Form 8-K Apollo Global Management For: Oct 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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October 30, 2014
Date of Report (Date of earliest event reported)
Apollo Global Management, LLC
(Exact name of registrant as specified in its charter)
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Delaware | � | 001-35107 | � | 20-8880053 |
(State of Incorporation) | � | (Commission File Number) | � | (IRS Employer |
� | � | � | � | Identification Number) |
� | � | 9 West 57th�Street, 43rd�Floor | � | � |
� | � | New York, New York 10019 | � | � |
� | � | (Address of principal executive offices) (Zip Code) | � | � |
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(212) 515-3200
(Registrant's telephone number, including area code)
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N/A
(Former Name or Former Address, if Changed Since Last Report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 ����Results of Operations and Financial Condition.
On October 30, 2014, Apollo Global Management, LLC issued a press release announcing its financial results for the third quarter ended September 30, 2014.
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A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01����Financial Statements and Exhibits.
(d)����Exhibits
Exhibit No. | Description |
Exhibit 99.1 | Press release of Apollo Global Management, LLC dated October 30, 2014 |
The information included in this Current Report on Form�8-K (including the exhibit hereto) is being furnished under Item 2.02, "Results of Operations and Financial Condition" and Item 9.01 Financial Statements and Exhibits of Form�8-K.��As such, the information (including the exhibit) herein shall not be deemed to be "filed" for the purposes of Section�18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
APOLLO GLOBAL MANAGEMENT, LLC | ||
Date: October 30, 2014 | By: | /s/ Martin Kelly |
Martin Kelly | ||
Chief Financial Officer | ||
EXHIBIT INDEX
Exhibit No. | Description |
Exhibit 99.1 | Press release of Apollo Global Management, LLC dated October 30, 2014 |
Exhibit 99.1
�Apollo Global Management, LLC Reports Third Quarter 2014 Results
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" | U.S. GAAP net income attributable to Apollo Global Management, LLC of $2.2 million for the third quarter ended September�30, 2014, compared to $192.5 million for the comparable period in 2013 |
" | Apollo declares a distribution of $0.73 per Class A share for the third quarter of 2014 |
" | Total economic net income ( ENI ) after taxes of $48.0 million for the third quarter ended September�30, 2014, compared to $550.9 million for the comparable period in 2013 |
" | ENI after taxes per share of $0.12 for the third quarter ended September�30, 2014, compared to $1.40 per share for the comparable period in 2013 |
" | Total distributable earnings ( DE ) after taxes and related payables of $342.7 million for the third quarter ended September�30, 2014, compared to $455.6 million for the comparable period in 2013 |
" | Total assets under management ( AUM ) of $163.9 billion as of September 30, 2014, compared to $112.7 billion as of September 30, 2013 |
New York, October 30, 2014 - Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, Apollo ) today reported results for the third quarter ended September 30, 2014.
U.S. GAAP results for the third quarter ended September�30, 2014 included net income attributable to Apollo Global Management, LLC of $2.2 million and net loss per Class A share of $0.05, compared to $192.5 million, or $1.13 per Class A share, for the same period in 2013. The net loss per Class A share during the current quarter is a result of undistributed GAAP losses in excess of distributions paid to Class A shareholders during the quarter.
Apollo reported ENI after taxes of $48.0 million for the third quarter ended September 30, 2014, compared to $550.9 million for the same period in 2013. The $502.9 million decrease in ENI after taxes was driven by lower Incentive Business ENI, partially offset by an increase in Management Business ENI.
Apollo reported DE after taxes and related payables of $342.7 million for the third quarter ended September 30, 2014, compared to $455.6 million for the same period in 2013. The $112.9 million decrease in DE after taxes and related payables was primarily driven by lower net realized carried interest income compared to the same period in 2013.
Apollos total AUM was $163.9 billion as of September�30, 2014, an increase of $51.2 billion, or 45%, compared to $112.7 billion as of September 30, 2013. Fee-generating AUM was $129.6 billion as of September 30, 2014, an increase of $50.3 billion, or 63%, compared to $79.3 billion as of September 30, 2013. The
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increase in total AUM and fee-generating AUM was driven by growth in Apollos credit and private equity segments.
During the third quarter, we sustained our pace of significant realization activity and distributed nearly $4.6 billion to Apollos fund investors, bringing the total to $16.5 billion in the last four quarters, said Leon Black, Chairman and Chief Executive Officer.� In the current market environment, we continue to leverage Apollos integrated global platform to raise and deploy capital across all of our businesses, while maintaining our strong investment performance.
Combined Segments
Total revenue for Apollos combined segments was $241.1 million for the third quarter ended September�30, 2014, a decrease of $912.3 million, or 79%, compared to the same period in 2013, due to a decrease in Incentive Business revenues of $1.0 billion due primarily to a $871.6 million decrease in unrealized carried interest, partially offset by an increase in Management Business revenues of $107.9 million. Total expenses for Apollos combined segments were $171.5 million for the third quarter ended September�30, 2014, a decrease of $413.4 million, or 71%, compared to the same period in 2013, primarily driven by a decrease in profit sharing expense.
Total revenue for Apollo's Management Business was $311.1 million for the third quarter ended September�30, 2014, an increase of $107.9 million, or 53%, from the same period in 2013. This includes management fee revenues of $227.7 million for the third quarter ended September�30, 2014, an increase of $62.5 million, or 38%, from the same period in 2013, primarily due to an increase in fee-generating AUM. In addition, there was $71.3 million of advisory and transaction fees for the third quarter ended September�30, 2014, an increase of $42.4 million, or 147%, from the same period in 2013 primarily due to a higher capital and surplus fee earned from Athene Holding Ltd and its subsidiaries ("Athene").
Total expenses for Apollo's Management Business were $177.2 million for the third quarter ended September�30, 2014, an increase of $16.9 million, or 11%, from the same period in 2013. Total compensation expenses, including salary and benefits and equity-based compensation, were $107.1 million for the third quarter ended September 30, 2014, an increase of $9.3 million, or 10%, from the same period in 2013. This increase was principally driven by increased headcount to support growth in fee-generating AUM. Non-compensation expenses for Apollo's Management Business were $70.1 million during the third quarter ended September 30, 2014, an increase of $7.6 million from the same period in 2013 primarily due to placement fees.
Apollo's Incentive Business reported total carried interest loss of $70.0 million for the third quarter ended September�30, 2014, a decrease of $1.0 billion from the same period in 2013. Apollo reported a net reversal of total profit sharing expense of $5.7 million for the third quarter ended September 30, 2014, resulting in a decrease in total profit sharing expense of $430.3 million from the same period in 2013. The decrease in total profit sharing expense was driven by the corresponding decrease in carried interest income from the same period in 2013. During the third quarter ended September�30, 2014, the Incentive Business generated $490.3 million of realized gains, which was largely attributable to partial dispositions relating to a number of investments held by funds managed by Apollo, including Sprouts Farmers Market, Inc., Rexnord Corporation, and Athlon Energy, Inc., and a final disposition of Berry Plastics Group Inc.
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Private Equity Segment
Apollo's private equity segment reported an economic net loss of $23.1 million for the third quarter ended September�30, 2014, compared to an economic net income of $538.5 million for the same period in 2013. Apollos private equity segment had a net unrealized carried interest loss of $79.5 million for the third quarter ended September 30, 2014, which included realized carried interest income of $370.0 million that was largely driven by dispositions in Apollo Investment Fund VI, L.P. ("Fund VI") and Apollo Investment Fund VII, L.P. ("Fund VII").
Apollo's traditional private equity funds depreciated by approximately 2% during the third quarter ended September�30, 2014. From its inception in 2008 through September�30, 2014, Fund VII generated an annual gross and net IRR of 38% and 29%, respectively. Fund VI, which began investing in 2006, generated an annual gross and net IRR of 13% and 11%, respectively, since its inception through September�30, 2014.
Management fees from Apollo's private equity segment were $76.8 million for the third quarter ended September 30, 2014, which increased by $12.0 million compared to the same period in 2013 due to the commencement of Apollo Investment Fund VIII, L.P.s ("Fund VIII") investment period, partially offset by significant realizations in Fund VI and Fund VII as well as a change in the fee basis with respect to Fund VII. Advisory and transaction fees were $11.8 million for the third quarter ended September 30, 2014, which increased by $6.2 million compared to the same period in 2013 primarily due to a transaction fee associated with a recent acquisition. Total Management Business expenses within the private equity segment were $51.1 million for the third quarter of 2014, which decreased by $5.4 million compared to the same period in 2013.
Uncalled commitments within Apollo's private equity segment were $22.4 billion as of September�30, 2014, and $901 million of capital was deployed by these funds and co-investment vehicles during the third quarter ended September�30, 2014. As of September 30, 2014, Apollo's private equity segment total AUM was $46.2 billion, compared to $42.8 billion at September�30, 2013.
Credit Segment
Apollo's credit segment generated ENI of $109.2 million for the third quarter ended September�30, 2014, compared to ENI of $79.5 million for the third quarter of 2013. The $29.7 million year-over-year increase in ENI resulted from an increase in ENI in the Management Business, which generated ENI of $97.7 million for the third quarter ended September 30, 2014, compared to $47.6 million for the same period in 2013 as a result of higher management fees and advisory and transaction fees. This was offset by a reduction in ENI in the Incentive Business, which generated ENI of $11.5 million for the third quarter ended September 30, 2014, compared to $31.9 million for the same period in 2013 as a result of lower net carried interest income.
Management fees from Apollo's credit segment were $139.7 million for the third quarter ended September�30, 2014, which increased by $52.7 million, or 61%, compared to the same period in 2013 primarily due to higher fee-generating AUM from Athene. Total Management Business expenses within the credit segment were $111.2 million for the third quarter of 2014, which increased by $26.9 million compared to the same period in 2013, primarily due to costs associated with managing a greater amount of fee-generating AUM.
Uncalled commitments within our credit segment were $9.2 billion as of September�30, 2014, and $917 million of capital was deployed by Apollo's credit funds and strategic investment accounts ("SIAs") with a defined maturity date during the third quarter ended September�30, 2014. As of September 30, 2014, Apollo's credit segment total AUM was $107.7 billion, compared to $59.4 billion at September�30, 2013.
Real Estate Segment
Apollo's real estate segment had an economic net loss of $2.9 million for the third quarter of 2014, compared to an economic net loss of $3.1 million for the same period in 2013. Total revenues for the real estate segment during the third quarter of 2014 were $8.5 million, a decrease of $8.2 million, compared to the same period in 2013, primarily due to lower carried interest compared to the same period in 2013. Total expenses for the
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real estate segment during the third quarter of 2014 were $11.6 million, a decrease of $9.8 million compared to the same period in 2013 due to lower profit share expense and lower Management Business compensation compared to the same period in 2013.
Uncalled commitments within Apollo's real estate segment were $898 million as of September 30, 2014, and $369 million of capital was deployed by Apollo's real estate funds and SIAs with a defined maturity date and funds and SIAs in Apollo's real estate debt strategy during the third quarter ended September 30, 2014. As of September 30, 2014, Apollo's real estate segment total AUM was $9.0 billion, compared to $9.3 billion at September�30, 2013.
Capital and Liquidity
As of September 30, 2014, Apollo had $1.4 billion of cash and cash equivalents and $1.0 billion of debt (which does not include a $500 million undrawn revolving credit facility). These amounts exclude cash and debt associated with Apollo's consolidated funds and consolidated variable interest entities ( VIEs ).
As of September 30, 2014, Apollo had a $1.5 billion carried interest receivable on an unconsolidated basis and corresponding profit sharing payable of $755.3 million, as well as total investments on an unconsolidated basis, including investments in its private equity, credit and real estate funds, of $822 million.
