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Apollo Global Management, LLC Reports Financial Results For The Fourth Quarter And Year Ended December 31, 2012

2012 Schedule K-1 Distribution

The 2012 schedules K-1 will be available on or about March 15, 2013 and can be accessed via www.partnerdatalink.com/Apollo. You can visit this site now to register your email address to be notified when the 2012 schedules K-1 are available to be downloaded. Please note that the income, gain, loss, deduction, or credit reported to you on schedule K-1 is independent of the annual cash generated and the annual cash distributions made by Apollo. As a partnership for U.S. federal income tax purposes, investors in Apollo are required to report their share of the income, gain, loss, deduction, or credit that is allocated to them from Apollo. The U.S. federal taxable income of Apollo is determined by using the applicable U.S. federal income tax rules, and these amounts may vary from year to year depending on the nature of the income of Apollo and the activity of its subsidiaries.

Conference Call

Apollo will host a conference call on Friday, February 8, 2013 at 10:00 a.m. EST. During the call, Marc Spilker, President, Martin Kelly, Chief Financial Officer and Gary Stein, Head of Corporate Communications will review Apollo’s financial results for the fourth quarter and full year of 2012. The conference call may be accessed by dialing (888) 868-4188 (U.S. domestic) or +1 (615) 800-6914 (international), and providing conference call ID 87404740 when prompted by the operator. The number should be dialed at least ten minutes prior to the start of the call. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Investor Relations section of Apollo's website at www.agm.com.

Following the call a replay of the event may be accessed either telephonically or via audio webcast. A telephonic replay of the live broadcast will be available approximately two hours after the live broadcast by dialing (800) 585-8367 (U.S. callers) or +1 (404) 537-3406 (non-U.S. callers), pass code 87404740. To access the audio webcast, please visit Events in the Investor Relations section of Apollo’s website at www.agm.com.

About Apollo

Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $113 billion as of December 31, 2012, in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.

Forward-Looking Statements

This press release may contain forward looking statements that are within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 release, the words “believe,” “anticipate,” “estimate,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are subject to certain risks, uncertainties and assumptions, including risks relating to our dependence on certain key personnel, our ability to raise new private equity, credit or real estate funds, market conditions, generally, our ability to manage our growth, fund performance, changes in our regulatory environment and tax status, the variability of our revenues, net income and cash flow, our use of leverage to finance our businesses and investments by our funds and litigation risks, among others. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in the Company’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 9, 2012, and 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 release 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 release does not constitute an offer of any Apollo fund.

     
APOLLO GLOBAL MANAGEMENT, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(dollars in thousands, except share data)
 
Three Months Ended December 31,
  2012       2011  
Revenues:
Advisory and transaction fees from affiliates $ 37,382 $ 22,144
Management fees from affiliates 162,488 125,556
Carried interest income from affiliates   959,351     498,294  
Total Revenues   1,159,221     645,994  
 
Expenses:
Compensation and benefits:
Equity-based compensation 163,267 290,580
Salary, bonus and benefits 69,908 46,307
Profit sharing expense

365,086

211,984
Incentive fee compensation  

367

    694  
Total Compensation and Benefits 598,628 549,565
Interest expense 8,033 9,851
Professional fees 24,833 21,959
General, administrative and other 21,151 19,883
Placement fees 8,927 806
Occupancy 9,858 10,274
Depreciation and amortization   16,215     6,625  
Total Expenses   687,645     618,963  
 
Other Income:
Net gains from investment activities 138,287 20,580

Net (losses) gains from investment activities of consolidated

variable interest entities

(41,791 ) 24,242
Income from equity method investments 26,982 43,165
Interest and dividend income 2,600 3,191
Other income (loss), net   5,010     (973 )
Total Other Income   131,088     90,205  
Income before income tax provision 602,664 117,236
Income tax provision   (18,283 )   (19,406 )
Net Income 584,381 97,830
Net (income) attributable to Non-Controlling Interests   (412,872 )   (86,897 )

Net Income Attributable to Apollo Global

Management, LLC

$ 171,509   $ 10,933  
 
Distributions Declared per Class A Share $ 0.40   $ 0.20  
 
Net Income Per Class A Share:
Net Income Available to Class A Share – Basic and Diluted $ 1.12   $ 0.05  
Weighted Average Number of Class A Shares – Basic   130,027,037     123,551,847  
Weighted Average Number of Class A Shares – Diluted   132,678,221     123,551,847  
 
         
APOLLO GLOBAL MANAGEMENT, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010
(dollars in thousands, except share data)
 
  2012     2011     2010  
Revenues:
Advisory and transaction fees from affiliates $ 149,544 $ 81,953 $ 79,782
Management fees from affiliates 580,603 487,559 431,096
Carried interest (loss) income from affiliates   2,129,818     (397,880 )   1,599,020  
Total Revenues   2,859,965     171,632     2,109,898  
 
Expenses:
Compensation and benefits:
Equity-based compensation 598,654 1,149,753 1,118,412
Salary, bonus and benefits 274,574 251,095 249,571
Profit sharing expense

