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TheStreet Open House

Apollo Global Management, LLC Reports Second Quarter 2013 Results

Apollo intends to distribute to its shareholders on a quarterly basis substantially all of its net after-tax cash flow in excess of amounts determined by its manager to be necessary or appropriate to provide for the conduct of its business. However, Apollo cannot assure its shareholders that they will receive any distributions.

Conference Call

Apollo will host a conference call on Thursday, August 8, 2013 at 10:00 a.m. EDT. 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 second quarter ended June 30, 2013. 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 18390943 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 18390943. 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 June 30, 2013, 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, 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 press 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 1, 2013, 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 press 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 press release does not constitute an offer of any Apollo fund.

 

APOLLO GLOBAL MANAGEMENT, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012

(dollars in thousands, except share data)

     
 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

  2013       2012     2013       2012  
Revenues:
Advisory and transaction fees from affiliates $ 65,085 $ 69,777 $ 112,504 $ 97,013
Management fees from affiliates 155,070 143,326 305,517 270,504
Carried interest income (loss) from affiliates   277,106     (1,475 )   1,388,313     620,854  
Total Revenues   497,261     211,628     1,806,334     988,371  
 
Expenses:
Compensation and benefits:
Equity-based compensation 43,501 142,114 88,787 290,980
Salary, bonus and benefits 69,282 74,948 142,678 140,019
Profit sharing expense 124,229 19,851 547,849 268,875
Incentive fee compensation   3,015     (27 )   3,015     8  
Total Compensation and Benefits 240,027 236,886 782,329 699,882
 
Interest expense 7,594 10,567 15,112 21,947
Professional fees 21,665 16,832 37,725 28,359
General, administrative and other 26,037 23,575 48,978 42,782
Placement fees 3,120 8,131 12,478 9,052
Occupancy 10,149 8,990 19,954 17,716
Depreciation and amortization   14,195     11,981     28,813     20,454  
Total Expenses   322,787     316,962     945,389     840,192  
 
Other (Loss) Income:
Net gains (losses) from investment activities 1,116 (28,214 ) 53,249 129,494
Net (losses) gains from investment activities of consolidated variable interest entities (35,198 ) 31,763 12,663 15,562
Income (loss) from equity method investments 20,090 (839 ) 47,880 42,412
Interest income 3,049 2,202 6,140 3,816
Other income, net   2,778     1,945,549     4,076     1,951,365  
Total Other (Loss) Income   (8,165 )   1,950,461     124,008     2,142,649  
Income before income tax provision 166,309 1,845,127 984,953 2,290,828
Income tax provision   (18,139 )   (10,650 )   (36,718 )   (25,210 )
Net Income 148,170 1,834,477 948,235 2,265,618
Net income attributable to Non-controlling Interests   (89,433 )   (1,875,863 )   (640,520 )   (2,208,961 )
Net Income (Loss) Attributable to Apollo Global Management, LLC $ 58,737   $ (41,386 ) $ 307,715   $ 56,657  
 
Distributions Declared per Class A Share $ 0.57   $ 0.25   $ 1.62   $ 0.71  
 
Net Income Per Class A Share:
Net Income (Loss) Available to Class A Share – Basic $ 0.32   $ (0.38 ) $ 1.94   $ 0.32  
Net Income (Loss) Available to Class A Share –Diluted $ 0.32   $ (0.38 ) $ 1.93   $ 0.32  
Weighted Average Number of Class A Shares – Basic   137,289,147     126,457,443     134,285,776     125,863,348  
Weighted Average Number of Class A Shares – Diluted   137,289,147     126,457,443     138,104,463     126,260,767  
 
 

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

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

   
Three Months Ended Six Months Ended

March 31,

2012

 

June 30,

2012

 

September 30,

2012

 

December 31,

2012

 

March 31,

2013

 

June 30,

2013

June 30,

2012

 

June 30,

2013

Management Business:
 
Advisory and transaction fees from affiliates $ 27.3 $ 70.0 $ 15.2 $ 37.5 $ 47.4 $ 65.1 $ 97.3 $ 112.5
Management fees from affiliates 130.0 156.4 160.2 176.4 164.3 169.3 286.4 333.6
Carried interest income from affiliates:
Realized gains 9.6   9.2   9.7   9.3   9.0   10.1   18.8   19.1  
Total management business revenues 166.9 235.6 185.1 223.2 220.7 244.5 402.5 465.2
 
Equity-based compensation (1) 18.9 14.1 16.7 19.2 17.4 16.8 33.0 34.2
Salary, bonus and benefits 65.1 74.9 64.6 70.0 73.4 69.3 140.0 142.7
 