Distribution
Apollo Global Management, LLC has declared a third quarter 2014 cash distribution of $0.73 per Class A share. This distribution will be paid on November 21, 2014 to holders of record at the close of business on November 14, 2014. Apollo intends to distribute to its shareholders on a quarterly basis substantially all of its distributable earnings after taxes and related payables 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 in the future.
Conference Call
Apollo will host a conference call on Thursday, October 30, 2014 at 8:00 a.m. Eastern Time. During the call, members of Apollos senior management team will review Apollo's financial results for the third quarter ended September 30, 2014. 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 12339063 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 12339063. 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, Toronto, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $164 billion as of September�30, 2014 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.
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Contact Information
For inquiries regarding Apollo, please contact:
Gary M. Stein
Head of Corporate Communications
Apollo Global Management, LLC
212-822-0467
Noah Gunn
Investor Relations Manager
Apollo Global Management, LLC
212-822-0540
For media inquiries regarding Apollo, please contact:
Charles Zehren
Rubenstein Associates, Inc. for Apollo Global Management, LLC
212-843-8590
Forward-Looking Statements
In this press release, references to Apollo, we, us, our and the Company refer collectively to Apollo Global Management, LLC, together with its consolidated subsidiaries. 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 Apollo's Form 10-K filed with the Securities and Exchange Commission ( SEC ) on March�3, 2014, 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 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.
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APOLLO GLOBAL MANAGEMENT, LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(dollars in thousands, except share data)
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� | Three Months Ended� �September 30, | Nine Months Ended� �September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues: | |||||||||||||||
Advisory and transaction fees from affiliates, net | $ | 71,071 | $ | 28,961 | $ | 247,922 | $ | 141,465 | |||||||
Management fees from affiliates | 207,297 | 151,127 | 643,508 | 456,644 | |||||||||||
Carried interest (loss) income from affiliates | (57,233 | ) | 952,001 | 393,257 | 2,340,314 | ||||||||||
Total Revenues | 221,135 | 1,132,089 | 1,284,687 | 2,938,423 | |||||||||||
Expenses: | |||||||||||||||
Compensation and benefits: | |||||||||||||||
Equity-based compensation | 13,987 | 20,832 | 101,676 | 109,619 | |||||||||||
Salary, bonus and benefits | 90,402 | 81,266 | 260,764 | 223,944 | |||||||||||
Profit sharing expense | (5,804 | ) | 424,542 | 258,933 | 975,406 | ||||||||||
Total Compensation and Benefits | 98,585 | 526,640 | 621,373 | 1,308,969 | |||||||||||
Interest expense | 7,389 | 7,179 | 15,027 | 22,291 | |||||||||||
Professional fees | 17,936 | 18,752 | 57,599 | 56,477 | |||||||||||
General, administrative and other | 23,652 | 21,720 | 73,621 | 70,698 | |||||||||||
Placement fees | 8,760 | 3,185 | 14,035 | 15,663 | |||||||||||
Occupancy | 9,916 | 9,849 | 30,237 | 29,803 | |||||||||||
Depreciation and amortization | 11,150 | 12,790 | 33,984 | 41,603 | |||||||||||
Total Expenses | 177,388 | 600,115 | 845,876 | 1,545,504 | |||||||||||
Other (Loss) Income: | |||||||||||||||
Net gains from investment activities | 12 | 74,045 | 213,886 | 127,294 | |||||||||||
Net (losses) gains from investment activities of consolidated variable interest entities | (98,848 | ) | 78,601 | (7,688 | ) | 91,264 | |||||||||
Income from equity method investments | 4,445 | 32,236 | 58,056 | 80,116 | |||||||||||
Interest income | 2,243 | 3,304 | 8,297 | 9,444 | |||||||||||
Other income, net | 10,013 | 22,634 | 29,782 | 26,710 | |||||||||||
Total Other (Loss) Income | (82,135 | ) | 210,820 | 302,333 | 334,828 | ||||||||||
(Loss) Income before income tax provision | (38,388 | ) | 742,794 | 741,144 | 1,727,747 | ||||||||||
Income tax provision | (29,376 | ) | (47,204 | ) | (96,962 | ) | (83,922 | ) | |||||||
Net (Loss) Income | (67,764 | ) | 695,590 | 644,182 | 1,643,825 | ||||||||||
Net loss (income) attributable to Non-controlling Interests | 69,974 | (503,074 | ) | (498,135 | ) | (1,143,594 | ) | ||||||||
Net Income Attributable to Apollo Global Management, LLC | $ | 2,210 | $ | 192,516 | $ | 146,047 | $ | 500,231 | |||||||
Net (Loss) Income Per Class�A Share: | |||||||||||||||
Net (Loss) Income Available to Class�A Share Basic | $ | (0.05 | ) | $ | 1.13 | $ | 0.58 | $ | 3.11 | ||||||
Net (Loss) Income Available to Class�A Share Diluted | $ | (0.05 | ) | $ | 1.13 | $ | 0.58 | $ | 3.08 | ||||||
Weighted Average Number of Class�A Shares Basic | 158,466,602 | 142,829,913 | 153,071,007 | 137,165,119 | |||||||||||
Weighted Average Number of Class�A Shares Diluted | 158,466,602 | 146,212,984 | 153,071,007 | 140,423,929 | |||||||||||
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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 | Nine Months Ended | |||||||||||||||||||||||||||||||||
� | March 31, 2013 | June 30, 2013 | September 30, � �2013 | December 31, 2013 | March 31, 2014 | June 30, 2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | ||||||||||||||||||||||||||
Management Business: | |||||||||||||||||||||||||||||||||||
Advisory and transaction fees from affiliates, net | $ | 47.4 | $ | 65.1 | $ | 28.9 | $ | 55.2 | $ | 116.1 | $ | 60.8 | $ | 71.3 | $ | 141.4 | $ | 248.2 | |||||||||||||||||
Management fees from affiliates | 164.3 | 169.3 | 165.2 | 231.8 | 223.8 | 228.9 | 227.7 | 498.8 | 680.4 | ||||||||||||||||||||||||||
Carried interest income from affiliates: | |||||||||||||||||||||||||||||||||||
Realized gains | 9.0 | 10.1 | 9.1 | 8.7 | 8.5 | 10.0 | 12.1 | 28.2 | 30.6 | ||||||||||||||||||||||||||
Total management business revenues | 220.7 | 244.5 | 203.2 | 295.7 | 348.4 | 299.7 | 311.1 | 668.4 | 959.2 | ||||||||||||||||||||||||||
Equity-based compensation(1) | 17.4 | 16.8 | 16.5 | 15.6 | 58.1 | 13.7 | 15.3 | 50.7 | 87.1 | ||||||||||||||||||||||||||
Salary, bonus and benefits | 73.4 | 69.3 | 81.3 | 70.8 | 80.5 | 89.9 | 91.8 | 224.0 | 262.2 | ||||||||||||||||||||||||||
Interest expense | 7.5 | 7.6 | 7.2 | 7.0 | 3.1 | 4.5 | 7.4 | 22.3 | 15.0 | ||||||||||||||||||||||||||
Professional fees | 15.4 | 21.6 | 18.4 | 27.0 | 19.0 | 19.9 | 17.7 | 55.4 | 56.6 | ||||||||||||||||||||||||||
General, administrative and other | 22.6 | 25.9 | 21.3 | 27.3 | 24.4 | 25.0 | 23.7 | 69.8 | 73.1 | ||||||||||||||||||||||||||
Placement fees | 9.4 | 3.1 | 3.2 | 26.7 | 1.8 | 3.5 | 8.7 | 15.7 | 14.0 | ||||||||||||||||||||||||||
Occupancy | 9.8 | 10.2 | 9.8 | 10.1 | 9.9 | 10.4 | 10.0 | 29.8 | 30.3 | ||||||||||||||||||||||||||
Depreciation and amortization(2) | 2.9 | 2.9 | 2.6 | 2.6 | 2.6 | 2.5 | 2.6 | 8.4 | 7.7 | ||||||||||||||||||||||||||
Total non-compensation expenses | 67.6 | 71.3 | 62.5 | 100.7 | 60.8 | 65.8 | 70.1 | 201.4 | 196.7 | ||||||||||||||||||||||||||
Total management business expenses | 158.4 | 157.4 | 160.3 | 187.1 | 199.4 | 169.4 | 177.2 | 476.1 | 546.0 | ||||||||||||||||||||||||||
Other income (loss) | 7.2 | 5.2 | 22.8 | 8.7 | 6.4 | 4.3 | (0.1 | ) | 35.2 | 10.6 | |||||||||||||||||||||||||
Non-controlling interest(3) | (3.5 | ) | (3.2 | ) | (2.8 | ) | (4.5 | ) | (3.3 | ) | (3.1 | ) | (3.2 | ) | (9.5 | ) | (9.6 | ) | |||||||||||||||||
Management Business Economic Net Income | 66.0 | 89.1 | 62.9 | 112.8 | 152.1 | 131.5 | 130.6 | 218.0 | 414.2 | ||||||||||||||||||||||||||
Incentive Business: | |||||||||||||||||||||||||||||||||||
Carried interest income: | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) | 771.4 | (574.9 | ) | 311.3 | (105.0 | ) | (301.8 | ) | 37.7 | (560.3 | ) | 507.8 | (824.4 | ) | |||||||||||||||||||||
Realized gains | 345.2 | 840.5 | 638.9 | 631.8 | 462.7 | 241.7 | 490.3 | 1,824.6 | 1,194.7 | ||||||||||||||||||||||||||
Total carried interest income | 1,116.6 | 265.6 | 950.2 | 526.8 | 160.9 | 279.4 | (70.0 | ) | 2,332.4 | 370.3 | |||||||||||||||||||||||||
Profit sharing expense: | |||||||||||||||||||||||||||||||||||
Unrealized profit sharing expense | 272.8 | (219.6 | ) | 165.3 | (23.2 | ) | (99.1 | ) | 65.9 | (220.8 | ) | 218.5 | (254.0 | ) | |||||||||||||||||||||
Realized profit sharing expense | 150.8 | 346.8 | 259.3 | 221.0 | 203.1 | 94.7 | 215.1 | 756.9 | 512.9 | ||||||||||||||||||||||||||
Total profit sharing expense | 423.6 | 127.2 | 424.6 | 197.8 | 104.0 | 160.6 | (5.7 | ) | 975.4 | 258.9 | |||||||||||||||||||||||||
Other income, net | 0.3 | 2.9 | 7.0 | 14.0 | 12.0 | 3.2 | 26.0 | ||||||||||||||||||||||||||||
Net gains (losses) from investment activities | 4.0 | (5.7 | ) | (7.1 | ) | (3.8 | ) | 18.0 | (9.3 | ) | 0.2 | (8.8 | ) | 8.9 | |||||||||||||||||||||
