RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED ENTITIES

The Company typically facilitates the initial payment of certain operating costs incurred by the funds that it manages as well as their affiliates. These costs are normally reimbursed by such funds and are included in due from affiliates.

Due from affiliates and due to affiliates are comprised of the following:



	As of March 31, 2014		As of December 31, 2013
Due from Affiliates:
Due from private equity funds	$	47,742	$	57,582
Due from portfolio companies	40,267		23,484
Due from credit funds⁽¹⁾	283,852		216,750
Due from Contributing Partners, employees and former employees	1,381		2,659
Due from real estate funds	14,923		12,119
Other	15		4,653
Total Due from Affiliates	$	388,180	$	317,247
Due to Affiliates:
Due to Managing Partners and Contributing Partners in connection with the tax receivable agreement	$	523,324	$	525,483
Due to private equity funds	2,322		825
Due to credit funds	2,725		1,773
Distributions payable to employees	18,687		67,290
Total Due to Affiliates	$	547,058	$	595,371


(1)	Includes Athene Services Derivative as discussed in "Athene" below.

Tax Receivable Agreement and Other

Subject to certain restrictions, each of the Managing Partners and Contributing Partners has the right to exchange their vested AOG Units for the Company’s Class A shares. Certain Apollo Operating Group entities have made an election under Section 754 of the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), which will result in an adjustment to the tax basis of the assets owned by the Apollo Operating Group at the time of the exchange. These exchanges will result in increases in tax deductions that will reduce the amount of tax that APO Corp. will otherwise be required to pay in the future.

The tax receivable agreement provides for the payment to the Managing Partners and Contributing Partners of 85% of the amount of cash savings, if any, in U.S. Federal, state, local and foreign income taxes that APO Corp. would realize as a result of the increases in tax basis of assets that resulted from the 2007 Reorganization and the Secondary Offering. If the Company does not make the required annual payment on a timely basis as outlined in the tax receivable agreement, interest is accrued on the balance until the payment date. These payments are expected to occur approximately over the next 20 years. In connection with the amendment of the AMH partnership agreement in April of 2010, the tax receivable agreement was revised to reflect the Managing Partners’ agreement to defer 25%, or $12.1 million, of the required payments pursuant to the tax receivable agreement that are attributable to the 2010 fiscal year for a period of four years until 2015. During the three months ended March 31, 2014 and 2013, there were no payments made in connection with the tax receivable agreement.

Due from Contributing Partners, Employees and Former Employees

As of March 31, 2014 and December 31, 2013, due from Contributing Partners, Employees and Former Employee balances include various amounts due to the Company including director fee receivables.

Distributions

In addition to other distributions such as payments pursuant to the tax receivable agreement, the table below presents information regarding the quarterly distributions which were made at the sole discretion of the manager of the Company during 2013 and 2014 (in millions, except per share amounts):



Distribution Declaration Date	Distribution per Class A Share Amount		Distribution Payment Date	Distribution to Class A Shareholders		Distribution to Non-Controlling Interest Holders in the Apollo Operating Group			Total Distributions from Apollo Operating Group		Distribution Equivalents on Participating Securities
February 8, 2013	$	1.05	February 28, 2013	$	138.7	$	252.0		$	390.7	$	25.0
April 12, 2013	—		April 12, 2013	—		55.2		⁽¹⁾	55.2		—
May 6, 2013	0.57		May 30, 2013	80.8		131.8			212.6		14.3
August 8, 2013	1.32		August 30, 2013	189.7		305.2			494.9		30.8
November 7, 2013	1.01		November 29, 2013	147.7		231.2			378.9		24.1
For the year ended December 31, 2013	$	3.95		$	556.9	$	975.4		$	1,532.3	$	94.2
February 7, 2014	$	1.08	February 26, 2014	$	160.9	$	247.3		$	408.2	$	25.5
For the three months ended March 31, 2014	$	1.08		$	160.9	$	247.3		$	408.2	$	25.5


(1)	On April 12, 2013, the Company made a $0.23 distribution to the non-controlling interest holders in the Apollo Operating Group.