Interest expense 11.4 10.2 7.5 8.0 7.5 7.6 21.6 15.1
Professional fees 11.3 16.5 10.9 24.6 15.4 21.6 27.8 37.0
General, administrative and other 18.7 23.1 23.9 20.9 22.6 25.9 41.8 48.5
Placement fees 0.9 8.1 4.3 9.0 9.4 3.1 9.0 12.5
Occupancy 8.7 9.0 9.7 9.8 9.8 10.2 17.7 20.0
Depreciation and amortization (2) 2.4   2.4   2.8   2.6   2.9   2.9   4.8   5.8  
Total non-compensation expenses 53.4 69.3 59.1 74.9 67.6 71.3 122.7 138.9
 
Total management business expenses 137.4 158.3 140.4 164.1 158.4 157.4 295.7 315.8
 
Other income (loss) 7.0 (4.5 ) 11.1 7.4 7.2 5.2 2.5 12.4
 
Non-controlling interest (3) (1.4 ) (2.4 ) (2.7 ) (2.2 ) (3.5 ) (3.2 ) (3.8 ) (6.7 )
 
Management Business Economic Net Income 35.1   70.4   53.1   64.3   66.0   89.1   105.5   155.1  
 
Incentive Business:
 
Carried interest income:
Unrealized gains (losses) 474.3 (52.8 ) 344.2 400.7 771.4 (574.9 ) 421.5 196.5
Realized gains 149.8   56.0   229.8   561.6   345.2   840.5   205.8   1,185.7  
Total carried interest income 624.1 3.2 574.0 962.3 1,116.6 265.6 627.3 1,382.2
 
Profit sharing expense:
Unrealized profit sharing expense 178.4 (10.8 ) 124.7 133.8 272.8 (219.6 ) 167.6 53.2
Realized profit sharing expense 70.7   30.7   112.7   231.3   150.8   343.8   101.4   494.6  
Total profit sharing expense 249.1 19.9 237.4 365.1 423.6 124.2 269.0 547.8
 
Incentive fee compensation 0.4 0.3 3.0 3.0
 
Other income, net 0.2 0.2
 
Net gains (losses) from investment activities 3.4 (13.1 ) 2.1 6.5 4.0 (5.7 ) (9.7 ) (1.7 )
Income from equity method investments 48.5   1.4   42.1   29.2   29.4   19.3   49.9   48.7  
Other income (loss) 51.9 (11.7 ) 44.2 35.7 33.4 13.8 40.2 47.2
 
Incentive Business Economic Net Income (Loss) 426.9   (28.4 ) 380.4   632.6   726.4   152.2   398.5   878.6  
 
Total Economic Net Income 462.0   42.0   433.5   696.9   792.4   241.3   504.0   1,033.7  
 
Income Tax Provision on Economic Net Income (4) (39.7 ) (23.3 ) (54.5 ) (41.1 ) (51.1 ) (43.5 ) (63.0 ) (94.6 )
 
Total Economic Net Income After Taxes $ 422.3   $ 18.7   $ 379.0   $ 655.8   $ 741.3   $ 197.8   $ 441.0   $ 939.1  
Non-GAAP Weighted average diluted shares outstanding (in millions) 383.6   386.0   386.9   388.3   392.1   393.8   384.8   392.9  
Total ENI After Taxes per Share $ 1.10   $ 0.05   $ 0.98   $ 1.69   $ 1.89   $ 0.50   $ 1.15   $ 2.39  
     

(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 share data)

 

Private Equity Segment: (1)

   
Three Months Ended Six Months Ended
March 31,

2012

  June 30,

2012

  September 30,

2012

  December 31,

2012

  March 31,

2013

 

June 30,

2013

June 30,

2012

 

June 30,

2013

Management Business:
 
Advisory and transaction fees from affiliates $ 23.2 $ 61.5 $ 9.6 $ 27.4 $ 24.5 $ 41.8 $ 84.7 $ 66.3
Management fees from affiliates 67.0   69.2   68.5   72.3   66.3   65.7   136.2   132.0
Total management business revenues 90.2 130.7 78.1 99.7 90.8 107.5 220.9 198.3
 
Equity-based compensation 7.8 7.4 7.2 8.8 8.4 7.5 15.2 15.9
Salary, bonus and benefits 30.8 37.8 25.7 34.2 32.4 30.6 68.6 63.0
Other expenses 20.8   23.9   17.3   21.3   21.9   26.8   44.7   48.7
Total management business expenses 59.4 69.1 50.2 64.3 62.7 64.9 128.5 127.6
 
Other income (loss) 3.3   (3.2 ) 2.9   1.7   1.6   0.9   0.1   2.5
 
Management Business Economic Net Income 34.1   58.4   30.8   37.1   29.7   43.5   92.5   73.2
 
Incentive Business:
 
Carried interest income:
Unrealized gains (losses) 326.0 (37.7 ) 152.4 414.2 697.6 (509.7 ) 288.3 187.9
Realized gains 122.1   43.4   188.2   458.9   293.4   738.2   165.5   1,031.6
Total carried interest income 448.1 5.7 340.6 873.1 991.0 228.5 453.8 1,219.5
 