Income from equity method investments | 29.4 | 19.2 | 30.7 | 34.0 | 28.3 | 26.0 | 4.7 | 79.3 | 59.0 | ||||||||||||||||||||||||||
Other income | 33.4 | 13.8 | 26.5 | 37.2 | 60.3 | 16.7 | 16.9 | 73.7 | 93.9 | ||||||||||||||||||||||||||
Incentive Business Economic Net Income (Loss) | 726.4 | 152.2 | 552.1 | 366.2 | 117.2 | 135.5 | (47.4 | ) | 1,430.7 | 205.3 | |||||||||||||||||||||||||
Total Economic Net Income | 792.4 | 241.3 | 615.0 | 479.0 | 269.3 | 267.0 | 83.2 | 1,648.7 | 619.5 | ||||||||||||||||||||||||||
Income Tax Provision on Economic Net Income(4) | (28.8 | ) | (21.2 | ) | (64.1 | ) | (35.0 | ) | (50.7 | ) | (59.5 | ) | (35.2 | ) | (114.1 | ) | (145.4 | ) | |||||||||||||||||
Total Economic Net Income After Taxes | $ | 763.6 | $ | 220.1 | $ | 550.9 | $ | 444.0 | $ | 218.6 | $ | 207.5 | $ | 48.0 | $ | 1,534.6 | $ | 474.1 | |||||||||||||||||
Non-GAAP Weighted Average Diluted Shares Outstanding (in millions) | 392.1 | 393.8 | 394.8 | 395.3 | 398.1 | 399.7 | 400.6 | 393.5 | 399.4 | ||||||||||||||||||||||||||
Total ENI After Taxes per Share | $ | 1.95 | $ | 0.56 | $ | 1.40 | $ | 1.12 | $ | 0.55 | $ | 0.52 | $ | 0.12 | $ | 3.90 | $ | 1.19 | |||||||||||||||||
(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) | During the first quarter of 2014, the calculation of the income tax provision on economic net income was revised to include the benefit of tax deductions in excess of GAAP deductions from share-based arrangements, as further discussed in the definition of ENI After Taxes in the non-GAAP financial information and definitions section of this press release. The prior period financial data was recast to conform to the revised definition of income tax provision on economic net income. The difference in the ENI tax provision under the revised definition as compared to the previous methodology is $22.3 million or $0.06 per Class A share for each quarter presented in 2013. |
7
APOLLO GLOBAL MANAGEMENT, LLC
SEGMENT RESULTS (UNAUDITED)
(dollars in millions, except share data)
Private Equity Segment:
� | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
� | March�31, 2013 | June 30, 2013 | September 30, � �2013 | December�31, 2013 | March�31, 2014 | June 30, � �2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | ||||||||||||||||||||||||||
Management Business: | |||||||||||||||||||||||||||||||||||
Advisory and transaction fees from affiliates, net | $ | 24.5 | $ | 41.8 | $ | 5.6 | $ | 6.5 | $ | 37.7 | $ | 5.2 | $ | 11.8 | $ | 71.9 | $ | 54.7 | |||||||||||||||||
Management fees from affiliates | 66.3 | 65.7 | 64.8 | 88.0 | 79.4 | 82.1 | 76.8 | 196.8 | 238.3 | ||||||||||||||||||||||||||
Total management business revenues | 90.8 | 107.5 | 70.4 | 94.5 | 117.1 | 87.3 | 88.6 | 268.7 | 293.0 | ||||||||||||||||||||||||||
Equity-based compensation | 8.4 | 7.5 | 7.5 | 8.6 | 24.4 | 7.1 | 7.9 | 23.4 | 39.4 | ||||||||||||||||||||||||||
Salary, bonus and benefits | 27.4 | 25.7 | 27.9 | 28.8 | 22.3 | 26.7 | 23.8 | 81.0 | 72.8 | ||||||||||||||||||||||||||
Other expenses | 21.9 | 26.8 | 21.1 | 42.7 | 18.7 | 20.5 | 19.4 | 69.8 | 58.6 | ||||||||||||||||||||||||||
Total management business expenses | 57.7 | 60.0 | 56.5 | 80.1 | 65.4 | 54.3 | 51.1 | 174.2 | 170.8 | ||||||||||||||||||||||||||
Other income (loss) | 1.6 | 0.9 | 6.7 | 3.8 | 1.7 | 0.9 | (1.4 | ) | 9.2 | 1.2 | |||||||||||||||||||||||||
Management Business Economic Net Income | 34.7 | 48.4 | 20.6 | 18.2 | 53.4 | 33.9 | 36.1 | 103.7 | 123.4 | ||||||||||||||||||||||||||
Incentive Business: | |||||||||||||||||||||||||||||||||||
Carried interest income (loss): | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) | 697.6 | (509.7 | ) | 318.3 | (51.5 | ) | (293.6 | ) | (10.4 | ) | (449.5 | ) | 506.2 | (753.5 | ) | ||||||||||||||||||||
Realized gains | 293.4 | 738.2 | 534.1 | 496.9 | 396.9 | 198.0 | 370.0 | 1,565.7 | 964.9 | ||||||||||||||||||||||||||
Total carried interest income (loss) | 991.0 | 228.5 | 852.4 | 445.4 | 103.3 | 187.6 | (79.5 | ) | 2,071.9 | 211.4 | |||||||||||||||||||||||||
Profit sharing expense: | |||||||||||||||||||||||||||||||||||
Unrealized profit sharing expense | 256.0 | (199.6 | ) | 129.0 | (37.7 | ) | (115.9 | ) | 33.7 | (186.4 | ) | 185.4 | (268.6 | ) | |||||||||||||||||||||
Realized profit sharing expense | 131.9 | 312.9 | 229.1 | 208.8 | 182.0 | 82.1 | 167.2 | 673.9 | 431.3 | ||||||||||||||||||||||||||
Total profit sharing expense | 387.9 | 113.3 | 358.1 | 171.1 | 66.1 | 115.8 | (19.2 | ) | 859.3 | 162.7 | |||||||||||||||||||||||||
Other income, net | 0.1 | 0.4 | 1.2 | 1.6 | 0.5 | 1.6 | |||||||||||||||||||||||||||||
Income from equity method investments | 22.6 | 12.0 | 23.2 | 21.1 | 18.8 | 13.4 | 1.1 | 57.8 | 33.3 | ||||||||||||||||||||||||||
Total other income | 22.6 | 12.1 | 23.6 | 22.3 | 20.4 | 13.4 | 1.1 | 58.3 | 34.9 | ||||||||||||||||||||||||||
Incentive Business Economic Net Income (Loss) | 625.7 | 127.3 | 517.9 | 296.6 | 57.6 | 85.2 | (59.2 | ) | 1,270.9 | 83.6 | |||||||||||||||||||||||||
Total Economic Net Income (Loss) | $ | 660.4 | $ | 175.7 | $ | 538.5 | $ | 314.8 | $ | 111.0 | $ | 119.1 | $ | (23.1 | ) | $ | 1,374.6 | $ | 207.0 | ||||||||||||||||
8
APOLLO GLOBAL MANAGEMENT, LLC
SEGMENT RESULTS (UNAUDITED)
(dollars in millions, except share data)
Credit Segment:
� | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
� | March�31, 2013 | June�30, 2013 | September 30, � �2013 | December�31, 2013 | March�31, 2014 | June 30, � �2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | ||||||||||||||||||||||||||
Management Business: | |||||||||||||||||||||||||||||||||||
Advisory and transaction fees from affiliates, net | $ | 21.8 | $ | 22.0 | $ | 23.3 | $ | 47.6 | $ | 77.5 | $ | 55.6 | $ | 58.6 | $ | 67.1 | $ | 191.7 | |||||||||||||||||
Management fees from affiliates | 84.4 | 90.4 | 87.0 | 130.6 | 131.6 | 134.6 | 139.7 | 261.8 | 405.9 | ||||||||||||||||||||||||||
Carried interest income from affiliates: | |||||||||||||||||||||||||||||||||||
Realized gains | 9.0 | 10.1 | 9.1 | 8.7 | 8.5 | 10.0 | 12.1 | 28.2 | 30.6 | ||||||||||||||||||||||||||
Total management business revenues | 115.2 | 122.5 | 119.4 | 186.9 | 217.6 | 200.2 | 210.4 | 357.1 | 628.2 | ||||||||||||||||||||||||||
Equity-based compensation | 6.5 | 7.1 | 5.9 | 4.6 | 28.3 | 5.5 | 6.3 | 19.5 | 40.1 | ||||||||||||||||||||||||||
Salary, bonus and benefits | 38.8 | 36.4 | 44.0 | 33.9 | 50.7 | 55.8 | 60.4 | 119.2 | 166.9 | ||||||||||||||||||||||||||
Other expenses | 38.4 | 38.2 | 34.4 | 51.1 | 36.4 | 39.7 | 44.5 | 111.0 | 120.6 | ||||||||||||||||||||||||||
Total management business expenses | 83.7 | 81.7 | 84.3 | 89.6 | 115.4 | 101.0 | 111.2 | 249.7 | 327.6 | ||||||||||||||||||||||||||
Other income | 4.5 | 4.0 | 15.3 | 4.7 | 4.3 | 3.2 | 1.7 | 23.8 | 9.2 | ||||||||||||||||||||||||||
Non-controlling interest | (3.5 | ) | (3.2 | ) | (2.8 | ) | (4.5 | ) | (3.3 | ) | (3.1 | ) | (3.2 | ) | (9.5 | ) | (9.6 | ) | |||||||||||||||||
Management Business Economic Net Income | 32.5 | 41.6 | 47.6 | 97.5 | 103.2 | 99.3 | 97.7 | 121.7 | 300.2 | ||||||||||||||||||||||||||
Incentive Business: | |||||||||||||||||||||||||||||||||||
Carried interest income: | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) | 73.2 | (58.8 | ) | (10.3 | ) | (60.7 | ) | (7.9 | ) | 47.2 | (107.2 | ) | 4.1 | (67.9 | ) | ||||||||||||||||||||
Realized gains | 51.5 | 102.1 | 104.8 | 134.9 | 65.8 | 39.7 | 120.3 | 258.4 | 225.8 | ||||||||||||||||||||||||||
Total carried interest income | 124.7 | 43.3 | 94.5 | 74.2 | 57.9 | 86.9 | 13.1 | 262.5 | 157.9 | ||||||||||||||||||||||||||
Profit sharing expense: | |||||||||||||||||||||||||||||||||||
Unrealized profit sharing expense | 16.5 | (15.5 | ) | 34.5 | 12.4 | 17.4 | 31.0 | (30.9 | ) | 35.5 | 17.5 | ||||||||||||||||||||||||
Realized profit sharing expense | 18.8 | 33.9 | 30.2 | 11.9 | 21.1 | 11.0 | 47.7 | 82.9 | 79.8 | ||||||||||||||||||||||||||
Total profit sharing expense | 35.3 | 18.4 | 64.7 | 24.3 | 38.5 | 42.0 | 16.8 | 118.4 | 97.3 | ||||||||||||||||||||||||||
Other income, net | 0.2 | 2.5 | 5.8 | 12.4 | 12.0 | 2.7 | 24.4 | ||||||||||||||||||||||||||||
Net gains (losses) from investment activities | 4.0 | (5.7 | ) | (7.1 | ) | (3.8 | ) | 18.0 | (9.3 | ) | 0.2 | (8.8 | ) | 8.9 | |||||||||||||||||||||
Income from equity method investments | 6.9 | 6.4 | 6.7 | 10.7 | 8.8 | 9.4 | 3.0 | 20.0 | 21.2 | ||||||||||||||||||||||||||
Total other income | 10.9 | 0.9 | 2.1 | 12.7 | 39.2 | 0.1 | 15.2 | 13.9 | 54.5 | ||||||||||||||||||||||||||
Incentive Business Economic Net Income | 100.3 | 25.8 | 31.9 | 62.6 | 58.6 | 45.0 | 11.5 | 158.0 | 115.1 | ||||||||||||||||||||||||||
Total Economic Net Income | $ | 132.8 | $ | 67.4 | $ | 79.5 | $ | 160.1 | $ | 161.8 | $ | 144.3 | $ | 109.2 | $ | 279.7 | $ | 415.3 | |||||||||||||||||
9
APOLLO GLOBAL MANAGEMENT, LLC
SEGMENT RESULTS (UNAUDITED)
(dollars in millions, except share data)
Real Estate Segment:
�
� | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
� | March�31, 2013 | June 30, �2013 | September 30, � �2013 | December�31, 2013 | March�31, 2014 | June 30, � �2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | ||||||||||||||||||||||||||
