NET INCOME (LOSS) PER CLASS A SHARE

U.S. GAAP requires use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method, during periods of net income, the net income is first reduced for distributions declared on all classes of securities to arrive at undistributed earnings. During periods of net losses, the net loss is reduced for distributions declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to share in net losses of the entity.

The remaining earnings are allocated to Class A shares and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Earnings or losses allocated to each class of security are then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding common shares and all potential common shares assumed issued if they are dilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of these potential common shares.

The table below presents basic and diluted net income (loss) per Class A share using the two-class method for the three months ended March 31, 2014 and 2013:



	Basic and Diluted
	For the Three Months Ended March 31,
	2014				2013
Numerator:
Net income attributable to Apollo Global Management, LLC	$	72,169			$	248,978
Distributions declared on Class A shares	(160,867		)	⁽¹⁾	(138,746		)	⁽²⁾
Distributions on participating securities	(25,477		)		(24,992		)
Earnings allocable to participating securities	—			⁽³⁾	(13,718		)
Undistributed (loss) income attributable to Class A shareholders: Basic	(114,175		)		71,522
Dilution effect on undistributed income attributable to Class A shareholders	—				5,600
Dilution effect on distributable income attributable to participating securities	—				—
Undistributed (loss) income attributable to Class A shareholders: Diluted	$	(114,175	)		$	77,122
Denominator:
Weighted average number of Class A shares outstanding: Basic	147,776,519				131,249,034
Dilution effect of share options and unvested RSUs	—				4,770,767
Weighted average number of Class A shares outstanding: Diluted	147,776,519				136,019,801
Net income (loss) per Class A share: Basic
Distributed Income	$	1.09			$	1.06
Undistributed (Loss) Income	(0.77		)		0.54
Net Income per Class A Share: Basic	$	0.32			$	1.60
Net Income per Class A Share: Diluted⁽⁴⁾
Distributed income	$	1.09			$	1.02
Undistributed (loss) income	(0.77		)		0.57
Net Income per Class A Share: Diluted	$	0.32			$	1.59


(1)	The Company declared a $1.08 distribution on Class A shares on February 7, 2014.


(2)	The Company declared a $1.05 distribution on Class A shares on February 8, 2013.


(3)	No allocation of losses was made to the participating securities as the holders do not have a contractual obligation to share in the losses of the Company with Class A shareholders.

(4)

For the three months ended March 31, 2014, the Company had an undistributed loss attributable to Class A shareholders and as such there was no dilution. For the three months ended March 31, 2014, AOG Units, RSUs, share options and participating securities were anti-dilutive and were accordingly excluded from the diluted earnings per share calculation. For the three months ended March 31, 2013, AOG units and participating securities were determined to be anti-dilutive and were accordingly excluded from the diluted earnings per share calculation.

On October 24, 2007, the Company commenced the granting of restricted share units ("RSUs") that provide the right to receive, subject to vesting, Class A shares of Apollo Global Management, LLC, pursuant to the Company’s 2007 Omnibus Equity Incentive Plan. Certain RSU grants to employees provide the right to receive distribution equivalents on vested RSUs on an equal basis any time a distribution is declared. The Company refers to these RSU grants as “Plan Grants.” For certain Plan Grants, distribution equivalents are paid in January of the calendar year next following the calendar year in which a distribution on Class A shares was declared. In addition, certain RSU grants to employees provide that both vested and unvested RSUs participate in distribution equivalents on an equal basis with the Class A shareholders any time a distribution is declared. The Company refers to these as “Bonus Grants." As of March 31, 2014, approximately 21.3 million vested RSUs and 4.0 million unvested RSUs were eligible for participation in distribution equivalents.

Any distribution equivalent paid to an employee will not be returned to the Company upon forfeiture of the award by the employee. Vested and unvested RSUs that are entitled to non-forfeitable distribution equivalents qualify as participating securities and are included in the Company’s basic and diluted earnings per share computations using the two-class method. The holder of an RSU participating security would have a contractual obligation to share in the losses of the entity if the holder is obligated to fund the losses of the issuing entity or if the contractual principal or mandatory redemption amount of the participating security is reduced as a result of losses incurred by the issuing entity. Because the RSU participating securities do not have a mandatory redemption amount and the holders of the participating securities are not obligated to fund losses, neither the vested RSUs nor the unvested RSUs are subject to any contractual obligation to share in losses of the Company.

Holders of AOG Units are subject to the vesting requirements and transfer restrictions set forth in the agreements with the respective holders, and may up to four times each year, upon notice (subject to the terms of the Exchange Agreement), exchange their AOG Units for Class A shares on a one-for-one basis. A limited partner must exchange one partnership unit in each of the Apollo Operating Group partnerships to effectuate an exchange for one Class A share. As disclosed in note 1, in connection with the Secondary Offering, certain holders of AOG Units exchanged their AOG Units for Class A shares and approximately 8.8 million Class A shares were issued by the Company in the exchange. In November 2013, certain holders of AOG Units exchanged their AOG Units for Class A shares and approximately 2.3 million Class A shares were issued by the Company in the exchange. If all of the outstanding AOG Units were exchanged for Class A shares as of March 31, 2014, the result would be an additional 228,954,598 Class A shares added to the diluted earnings per share calculation.

Apollo Global Management, LLC has one Class B share outstanding, which is held by BRH Holdings GP, Ltd. ("BRH"). The voting power of the Class B share is reduced on a one vote per one AOG Unit basis in the event of an exchange of AOG Units for Class A shares, as discussed above. The Class B share has no net income (loss) per share as it does not participate in Apollo’s earnings (losses) or distributions. The Class B share has no distribution or liquidation rights. The Class B share has voting rights on a pari passu basis with the Class A shares. The Class B share had a super voting power of 228,954,598 votes as of March 31, 2014.

The table below presents transactions in Class A shares during the three months ended March 31, 2014 and each quarter during the year ended December 31, 2013 and the resulting impact on the Company’s and Holdings’ ownership interests in the Apollo Operating Group:



Date	Type of Class A Shares Transaction	Number of Shares Issued in Class A Shares Transaction (in thousands)	Apollo Global Management, LLC ownership% in Apollo Operating Group before Class A Shares Transaction	Apollo Global Management, LLC ownership% in Apollo Operating Group after Class A Shares Transaction	Holdings ownership% in Apollo Operating Group before Class A Shares Transaction	Holdings ownership% in Apollo Operating Group after Class A Shares Transaction
Quarter Ended March 31, 2013	Issuance	2,091	35.1%	35.5%	64.9%	64.5%
Quarter Ended June 30, 2013	Issuance/Offering	9,577	35.5%	38.0%	64.5%	62.0%	⁽¹⁾
Quarter Ended September 30, 2013	Issuance	1,977	38.0%	38.3%	62.0%	61.7%
Quarter Ended December 31, 2013	Issuance/Offering	2,581	38.3%	39.0%	61.7%	61.0%	⁽¹⁾
Quarter Ended March 31, 2014	Issuance	2,672	39.0%	39.4%	61.0%	60.6%

(1)

Certain holders of AOG Units exchanged their AOG Units for Class A shares. Approximately 8.8 million Class A shares were issued by the Company in the exchange, which settled on May 14, 2013. See note 1 for details regarding the Secondary Offering. In November 2013, certain holders of AOG Units exchanged their AOG Units for Class A shares and approximately 2.3 million Class A shares were issued by the Company in the exchange.