871,394

(63,453 ) 555,225
Incentive fee compensation  

739

    3,383     20,142  
Total Compensation and benefits 1,745,361 1,340,778 1,943,350
 
Interest expense 37,116 40,850 35,436
Professional fees 64,682 59,277 61,919
General, administrative and other 87,961 75,558 65,107
Placement fees 22,271 3,911 4,258
Occupancy 37,218 35,816 23,067
Depreciation and amortization   53,236     26,260     24,249  
Total Expenses   2,047,845     1,582,450     2,157,386  
 
Other Income:
Net gains (losses) from investment activities 288,244 (129,827 ) 367,871
Net (losses) gains from investment activities of consolidated variable interest entities (71,704 ) 24,201 48,206
Income from equity method investments 110,173 13,923 69,812
Interest and dividend income 9,693 4,731 1,528
Other income, net   1,964,679     205,520     195,032  
Total Other Income   2,301,085     118,548     682,449  
Income (loss) before income tax provision 3,113,205 (1,292,270 ) 634,961
Income tax provision   (65,410 )   (11,929 )   (91,737 )
Net Income (Loss) 3,047,795 (1,304,199 ) 543,224
Net (income) loss attributable to Non-Controlling Interests   (2,736,838 )   835,373     (448,607 )
Net Income (Loss) Attributable to Apollo Global Management, LLC $ 310,957   $ (468,826 ) $ 94,617  
 
Distributions Declared per Class A Share $ 1.35   $ 0.83   $ 0.21  
 
Net Income (Loss) Per Class A Share:
Net Income (Loss) Per Class A Share – Basic and Diluted $ 2.06   $ (4.18 ) $ 0.83  
Weighted Average Number of Class A Shares – Basic   127,693,489     116,364,110     96,964,769  
Weighted Average Number of Class A Shares – Diluted   129,540,377     116,364,110     96,964,769  
 
       

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except per share data)

 

Summary of Combined Segment Results for Management Business and Incentive Business:

 
Three Months Ended For the Year Ended

March 31, 2011

 

June 30, 2011

 

September 30, 2011

 

December 31, 2011

 

 

March 31, 2012

   

 

June 30, 2012

   

September 30, 2012

 

December 31, 2012

December 31, 2011

 

December 31, 2012

Management Business:
 
Advisory and transaction fees from affiliates $ 19.4 $ 23.6 $ 17.2 $ 22.1 $ 27.3 $ 70.0 $ 15.2 $ 37.5 $ 82.3 $ 150.0
Management fees from affiliates 118.2 121.2 123.0 127.8 130.0 156.4 160.2 176.4 490.2 623.0
Carried interest income from affiliates:
Realized gains   12.5     11.2     11.3     9.5     9.6     9.2     9.7     9.3     44.5     37.8  
Total management business revenues 150.1 156.0 151.5 159.4 166.9 235.6 185.1 223.2 617.0 810.8
 
Equity-based compensation (1) 13.2 17.0 18.0 20.0 18.9 14.1 16.7 19.2 68.2 68.9
Salary, bonus and benefits 72.1 64.3 68.4 46.3 65.1 74.9 64.6 70.0 251.1 274.6
 
Interest expense 10.9 10.3 9.8 9.9 11.4 10.2 7.5 8.0 40.9 37.1
Professional fees 17.1 12.8 6.8 21.6 11.3 16.5 10.9 24.6 58.3 63.3
General, administrative and other 16.2 22.1 16.3 19.4 18.7 23.1 23.9 20.9 74.0 86.6
Placement fees 0.5 0.6 2.0 0.8 0.9 8.1 4.3 9.0 3.9 22.3
Occupancy 7.2 7.9 10.4 10.3 8.7 9.0 9.7 9.8 35.8 37.2
Depreciation and amortization (2)   2.9     2.6     3.0     2.6     2.4     2.4     2.8     2.6     11.1     10.2  
Total non-compensation expenses 54.8 56.3 48.3 64.6 53.4 69.3 59.1 74.9 224.0 256.7
 
Total management business expenses 140.1 137.6 134.7 130.9 137.4 158.3 140.4 164.1 543.3 600.2
 
Other income (loss) 8.3 13.7 (9.5 ) 2.3 7.0 (4.5 ) 11.1 7.4 14.8 21.0
 
Non-controlling interest (3)   (3.6 )   (1.6 )   (4.1 )   (2.8 )   (1.4 )   (2.4 )   (2.7 )   (2.2 )   (12.1 )   (8.7 )
 
Management Business Economic Net Income   14.7     30.5     3.2     28.0     35.1     70.4     53.1     64.3     76.4     222.9  
 
Incentive Business:
 
Carried interest income (loss):
Unrealized gains (losses) 411.4 (25.8 ) (1,683.2 ) 211.0 474.3 (52.8 ) 344.2 400.7 (1,086.6 ) 1,166.4
Realized gains   134.8     178.7     52.9     278.2     149.8     56.0     229.8     561.6     644.6     997.2  
Total carried interest income (loss) 546.2 152.9 (1,630.3 ) 489.2 624.1 3.2 574.0 962.3 (442.0 ) 2,163.6
 