Indemnity

Carried interest income from certain funds that the Company manages can be distributed to us on a current basis, but is subject to repayment by the subsidiary of the Apollo Operating Group that acts as general partner of the fund in the event that certain specified return thresholds are not ultimately achieved. The Managing Partners, Contributing Partners and certain other investment professionals have personally guaranteed, subject to certain limitations, the obligation of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to a particular Managing Partner’s or Contributing Partner’s distributions. An existing shareholders agreement includes clauses that indemnify each of the Company’s Managing Partners and certain Contributing Partners against all amounts that they pay pursuant to any of these personal guarantees in favor of certain funds that the Company manages (including costs and expenses related to investigating the basis for or objecting to any claims made in respect of the guarantees) for all interests that the Company’s Managing Partners and Contributing Partners have contributed or sold to the Apollo Operating Group.

Accordingly, in the event that the Company’s Managing Partners, Contributing Partners and certain investment professionals are required to pay amounts in connection with a general partner obligation for the return of previously made distributions, we will be obligated to reimburse the Company’s Managing Partners and certain Contributing Partners for the indemnifiable percentage of amounts that they are required to pay even though the Company did not receive the certain distribution to which that general partner obligation related. There was no indemnification liability recorded as of March 31, 2014 and December 31, 2013.

Athene

Athene Holding is the ultimate parent of various insurance company operating subsidiaries. Through its subsidiaries, Athene Holding provides insurance products focused primarily on the retirement market and its business centers primarily on issuing or reinsuring fixed and equity-indexed annuities.

As of March 31, 2014, AAA, through its investment in AAA Investments, owned the majority of the economic equity of Athene Holding. See the discussion of the AAA Transaction in note 3.

Apollo, through its consolidated subsidiary, Athene Asset Management, L.P. ("Athene Asset Management"), provides asset management services to Athene, including asset allocation and portfolio management strategies, and receives fees from Athene for providing such services. As of March 31, 2014, all of Athene’s assets were managed by Athene Asset Management.

Athene Asset Management receives a gross management fee equal to 0.40% per annum on all assets under management in accounts owned by or related to Athene (the “Athene Accounts”), with certain limited exceptions. In addition, the Company receives sub-advisory management fees and carried interest income with respect to a portion of the assets in the Athene Accounts. Athene Asset Management and other Apollo subsidiaries incur all expenses associated with their provision of services to Athene, including but not limited to, asset allocation services, direct asset management services, risk management, asset and liability matching management, mergers and acquisitions asset diligence, hedging and other services.

In connection with the AAA Transaction, a subsidiary of AAA Investments contributed three investment partnerships to Athene (the "Contributed Partnerships"). The Contributed Partnerships pay a quarterly management fee and carried interest to Apollo with respect to the assets contributed in the AAA Transaction. With respect to capital invested in an Apollo fund, Apollo receives management fees directly from the relevant funds under the investment management agreements with such funds and not pursuant to the services agreement with the Contributed Partnerships. In addition, carried interest is payable by the Contributed Partnerships with respect to each investment or group of investments (as specified in the particular partnership agreement), at a rate of 20% of the profit of such investment or group of investments, subject to applicable hurdle rates. Each investment or group of investments is treated separately for the purposes of calculating carried interest. The contributed assets also included certain investments in funds managed by Apollo, carried interest on which is assessed at the fund level.

Under a transaction advisory services agreement with Athene (the "Athene Services Agreement"), effective February 5, 2013, Apollo earns a quarterly monitoring fee of 0.50% of Athene’s capital and surplus as of the end of the applicable quarter multiplied by 2.5, excluding the shares of Athene Holding that were newly acquired (and not in satisfaction of prior commitments to buy such shares) by AAA Investments in the AAA Transaction (the “Excluded Athene Shares”), at the end of each quarter through December 31, 2014, the termination date. This quarterly monitoring fee is not applicable to the amount of invested capital attributable to the Excluded Athene Shares. As of March 31, 2014, all such monitoring fees were paid pursuant to a derivative contract between Athene and Apollo (the "Athene Services Derivative"). Each quarter, monitoring fees earned are translated into an accrued notional number of shares of Athene Holding, and the accrued notional shares of Athene Holding are fair valued. At Athene’s option, all notional shares accrued pursuant to the terms of the derivative contract are payable either in shares of Athene Holding or cash equal to the fair value of such shares of Athene Holding at the time of settlement. Settlement of Athene Services Derivative occurs on the earlier of a change in control of Athene or October 31, 2017. For the three months ended March 31, 2014 and 2013, Apollo earned $58.7 million and $19.5 million, respectively, related to this monitoring fee, which is recorded in advisory and transaction fees from affiliates, net, in the condensed consolidated statements of operations. As of March 31, 2014 and December 31, 2013, Apollo had a $187.6 million receivable and a $116.4 million receivable, respectively, which is accounted for as a derivative recorded in due from affiliates on the condensed consolidated statements of financial condition.