Management Business: | |||||||||||||||||||||||||||||||||||
Advisory and transaction fees from affiliates, net | $ | 1.1 | $ | 1.3 | $ | $ | 1.1 | $ | 0.9 | $ | $ | 0.9 | $ | 2.4 | $ | 1.8 | |||||||||||||||||||
Management fees from affiliates | 13.6 | 13.2 | 13.4 | 13.2 | 12.8 | 12.2 | 11.2 | 40.2 | 36.2 | ||||||||||||||||||||||||||
Total management business revenues | 14.7 | 14.5 | 13.4 | 14.3 | 13.7 | 12.2 | 12.1 | 42.6 | 38.0 | ||||||||||||||||||||||||||
Equity-based compensation | 2.5 | 2.2 | 3.1 | 2.4 | 5.4 | 1.1 | 1.0 | 7.8 | 7.5 | ||||||||||||||||||||||||||
Salary, bonus and benefits | 7.2 | 7.1 | 9.4 | 8.2 | 7.5 | 7.4 | 7.6 | 23.7 | 22.5 | ||||||||||||||||||||||||||
Other expenses | 7.3 | 6.0 | 7.1 | 7.1 | 5.7 | 5.6 | 6.3 | 20.4 | 17.6 | ||||||||||||||||||||||||||
Total management business expenses | 17.0 | 15.3 | 19.6 | 17.7 | 18.6 | 14.1 | 14.9 | 51.9 | 47.6 | ||||||||||||||||||||||||||
Other income (loss) | 1.1 | 0.3 | 0.8 | 0.2 | 0.4 | 0.2 | (0.4 | ) | 2.2 | 0.2 | |||||||||||||||||||||||||
Management Business Economic Net Loss | (1.2 | ) | (0.5 | ) | (5.4 | ) | (3.2 | ) | (4.5 | ) | (1.7 | ) | (3.2 | ) | (7.1 | ) | (9.4 | ) | |||||||||||||||||
Incentive Business: | |||||||||||||||||||||||||||||||||||
Carried interest income (loss): | |||||||||||||||||||||||||||||||||||
Unrealized gains (losses) | 0.6 | (6.4 | ) | 3.3 | 7.2 | (0.3 | ) | 0.9 | (3.6 | ) | (2.5 | ) | (3.0 | ) | |||||||||||||||||||||
Realized gains | 0.3 | 0.2 | 4.0 | 0.5 | 4.0 | ||||||||||||||||||||||||||||||
Total carried interest income (loss) | 0.9 | (6.2 | ) | 3.3 | 7.2 | (0.3 | ) | 4.9 | (3.6 | ) | (2.0 | ) | 1.0 | ||||||||||||||||||||||
Profit sharing expense: | |||||||||||||||||||||||||||||||||||
Unrealized profit sharing expense | 0.3 | (4.5 | ) | 1.8 | 2.1 | (0.6 | ) | 1.2 | (3.5 | ) | (2.4 | ) | (2.9 | ) | |||||||||||||||||||||
Realized profit sharing expense | 0.2 | 0.2 | 1.6 | 0.2 | 0.2 | 1.8 | |||||||||||||||||||||||||||||
Total profit sharing expense | 0.5 | (4.5 | ) | 1.8 | 2.3 | (0.6 | ) | 2.8 | (3.3 | ) | (2.2 | ) | (1.1 | ) | |||||||||||||||||||||
(Loss) income from equity method investments | (0.1 | ) | 0.8 | 0.8 | 2.2 | 0.7 | 3.2 | 0.6 | 1.5 | 4.5 | |||||||||||||||||||||||||
Incentive Business Economic Net Income (Loss) | 0.3 | (0.9 | ) | 2.3 | 7.1 | 1.0 | 5.3 | 0.3 | 1.7 | 6.6 | |||||||||||||||||||||||||
Total Economic Net (Loss) Income | $ | (0.9 | ) | $ | (1.4 | ) | $ | (3.1 | ) | $ | 3.9 | $ | (3.5 | ) | $ | 3.6 | $ | (2.9 | ) | $ | (5.4 | ) | $ | (2.8 | ) | ||||||||||
10
APOLLO GLOBAL MANAGEMENT, LLC
DISTRIBUTABLE EARNINGS (UNAUDITED)
(dollars in millions, except share data)
Summary of Distributable Earnings and Economic Net Income
�Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
March 31, 2013 | �June 30, 2013 | September 30, � �2013 | �December 31, 2013 | �March 31, 2014 | �June 30, 2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | |||||||||||||||||||||||||||
Management Business Economic Net Income | $ | 66.0 | $ | 89.1 | $ | 62.9 | $ | 112.8 | $ | 152.1 | $ | 131.5 | $ | 130.6 | $ | 218.0 | $ | 414.2 | |||||||||||||||||
Net realized carried interest income | 194.4 | 493.7 | 379.6 | 410.8 | 259.6 | 147.0 | 275.2 | 1,067.7 | 681.8 | ||||||||||||||||||||||||||
Realized investment income(1) | 19.7 | 29.2 | 27.5 | 31.3 | 24.7 | 5.7 | 6.4 | 76.4 | 36.8 | ||||||||||||||||||||||||||
Athene capital and surplus fees(2) | (20.1 | ) | (21.8 | ) | (22.6 | ) | (45.5 | ) | (59.1 | ) | (51.9 | ) | (58.0 | ) | (64.5 | ) | (169.0 | ) | |||||||||||||||||
Equity-based compensation | 17.4 | 16.8 | 16.5 | 15.6 | 58.1 | 13.7 | 15.3 | 50.7 | 87.1 | ||||||||||||||||||||||||||
Depreciation and amortization | 2.9 | 2.9 | 2.6 | 2.6 | 2.6 | 2.5 | 2.6 | 8.4 | 7.7 | ||||||||||||||||||||||||||
Distributable Earnings | 280.3 | 609.9 | 466.5 | 527.6 | 438.0 | 248.5 | 372.1 | 1,356.7 | 1,058.6 | ||||||||||||||||||||||||||
Taxes and related payables(3) | (4.9 | ) | (6.0 | ) | (10.9 | ) | (19.4 | ) | (25.9 | ) | (21.4 | ) | (29.4 | ) | (21.8 | ) | (76.7 | ) | |||||||||||||||||
Distributable Earnings After Taxes and Related Payables | $ | 275.4 | $ | 603.9 | $ | 455.6 | $ | 508.2 | $ | 412.1 | $ | 227.1 | $ | 342.7 | $ | 1,334.9 | $ | 981.9 | |||||||||||||||||
Net unrealized carried interest income (loss) | 498.6 | (355.4 | ) | 146.0 | (81.7 | ) | (202.7 | ) | (28.2 | ) | (339.5 | ) | 289.2 | (570.4 | ) | ||||||||||||||||||||
Unrealized investment and other income (loss) | 13.7 | (15.3 | ) | (1.0 | ) | 5.8 | 35.6 | 11.0 | 10.5 | (2.6 | ) | 57.1 | |||||||||||||||||||||||
Add back: Athene capital and surplus fees(2) | 20.1 | 21.8 | 22.6 | 45.5 | 59.1 | 51.9 | 58.0 | 64.5 | 169.0 | ||||||||||||||||||||||||||
Add back: Taxes and related payables(3) | 4.9 | 6.0 | 10.9 | 19.4 | 25.9 | 21.4 | 29.4 | 21.8 | 76.7 | ||||||||||||||||||||||||||
Less: Equity-based compensation | (17.4 | ) | (16.8 | ) | (16.5 | ) | (15.6 | ) | (58.1 | ) | (13.7 | ) | (15.3 | ) | (50.7 | ) | (87.1 | ) | |||||||||||||||||
Less: Depreciation and amortization | (2.9 | ) | (2.9 | ) | (2.6 | ) | (2.6 | ) | (2.6 | ) | (2.5 | ) | (2.6 | ) | (8.4 | ) | (7.7 | ) | |||||||||||||||||
Total Economic Net Income | 792.4 | 241.3 | 615.0 | 479.0 | 269.3 | 267.0 | 83.2 | 1,648.7 | 619.5 | ||||||||||||||||||||||||||
Income Tax Provision on Economic Net Income | (28.8 | ) | (21.2 | ) | (64.1 | ) | (35.0 | ) | (50.7 | ) | (59.5 | ) | (35.2 | ) | (114.1 | ) | (145.4 | ) | |||||||||||||||||
Total Economic Net Income After Taxes | $ | 763.6 | $ | 220.1 | $ | 550.9 | $ | 444.0 | $ | 218.6 | $ | 207.5 | $ | 48.0 | $ | 1,534.6 | $ | 474.1 | |||||||||||||||||
(1) | Represents realized gains from our general partner investments in our funds and other balance sheet investments. |
(2) | Represents monitoring fees paid by Athene to Apollo by delivery of common shares of Athene Holding, calculated based on Athene's capital and surplus, as defined in our transaction and advisory services agreement with Athene. |
(3) | Represents the estimated current corporate, local and Non-U.S. taxes as well as the payable under Apollo's tax receivable agreement. |
11
APOLLO GLOBAL MANAGEMENT, LLC
DISTRIBUTABLE EARNINGS (UNAUDITED)
(dollars in millions, except share data)
Distribution to Common and Equivalents(1)�
�Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
March 31, 2013 | �June 30, 2013 | September 30, � �2013 | �December 31, 2013 | �March 31, 2014 | �June 30, 2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | |||||||||||||||||||||||||||
Distributable Earnings After Taxes and Related Payables | $ | 275.4 | $ | 603.9 | $ | 455.6 | $ | 508.2 | $ | 412.1 | $ | 227.1 | $ | 342.7 | $ | 1,334.9 | $ | 981.9 | |||||||||||||||||
Add back: Taxes and related payables attributable to common and equivalents | 2.7 | 3.7 | 8.6 | 17.2 | 22.6 | 18.7 | 26.9 | 15.0 | 68.2 | ||||||||||||||||||||||||||
Distributable earnings before certain payables(2) | 278.1 | 607.6 | 464.2 | 525.4 | 434.7 | 245.8 | 369.6 | 1,349.9 | 1,050.1 | ||||||||||||||||||||||||||
Percent to common and equivalents | 40 | % | 42 | % | 42 | % | 43 | % | 43 | % | 45 | % | 45 | % | 42 | % | 44 | % | |||||||||||||||||
Distributable earnings before other payables attributable to common and equivalents | 111.0 | 257.8 | 195.5 | 225.4 | 186.8 | 111.1 | 167.9 | 564.3 | 465.8 | ||||||||||||||||||||||||||
Less: Taxes and related payables attributable to common and equivalents | (2.7 | ) | (3.7 | ) | (8.6 | ) | (17.2 | ) | (22.6 | ) | (18.7 | ) | (26.9 | ) | (15.0 | ) | (68.2 | ) | |||||||||||||||||
Distributable earnings attributable to common and equivalents | 108.3 | 254.1 | 186.9 | 208.2 | 164.2 | 92.4 | 141.0 | 549.3 | 397.6 | ||||||||||||||||||||||||||
Distributable earnings per share of common and equivalent(3) | $ | 0.69 | $ | 1.51 | $ | 1.11 | $ | 1.21 | $ | 0.94 | $ | 0.51 | $ | 0.77 | $ | 3.31 | $ | 2.22 | |||||||||||||||||
Retained capital per share of common and equivalent(3) | (0.12 | ) | (0.19 | ) | (0.10 | ) | (0.13 | ) | (0.10 | ) | (0.05 | ) | (0.04 | ) | (0.41 | ) | (0.19 | ) | |||||||||||||||||
Net distribution per share of common and equivalent(3) | $ | 0.57 | $ | 1.32 | $ | 1.01 | $ | 1.08 | $ | 0.84 | $ | 0.46 | $ | 0.73 | $ | 2.90 | $ | 2.03 | |||||||||||||||||
(1) | Common and equivalents refers to Class A shares and RSUs that participate in distributions. |
(2) | Distributable earnings before certain payables represents distributable earnings before the deduction for the estimated current corporate taxes and the payable under Apollo's tax receivable agreement. |
(3) | Per share calculations are based on total Class A shares outstanding and RSUs that participate in distributions. |
12
APOLLO GLOBAL MANAGEMENT, LLC
RECONCILIATION OF U.S. GAAP NET INCOME
ATTRIBUTABLE TO APOLLO GLOBAL MANAGEMENT, LLC
TO ECONOMIC NET INCOME
(UNAUDITED)
(dollars in millions)
Reconciliation of U.S. GAAP Net Income Attributable to Apollo Global Management, LLC to Economic Net Income:
�
� | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
March�31, 2013 | June 30, 2013 | September 30, � �2013 | December�31, 2013 | March�31, 2014 | June 30, � �2014 | September 30, � �2014 | September 30, � �2013 | September 30, � �2014 | |||||||||||||||||||||||||||
Net Income Attributable to Apollo Global Management, LLC | $ | 249.0 | $ | 58.7 | $ | 192.5 | $ | 159.2 | $ | 72.2 | $ | 71.7 | $ | 2.2 | $ | 500.2 | $ | 146.1 | |||||||||||||||||
Impact of non-cash charges related to equity-based compensation: | |||||||||||||||||||||||||||||||||||
AOG units | 15.0 | 15.0 | 30.0 | ||||||||||||||||||||||||||||||||
RSUs - Private placement awards(1) | 11.4 | 11.0 | 3.3 | 0.1 | 0.1 | (0.2 | ) | 25.7 | (0.1 | ) | |||||||||||||||||||||||||
Other equity-based compensation awards�(2) | 1.3 | 0.5 | 0.6 | 0.4 | 0.1 | (0.1 | ) | 0.1 | 2.4 | 0.1 | |||||||||||||||||||||||||
AAA RDUs | 0.3 | 0.2 | 0.3 | 0.4 | 0.2 | (0.1 | ) | 0.8 | 0.1 | ||||||||||||||||||||||||||
Total non-cash charges related to equity-based compensation | 28.0 | 26.7 | 4.2 | 0.9 | 0.4 | (0.4 | ) | 0.1 | 58.9 | 0.1 | |||||||||||||||||||||||||
Income tax provision | 18.6 | 18.1 | 47.2 | 23.7 | 32.5 | 35.0 | 29.4 | 83.9 | 96.9 | ||||||||||||||||||||||||||
Amortization of intangible assets associated with the 2007 ����������reorganization and acquisitions | 11.6 | 11.3 | 10.3 | 10.0 | 9.1 | 8.6 | 8.6 | 33.2 | 26.3 | ||||||||||||||||||||||||||
Net income attributable to Non-controlling Interests in ����������Apollo Operating Group | 485.2 | 126.5 | 360.8 | 285.2 | 155.1 | 152.1 | 42.9 | 972.5 | 350.1 | ||||||||||||||||||||||||||
Economic Net Income | $ | 792.4 | $ | 241.3 | $ | 615.0 | $ | 479.0 | $ | 269.3 | $ | 267.0 | $ | 83.2 | $ | 1,648.7 | $ | 619.5 | |||||||||||||||||
(1) | Represents RSU awards granted in connection with the 2007 private placement. |
(2) | Includes non-cash revenue and expense related to equity awards granted by unconsolidated affiliates to employees of the Company. |
13
APOLLO GLOBAL MANAGEMENT, LLC
ASSETS UNDER MANAGEMENT (UNAUDITED)
Assets Under ManagementFee-Generating and Non-Fee Generating
The table below sets forth fee-generating and non-fee generating AUM by segment as of September�30, 2014 and 2013 and December�31, 2013. Changes in market conditions and additional funds raised have had significant impact on Apollo's AUM.
�
� | As of � �September 30, | As of � �December 31, | ||||||||||
� | 2014 | 2013 | 2013 | |||||||||
� | (in millions)���� | |||||||||||
Total Assets Under Management | $ | 163,900 | (1)� | $ | 112,687 | (1)� | $ | 161,177 | (1)� | |||
Fee-generating | 129,577 | 79,343 | 128,368 | |||||||||
Non-fee generating | 34,323 | (1)� | 33,344 | (1)� | 32,809 | (1)� | ||||||
Private Equity | 46,173 | 42,767 | 49,908 | |||||||||
Fee-generating | 32,104 | 27,059 | 34,173 | |||||||||
Non-fee generating | 14,069 | 15,708 | 15,735 | |||||||||
Credit | 107,675 | 59,359 | 100,886 | |||||||||
Fee-generating | 91,614 | 46,625 | 88,249 | |||||||||
Non-fee generating | 16,061 | 12,734 | 12,637 | |||||||||
Real Estate | 9,045 | 9,339 | 9,289 | |||||||||
Fee-generating | 5,859 | 5,659 | 5,946 | |||||||||
Non-fee generating | 3,186 | 3,680 | 3,343 | |||||||||
�
(1) | As of September�30, 2014 and 2013 and December�31, 2013, includes $1.0 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments. |
The following table presents Carry Eligible AUM and Carry Generating AUM for each of Apollo's three segments as of September�30, 2014 and 2013 and December�31, 2013:
Carry Eligible AUM | Carry Generating AUM | ||||||||||||||||||||||
As of � �September 30, | As of � �December 31, | As of � �September 30, | As of � �December 31, | ||||||||||||||||||||
2014 | 2013 | 2013 | 2014 | 2013 | 2013 | ||||||||||||||||||
(in millions)���� | |||||||||||||||||||||||
Private equity | $ | 40,527 | $ | 39,157 | $ | 45,050 | $ | 18,651 | $ | 11,635 | $ | 24,791 | |||||||||||
Credit | 38,676 | 29,541 | 34,580 | 24,439 | 20,476 | 23,539 | |||||||||||||||||
Real estate | 2,525 | 3,043 | 3,041 | 850 | 540 | 941 | |||||||||||||||||
Total(1)(2) | $ | 82,734 | $ | 72,972 | $ | 83,729 | $ | 43,940 | $ | 32,651 | $ | 49,271 | |||||||||||
(1) | As of September�30, 2014 and 2013 and December�31, 2013, Carry Eligible AUM includes $1.0 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments. |
(2) | As of September�30, 2014 and 2013 and December�31, 2013, Carry Eligible AUM includes $29.5 billion, $21.6 billion and $28.7 billion of Uninvested Carry Eligible AUM, respectively, and $9.3 billion, $18.7 billion and $5.8 billion of AUM Not Currently Generating Carry, respectively. |
�
14
APOLLO GLOBAL MANAGEMENT, LLC
ASSETS UNDER MANAGEMENT (UNAUDITED)
The following tables summarize changes in total AUM for each of Apollo's three segments for the three and nine months ended September 30, 2014 and 2013:
�
� | For the� �Three Months Ended� �September 30, | For the� �Nine Months Ended� �September 30, | |||||||||||||||
� | 2014 | 2013 | 2014 | 2013 | |||||||||||||
� | (in millions) | ||||||||||||||||
Change in Total AUM: | |||||||||||||||||
Beginning of Period | $ | 167,496 | (1)� | $ | 113,116 | (1)� | $ | 161,177 | (1)� | $ | 113,379 | (1)� | |||||
(Loss) Income | (559 | ) | 5,327 | 2,836 | 11,661 | ||||||||||||
Subscriptions/Capital raised | 2,845 | 4,022 | 8,905 | (2)� | 12,148 | ||||||||||||
Distributions | (4,573 | ) | (6,259 | ) | (10,664 | ) | (16,841 | ) | |||||||||
Redemptions� | (293 | ) | (104 | ) | (613 | ) | (1,122 | ) | |||||||||
Leverage/Other(3) | (1,016 | ) | (3,415 | ) | 2,259 | (6,538 | ) | ||||||||||
End of Period | $ | 163,900 | (1)� | $ | 112,687 | (1)� | $ | 163,900 | (1)� | $ | 112,687 | (1)� | |||||
Change in Private Equity AUM: | |||||||||||||||||
Beginning of Period | $ | 51,585 | $ | 40,213 | $ | 49,908 | $ | 37,832 | |||||||||
(Loss) Income | (727 | ) | 4,131 | 861 | 8,646 | ||||||||||||
Subscriptions/Capital raised | 221 | 3,332 | 3,041 | (2)� | 9,170 | ||||||||||||
Distributions | (2,834 | ) | (4,210 | ) | (6,591 | ) | (11,781 | ) | |||||||||
Redemptions | (19 | ) | |||||||||||||||
Net segment transfers | (1,205 | ) | 56 | (1,216 | ) | 1,118 | |||||||||||
Leverage | (867 | ) | (755 | ) | 170 | (2,199 | ) | ||||||||||
End of Period | $ | 46,173 | $ | 42,767 | $ | 46,173 | $ | 42,767 | |||||||||
Change in Credit AUM: | |||||||||||||||||
Beginning of Period | $ | 105,725 | $ | 62,212 | $ | 100,886 | $ | 64,406 | |||||||||
Income | 436 | 991 | 1,920 | 2,887 | |||||||||||||
Subscriptions/Capital raised | 2,443 | 690 | 5,242 | (2)� | 1,990 | ||||||||||||
Distributions | (1,347 | ) | (1,568 | ) | (2,805 | ) | (4,209 | ) | |||||||||
Redemptions | (293 | ) | (104 | ) | (479 | ) | (813 | ) | |||||||||
Net segment transfers | 1,060 | (184 | ) | 562 | (679 | ) | |||||||||||
Leverage/Other(3) | (349 | ) | (2,678 | ) | 2,349 | (4,223 | ) | ||||||||||
End of Period | $ | 107,675 | $ | 59,359 | $ | 107,675 | $ | 59,359 | |||||||||
Change in Real Estate AUM: | |||||||||||||||||
Beginning of Period | $ | 9,056 | $ | 9,473 | $ | 9,289 | $ | 8,800 | |||||||||
(Loss) Income | (146 | ) | 197 | 142 | 116 | ||||||||||||
Subscriptions/Capital raised | 181 | 622 | 988 | ||||||||||||||
Distributions | (392 | ) | (477 | ) | (1,268 | ) | (847 | ) | |||||||||
Redemptions(4) | (134 | ) | (290 | ) | |||||||||||||
Net segment transfers | 145 | 128 | 654 | 688 | |||||||||||||
Leverage | 201 | 18 | (260 | ) | (116 | ) | |||||||||||
End of Period | $ | 9,045 | $ | 9,339 | $ | 9,045 | $ | 9,339 | |||||||||
(1) | As of September�30, 2014 and 2013, June�30, 2014 and 2013, and December�31, 2013 and 2012 includes $1.0 billion, $1.2 billion, $1.1 billion, $1.2 billion, $1.1 billion and $2.3 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments. |
(2) | For the nine months ended September�30, 2014, includes $2.5 billion, respectively, of AUM from co-investment vehicles that was raised in prior periods. |
(3) | Represents changes in used and available leverage, and includes the changes in NAV on AUM managed by Athene Asset Management that is not sub-advised by Apollo. |
(4) | Represents release of unfunded commitments primarily related to two legacy Citi Property Investors ("CPI") real estate funds that were past their investment periods. |
15
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 Apollo's three segments for the three and nine months ended September 30, 2014 and 2013:
� | For the� �Three Months Ended� �September 30, | For the� �Nine Months Ended� �September 30, | ||||||||||||||
� | 2014 | 2013 | 2014 | 2013 | ||||||||||||
� | (in millions) | |||||||||||||||
Change in Total Fee-Generating AUM: | ||||||||||||||||
Beginning of Period | $ | 130,329 | $ | 79,290 | $ | 128,368 | $ | 81,934 | ||||||||
(Loss) Income | (140 | ) | 956 | 646 | 1,989 | |||||||||||
Subscriptions/Capital raised | 282 | 10,240 | 2,465 | 12,403 | ||||||||||||
Distributions | (1,041 | ) | (1,865 | ) | (3,614 | ) | (5,017 | ) | ||||||||
Redemptions | (286 | ) | (27 | ) | (449 | ) | (737 | ) | ||||||||