Profit sharing expense:
Unrealized profit sharing expense 167.6 (9.6 ) (582.7 ) 54.1 178.4 (10.8 ) 124.7 133.8 (370.6 ) 426.1
Realized profit sharing expense   49.5     80.4     19.3     157.8     70.7     30.7     112.7     231.3     307.0     445.4  
Total profit sharing expense 217.1 70.8 (563.4 ) 211.9 249.1 19.9 237.4 365.1 (63.6 ) 871.5
 
Incentive fee compensation 10.1 (3.6 ) (3.8 ) 0.7

 

 

0.4 0.3 3.4 0.7
 
Net gains (losses) from investment activities 17.8 2.3 (33.4 ) 7.4 3.4 (13.1 ) 2.1 6.5 (5.9 ) (1.1 )
Income (loss) from equity method investments   25.1     6.8     (65.7 )   44.6     48.5     1.4     42.1     29.2     10.8     121.2  
Other income (loss) 42.9 9.1 (99.1 ) 52.0 51.9 (11.7 ) 44.2 35.7 4.9 120.1
 
Incentive Business Economic Net Income (Loss)   361.9     94.8     (1,162.2 )   328.6     426.9     (28.4 )   380.4     632.6     (376.9 )   1,411.5  
 
Total Economic Net Income (Loss)   376.6     125.3     (1,159.0 )   356.6     462.0     42.0     433.5     696.9     (300.5 )   1,634.4  
 
Income Tax (Provision) Benefit on Economic Net Income (4)   (25.2 )   (7.8 )   66.5     (54.6 )   (39.7 )   (23.3 )   (54.5 )   (41.1 )   (21.1 )   (158.6 )
 
Total Economic Net Income (Loss) After Taxes $ 351.4   $ 117.5   $ (1,092.5 ) $ 302.0   $ 422.3   $ 18.7   $ 379.0   $ 655.8   $ (321.6 ) $ 1,475.8  
Non-GAAP Weighted average diluted shares outstanding (in millions)   353.6     376.0     378.0     379.3     383.6     386.0     386.9     388.3     371.8     386.2  
Total ENI After Taxes per Share $ 0.99   $ 0.31   $ (2.89 ) $ 0.80   $ 1.10   $ 0.05   $ 0.98   $ 1.69   $ (0.86 ) $ 3.82  
 
(1)   The combined amounts relate to restricted share units (“RSUs”) (excluding RSUs granted in connection with the 2007 private placement) and share options. Excludes equity-based compensation expense comprising amortization of Apollo Operating Group (“AOG”) units.
(2) Includes amortization of leasehold improvements.
(3) Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of the credit management companies.
(4) See the definition of ENI after taxes in the non-GAAP financial information and definitions section of this press release.

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except per share data)

       

Private Equity Segment:

 
Three Months Ended For the Year Ended
March 31, 2011   June 30, 2011   September 30, 2011   December 31, 2011   March 31, 2012   June 30, 2012   September 30, 2012   December 31, 2012 December 31, 2011   December 31, 2012
Management Business:
 

Advisory and transaction fees from affiliates

$ 15.1 $ 21.6 $ 14.8 $ 15.4 $ 25.9 $ 65.1 $ 13.3 $ 34.2 $ 66.9 $ 138.5
Management fees from affiliates   65.5   65.4     65.3     67.0     67.0   69.2     68.5   72.3   263.2     277.0
Total management business revenues 80.6 87.0 80.1 82.4 92.9 134.3 81.8 106.5 330.1 415.5
 
Equity-based compensation 7.2 7.5 8.1 9.0 7.8 7.4 7.2 8.8 31.8 31.2
Salary, bonus and benefits 37.8 27.8 32.4 27.1 30.8 37.8 25.7 34.2 125.1 128.5
Other expenses   23.6   26.6     24.8     24.3     20.8   23.9     17.3   21.3   99.3     83.3
Total management business expenses 68.6 61.9 65.3 60.4 59.4 69.1 50.2 64.3 256.2 243.0
 
Other income (loss)   5.1   3.7     (1.0 )   (0.7 )   3.3   (3.2 )   2.9   1.7   7.1     4.7
Management Business Economic Net Income   17.1   28.8     13.8     21.3     36.8   62.0     34.5   43.9   81.0     177.2
 
Incentive Business:
 
Carried interest income (loss):
Unrealized gains (losses) 323.1 (32.4 ) (1,399.1 ) 88.7 326.0 (37.7 ) 152.4 414.2 (1,019.7 ) 854.9
Realized gains   118.6   171.4     40.5     240.0     122.1   43.4     188.2   458.9   570.5     812.6
Total carried interest income (loss) 441.7 139.0 (1,358.6 ) 328.7 448.1 5.7 340.6 873.1 (449.2 ) 1,667.5
 
Profit sharing expense:
Unrealized profit sharing expense 147.1 (17.4 ) (513.1 ) 13.1 153.7 (9.1 ) 70.2 129.2 (370.3 ) 344.0
Realized profit sharing expense   45.1   77.4     15.8     131.6     50.6   22.9     89.6   195.4   269.9     358.5
Total profit sharing expenses 192.2 60.0 (497.3 ) 144.7 204.3 13.8 159.8 324.6 (100.4 ) 702.5
 