Profit sharing expense:
Unrealized profit sharing expense 153.7 (9.1 ) 70.2 129.2 256.0 (199.6 ) 144.6 56.4
Realized profit sharing expense 50.6   22.9   89.6   195.4   128.3   306.9   73.5   435.2
Total profit sharing expenses 204.3 13.8 159.8 324.6 384.3 107.3 218.1 491.6
 
Income from equity method investments 30.6   1.9   24.9   16.6   22.6   12.1   32.5   34.7
Total other income 30.6 1.9 24.9 16.6 22.6 12.1 32.5 34.7
 
Incentive Business Economic Net Income (Loss) 274.4   (6.2 ) 205.7   565.1   629.3   133.3   268.2   762.6
 
Total Economic Net Income $ 308.5   $ 52.2   $ 236.5   $ 602.2   $ 659.0   $ 176.8   $ 360.7   $ 835.8
      (1)     Certain reclassifications have been made to conform to the current presentation. Refer to Apollo's second quarter 2013 Form 10-Q for additional information.
 

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

 

Credit Segment: (1)

 
  Three Months Ended   Six Months Ended
March 31,

2012

  June 30,

2012

  September 30,

2012

  December 31,

2012

  March 31,

2013

 

June 30,

2013

June 30,

2012

 

June 30,

2013

Management Business:
Advisory and transaction fees from affiliates $ 4.1 $ 7.9 $ 5.6 $ 10.0 $ 21.8 $ 22.0 $ 12.0 $ 43.8
Management fees from affiliates 52.6 74.3 80.8 92.0 84.4 90.4 126.9 174.8
Carried interest income from affiliates:
Realized gains 9.6   9.2   9.7   9.3   9.0   10.1   18.8   19.1  
Total management business revenues 66.3 91.4 96.1 111.3 115.2 122.5 157.7 237.7
 
Equity-based compensation 8.1 4.3 6.9 7.7 6.5 7.1 12.4 13.6
Salary, bonus and benefits 27.6 31.2 31.7 32.3 34.3 32.0 58.8 66.3
Other expenses 25.9   39.2   37.4   46.6   38.4   38.2   65.1   76.6  
Total management business expenses 61.6 74.7 76.0 86.6 79.2 77.3 136.3 156.5
 
Other income (loss) 2.9 (0.7 ) 7.5 5.3 4.5 4.0 2.2 8.5
 
Non-controlling interest (1.4 ) (2.4 ) (2.7 ) (2.2 ) (3.5 ) (3.2 ) (3.8 ) (6.7 )
 
Management Business Economic Net Income 6.2   13.6   24.9   27.8   37.0   46.0   19.8   83.0  
 
Incentive Business:
 
Carried interest income (loss):
Unrealized gains (losses) 148.3 (16.7 ) 187.0 (17.5 ) 73.2 (58.8 ) 131.6 14.4
Realized gains 26.0   10.0   41.6   102.3   51.5   102.1   36.0   153.6  
Total carried interest income (loss) 174.3 (6.7 ) 228.6 84.8 124.7 43.3 167.6 168.0
 
Profit sharing expense:
Unrealized profit sharing expense 24.7 (2.9 ) 51.1 2.5 16.5 (15.5 ) 21.8 1.0
Realized profit sharing expense 18.6   6.8   22.3   31.7   22.0   36.3   25.4   58.3  
Total profit sharing expense 43.3 3.9 73.4 34.2 38.5 20.8 47.2 59.3
 
Incentive fee compensation 0.4 0.3 3.0 3.0
 
Other income, net 0.2 0.2
 
Net gains (losses) from investment activities 3.4 (13.1 ) 2.1 6.5 4.0 (5.7 ) (9.7 ) (1.7 )
Income (loss) from equity method investments 17.7   (0.7 ) 16.9   12.2   6.9   6.4   17.0   13.3  
Total other income (loss) 21.1 (13.8 ) 19.0 18.7 10.9 0.9 7.3 11.8
 
Incentive Business Economic Net Income (Loss) 152.1   (24.4 ) 173.8   69.0   97.1   20.4   127.7   117.5  
 
Total Economic Net Income (Loss) $ 158.3   $ (10.8 ) $ 198.7   $ 96.8   $ 134.1   $ 66.4   $ 147.5   $ 200.5  
   

(1)

    Certain reclassifications have been made to conform to the current presentation. Refer to Apollo's second quarter 2013 Form 10-Q for additional information.
 

