired by investment funds affiliated with Apollo along with Riverstone Holdings LLC, Access Industries, Inc., Korea National Oil Corporation and other investors.

Apollo’s Incentive Business reported $3.2 million of total carried interest income during the second quarter of 2012, compared to $152.9 million during the second quarter of 2011. These amounts include $56.0 million of realized gains from carried interest income for the second quarter of 2012, compared to $178.7 million for the second quarter of 2011, which was primarily driven by the sale of Hughes Communications Inc., a portfolio company investment in Fund IV that was sold during the second quarter of 2011. The decrease in total carried interest income was also impacted by lower unrealized investment appreciation in Apollo’s private equity funds during the second quarter of 2012 compared to the second quarter of 2011.

Total expenses for Apollo’s Management Business were $158.3 million during the second quarter of 2012, compared to $137.6 million during the second quarter of 2011. Total salary, bonus and benefits expense for Apollo’s Management Business was $74.9 million during the second quarter of 2012, an increase of $10.6 million, or 16%, from the second quarter of 2011. Non-compensation expenses for Apollo’s Management Business were $69.3 million during the second quarter of 2012, an increase of $13.0 million, or 23%, from the second quarter of 2011. The increase in non-compensation expense during the second quarter of 2012 was largely driven by $8.1 million of placement fees incurred in connection with recent fundraising activities, as well as $2.8 million of Stone Tower acquisition costs that are not expected to recur.

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