Income (losses) from equity method investments   15.8   4.5     (39.4 )   27.1     30.6   1.9     24.9   16.6   8.0     74.1
Total other income (loss) 15.8 4.5 (39.4 ) 27.1 30.6 1.9 24.9 16.6 8.0 74.1
 
Incentive Business Economic Net Income (Loss)   265.3   83.5     (900.7 )   211.1     274.4   (6.2 )   205.7   565.1   (340.8 )   1,039.1
 
Total Economic Net Income (Loss) $ 282.4 $ 112.3   $ (886.9 ) $ 232.4   $ 311.2 $ 55.8   $ 240.2 $ 609.0 $ (259.8 ) $ 1,216.3
 

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except per share data)

       

Credit Segment:

 
Three Months Ended For the Year Ended
March 31, 2011   June 30, 2011   September 30, 2011   December 31, 2011  

 

March 31, 2012

   

 

June 30, 2012

    September 30, 2012   December 31,

2012

December 31, 2011   December 31, 2012
Management Business:
 
Advisory and transaction fees from affiliates $ 4.3 $ 2.0 $ 1.9 $ 6.5 $ 1.4 $ 4.3 $ 1.9 $ 3.2 $ 14.7 $ 10.8
Management fees from affiliates 43.4 46.1 47.2 50.0 52.6 74.3 80.8 92.0 186.7 299.7
Carried interest income from affiliates:
Realized gains   12.5     11.2     11.3     9.5     9.6     9.2     9.7     9.3     44.5     37.8  
Total management business revenues 60.2 59.3 60.4 66.0 63.6 87.8 92.4 104.5 245.9 348.3
 
Equity-based compensation 3.5 6.3 6.4 7.1 8.1 4.3 6.9 7.7 23.3 27.0
Salary, bonus and benefits 24.5 28.6 29.1 10.7 27.6 31.2 31.7 32.3 92.9 122.8
Other expenses   26.0     23.8     17.5     27.7     25.9     39.2     37.4     46.6     95.0     149.1  
Total management business expenses 54.0 58.7 53.0 45.5 61.6 74.7 76.0 86.6 211.2 298.9
 
Other income (loss) 2.7 0.5 (8.3 ) 3.1 2.9 (0.7 ) 7.5 5.3 (2.0 ) 15.0
 
Non-controlling interest   (3.6 )   (1.6 )   (4.1 )   (2.8 )   (1.4 )   (2.4 )   (2.7 )   (2.2 )   (12.1 )   (8.7 )
 
Management Business Economic Net Income (Loss)   5.3     (0.5 )   (5.0 )   20.8     3.5     10.0     21.2     21.0     20.6     55.7  
 
Incentive Business:
 
Carried interest income (loss):
Unrealized gains (losses) 88.3 6.6 (284.1 ) 122.3 148.3 (16.7 ) 187.0 (17.5 ) (66.9 ) 301.1
Realized gains   16.2     7.3     12.4     38.2     26.0     10.0     41.6     102.3     74.1     179.9  
Total carried interest income (loss) 104.5 13.9 (271.7 ) 160.5 174.3 (6.7 ) 228.6 84.8 7.2 481.0
 
Profit sharing expense:
Unrealized profit sharing expense 20.5 7.8 (69.6 ) 41.0 24.7 (2.9 ) 51.1 2.5 (0.3 ) 75.4
Realized profit sharing expense   4.4     3.0     3.5     24.8     18.6     6.8     22.3     31.7     35.7     79.4  
Total profit sharing expense 24.9 10.8 (66.1 ) 65.8 43.3 3.9 73.4 34.2 35.4 154.8
 
Incentive fee compensation 10.1 (3.6 ) (3.8 ) 0.7

 

 

0.4 0.3 3.4 0.7
 
Net gains (losses) from investment activities 17.8 2.3 (33.4 ) 7.4 3.4 (13.1 ) 2.1 6.5 (5.9 ) (1.1 )
Income (loss) from equity method investments   9.1     2.0     (26.4 )   17.4     17.7     (0.7 )   16.9     12.2     2.1     46.1  
Total other income (loss) 26.9 4.3 (59.8 ) 24.8 21.1 (13.8 ) 19.0 18.7 (3.8 ) 45.0
 
Incentive Business Economic Net Income (Loss)   96.4     11.0     (261.6 )   118.8     152.1     (24.4 )   173.8     69.0     (35.4 )   370.5  
 
Total Economic Net Income (Loss) $ 101.7   $ 10.5   $ (266.6 ) $ 139.6   $ 155.6   $ (14.4 ) $ 195.0   $ 90.0   $ (14.8 ) $ 426.2  
 

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except per share data)

       

Real Estate Segment:

 
Three Months Ended For the Year Ended
March 31, 2011  

June 30,2011

 

September 30,2011

   

December 31, 2011

 

March 31, 2012

    June 30 2012  

September 30, 2012

   