In accordance with the services agreement among AAA, AAA Investments and the other service recipients party thereto and Apollo (the "AAA Services Agreement"), Apollo receives a management fee for managing the assets of AAA Investments. In connection with the consummation of the AAA Transaction, on October 31, 2012, the AAA Services Agreement was amended. Pursuant to the amended AAA Services Agreement, the parties agreed that there will be no management fees payable by AAA Investments with respect to the Excluded Athene Shares. AAA Investments will continue to pay Apollo the same management fee on its investment in Athene (other than with respect to the Excluded Athene Shares), except that Apollo agreed that the obligation to pay the existing management fee shall terminate on December 31, 2014 (although services will continue through December 31, 2020). Pursuant to the amended AAA Services Agreement as in effect on March 31, 2014, in the event that AAA makes a tender offer for all or substantially all of its units where the consideration is to be paid in shares of Athene Holding (or if AAA accomplishes a similar transaction using an alternative structure that is no less favorable in all material respects to the AAA unitholders as a whole), the management fee will be unwound and a lump sum payment will be made to Apollo equal to the remaining management fee that would have been due until the expiration date (December 31, 2020), using an 8% discount rate and assuming a 14% growth rate to then existing management fees, compounded annually, until the expiration date (the "AAA Unwind Fee"), subject to a cap of $25.0 million if the tender offer or similar transaction commences in 2014, $20.0 million if the tender offer or similar transaction commences in 2015 and zero if the tender offer or similar transaction commences in 2016 or thereafter. As of March 31, 2014, all such management fees were accrued pursuant to a derivative contract between AAA Investments and Apollo (the "AAA Services Derivative"). Each quarter, management fees earned are translated into an accrued notional number of shares of Athene Holding Ltd., and the accrued notional shares of Athene Holding are fair valued. At the option of AAA Investments, all notional shares accrued pursuant to the terms of the AAA Services Derivative contract are payable either in shares of Athene Holding or cash equal to the fair value of such shares of Athene Holding at the time of settlement. Settlement of the AAA Services Derivative occurs on the earlier of a change of control of Athene or October 31, 2017. As of March 31, 2014 and December 31, 2013, Apollo had a receivable of $18.9 million and $14.3 million, respectively, related to the AAA Services Agreement, which is recorded in due from affiliates on the condensed consolidated statements of financial condition. The total management fees earned by Apollo related to the AAA Services Agreement and the Contributed Partnerships for the three months ended March 31, 2014 and 2013 were $2.9 million (of which $0.4 million related to the AAA Services Derivative, as described above) and $3.1 million (of which $0.6 million related to the AAA Services Derivative, as described above), respectively, which is recorded in management fees from affiliates in the condensed consolidated statements of operations.

In addition, Apollo, as general partner of AAA Investments, is generally entitled to a carried interest that allocates to it 20% of the realized returns (net of related expenses, including borrowing costs) on the investments of AAA Investments, except that Apollo will not be entitled to receive any carried interest in respect of the Excluded Athene Shares. Carried interest receivable from AAA Investments will be paid in shares of Athene Holding (valued at the then fair market value) if there is a distribution in kind of shares of Athene Holding, or paid in cash if AAA sells the shares of Athene Holding. For the three months ended March 31, 2014 and 2013, the Company recorded carried interest income less the related profit sharing expense of $14.6 million and $1.4 million, respectively, from AAA Investments, which is recorded in the condensed consolidated statements of operations. As of March 31, 2014 and December 31, 2013, the Company had a $121.3 million and a $100.9 million carried interest receivable, respectively, related to AAA Investments. As of March 31, 2014 and December 31, 2013, the Company had a related profit sharing payable of $34.7 million and $28.8 million, respectively, recorded in profit sharing payable in the condensed consolidated statements of financial condition.