APOLLO GLOBAL MANAGEMENT, LLC

SEGMENT RESULTS (UNAUDITED)

(dollars in millions, except share data)

 

Real Estate Segment:

 
  Three Months Ended   Six Months Ended
March 31,

2012

  June 30,

2012

  September 30,

2012

  December 31,

2012

  March 31,

2013

 

June 30,

2013

June 30,

2012

 

June 30,

2013

Management Business:
 
Advisory and transaction fees from affiliates $ $ 0.6 $ $ 0.1 $ 1.1 $ 1.3 $ 0.6 $ 2.4
Management fees from affiliates 10.4   12.9   10.9   12.1   13.6   13.2   23.3   26.8  
Total management business revenues 10.4 13.5 10.9 12.2 14.7 14.5 23.9 29.2
 
Equity-based compensation 3.0 2.4 2.6 2.7 2.5 2.2 5.4 4.7
Salary, bonus and benefits 6.7 5.9 7.2 3.5 6.7 6.7 12.6 13.4
Other expenses 6.7   6.2   4.4   6.9   7.3   6.0   12.9   13.3  
Total management business expenses 16.4 14.5 14.2 13.1 16.5 14.9 30.9 31.4
 
Other income (loss) 0.8   (0.6 ) 0.7   0.4   1.1   0.3   0.2   1.4  
 
Management Business Economic Net Loss (5.2 ) (1.6 ) (2.6 ) (0.5 ) (0.7 ) (0.1 ) (6.8 ) (0.8 )
 
Incentive Business:
 
Carried interest income:
Unrealized gains (losses) 1.6 4.8 4.0 0.6 (6.4 ) 1.6 (5.8 )
Realized gains 1.7   2.6     0.4   0.3   0.2   4.3   0.5  
Total carried interest income 1.7 4.2 4.8 4.4 0.9 (6.2 ) 5.9 (5.3 )
 
Profit sharing expense:
Unrealized profit sharing expense 1.2 3.4 2.1 0.3 (4.5 ) 1.2 (4.2 )
Realized profit sharing expense 1.5   1.0   0.8   4.2   0.5   0.6   2.5   1.1  
Total profit sharing expense 1.5 2.2 4.2 6.3 0.8 (3.9 ) 3.7 (3.1 )
 
Income (Loss) from equity method investments 0.2   0.2   0.3   0.3   (0.1 ) 0.8   0.4   0.7  
 
Incentive Business Economic Net Income (Loss) 0.4   2.2   0.9   (1.6 )   (1.5 ) 2.6   (1.5 )
 
Total Economic Net (Loss) Income $ (4.8 ) $ 0.6   $ (1.7 ) $ (2.1 ) $ (0.7 )   $ (1.6 ) $ (4.2 ) $ (2.3 )
 
 

APOLLO GLOBAL MANAGEMENT, LLC

RECONCILIATION OF U.S. GAAP NET INCOME (LOSS) TO ECONOMIC NET INCOME

(UNAUDITED)

(dollars in millions)

 

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

  Three Months Ended   Six Months Ended

March 31, 2012

 

June 30, 2012

 

September 30, 2012

 

December 31, 2012

 

March 31, 2013

 

June 30, 2013

June 30, 2012

 

June 30, 2013

Net Income (Loss) Attributable to Apollo Global Management, LLC $ 98.0 $ (41.3 ) $ 82.7 $ 171.6 $ 249.0 $ 58.7 $ 56.7 $ 307.7
Impact of non-cash charges related to equity-based compensation:
AOG units 116.2 116.1 116.2 132.4 15.0 15.0 232.3

30.0

RSUs - Private placement awards (1) 13.3 11.0 10.9 10.9 11.4 11.0 24.3 22.4
ARI restricted stock awards, ARI RSUs and AMTG RSUs 0.4 0.4 0.5 0.4 1.3 0.5 0.8 1.8
AAA RDUs 0.1   0.3   0.3   0.3   0.3   0.2   0.4   0.5

Total non-cash charges related to equity-based compensation

130.0 127.8 127.9 144.0 28.0 26.7 257.8 54.7
Income tax provision 14.6 10.6 21.9 18.3 18.6 18.1 25.2 36.7
Amortization of intangible assets associated with the 2007 reorganization and acquisitions 6.1 9.6 13.7 13.6 11.6 11.3 15.7 22.9
Net income (loss) attributable to Non-controlling Interests in Apollo Operating Group 213.3   (64.7 ) 187.3   349.4   485.2   126.5   148.6   611.7
Economic Net Income $ 462.0   $ 42.0   $ 433.5   $ 696.9   $ 792.4   $ 241.3   $ 504.0   $ 1,033.7
 
      (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 June 30, 2013 and 2012 and December 31, 2012. Changes in market conditions, the additional funds raised and strategic acquisitions have had significant impacts to our AUM:

 
  As of June 30,     As of December 31,
2013     2012 2012
(in millions)
Total Assets Under Management $ 113,116 (1) $ 104,893 (1) $ 113,379     (1)
Fee-generating 79,290 77,449 81,934
Non-fee generating 33,826 (1) 27,444 (1) 31,445 (1)
 
Private Equity 40,213 38,228 37,832
Fee-generating 26,014 27,754 27,932
Non-fee generating 14,199 10,474 9,900
 
Credit 62,212 56,108 (2) 64,406 (3)
Fee-generating 47,507 45,509 (2) 49,518 (3)
Non-fee generating 14,705 10,599 (2) 14,888 (3)
 