December 31,

2012

December 31,2011

    December 31, 2012
Management Business:
 
Advisory and transaction fees from affiliates $

$

$

0.5 $ 0.2

$

$ 0.6

$

$ 0.1

$

0.7 $ 0.7
Management fees from affiliates   9.3     9.7   10.5     10.8     10.4     12.9     10.9     12.1     40.3     46.3  
Total management business revenues 9.3 9.7 11.0 11.0 10.4 13.5 10.9 12.2 41.0 47.0
 
Equity-based compensation 2.5 3.2 3.5 3.9 3.0 2.4 2.6 2.7 13.1 10.7
Salary, bonus and benefits 9.8 7.9 6.9 8.5 6.7 5.9 7.2 3.5 33.1 23.3
Other expenses   5.2     5.9   6.0     12.6     6.7     6.2     4.4     6.9     29.7     24.2  
Total management business expenses 17.5 17.0 16.4 25.0 16.4 14.5 14.2 13.1 75.9 58.2
 
Other income (loss)   0.5     9.5   (0.2 )   (0.1 )   0.8     (0.6 )   0.7     0.4     9.7     1.3  
 
Management Business Economic Net (Loss) Income   (7.7 )   2.2   (5.6 )   (14.1 )   (5.2 )   (1.6 )   (2.6 )   (0.5 )   (25.2 )   (9.9 )
 
Incentive Business:
 
Carried interest income:
Unrealized gains

 

 

 

1.6 4.8 4.0

 

10.4
Realized gains    

 

 

        1.7     2.6  

 

    0.4  

 

    4.7  
Total carried interest income

 

 

 

1.7 4.2 4.8 4.4

 

15.1
 
Profit sharing expense:
Unrealized profit sharing expense

 

 

 

1.2 3.4 2.1

 

6.7
Realized profit sharing expense      

 

    1.4     1.5     1.0     0.8     4.2     1.4     7.5  
Total profit sharing expense

1.4 1.5 2.2 4.2 6.3 1.4 14.2
 
Income from equity method investments   0.1     0.3   0.2     0.1     0.2     0.2     0.3     0.3     0.7     1.0  
 
Incentive Business Economic Net Income (Loss)   0.1     0.3   0.2     (1.3 )   0.4     2.2     0.9     (1.6 )   (0.7 )   1.9  
 
Total Economic Net (Loss) Income $ (7.6 ) $ 2.5 $ (5.4 ) $ (15.4 ) $ (4.8 ) $ 0.6   $ (1.7 ) $ (2.1 ) $ (25.9 ) $ (8.0 )
 
       
APOLLO GLOBAL MANAGEMENT, LLC
RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ECONOMIC NET INCOME (LOSS) (UNAUDITED)
(dollars in millions)
 

Reconciliation of U.S. GAAP Net Income (Loss) to Economic Net Income (Loss):

 
Three Months Ended

 

For the Year Ended

March 31, 2011   June 30, 2011   September 30, 2011   December 31, 2011  

 

March 31, 2012

 

 

June 30, 2012

   

 

September 30, 2012

 

 

December 31, 2012

 

December 31, 2011

   

 

December 31, 2012

Net Income (Loss) Attributable to Apollo Global Management, LLC $ 38.2 $ (51.0 ) $ (467.0 ) $ 11.0 $ 98.0 $ (41.3 ) $ 82.7 $ 171.6 $ (468.8 ) $ 311.0
Impact of non-cash charges related to equity-based compensation:
AOG units 258.2 258.2 258.2 258.2 116.2 116.1 116.2 132.4 1,032.8 480.9
RSUs - Private placement awards (1) 11.9 11.9 11.4 11.8 13.3 11.0 10.9 10.9 47.0 46.1
ARI restricted stock awards, ARI RSUs and AMTG RSUs 0.2 0.2 0.4 0.5 0.4 0.4 0.5 0.4 1.3 1.7
AAA RDUs   0.1   0.1     0.2     0.1     0.1   0.3     0.3   0.3   0.5     1.0
Total non-cash charges related to equity-based compensation 270.4 270.4 270.2 270.6 130.0 127.8 127.9 144.0 1,081.6 529.7
 
Income tax provision (benefit) 8.8 3.6 (19.9 ) 19.4 14.6 10.6 21.9 18.3 11.9 65.4
Income (loss) from consolidated VIEs

0.7

(0.7 )

 

 

 

 

 

 

Amortization of intangible assets associated with the 2007 Reorganization and acquisitions 3.2 4.3 3.6 4.0 6.1 9.6 13.7 13.6 15.1 43.0
Net income (loss) attributable to Non-Controlling Interests in Apollo Operating Group   56.0   (102.0 )   (946.6 )   52.3     213.3   (64.7 )   187.3   349.4   (940.3 )   685.3
 
Economic Net Income (Loss) $ 376.6 $ 125.3   $ (1,159.0 ) $ 356.6   $ 462.0 $ 42.0   $ 433.5 $ 696.9 $ (300.5 ) $ 1,634.4
 
(1)   Represents RSU awards granted in connection with the 2007 private placement.