Net movements between Fee-Generating and Non-Fee Generating | 547 | (7,229 | ) | 66 | (6,808 | ) | ||||||||||
Leverage/Other(1) | (114 | ) | (2,022 | ) | 2,095 | (4,421 | ) | |||||||||
End of Period | $ | 129,577 | $ | 79,343 | $ | 129,577 | $ | 79,343 | ||||||||
Change in Private Equity Fee-Generating AUM: | ||||||||||||||||
Beginning of Period | $ | 33,554 | $ | 26,014 | $ | 34,173 | $ | 27,932 | ||||||||
(Loss) Income | (8 | ) | 274 | (54 | ) | 348 | ||||||||||
Subscriptions/Capital raised | 9,586 | 455 | 9,629 | |||||||||||||
Distributions | (111 | ) | (788 | ) | (591 | ) | (2,026 | ) | ||||||||
Redemptions | (19 | ) | ||||||||||||||
Net segment transfers | (1,266 | ) | 50 | (1,277 | ) | 246 | ||||||||||
Net movements between Fee-Generating and Non-Fee Generating | (49 | ) | (7,333 | ) | (514 | ) | (7,523 | ) | ||||||||
Leverage | (16 | ) | (744 | ) | (88 | ) | (1,528 | ) | ||||||||
End of Period | $ | 32,104 | $ | 27,059 | $ | 32,104 | $ | 27,059 | ||||||||
Change in Credit Fee-Generating AUM: | ||||||||||||||||
Beginning of Period | $ | 90,780 | $ | 47,507 | $ | 88,249 | $ | 49,518 | ||||||||
(Loss) Income | (43 | ) | 618 | 703 | 1,603 | |||||||||||
Subscriptions/Capital raised | 214 | 654 | 1,606 | 1,858 | ||||||||||||
Distributions | (633 | ) | (749 | ) | (1,861 | ) | (2,378 | ) | ||||||||
Redemptions | (286 | ) | (27 | ) | (449 | ) | (718 | ) | ||||||||
Net segment transfers | 1,073 | (178 | ) | 575 | (884 | ) | ||||||||||
Net movements between Fee-Generating and Non-Fee Generating | 607 | 78 | 608 | 519 | ||||||||||||
Leverage/Other(1) | (98 | ) | (1,278 | ) | 2,183 | (2,893 | ) | |||||||||
End of Period | $ | 91,614 | $ | 46,625 | $ | 91,614 | $ | 46,625 | ||||||||
Change in Real Estate Fee-Generating AUM: | ||||||||||||||||
Beginning of Period | $ | 5,995 | $ | 5,769 | $ | 5,946 | $ | 4,484 | ||||||||
(Loss) Income | (90 | ) | 64 | (4 | ) | 38 | ||||||||||
Subscriptions/Capital raised | 68 | 404 | 916 | |||||||||||||
Distributions | (296 | ) | (328 | ) | (1,161 | ) | (613 | ) | ||||||||
Net segment transfers | 193 | 128 | 702 | 638 | ||||||||||||
Net movements between Fee-Generating and Non-Fee Generating | (11 | ) | 26 | (28 | ) | 196 | ||||||||||
End of Period | $ | 5,859 | $ | 5,659 | $ | 5,859 | $ | 5,659 | ||||||||
(1) | Represents changes in used and available leverage, and includes the changes in NAV on AUM managed by Athene Asset Management that is not sub-advised by Apollo. |
As of September�30, 2014, approximately 69% of the value of our funds' investments on a gross basis were determined using market-based valuation methods (i.e., reliance on broker or listed exchange quotes) and the remaining 31% were determined primarily by comparable company and industry multiples or discounted cash flow models. For our private equity, credit and real estate segments, the percentage determined using market-based valuation methods as of September�30, 2014 were 47%, 81% and 52%, respectively.
16
APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
Investment Record
The following table summarizes the investment record by segment for Apollo's multi-year drawdown, commitment-based funds and strategic investment accounts ( SIAs ) that have a defined maturity date in which investors make commitments to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available. All amounts are as of September�30, 2014, unless otherwise noted:
� | � | � | � | � | � | As of� �September 30, 2014 | As of� �December 31, 2013 | |||||||||||||||||||||||||||||
� | Strategy | Vintage Year | Committed Capital | Total Invested Capital | Realized | Unrealized(1) | Total Value | Gross IRR | Net IRR | Gross IRR | Net IRR | |||||||||||||||||||||||||
� | � | (in millions) | � | � | � | |||||||||||||||||||||||||||||||
Private Equity:(2) | ||||||||||||||||||||||||||||||||||||
Fund VIII | Traditional Private Equity Funds | 2013 | $ | 18,377 | $ | 1,154 | $ | $ | 1,274 | $ | 1,274 | NM | (3)� | NM | (3)� | NM | (3)� | NM | (3)� | |||||||||||||||||
Fund VII | Traditional Private Equity Funds | 2008 | 14,677 | 15,161 | 22,964 | 9,585 | 32,549 | 38 | % | 29 | % | 39 | % | 30 | % | |||||||||||||||||||||
Fund VI | Traditional Private Equity Funds | 2006 | 10,136 | 12,457 | 14,975 | 6,154 | 21,129 | 13 | 11 | 15 | 12 | |||||||||||||||||||||||||
Fund V | Traditional Private Equity Funds | 2001 | 3,742 | 5,192 | 12,655 | 285 | 12,940 | 61 | 44 | 61 | 44 | |||||||||||||||||||||||||
Fund IV | Traditional Private Equity Funds | 1998 | 3,600 | 3,481 | 6,776 | 27 | 6,803 | 12 | 9 | 12 | 9 | |||||||||||||||||||||||||
Fund III | Traditional Private Equity Funds | 1995 | 1,500 | 1,499 | 2,695 | 2,695 | 18 | 11 | 18 | 11 | ||||||||||||||||||||||||||
Fund I, II & MIA(4) | Traditional Private Equity Funds | 1990/ 1992 | 2,220 | 3,773 | 7,924 | 7,924 | 47 | 37 | 47 | 37 | ||||||||||||||||||||||||||
Subtotal | $ | 54,252 | $ | 42,717 | $ | 67,989 | $ | 17,325 | $ | 85,314 | 39 | % | (5)� | 26 | % | (5)� | 39 | % | (5)� | 26 | % | (5)� | ||||||||||||||
AION | Other | 2013 | 825 | 134 | 169 | 169 | NM | (3)� | NM | (3)� | NM | (3)� | NM | (3)� | ||||||||||||||||||||||
ANRP | Natural Resources | 2012 | 1,323 | 588 | 25 | 748 | 773 | 22 | % | 11 | % | 18 | % | 7 | % | |||||||||||||||||||||
Total Private Equity | $ | 56,400 | $ | 43,439 | $ | 68,014 | $ | 18,242 | $ | 86,256 | ||||||||||||||||||||||||||
Credit:(6) | ||||||||||||||||||||||||||||||||||||
ACRF III (7) | Structured Credit | $ | 205 | $ | 123 | $ | 3 | $ | 118 | $ | 121 | NM | (3)� | NM | (3)� | NM | (3)� | NM | (3)� | |||||||||||||||||
COF III (7) | Opportunistic Credit | 3,426 | 975 | 105 | 910 | 1,015 | NM | (3)� | NM | (3)� | NM | (3)� | NM | (3)� | ||||||||||||||||||||||
FCI II | Structured Credit | 2013 | 1,555 | 653 | 5 | 756 | 761 | NM | (3)� | NM | (3)� | NM | (3)� | NM | (3)� | |||||||||||||||||||||
EPF II(8) | Non-Performing�Loans | 2012 | 3,566 | 1,965 | 366 | 1,974 | 2,340 | 28 | % | 13 | % | NM | (3)� | NM | (3)� | |||||||||||||||||||||
FCI | Structured Credit | 2012 | 559 | 443 | 188 | 518 | 706 | 14 | 10 | NM | (3)� | NM | (3)� | |||||||||||||||||||||||
AEC | European Credit | 2012 | 292 | 605 | 499 | 180 | 679 | 15 | 10 | 19 | % | 12 | % | |||||||||||||||||||||||
AIE II(8) | European Credit | 2008 | 261 | 840 | 1,243 | 96 | 1,339 | 20 | 17 | 20 | 17 | |||||||||||||||||||||||||
COF I | U.S. Performing Credit | 2008 | 1,485 | 1,611 | 4,273 | 148 | 4,421 | 30 | 27 | 30 | 27 | |||||||||||||||||||||||||
COF II | U.S. Performing Credit | 2008 | 1,583 | 2,176 | 2,985 | 159 | 3,144 | 14 | 11 | 14 | 11 | |||||||||||||||||||||||||
EPF I(8) | Non-Performing Loans | 2007 | 1,636 | 2,150 | 2,703 | 804 | 3,507 | 22 | 18 | 21 | 16 | |||||||||||||||||||||||||
ACLF | U.S. Performing Credit | 2007 | 984 | 1,449 | 2,446 | 155 | 2,601 | 13 | 11 | 13 | 11 | |||||||||||||||||||||||||
Total Credit | $ | 15,552 | $ | 12,990 | $ | 14,816 | $ | 5,818 | $ | 20,634 | ||||||||||||||||||||||||||
Real Estate:(6) | ||||||||||||||||||||||||||||||||||||
AGRE U.S. Real Estate Fund, L.P(9) | Equity | 2012 | $ | 865 | $ | 582 | $ | 299 | $ | 441 | $ | 740 | 17 | % | 13 | % | 17 | % | 14 | % | ||||||||||||||||
AGRE Debt Fund I, LP | Debt | 2011 | 1,127 | 954 | 276 | 812 | 1,088 | 11 | 9 | 13 | 11 | |||||||||||||||||||||||||
CPI Capital Partners North America(10) | Equity | 2006 | 600 | 453 | 350 | 30 | 380 | 16 | 11 | 17 | 13 | |||||||||||||||||||||||||
CPI Capital Partners Asia Pacific(10) | Equity | 2006 | 1,292 | 1,179 | 1,470 | 211 | 1,681 | 34 | 30 | 37 | 33 | |||||||||||||||||||||||||
CPI Capital Partners Europe(8)(10) | Equity | 2006 | 1,468 | 969 | 403 | 315 | 718 | 4 | 3 | 2 | 1 | |||||||||||||||||||||||||
CPI Other(11) | Equity | Various | 2,101 | N/A | N/A | (11)� | N/A | (11)� | N/A | (11)� | NM | (11)� | NM | (11)� | NM | (11)� | NM | (11)� | ||||||||||||||||||
Total Real Estate | $ | 7,453 | $ | 4,137 | $ | 2,798 | $ | 1,809 | $ | 4,607 | ||||||||||||||||||||||||||
��
(1) | Figures include the market values, estimated fair value of certain unrealized investments and capital committed to investments. |
(2) | Amounts presented are computed based on actual timing of the funds' cash inflows and outflows. |
(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) | Fund I and Fund II were structured such that investments were made from either fund depending on which fund had available capital. Apollo does 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. 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 Apollo's managing partners and other investment professionals. |
(5) | Total IRR is calculated based on total cash flows for all funds presented. |
17
APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
(6) | The investment record table for the credit and real estate funds and SIAs presented is computed based on the actual dates of capital contributions, distributions and ending limited partners capital as of the specified dates. |
(7) | Apollo Credit Opportunity Fund III, L.P. ("COF III") and Apollo Structured Recovery Fund III, L.P. ("ACRF III") were launched during 2013 and 2014, respectively, and have not established their vintage year. |