Real Estate 9,473 7,861 (2) 8,800 (3)
Fee-generating 5,769 4,186 (2) 4,484 (3)
Non-fee generating 3,704 3,675 (2) 4,316 (3)
 
      (1)     As of June 30, 2013 and 2012 and December 31, 2012, includes $1.2 billion, $2.7 billion, and $2.3 billion of commitments, respectively, 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 March 31, 2012 for certain publicly traded vehicles managed by Apollo.
(3) 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 and six months ended June 30, 2013 and 2012:

 
  For the Three Months Ended June 30, For the Six Months Ended June 30,  
2013 2012 2013 2012  
(in millions)
Change in Total AUM:
Beginning of Period $ 114,269 (1) $ 86,126 (1) $ 113,379 (1) $ 75,222
Income 2,277 380 6,334 4,836
Subscriptions/Capital raised 6,926 2,251 8,126 6,592
Other inflows/Acquisitions 18,546 19,928
Distributions (7,186 ) (3,269 ) (10,582 ) (3,582 )
Redemptions (665 ) (654 ) (1,018 ) (753 )
Leverage (2,505 ) 1,513   (3,123 ) 2,650  
End of Period $ 113,116   (1) $ 104,893   (1) $ 113,116   (1) $ 104,893   (1)
Change in Private Equity AUM:
Beginning of Period $ 39,205 $ 38,398 $ 37,832 $ 35,384
Income 1,233 517 4,515 3,748
Subscriptions/Capital raised 5,834 20 5,838 28
Distributions (5,669 ) (1,518 ) (7,571 ) (1,578 )
Redemptions (19 ) (19 )
Net segment transfers 850 158 1,062 157
Leverage (1,221 ) 653   (1,444 ) 489  
End of Period $ 40,213   $ 38,228   $ 40,213   $ 38,228  
Change in Credit AUM:
Beginning of Period $ 63,535 $ 36,465 $ 64,406 $ 31,867
Income (Loss) 1,165 (117 ) 1,896 934
Subscriptions/Capital raised 627 2,101 1,300 3,129
Other inflows/Acquisitions 18,546 19,928
Distributions (1,285 ) (1,162 ) (2,641 ) (1,244 )
Redemptions (356 ) (381 ) (709 ) (480 )
Net segment transfers (256 ) (551 ) (495 ) (640 )
Leverage (1,218 ) 1,207   (1,545 ) 2,614  
End of Period $ 62,212   $ 56,108   $ 62,212   $ 56,108  
Change in Real Estate AUM:
Beginning of Period $ 9,412 $ 8,263 $ 8,800 $ 7,971
(Loss) Income (125 ) (20 ) (81 ) 154
Subscriptions/Capital raised 465 84 988 389
Distributions (232 ) (589 ) (370 ) (760 )
Redemptions (2) (290 ) (273 ) (290 ) (273 )
Net segment transfers 309 743 560 833
Leverage (66 ) (347 ) (134 ) (453 )
End of Period $ 9,473   $ 7,861   $ 9,473   $ 7,861  
 
      (1)     As of June 30, 2013 and 2012, March 31, 2013 and 2012, and December 31, 2012 includes $1.2 billion, $2.7 billion, $2.1 billion, $3.0 billion, and $2.3 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within our three segments.
(2) Represents release of unfunded commitments primarily related to two legacy CPI 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 and six months ended June 30, 2013 and 2012:

 
  For the Three Months Ended June 30,   For the Six Months Ended June 30,
2013   2012 2013   2012
(in millions) (in millions)
Change in Total Fee-Generating AUM:
Beginning of Period $ 81,633 $ 59,571 $ 81,934 $ 58,121
Income 2,917 (110 ) 3,090 289
Subscriptions/Capital raised 1,084 2,609 2,163 3,023
Other inflows/Acquisitions 16,194 17,576
Distributions (4,298 ) (1,269 ) (5,209 ) (1,453 )
Redemptions (340 ) (363 ) (710 ) (460 )
Net movements between Fee-Generating and Non-Fee Generating 256 (615 ) 421 (618 )
Leverage (1,962 ) 1,432   (2,399 ) 971  
End of Period $ 79,290   $ 77,449   $ 79,290   $ 77,449  
Change in Private Equity Fee-Generating AUM:
Beginning of Period $ 27,868 $ 27,653 $ 27,932 $ 28,031
Income 2,070 58 2,131 134
Subscriptions/Capital raised 39 18 43 28
Distributions (3,201 ) (298 ) (3,295 ) (351 )
Redemptions (19 ) (19 )
Net segment transfers 196
Net movements between Fee-Generating and Non-Fee Generating (193 ) 230 (190 ) 239
Leverage (550 ) 93   (784 ) (327 )
End of Period $ 26,014   $ 27,754   $ 26,014   $ 27,754  
Change in Credit Fee-Generating AUM:
Beginning of Period $ 48,488 $ 28,207 $ 49,518 $ 26,553
Income (Loss) 923 (125 ) 985 130
Subscriptions/Capital raised 572 2,478 1,204 2,781
Other inflows/Acquisitions 16,194 17,576
Distributions (879 ) (833 ) (1,629 ) (903 )
Redemptions (321 ) (363 ) (691 ) (460 )
Net segment transfers (259 ) (501 ) (706 ) (589 )
Net movements between Fee-Generating and Non-Fee Generating 395 (887 ) 441 (877 )
Leverage (1,412 ) 1,339   (1,615 ) 1,298  
End of Period $ 47,507   $ 45,509   $ 47,507   $ 45,509  
Change in Real Estate Fee-Generating AUM:
Beginning of Period $ 5,277 $ 3,711 $ 4,484 $ 3,537
(Loss) Income (76 ) (43 ) (26 ) 25
Subscriptions/Capital raised 473 113 916 214
Distributions (218 ) (138 ) (285 ) (199 )
Net segment transfers 259 501 510 589
Net movements between Fee-Generating and Non-Fee Generating 54   42   170   20  
End of Period $ 5,769   $ 4,186   $ 5,769   $ 4,186  
 