For the three months ended March 31, 2014 and 2013, Apollo earned revenues in the aggregate totaling $154.6 million and $63.1 million, respectively, consisting of management fees, sub-advisory and monitoring fees and carried interest income from Athene after considering the related profit sharing expense and changes in the market value of the Athene Services Derivative and the AAA Services Derivative discussed above, which is recorded in the condensed consolidated statement of operations.

The Athene Services Agreement and the AAA Services Agreement together with the Athene Services Derivative and the AAA Services Derivative, meet the definition of a derivative under U.S. GAAP. The Company has classified these derivatives as Level III assets in the fair value hierarchy, as the pricing inputs into the determination of fair value require significant judgment and estimation. See note 5 for further discussion regarding fair value measurements.

The change in unrealized market value of these derivatives is reflected in other income, net in the condensed consolidated statements of operations. For the three months ended March 31, 2014 and 2013, there were $14.0 million and $0.0 million of changes in market value recognized related to these derivatives, respectively.

Regulated Entities

Apollo Global Securities, LLC (“AGS”) is a registered broker dealer with the United States Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, subject to the minimum net capital requirements of the SEC. AGS was in compliance with these requirements at March 31, 2014. From time to time, this entity is involved in transactions with affiliates of Apollo, including portfolio companies of the funds Apollo manages, whereby AGS earns underwriting and transaction fees for its services. Apollo Management International LLP, based in London, is subject to the capital requirements of the U.K. Financial Conduct Authority. This entity has continuously operated in excess of these regulatory capital requirements.

All of the investment advisors of the Apollo funds are registered as investment advisors, either directly or as a "relying advisor" with the SEC. Registered investment advisors are subject to the requirements and regulations of the Investment Advisers Act of 1940, as amended.

Apollo Management Singapore Pte. Ltd. was granted a Capital Markets Service License with the Monetary Authority of Singapore in October 2013. In addition, Apollo Capital Management, L.P. is registered with the Securities and Exchange Board of India as a foreign institutional investor.

Interests in Consolidated Entities

The table below presents equity interests in Apollo’s consolidated, but not wholly-owned, subsidiaries and funds. Net income attributable to Non-Controlling Interests consisted of the following:



	For the Three Months Ended March 31,
	2014			2013
	(in thousands)
AAA⁽¹⁾	$	(199,269	)	$	(45,682	)
Interest in management companies and a co-investment vehicle⁽²⁾	(3,585		)	(3,836		)
Other consolidated entities	(4,698		)	21,919
Net income attributable to Non-Controlling Interests in consolidated entities	(207,552		)	(27,599		)
Net income attributable to Appropriated Partners’ Capital⁽³⁾	(24,823		)	(38,242		)
Net income attributable to Non-Controlling Interests in the Apollo Operating Group	(155,100		)	(485,246		)
Net Income attributable to Non-Controlling Interests	$	(387,475	)	$	(551,087	)
Net income attributable to Appropriated Partners’ Capital⁽⁴⁾	24,823			38,242
Comprehensive Income Attributable to Non-Controlling Interests	$	(362,652	)	$	(512,845	)


(1)	Reflects the Non-Controlling Interests in the net (income) loss of AAA and is calculated based on the Non-Controlling Interests ownership percentage in AAA, which was approximately 97.5% and 97.3% as of March 31, 2014 and 2013, respectively. As of March 31, 2014 and 2013, Apollo owned approximately 2.5% and 2.7% of AAA, respectively.


(2)	Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of our credit funds.


(3)	Reflects net income of the consolidated CLOs classified as VIEs.


(4)	Appropriated Partners’ Capital is included in total Apollo Global Management, LLC shareholders’ equity and is therefore not a component of comprehensive income attributable to Non-Controlling Interests on the condensed consolidated statements of comprehensive income.