APOLLO GLOBAL MANAGEMENT, LLC

ASSETS UNDER MANAGEMENT

(UNAUDITED)

Assets Under Management—Fee-Generating and Non-Fee Generating

The table below sets forth fee-generating and non-fee generating AUM by segment as of December 31, 2012, 2011 and 2010. Changes in market conditions, the additional funds raised and strategic acquisitions have had significant impacts to our AUM:

     
As of December 31,
2012   2011   2010
(in millions)
Total Assets Under Management $

113,379

(1)

$ 75,222 $ 67,551
Fee-generating 81,934 58,121 47,037
Non-fee generating

31,445

(1)

17,101 20,514
 
Private Equity (2) 37,832 35,384 38,799
Fee-generating 27,932 28,031 27,874
Non-fee generating 9,900 7,353 10,925
 

Credit (2)

64,406 31,867 22,283
Fee-generating 49,518 26,553 16,484
Non-fee generating 14,888 5,314 5,799
 
Real Estate 8,800 7,971 6,469
Fee-generating 4,484 3,537 2,679
Non-fee generating 4,316 4,434 3,790
 
(1)   Includes $2.3 billion of commitments that have yet to be deployed to an Apollo fund within our three segments.
(2) Includes fee-generating and non-fee generating AUM as of September 30, 2012 for certain publicly traded vehicles managed by Apollo.

APOLLO GLOBAL MANAGEMENT, LLC

ASSETS UNDER MANAGEMENT

(UNAUDITED)

The following tables summarize changes in total AUM and total AUM for each of our segments for the three months ended December 31, 2012 and 2011 and years ended December 31, 2012, 2011, and 2010:

       
For the Three Months Ended December 31,   For the Year Ended December 31,

 

2012

   

 

2011

 

 

2012

   

 

2011

 

 

2010 (1)

 
(in millions)
Change in Total AUM:
Beginning of Period $

109,702

(2)

$ 65,085 $ 75,222 $ 67,551 $ 53,609
Income (Loss) 3,587 2,619 12,038 (1,477 ) 8,623
Subscriptions/Capital raised 1,558 856 9,688 3,797 617
Other inflows/Acquisitions 3,701 7,958 23,629 9,355 3,713
Distributions (4,909 ) (1,369 ) (10,858 ) (5,153 ) (2,518 )
Redemptions (185 ) (237 ) (1,221 ) (532 ) (338 )
Leverage   (75 )   310     4,881     1,681     3,845  
End of Period $

113,379

(2)

$ 75,222   $

113,379

(2)

$ 75,222   $ 67,551  
Change in Private Equity AUM:
Beginning of Period $ 38,983 $ 34,779 $ 35,384 $ 38,799 $ 34,002
Income (Loss) 2,343 1,547 8,108 (1,612 ) 6,387
Subscriptions/Capital raised 387 259 662 417

 

Distributions (3,521 ) (1,052 ) (6,537 ) (3,464 ) (1,568 )
Net segment transfers 50 (61 ) 317 167 (68 )
Leverage   (410 )   (88 )   (102 )   1,077     46  
End of Period $ 37,832   $ 35,384   $ 37,832   $ 35,384   $ 38,799  
Change in Credit AUM:
Beginning of Period $ 60,107 $ 22,406 $ 31,867 $ 22,283 $ 19,112
Income (Loss) 993 1,098 3,274 (110 ) 2,207
Subscriptions/Capital raised 1,169 547 5,504 3,094 512
Other inflows/Acquisitions 3,701 7,958 23,629 9,355

 

Distributions (1,319 ) (271 ) (3,197 ) (1,237 ) (698 )
Redemptions (185 ) (237 ) (948 ) (532 ) (338 )
Net segment transfers (285 ) (127 ) (1,023 ) (1,353 ) (291 )
Leverage   225     493     5,300     367     1,779  
End of Period $ 64,406   $ 31,867   $ 64,406   $ 31,867   $ 22,283  
Change in Real Estate AUM:
Beginning of Period $ 8,129 $ 7,900 $ 7,971 $ 6,469 $ 495
Income (Loss) 251 (26 ) 656 245 29
Subscriptions/Capital raised 2 50 475 286 105
Other inflows/Acquisitions

 

 

 

 

 

3,713
Distributions (69 ) (46 ) (1,124 ) (452 ) (252 )
Redemptions (3) ……………………

 

 

(273

) (3)

 

 

 

Net segment transfers 377 188 1,412 1,186 359
Leverage   110     (95 )   (317 )   237     2,020  
End of Period $ 8,800   $ 7,971   $ 8,800   $ 7,971   $ 6,469  
 

(1)

 

Reclassified to conform to current period’s presentation.

(2)

Includes $2.5 billion and $2.3 billion of commitments that have yet to be deployed to an Apollo fund within our three segments at the end of the third quarter 2012 and fourth quarter 2012, respectively.

(3)

Includes $273 million of released unfunded commitments primarily related to two legacy real estate funds that were past their investment periods.