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 June 30, 2013, unless otherwise noted:

 
              As of June 30, 2013 As of December 31, 2012    
Vintage

Year

Committed

Capital

Total Invested Capital

Realized Unrealized (1)

Total Value

Gross

IRR

Net

IRR

Gross

IRR

Net

IRR

 
(in millions)
Fund VIII (2) 2013 $ 6,641 $ $ $ $ NM (3) NM (3) NM (3) NM (3)
AION (2) 2013 277 NM (3) NM (3) NM (3) NM (3)
ANRP (3) 2012 1,323 338 12 327 339 NM (3) NM (3) NM (3) NM (3)
Fund VII 2008 14,676 14,686 14,909 12,107 27,016 37 % 28 % 35 % 26 %
Fund VI 2006 10,136 11,819 9,564 9,232 18,796 12 10 11 9
Fund V 2001 3,742 5,192 12,230 642 12,872 61 44 61 44
Fund IV 1998 3,600 3,481 6,767 52 6,819 12 9 12 9
Fund III 1995 1,500 1,499 2,654 41 2,695 18 11 18 11
Fund I, II & MIA (4) 1990/92 2,220   3,773   7,924     7,924   47 37 47 37
Totals $ 44,115   $ 40,788   $ 54,060   $ 22,401   $ 76,461   39 % (5) 26 % (5) 39 % (5) 25 % (5)
 
     

Current Net Asset Value as of June 30, 2013

  Total Return  
Vintage Year

For the Three Months Ended June 30, 2013

 

For the Six Months Ended June 30, 2013

 

For the Year Ended December 31, 2012

AAA (6) 2006 $1,654.3 2% 7% 20%
      (1)     Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.
(2) Fund VIII and AION Capital Partners Limited (“AION”) were launched during 2013 and 2012, respectively, and a vintage year has not yet been established for these funds. On June 28, 2013, Fund VIII had a first closing of $6.6 billion.
(3) Apollo Natural Resources Partners, L.P. (“ANRP”) commenced investing capital less than 24 months prior to the period indicated and had its final capital raise in 2012, establishing its vintage year. Given the limited investment period and overall longer investment period for private equity funds, the return information was deemed not meaningful.
(4) 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.
(5) Total IRR is calculated based on total cash flows for all funds presented.
(6) AAA completed its initial public offering in June 2006 and is the sole limited partner in AAA Investments, L.P. (“AAA Investments”). 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, AAA and AAA Investments consummated a transaction whereby a wholly-owned subsidiary of AAA Investments contributed substantially all of its investments to Athene in exchange for common shares of Athene Holding, Ltd., cash and a short term promissory note (the “AAA Transaction”). After the AAA Transaction, Athene was AAA’s only material investment and as of June 30, 2013, AAA, through its investment in AAA Investments, was the largest shareholder of Athene Holding Ltd. with an approximate 72% ownership stake (without giving effect to restricted common shares issued under Athene’s management equity plan). Additional information related to AAA can be found on its website www.apolloalternativeassets.com. The information contained in AAA’s website is not part of this press release.

APOLLO GLOBAL MANAGEMENT, LLC FUND PERFORMANCE (UNAUDITED)

       

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 which had total AUM of approximately $10.3 billion as of June 30, 2013. Such CLO performance information is not included in the following credit investment record tables. All amounts are as of June 30, 2013, unless otherwise noted:

 
                As of June 30, 2013   As of December 31, 2012    
Strategy Vintage

Year

Committed

Capital

Total

Invested

Capital

Realized

Unrealized (1)

Total Value Gross

IRR

Net

IRR

Gross

IRR

Net

IRR

 
(in millions)

ACRF II (2)

Structured Credit 2012 $ 104.4 $ 104.4 $ 2.0 $ 113.7 $ 115.7 NM (4) NM (4) NM (4) NM (4)

EPF II (3)(5)

