Private Equity Segment

ENI from Apollo’s private equity segment was $55.8 million for the second quarter of 2012, a $56.5 million or 50% decrease compared to $112.3 million for the second quarter of 2011. Management Business revenues for the private equity segment were $134.3 million for the second quarter of 2012, compared to $87.0 million for the second quarter of 2011. The $47.3 million increase was primarily driven by higher advisory and transaction fees from the EP Energy acquisition previously mentioned. Management Business expenses for the private equity segment were $69.1 million for the second quarter of 2012, compared to $61.9 million for the second quarter of 2011.

Apollo’s private equity segment reported $5.7 million of total carried interest income for the second quarter of 2012, compared to $139.0 million for the same period in 2011. Profit sharing expense was $13.8 million for the second quarter of 2012, compared to $60.0 million for the same period in 2011. Income from equity method investments was $1.9 million for the second quarter of 2012, compared to $4.5 million for the same period in 2011.

Apollo’s private equity fund performance, as measured by IRR, was down slightly during the second quarter of 2012. From its inception in 2008 through June 30, 2012, Fund VII generated an annual gross and net IRR of 33% and 23%, respectively. Fund VI, which began investing in 2006 during the peak of the credit and housing market boom, generated an annual gross and net IRR of 9% and 8%, respectively, since its inception through June 30, 2012. The combined fair value of Apollo’s private equity funds was 46% above cost as of June 30, 2012 and appreciated by 1% during the second quarter of 2012.

Apollo continued to identify compelling investment opportunities during the quarter, led by the previously mentioned acquisition of EP Energy for approximately $7.1 billion including debt. Private equity capital invested during the second quarter of 2012 was $1.7 billion, and uncalled private equity commitments, or “dry powder”, was $6.6 billion as of June 30, 2012.

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