APOLLO GLOBAL MANAGEMENT, LLC

ASSETS UNDER MANAGEMENT

(UNAUDITED)

The following tables summarize changes in total fee-generating AUM and fee-generating AUM for each of our segments for the three months and years ended December 31, 2012 and 2011:

       
For the Three Months Ended December 31,   For the Year Ended December 31,
  2012       2011     2012       2011  
(in millions)
Change in Total Fee-Generating AUM:
Beginning of Period $ 77,676 $ 49,651 $ 58,121 $ 47,037
Income (Loss) 749 149 1,390 (393 )
Subscriptions/Capital raised 1,522 677 5,873 2,547
Other inflows/Acquisitions 3,701 7,960 21,277 9,355
Distributions (1,308 ) (135 ) (3,728 ) (734 )
Redemptions (171 ) (226 ) (909 ) (481 )
Net movements between Fee Generating and Non-Fee Generating (18 ) 511 (564

)

761
Leverage   (217 )   (466 )   474     29  
End of Period $ 81,934   $ 58,121   $ 81,934   $ 58,121  
Change in Private Equity Fee-Generating AUM:
Beginning of Period $ 28,146 $ 27,786 $ 28,031 $ 27,874
Income (Loss) 153 70 285 (112 )
Subscriptions/Capital raised 376 260 644 410
Distributions (540 ) (17 ) (1,256 ) (272 )
Net segment transfers 50 (62 ) 50 (88 )
Net movements between Fee Generating and Non-Fee Generating 155 135 515 285
Leverage   (408 )   (141 )   (337 )   (66 )
End of Period $ 27,932   $ 28,031   $ 27,932   $ 28,031  
Change in Credit Fee-Generating AUM:
Beginning of Period $ 45,302 $ 18,507 $ 26,553 $ 16,484
Income 539 83 988 301
Subscriptions/Capital raised 1,144 317 4,953 1,795
Other inflows/Acquisitions 3,701 7,960 21,277 9,355
Distributions (707 ) (13 ) (2,029 ) (283 )
Redemptions (171 ) (226 ) (909 ) (481 )
Net segment transfers (377 ) (106 ) (1,096 ) (638 )
Net movements between Fee Generating and Non-Fee Generating (104 ) 356 (1,030 ) 356
Leverage   191     (325 )   811     (336 )
End of Period $ 49,518   $ 26,553   $ 49,518   $ 26,553  
Change in Real Estate Fee-Generating AUM:
Beginning of Period $ 4,228 $ 3,358 $ 3,537 $ 2,679
Income (Loss) 57 (4 ) 117 (582 )
Subscriptions/Capital raised 2 100 276 342
Distributions (61 ) (105 ) (443 ) (179 )
Net segment transfers 327 168 1,045 726
Net movements between Fee Generating and Non-Fee Generating (69 ) 20 (48 ) 120
Leverage

 

 

 

 

 

    431  
End of Period $ 4,484   $ 3,537   $ 4,484   $ 3,537  
 

APOLLO GLOBAL MANAGEMENT, LLC

FUND PERFORMANCE (UNAUDITED)

Investment Record

Private Equity

The following table summarizes the investment record of our private equity funds. All amounts are as of December 31, 2012, unless otherwise noted:

                     
Vintage Year Committed Capital

 

 

 

 

As of December 31, 2012 As of December 31, 2011 As of December 31, 2010

Total Invested Capital

Realized

Unrealized (1)

Total Value

Gross IRR   Net IRR Gross IRR   Net IRR Gross IRR   Net IRR
(in millions)
AION (2) 2012 $ 274

 

 

 

 

NM (2) NM (2)

N/A

N/A

N/A

N/A

 

ANRP (2) 2012 $ 1,323 $ 265 $ 11 $ 239 $ 250 NM (2) NM (2)

N/A

 

N/A N/A N/A
Fund VII 2008 14,676 13,585 10,757 12,367 23,124 35 % 26 % 31 % 22 % 46 % 32 %
Fund VI 2006 10,136 11,813 6,657 10,343 17,000 11 9 6 5 13 10
Fund V 2001 3,742 5,192 11,618 1,198 12,816 61 44 61 44 62 45
Fund IV 1998 3,600 3,481 6,767 54 6,821 12 9 12 9 11 9
Fund III 1995 1,500 1,499 2,654 28 2,682 18 11 18 12 18 12
Fund I, II & MIA (3) 1990/92   2,220   3,773   7,924

 

 

  7,924 47 37 47 37 47 37
Totals $ 37,471 $ 39,608 $ 46,388 $ 24,229 $ 70,617 39

% (4)

25 % (4) 39 % (4) 25 % (4) 39 % (4) 26

% (4)

 
      Vintage Year   Current Net Asset Value as of December 31, 2012   Total Return

For the Year Ended December 31, 2012

 

For the Year Ended December 31, 2011

 

For the Year Ended December 31, 2010

AAA (5) 2006 $ 1,662.9 20% (8)% 28%

(1)

 

Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.

(2)

AION Capital Partners Limited (“AION”) and Apollo Natural Resources Partners, L.P. (“ANRP”) commenced investing capital less than 24 months prior to the period indicated. Given the limited investment period and overall longer investment period for private equity funds, the return information was deemed not meaningful.