Non-Performing Loans 2012 3,599.2 483.4 61.3 451.2 512.5 NM (4) NM (4) NM (4) NM (4)
FCI (3) Structured Credit 2012 558.8 443.2 15.0 564.0 579.0 NM (4) NM (4) NM (4) NM (4)
AESI (3)(5) European Credit 2011 462.5 576.6 367.7 265.8 633.5 NM (4) NM (4) NM (4) NM (4)
AEC (3) European Credit 2011 292.5 344.6 207.5 150.0 357.5 NM (4) NM (4) NM (4) NM (4)
AIE II (5) European Credit 2008 268.5 848.1 1,070.2 244.3 1,314.5 19.1 % 15.5 % 19.4 % 15.6 %
COF I U.S. Performing Credit 2008 1,484.9 1,611.3 2,682.4 1,574.4 4,256.8 30.5 27.5 30.7 27.6
COF II U.S. Performing Credit 2008 1,583.0 2,176.4 2,369.6 724.2 3,093.8 13.9 11.3 14.3 11.7
EPF I (5) Non-Performing Loans 2007 1,684.7 2,131.9 1,718.2 1,237.8 2,956.0 19.4 13.2 18.6 11.6
ACLF U.S. Performing Credit 2007 984.0 1,448.5 2,168.0 209.0 2,377.0 13.1 11.2 13.0 11.2
Artus U.S. Performing Credit 2007 106.6   190.1   225.9     225.9   7.0 6.8 7.0 6.8
Totals $ 11,129.1   $ 10,358.5   $ 10,887.8   $ 5,534.4   $ 16,422.2  
 
      (1)     Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments.
(2) As part of the acquisition of Stone Tower Capital, LLC (“Stone Tower”), 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 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. Apollo European Principal Finance Fund II, L.P. (“EPF II”) and Financial Credit Investment I, L.P. (“FCI”) deployed capital prior to the vintage year and had their final capital raises in 2012, establishing their 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 $1.30 as of June 30, 2013.

APOLLO GLOBAL MANAGEMENT, LLC FUND PERFORMANCE (UNAUDITED)

The following table summarizes the investment record for certain funds and SIAs with no maturity date. All amounts are as of June 30, 2013, unless otherwise noted:

 
      Net Return  
Strategy

Vintage Year

Net Asset Value as of June 30, 2013

Since Inception to June 30, 2013

For the Six Months Ended June 30, 2013

For the Six Months Ended June 30, 2012

Since Inception to December 31, 2012

For the Year Ended December 31, 2012

 

(in millions)
AIF (1) U.S. Performing Credit 2013 $ 272.9 NM (3) NM (3) N/A N/A N/A
ACSP (2) Opportunistic Credit 2012 234.6 NM (3) NM (3) NM (3) NM (3) NM (3)
ACSF (4) Opportunistic Credit 2011 197.7 NM (4) NM (4) NM (4) NM (4) NM (4)
AFT (1) U.S. Performing Credit 2011 293.4 15.9% 4.0% NM (3) NM (3) NM (3)
AMTG (5) Structured Credit 2011 769.5 NM (3) NM (3) NM (3) NM (3) NM (3)
STCS (4) Opportunistic Credit 2010 53.5 NM (4) NM (4) NM (4) NM (4) NM (4)
SOMA (6) Opportunistic Credit 2007 593.0 49.6 3.3 13.8% 44.9% 15.1%
ACF (4) U.S. Performing Credit 2005 2,156.5 NM (4) NM (4) NM (4) NM (4) NM (4)
AINV (7) Opportunistic Credit 2004 1,833.2 54.7 5.3 6.2 47.1 9.9

Value Funds (8)

Opportunistic Credit 2003/2006 365.1   75.8 5.7 8.6 66.2 10.8
Totals $ 6,769.4  
      (1)     The Apollo Senior Floating Rate Fund Inc. (“AFT”) and Apollo Tactical Income Fund (“AIF”) completed their initial public offerings during the first quarter of 2011 and 2013, respectively. Refer to www.agmfunds.com for the most recent financial information on AFT and AIF. The information contained in AFT’s and AIF’s websites is not part of this press release.
(2) Apollo Centre Street Partnership, L.P. (“ACSP”) is a strategic investment account with $615.0 million of committed capital. Net asset value is presented for the primary mandate and excludes investments in other Apollo funds.
(3) 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.
(4) As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Credit Strategies Master Fund Ltd. (“ACSF”), Stone Tower Credit Solutions Master Fund Ltd. (“STCS”), and Apollo Credit Master Fund Ltd. (“ACF”). As of June 30, 2013, the net returns from inception for ACSF, ACF and STCS were 26.2%, (2.2)%, and 37.9% respectively. These returns were primarily achieved during a period in which Apollo did not make the initial investment decisions. Apollo became the manager of these funds upon completing the acquisition on April 2, 2012.
(5) Refer to www.apolloresidentialmortgage.com for the most recent financial information on Apollo Residential Mortgage, Inc. (“AMTG”). The information contained in AMTG’s website is not part of this press release.
(6) Net asset value and returns are for the primary mandate, which follows similar strategies as the Value Funds and excludes Apollo Special Opportunities Managed Account, L.P.’s (“SOMA”) investments in other Apollo funds.
(7) Net return for AINV represents net asset value return including reinvested dividends. Refer to www.apolloic.com for the most recent public financial information on AINV. The information contained in AINV’s website is not part of this press release.
(8) Value Funds consist of Apollo Strategic Value Master Fund, L.P., together with its feeder funds, and Apollo Value Investment Master Fund, L.P., together with its feeder funds.