(8) | Funds are denominated in Euros and historical figures are translated into U.S. dollars at an exchange rate of �1.00 to $1.26 as of September�30, 2014. |
(9) | AGRE U.S. Real Estate Fund, L.P., a closed-end private investment fund has $152 million of co-invest commitments raised, which are included in the figures in the table above. A co-invest entity within AGRE U.S. Real Estate Fund is denominated in GBP and translated into U.S. dollars at an exchange rate of �1.00 to $1.62 as of September�30, 2014. |
(10) | As part of the 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 September�30, 2014 were (7)%, 7% and (8)% 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. |
(11) | CPI Other consists of 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. CPI Other fund performance is a result of invested capital prior to Apollos management of these funds. Return and certain other performance data are therefore not considered meaningful as Apollo performs primarily an administrative role. |
Credit
The following table summarizes the investment record for certain funds and SIAs within Apollo's credit segment with no maturity date. All amounts are as of September�30, 2014, unless otherwise noted:
� | � | � | � | Net Return | |||||||||||||||||||
� | Strategy | Vintage Year | Net Asset Value as of September 30, 2014 | Since Inception to September 30, 2014 | For the Nine Months Ended September 30, 2014 | For the Nine Months Ended September 30, 2013 | Since Inception to December 31, 2013 | For the Year Ended December 31, 2013 | |||||||||||||||
� | � | � | (in millions) | � | � | � | � | � | |||||||||||||||
TRF(1) | U.S. Performing Credit | 2014 | $ | 293 | NM | (1)� | NM | (1)� | NM | (1)� | NM | (1)� | NM | (1)� | |||||||||
ACSF(2) | Opportunistic Credit | 2011 | 449 | 26 | % | (2)� | 4 | �% | (2)� | NM | (2)� | NM | (2)� | NM | (2)� | ||||||||
SOMA(3) | Opportunistic Credit | 2007 | 801 | 69 | 7 | 7 | % | 58 | % | 9 | % | ||||||||||||
ACF(2) | U.S. Performing Credit | 2005 | 1,995 | 34 | (2)� | 6 | (2)� | NM | (2)� | NM | (2)� | NM | (2)� | ||||||||||
Value Funds(4) | Opportunistic Credit | 2003/2006 | 241 | 70 | (2 | ) | 5 | 74 | 5 | ||||||||||||||
Totals | $ | 3,779 | |||||||||||||||||||||
(1) | Apollo Total Return Fund ( TRF ) returns have not been presented as the fund commenced investing capital less than 24 months prior to period indicated and therefore such return information was deemed not meaningful. |
(2) | As part of the Stone Tower acquisition, Apollo acquired the manager of Apollo Credit Strategies Master Fund Ltd. ( ACSF ) and Apollo Credit Master Fund Ltd. ( ACF ). The net returns are presented in the investment record table above since acquisition on April 2, 2012. As of September�30, 2014, the net returns from inception for ACSF and ACF were 43% and 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. |
(3) | Net asset value and returns are for the primary mandate and excludes Apollo Special Opportunities Managed Account, L.P.s ( SOMA ) investments in other Apollo funds. |
(4) | 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. |
18
APOLLO GLOBAL MANAGEMENT, LLC
FUND PERFORMANCE (UNAUDITED)
The following table summarizes the investment record for publicly traded vehicles that Apollo manages by segment as of September�30, 2014:
Total Returns(1) | |||||||||||||||||||||||||||||||
Strategy | IPO Year(2) | Raised Capital(3) | Gross Assets | Current NAV | Since Inception to September 30, 2014 | For the Nine Months Ended September 30, 2014 | For the Nine Months Ended September 30, 2013 | Since Inception to December 31, 2013 | For the Year Ended December 31, 2013 | ||||||||||||||||||||||
� | (in millions) | ||||||||||||||||||||||||||||||
Private Equity: | |||||||||||||||||||||||||||||||
AAA(4) | Other | 2006 | $ | 1,823 | $ | 2,148 | $ | 2,145 | 56 | % | 10 | �% | 93 | �% | 41 | % | 91 | �% | |||||||||||||
Credit: | |||||||||||||||||||||||||||||||
AIF(5) | U.S.�Performing�Credit | 2013 | 276 | 419 | 281 | NM | (6)� | NM | (6)� | NM | (6)� | NM | (6)� | NM | (6)� | ||||||||||||||||
AFT(5) | U.S.�Performing�Credit | 2011 | 295 | 443 | 294 | 9 | (1 | ) | NM | (6)� | NM | (6)� | |||||||||||||||||||
AMTG(7) | Structured Credit | 2011 | 791 | 3,895 | 797 | 22 | 13 | (20 | ) | 8 | (17 | ) | |||||||||||||||||||
AINV (8) | Opportunistic Credit | 2004 | 3,080 | 3,812 | 2,069 | 61 | 3 | 5 | 55 | 12 | |||||||||||||||||||||
Real Estate: | |||||||||||||||||||||||||||||||
ARI�(9) | Debt | 2009 | 879 | 1,466 | 850 | 25 | 4 | 1 | 20 | 10 | |||||||||||||||||||||
Totals | $ | 7,144 | $ | 12,183 | $ | 6,436 | |||||||||||||||||||||||||
(1) | 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 commissions. |
(2) | An initial public offering ("IPO") year represents the year in which the vehicle commenced trading on a national securities exchange. Apollo Tactical Income Fund Inc. ( AIF ), Apollo Senior Floating Rate Fund Inc. ("AFT"), Apollo Residential Mortgage, Inc. ("AMTG") and Apollo Commercial Real Estate Finance, Inc. ("ARI") are publicly traded vehicles traded on the New York Stock Exchange ("NYSE"). Apollo Investment Corporation ("AINV") is a public company traded on the National Association of Securities Dealers Automated Quotation. AAA is a publicly traded vehicle traded on Euronext Amsterdam. |
(3) | Amounts represent raised capital net of offering and issuance costs. |
(4) | AAA is the sole limited partner in AAA Investments, L.P. ( AAA Investments ). Athene was AAA Investments only investment as of September�30, 2014. During the second quarter of 2014, Athene Holding Ltd. raised $1.2 billion of net equity commitments primarily from third-party institutional investors, certain existing investors in Athene, and employees of Athene and its affiliates (the Athene Private Placement ). For the period December 31, 2013 through September�30, 2014, AAA Investments' ownership stake in Athene was reduced as a result of the Athene Private Placement, the issuance of shares under the amended AAA services agreement and the issuance of 3.7 million unrestricted common shares of Athene Holding Ltd. under Athenes management equity plan and was increased by the conversion to common shares of AAA Investments' note receivable from Athene, resulting in an approximate 48.3% economic ownership stake (calculated as if the commitments in the Athene Private Placement closed through September�30, 2014 were fully drawn down but without giving effect to (i) restricted common shares issued under Athenes management equity plan or (ii) common shares to be issued after September�30, 2014 under the amended AAA services agreement or the amended Athene services agreement) and effectively 45% of the voting power of Athene. |
(5) | Gross Assets presented for AFT and AIF represents total managed assets of these closed-end funds. |
(6) | Returns have not been presented as the publicly traded vehicle commenced investing capital less than 24 months prior to the period indicated and therefore such return information was deemed not meaningful. |
(7) | Refer to www.apolloresidentialmortgage.com for the most recent financial information on AMTG. The information contained on AMTGs website is not part of this press release. All amounts are as of June�30, 2014 except for total returns. |
(8) | Refer to www.apolloic.com for the most recent financial information on AINV. The information contained on AINVs website is not part of this press release. All amounts are as of June�30, 2014 except for total returns. |
(9) | Refer to www.apolloreit.com for the most recent financial information on ARI. The information contained on ARIs website is not part of this press release. All amounts are as of June�30, 2014 except for total returns. |
Athene and SIAs
As of September�30, 2014, Athene Asset Management, L.P. had $60.1 billion of total AUM in accounts owned by or related to Athene, of which approximately $11.8 billion was either sub-advised by Apollo or invested in Apollo funds and investment vehicles. Of the approximately $11.8 billion of assets, the vast majority were in sub-advisory managed accounts that manage high grade credit asset classes, such as collateralized loan obligation ("CLO") debt, commercial mortgage backed securities, and insurance-linked securities.
Apollo also manages CLOs within Apollo's credit segment, with such CLOs representing a total AUM of approximately $13.3 billion as of September�30, 2014. Such CLO performance information is not included in the above investment record tables.
As of September�30, 2014, Apollo managed approximately $15 billion of total AUM in SIAs, which include certain SIAs in the investment record tables above and capital deployed�from certain SIAs across Apollo's private equity, credit and real estate funds. The above investment record tables exclude certain funds with an aggregate AUM of approximately $6.0 billion as of September�30, 2014 because management deemed them to be immaterial.