(3)

Fund I and Fund II were structured such that investments were made from either fund depending on which fund had available capital. We do not differentiate between Fund I and Fund II investments for purposes of performance figures because they are not meaningful on a separate basis and do not demonstrate the progression of returns over time. 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 of Apollo Global Management, LLC. As a result, Apollo Global Management, LLC did not receive the economics associated with these entities. The investment performance of these funds is presented to illustrate fund performance associated with our managing partners and other investment professionals.

(4)

Total IRR is calculated based on total cash flows for all funds presented.

(5)

AP Alternative Assets, L.P. (“AAA”) completed its initial public offering in June 2006 and is the sole limited partner in AAA Investments, L.P. (the “Investment Partnership”). AAA was originally designed to give investors in its common units exposure as a limited partner to certain of the strategies that we employ and allowed us to manage the asset allocations to those strategies by investing alongside our private equity funds and directly in our credit funds and certain other opportunistic investments that we sponsor and manage. On October 31, 2012 the Investment Partnership closed on an agreement to contribute substantially all of its investments to Athene Holding Ltd. (“Athene”) in exchange for common shares of Athene, cash and a short term promissory note (the “Transaction”). After the Transaction, Athene is the Investment Partnership’s only material investment and the Investment Partnership will remain the largest shareholder of Athene with an approximate 77% ownership stake (based on capital invested to date). Total Returns have been presented on an annualized basis and were calculated on a weighted average basis. See www.alternativeassets.com for the most recent financial information on AAA. The information contained in AAA’s website is not part of this press release.

APOLLO GLOBAL MANAGEMENT, LLC

FUND PERFORMANCE (UNAUDITED)

Investment Record (continued)

Credit

The following table summarizes the investment record for certain funds and strategic investment accounts (SIAs) with a defined maturity date and internal rate of return since inception, which is computed for the purposes of this table based on the actual dates of capital contributions, distributions and ending limited partners’ capital as of the specified date. Apollo also manages collateralized loan obligations (“CLOs”) within our credit segment with total AUM of approximately $10.6 billion as of December 31, 2012, which fund performance information is not included in the following credit investment tables. All amounts are as of December 31, 2012, unless otherwise noted:

                       
As of December 31, 2012 As of December 31, 2011 As of December 31, 2010
Strategy

Vintage Year

Committed Capital

Total Invested Capital

Realized

 

Unrealized (1)

Total Value Gross IRR   Net IRR Gross IRR   Net IRR Gross IRR   Net IRR
(in millions)
ACRF II (2) Structured Credit 2012 85.2 85.2 2.4 87.6 90.0

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

EPF II (3)(5) Non-Performing Loans 2012 3,615.2 175.9 19.7 173.0 192.7

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

FCI (3) Structured Credit 2012 558.8 347.3 15.0 401.2 416.2

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

AESI (3)(5) European Credit 2011 469.0 371.4 184.1 269.4 453.5

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

AEC (3) European Credit 2011 292.5 197.1 103.5 125.5 229.0

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

NM

(4)

AIE II (5) European Credit 2008 272.4 860.1 994.2 280.3 1,274.5

19.4

%

15.6

%

18.2

%

14.2

%

27.5

%

21.8

%

COF I U.S. Performing Credit 2008 1,484.9 1,611.3 1,980.4 2,048.6 4,029.0 30.7 27.6 25.0 22.4 32.5 29.0
COF II U.S. Performing Credit 2008 1,583.0 2,176.4 1,703.7 1,320.2 3,023.9 14.3 11.7 10.3 8.5 17.4 14.9
EPF I (5) Non-Performing Loans 2007 1,708.5 1,837.6 1,465.3 1,046.4 2,511.7 18.6 11.6 16.6 8.8 14.8 7.9
ACLF U.S. Performing Credit 2007 984.0 1,448.5 2,081.2 258.1 2,339.3 13.0 11.2 10.1 9.2 12.1 11.2
Artus U.S. Performing Credit 2007   106.6   190.1   225.9

 

  225.9

7.0

6.8

 

3.6

3.4 3.0 2.8
Totals $ 11,160.1 $ 9,300.9 $ 8,775.4 $ 6,010.3 $ 14,785.7
   

(1)

 

Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.

(2)

As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Structured Credit Recovery Master Fund II, Ltd. (“ACRF II”). Apollo became the manager of this fund upon completing the acquisition on April 2, 2012.

(3)

Apollo European Principal Finance Fund II, L.P. (“EPF II”), Apollo European Strategic Investment, L.P. (“AESI”) and Apollo European Credit Master Fund, L.P. (“AEC”) were launched during 2011 and have not established their vintage year. Financial Credit Investment I, L.P. (“FCI”) had its final capital raise in 2012, establishing its vintage year.

(4)

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.

(5)

Funds are denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.32 as of December 31, 2012.

APOLLO GLOBAL MANAGEMENT, LLC

FUND PERFORMANCE (UNAUDITED)

Investment Record (continued)

Credit (continued)

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