APOLLO GLOBAL MANAGEMENT, LLC FUND PERFORMANCE (UNAUDITED)

   

Real Estate

The following table summarizes the investment record for certain funds and SIAs with a defined maturity date and internal rate of return since inception, which for the purposes of this table is computed based on the actual dates of capital contributions, distributions and ending limited partners’ capital as of the specified date. All amounts are as of June 30, 2013, unless otherwise noted:

 
    As of June 30, 2013   As of December 31, 2012  
Vintage

Year

Committed

Capital

Current

Net Asset

Value

Total

Invested

Capital

Realized Unrealized (1) Total Value Gross

IRR

  Net

IRR

Gross

IRR

  Net

IRR

(in millions)
AGRE U.S. Real Estate Fund, L.P (3) 2012 $ 793.4 $ 406.5 $ 400.9 $ 2.6 $ 404.8 $ 407.4 NM (2) NM (2) NM (2) NM (2)
AGRE Debt Fund I, LP 2011 716.1 714.6 712.2 37.9 709.2 747.1 NM (2) NM (2) NM (2) NM (2)
2011 A4 Fund, L.P. 2011 234.7 219.7 930.8 938.6 938.6 15.9 % (2) 13.8% (2) NM (2) NM (2)
AGRE CMBS Fund, L.P. 2009 418.8 139.4 1,572.9 530.9 530.9 13.6 11.4 14.1 % 11.8 %
CPI Capital Partners North America 2006 600.0 80.7 452.5 296.4 72.4 368.8 15.6 (4) 11.1 (4) NM (4) NM (4)
CPI Capital Partners Asia Pacific 2006 1,291.6 442.5 1,151.1 1,107.9 451.7 1,559.6 34.3 (4) 30.7 (4) NM (4) NM (4)
CPI Capital Partners Europe (5) 2006 1,511.7 558.2 997.6 153.1 541.1 694.2 3.1 (4) 1.1 (4) NM (4) NM (4)
CPI Other (6) Various 2,960.1   945.7   N/A (6) N/A (6) N/A (6) N/A (6) NM (6) NM (6) NM (6) NM (6)
Totals $ 8,526.4   $ 3,507.3   $ 6,218.0   $ 1,597.9   $ 3,648.7   $ 5,246.6  
 
      (1)     Figures include estimated fair value of unrealized investments.
(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) AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund that intends to make real estate-related investments principally located in the United States, held closings in January 2011, June 2011 and April 2012 for a total of $263.2 million in base capital commitments and $450 million in additional capital commitments. Additionally, there was $72.0 million of co-invest commitments raised for an investment in the first quarter of 2012, which is included in the figures in the table above.
(4) As part of the Citi Property Investors (“CPI”) acquisition, Apollo acquired general partner interests in fully invested funds. The gross and net IRRs are presented in the investment record table above since acquisition on November 12, 2010. The net IRRs from the inception of the respective fund to June 30, 2013 were (7.9)%, 6.5% and (10.5)% for the CPI Capital Partners North America, Asia Pacific and Europe funds, respectively. These net IRRs were 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.
(5) CPI Capital Partners Europe is denominated in Euros and translated into U.S. dollars at an exchange rate of €1.00 to $1.30 as of June 30, 2013.
(6) CPI Other consists of funds or individual investments of which we are not the general partner or manager and only receive fees pursuant to either a sub-advisory agreement or an investment management and administrative agreement. CPI Other fund performance is a result of invested capital prior to Apollo’s management of these funds. Return and certain other performance data are therefore not considered meaningful as we perform primarily an administrative role.

The following table summarizes the investment record for Apollo Commercial Real Estate Finance, Inc. (“ARI”) as of June 30, 2013:

 
  Vintage Year   Raised Capital   Gross Assets   Current Net Asset Value
(in millions)
ARI (1) 2009 $713.9 $898.1 $686.0
 
      (1)     Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained in ARI’s website is not part of this press release.

APOLLO GLOBAL MANAGEMENT, LLC SUPPLEMENTAL SEGMENT INFORMATION (UNAUDITED)

   

Athene and SIAs

As of June 30, 2013, Athene Asset Management LLC had approximately $15.7 billion of total AUM, of which approximately $6.6 billion was either sub-advised by Apollo or invested in Apollo funds and investment vehicles.

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