19
APOLLO GLOBAL MANAGEMENT, LLC
SUPPLEMENTAL SEGMENT INFORMATION (UNAUDITED)
Supplemental Segment Information
Dollars Invested
The following table summarizes by segment the dollars invested for funds and SIAs with a defined maturity date and certain funds and SIAs in Apollo's real estate debt strategy during the specified reporting periods:
� | For the Three Months Ended� �September 30, | For the Nine Months Ended� �September 30, | |||||||||||||
� | 2014 | 2013 | 2014 | 2013 | |||||||||||
� | (in millions) | ||||||||||||||
Private Equity | $ | 901 | $ | 120 | $ | 1,871 | $ | 1,488 | |||||||
Credit | 917 | 481 | 3,655 | 2,090 | |||||||||||
Real Estate�(1) | 369 | 231 | 1,745 | 1,907 | |||||||||||
Total dollars invested | $ | 2,187 | $ | 832 | $ | 7,271 | $ | 5,485 | |||||||
(1) | Included in dollars invested is $285.6 million and $1,321.5 million for the three and nine months ended September 30, 2014, respectively, and $220.7 million and $1,567.7 million for the three and nine months ended September 30, 2013, respectively, for funds in Apollo's real estate debt strategy. |
Uncalled Commitments
The following table summarizes the uncalled commitments by segment during the specified reporting periods:
�
As of� �September 30, 2014 | As of� �September 30, 2013 | As of� �December 31, 2013 | |||||||||
� | (in millions) | ||||||||||
Private Equity | $ | 22,434 | $ | 16,125 | $ | 23,689 | |||||
Credit | 9,230 | 6,443 | 7,113 | ||||||||
Real Estate | 898 | 1,019 | 971 | ||||||||
Total Uncalled Commitments(1)(2) | $ | 33,568 | $ | 24,808 | $ | 32,852 | |||||
(1) | As of September�30, 2014 and 2013 and December�31, 2013, includes $1.0 billion, $1.2 billion and $1.1 billion of commitments, respectively, that have yet to be deployed to an Apollo fund within Apollo's three segments. |
(2) | As of September�30, 2014 and 2013 and December�31, 2013, $29.8 billion, $21.5 billion, and $29.5 billion, respectively, represents the amount of capital available for investment or reinvestment subject to the provisions of the applicable limited partnership agreements or other governing agreements. |
20
APOLLO GLOBAL MANAGEMENT, LLC
CARRIED INTEREST RECEIVABLE AND CARRIED INTEREST INCOME
(LOSS) SUMMARY (UNAUDITED)
The table below presents an analysis of Apollo's (i)�carried interest receivable on an unconsolidated basis and (ii)�realized and unrealized carried interest income (loss) for Apollo's combined segments Incentive Business as of and for the three and nine months ended September 30, 2014:
� | As of� �September 30, 2014 | For the Three Months Ended� �September 30, 2014 | For the Nine Months Ended� �September 30, 2014 | ||||||||||||||||||||||||
� | Carried Interest Receivable on an Unconsolidated Basis | Unrealized Carried Interest Income (Loss) | Realized Carried Interest Income | Total Carried Interest Income� (Loss) | Unrealized Carried Interest Income (Loss) | Realized Carried Interest Income | Total Carried Interest Income� (Loss) | ||||||||||||||||||||
� | (in millions) | ||||||||||||||||||||||||||
Private Equity Funds: | |||||||||||||||||||||||||||
Fund VII | $ | 797.6 | $ | (197.8 | ) | $ | 178.6 | $ | (19.2 | ) | $ | (98.9 | ) | $ | 468.2 | $ | 369.3 | ||||||||||
Fund VI | 101.5 | (236.2 | ) | 153.7 | (82.5 | ) | (596.0 | ) | 401.5 | (194.5 | ) | ||||||||||||||||
Fund V | 17.1 | (24.2 | ) | 18.9 | (5.3 | ) | (25.9 | ) | 42.7 | 16.8 | |||||||||||||||||
Fund IV | 5.5 | 0.3 | 0.3 | (2.2 | ) | (2.2 | ) | ||||||||||||||||||||
AAA/Other (1)(2) | 198.2 | 8.4 | 18.8 | 27.2 | (30.5 | ) | 52.5 | 22.0 | |||||||||||||||||||
Total Private Equity Funds | 1,119.9 | (449.5 | ) | 370.0 | (79.5 | ) | (753.5 | ) | 964.9 | 211.4 | |||||||||||||||||
Credit Funds: | |||||||||||||||||||||||||||
U.S. Performing Credit | 77.0 | (72.0 | ) | 59.2 | (12.8 | ) | (80.5 | ) | 101.7 | 21.2 | |||||||||||||||||
Opportunistic Credit | 42.6 | (13.6 | ) | 1.5 | (12.1 | ) | 7.2 | 6.1 | 13.3 | ||||||||||||||||||
Structured Credit | 59.3 | 0.1 | 0.7 | 0.8 | 3.8 | 4.7 | 8.5 | ||||||||||||||||||||
European Credit | 14.7 | 0.3 | 1.5 | 1.8 | (0.2 | ) | 10.2 | 10.0 | |||||||||||||||||||
Non-Performing Loans | 156.2 | (22.0 | ) | 57.4 | 35.4 | 1.8 | 103.1 | 104.9 | |||||||||||||||||||
Total Credit Funds | 349.8 | (107.2 | ) | 120.3 | 13.1 | (67.9 | ) | 225.8 | 157.9 | ||||||||||||||||||
Real Estate Funds: | |||||||||||||||||||||||||||
CPI Funds | 2.2 | (4.5 | ) | (4.5 | ) | (3.2 | ) | 0.6 | (2.6 | ) | |||||||||||||||||
AGRE U.S. Real Estate Fund, L.P. | 7.2 | 1.3 | 1.3 | 1.6 | 2.7 | 4.3 | |||||||||||||||||||||
Other | 2.8 | (0.4 | ) | (0.4 | ) | (1.4 | ) | 0.7 | (0.7 | ) | |||||||||||||||||
Total Real Estate Funds | 12.2 | (3.6 | ) | (3.6 | ) | (3.0 | ) | 4.0 | 1.0 | ||||||||||||||||||
Total | $ | 1,481.9 | (3)� | $ | (560.3 | ) | $ | 490.3 | $ | (70.0 | ) | $ | (824.4 | ) | $ | 1,194.7 | $ | 370.3 | |||||||||
(1) | Includes certain strategic investment accounts. |
(2) | Includes $121.4 million of carried interest receivable from AAA Investments which will be paid in common shares of Athene Holding Ltd. (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding Ltd. (unless such payment in shares would violate Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended), or paid in cash if AAA sells the shares of Athene Holding Ltd. |
(3) | There was a corresponding profit sharing payable of $755.3 million as of September�30, 2014 that resulted in a net carried interest receivable on an unconsolidated basis of $726.6 million as of September�30, 2014. Included within profit sharing payable are contingent consideration obligations of $96.9 million. |
21
APOLLO GLOBAL MANAGEMENT, LLC
SUPPLEMENTAL SHARE INFORMATION (UNAUDITED)
The table below presents Non-GAAP weighted average diluted shares outstanding for the three and nine months ended September 30, 2014 and 2013:
� | For the� �Three Months Ended� �September 30, | For the� �Nine Months Ended� �September 30, | |||||||||
� | 2014 | 2013 | 2014 | 2013 | |||||||
Total GAAP Weighted Average Outstanding Class�A Shares: | |||||||||||
Basic | 158,466,602 | 142,829,913 | 153,071,007 | 137,165,119 | |||||||
Non-GAAP Adjustments: | |||||||||||
AOG units | 222,736,477 | 231,230,636 | 225,782,718 | 235,535,012 | |||||||
Vested RSUs(1) | 19,410,438 | 20,728,513 | 20,639,048 | 20,838,687 | |||||||
Non-GAAP Weighted Average Diluted Shares Outstanding | 400,613,517 | 394,789,062 | 399,492,773 | 393,538,818 | |||||||
(1) | Vested RSUs presented have not yet been issued in the form of Class�A shares. As a result, the amount of vested RSUs indicated has been excluded from the outstanding Class�A share basic and diluted amounts. |
The table below presents Non-GAAP diluted shares outstanding as of September�30, 2014 and 2013:
� | As of � �September 30, | ||||
� | 2014 | 2013 | |||
Total GAAP Outstanding Class�A Shares: | |||||
Basic | 159,956,660 | 143,700,234 | |||
Non-GAAP Adjustments: | |||||
AOG units | 222,736,477 | 231,230,636 | |||
Vested RSUs(1) | 18,374,602 | 20,290,037 | |||
Non-GAAP Diluted Shares Outstanding | 401,067,739 | 395,220,907 | |||
(1) | Vested RSUs presented have not yet been issued in the form of Class�A shares. As a result, the amount of vested RSUs indicated has been excluded from the outstanding Class�A share basic and diluted amounts. |
Note: In addition to fully diluted shares outstanding above, there were approximately 4.2 million and 4.0 million unvested RSUs that participate in distributions as of September�30, 2014 and 2013, respectively.
22
APOLLO GLOBAL MANAGEMENT, LLC
NON-GAAP FINANCIAL INFORMATION AND DEFINITIONS (UNAUDITED)
Non-GAAP Financial Information
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 Net Income, or ENI, as well as ENI After Taxes are key performance measures used by management in evaluating the performance of Apollos private equity, credit and real estate segments. Management also believes the components of ENI such as the amount of management fees, advisory and transaction fees and carried interest income are indicative of Apollos performance. 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. | |
These measures of profitability have certain limitations in that they do not take into account certain items included under U.S. GAAP. ENI represents segment income (loss) attributable to Apollo Global Management, LLC, which excludes the impact of (i) non-cash charges related to RSUs granted in connection with the 2007 private placement and amortization of AOG units, (ii) income tax expense, (iii) amortization of intangibles associated with the 2007 reorganization as well as acquisitions, (iv) Non-Controlling Interests excluding the remaining interest held by certain individuals who receive an allocation of income from certain of our credit management companies and (v) non-cash revenue and expense related to equity awards granted by unconsolidated affiliates to employees of the Company. In addition, segment data excludes the assets, liabilities and operating results of the funds and VIEs that are included in the consolidated financial statements.
�
" | ENI After Taxes represents ENI adjusted to reflect income tax provision on ENI 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.� Economic assumptions and methodology that impact the implied income tax provision are made and is similar to those methodologies and certain assumptions used in calculating the income tax provision for Apollos consolidated statements of operations under U.S. GAAP. We believe this measure is more consistent with how we assess the performance of our segments which is described above in our definition of ENI. |
" | 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 ENI After Taxes per share. |
" | 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. |
�
" | Distributable Earnings, or DE, as well as DE After Taxes and Related Payables are derived from our segment reported results, and are supplemental measures to assess performance and amounts 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 affiliated funds. DE, which is a component of ENI, is the sum across all segments of (i) total management fees and advisory and transaction fees, excluding monitoring fees received from Athene based on its capital and surplus (as defined in Apollo's transaction advisory services agreement with Athene), (ii) realized carried interest income, and (iii) realized investment income, |
23
APOLLO GLOBAL MANAGEMENT, LLC
NON-GAAP FINANCIAL INFORMATION AND DEFINITIONS (UNAUDITED)
less (i) compensation expense, excluding the expense related to equity-based awards, (ii) realized profit sharing expense, and (iii) 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.
" | Assets Under Management, or AUM, refers to the assets we manage for the funds, partnerships and accounts to which we provide investment management 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 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 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 estate funds, partnerships and accounts we manage, and the structured portfolio company investments of the funds, partnerships and accounts we manage, 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; and |
(v) | the fair value of any other assets that we manage for the funds, partnerships and accounts to which we provide investment management services, plus unused credit facilities, including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification 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 no or nominal 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.
We use AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs.
�
" | Fee-generating AUM consists of assets we manage for the funds, partnerships and accounts to which we provide investment management services and on which we earn management fees, monitoring fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts we manage. 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, 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. |
24
APOLLO GLOBAL MANAGEMENT, LLC
NON-GAAP FINANCIAL INFORMATION AND DEFINITIONS (UNAUDITED)
" | Non-fee generating AUM consists of assets that do not produce management fees or monitoring fees. These assets generally consist of the following: |
(i) | fair value above invested capital for those funds that earn management fees based on invested capital; |
(ii) | net asset values related to general partner and co-investment ownership; |
(iii) | unused credit facilities; |
(iv) | available commitments on those funds that generate management fees on invested capital; |
(v) | structured portfolio company investments that do not generate monitoring fees; and |
(vi) | the difference between gross asset and net asset value for those funds that earn management fees based on net asset value.� |
" | 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 refers to funds' invested capital that is currently above its hurdle rate or preferred return, and the funds' profit is allocated to the general partner in accordance with the applicable limited partnership agreements or other governing agreements. |
� | AUM Not Currently Generating Carry refers to funds' invested capital that is currently below its hurdle rate or preferred return. |
� | Uninvested Carry Eligible AUM refers to available capital for investment or reinvestment subject to the provisions of applicable limited partnership agreements or other governing agreements that are not currently part of the NAV or fair value of investments�that may eventually produce carried interest income, which would be allocated to the general partner. |
We use non-fee generating AUM combined with fee-generating AUM as a performance measurement of our investment activities, as well as to monitor fund size in relation to professional resource and infrastructure needs. Non-fee generating AUM includes assets on which we could earn carried interest income.
�
" | Dollars invested is the aggregate amount of capital, including capital commitments from the limited partner investors in our funds, that have been invested by our multi-year drawdown, commitment-based funds and SIAs that have a defined maturity date and for funds and SIAs in our real estate debt strategy during a given period, which we believe is a useful supplemental measure because it provides shareholders with information about the capital deployed for investment opportunities in a given period. |
" | Uncalled commitments represents unfunded capital commitments that certain of Apollos funds and SIAs have received from limited partners to fund future or current investments and expenses, which we believe is a useful supplemental measure because it provides shareholders with information about the unfunded capital commitments available to be deployed for future or current investments and expenses for our private equity funds. |
" | Gross IRR of a private equity fund represents the cumulative investment-related cash flows for all of the investors in the fund on the basis of the actual timing of investment inflows and outflows (for unrealized investments assuming disposition on September�30, 2014 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 fund expenses (including interest incurred by the fund itself) and measures the returns on the funds investments as a whole without regard to whether all of the returns would, if distributed, be payable to the funds investors. |
" | Net IRR of a private equity fund means the gross IRR applicable to all investors, including related parties which may not pay fees, net of management fees, organizational expenses, transaction costs, and certain other fund expenses (including interest incurred by the fund itself). The realized and 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, thereby reducing the balance attributable to fund investors carried interest all offset to the extent of interest income, and measures returns based on amounts that, if distributed, would be paid to investors of the fund to the extent that a private equity fund exceeds all requirements detailed within the applicable fund agreement. |
25