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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q  

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO                     

Commission File Number: 001-35107

APOLLO GLOBAL MANAGEMENT, INC.

(Exact name of Registrant as specified in its charter) 

Delaware	20-8880053
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9 West 57th Street, 43rd Floor

New York, New York 10019

(Address of principal executive offices) (Zip Code)

(212) 515-3200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒   No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
			☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐   No ☒

 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	APO	New York Stock Exchange
6.375% Series A Preferred Stock	APO.PR A	New York Stock Exchange
6.375% Series B Preferred Stock	APO. PR B	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

As of November 3, 2021, there were 246,579,482 shares of Class A common stock, 1 share of Class B common stock and 1 share of Class C common stock of the Registrant outstanding.

As of November 3, 2021, on a fully exchanged and diluted basis, there were 432,799,880 shares of Class A common stock of the Registrant outstanding, which includes 157,065,879 Apollo Operating Group Units held by AP Professional Holdings, L.P. and 29,154,519 Apollo Operating Group Units held by subsidiaries of Athene Holding Ltd.

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	TABLE OF CONTENTS
		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	9
	Unaudited Condensed Consolidated Financial Statements
	Condensed Consolidated Statements of Financial Condition (Unaudited) as of September 30, 2021 and December 31, 2020	9
	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	11
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	12
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2021 and 2020	13
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2021 and 2020	16
	Notes to Condensed Consolidated Financial Statements (Unaudited)	19
ITEM 1A.	UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION	76
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	78
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	130
ITEM 4.	CONTROLS AND PROCEDURES	132
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	134
ITEM 1A.	RISK FACTORS	134
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	134
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	135
ITEM 4.	MINE SAFETY DISCLOSURES	135
ITEM 5.	OTHER INFORMATION	135
ITEM 6.	EXHIBITS	135
SIGNATURES

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Forward-Looking Statements

This quarterly report may contain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, but are not limited to, discussions related to Apollo’s expectations regarding the performance of its business, 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 quarterly report, the words “believe,” “anticipate,” “estimate,” “expect,” “intend” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or 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 be 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 credit, private equity, or real assets funds, the impact of the novel coronavirus disease 2019 (“COVID-19”), the impact of energy market dislocation, 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, litigation risks and consummation of the merger of Apollo with Athene Holding, potential corporate governance changes and related transactions which are subject to regulatory, corporate and stockholder approvals, among others. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on February 19, 2021 (the “2020 Annual Report”) and Quarterly Report on Form 10-Q filed with the SEC on May 10, 2021, 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 report and in our other filings with the SEC. 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.

Terms Used in This Report

In this quarterly report, references to “Apollo,” “we,” “us,” “our” and the “Company” refer collectively to Apollo Global Management, Inc. (“AGM Inc.”) and its subsidiaries, including the Apollo Operating Group and all of its subsidiaries, or as the context may otherwise require; "Class A shares" refers to the Class A common stock, $0.00001 par value per share, of AGM Inc.; “Class B share” refers to the Class B common stock, $0.00001 par value per share, of AGM Inc.; "Class C share" refers to the Class C common stock, $0.00001 par value per share, of AGM Inc.; “Series A Preferred shares” refers to the 6.375% Series A preferred stock of AGM Inc.; “Series B Preferred shares” refers to the 6.375% Series B preferred stock of AGM Inc.; and “Preferred shares” refers to the Series A Preferred shares and the Series B Preferred shares, collectively;

“AMH” refers to Apollo Management Holdings, L.P., a Delaware limited partnership, that is an indirect subsidiary of AGM Inc.;

“Apollo funds”, “our funds” and references to the “funds” we manage, refer to the funds (including the parallel funds and alternative investment vehicles of such funds), partnerships, accounts, including strategic investment accounts or “SIAs,” alternative asset companies and other entities for which subsidiaries of the Apollo Operating Group provide investment management or advisory services;

“Apollo Group” means (i) the Class C Stockholder and its affiliates, including their respective general partners, members and limited partners, (ii) Holdings and its affiliates, including their respective general partners, members and limited partners, (iii) with respect to each Co-Founder, such Co-Founder and such Co-Founder’s group (as defined in Section 13(d) of the Exchange Act), (iv) any former or current investment professional of or other employee of an Apollo employer (as defined below) or the Apollo Operating Group (or such other entity controlled by a member of the Apollo Operating Group) and any member of such person’s group, (v) any former or current executive officer of an Apollo employer or the Apollo Operating Group (or such other entity controlled by a member of the Apollo Operating Group) and any member of such person’s group; and (vi) any former or current director of an Apollo employer or the Apollo Operating Group (or such other entity controlled by a member of the Apollo Operating Group) and any member of such person’s group. With respect to any person, Apollo employer means AGM Inc. or such successor thereto or such other entity controlled by AGM Inc. or its successor as may be such person’s employer at such time, but does not include any portfolio companies;

“Apollo Operating Group” refers to (i) the limited partnerships and limited liability companies through which we currently operate our businesses and (ii) one or more limited partnerships or limited liability companies formed for the purpose of, among other activities, holding certain of our gains or losses on our principal investments in the funds, which we refer to as our “principal investments”;

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“Assets Under Management”, or “AUM”, refers to the assets of the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related 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 net asset value, or “NAV,” plus used or available leverage and/or capital commitments, or gross assets plus capital commitments, of the credit funds, partnerships and accounts for which we provide investment management or advisory services, other than certain collateralized loan obligations (“CLOs”), collateralized debt obligations (“CDOs”), and certain permanent capital vehicles, which have a fee-generating basis other than the mark-to-market value of the underlying assets;

(ii)the fair value of the investments of the private equity and real assets funds, partnerships and accounts we manage or advise plus the capital that such funds, partnerships and accounts are entitled to call from investors pursuant to capital commitments, plus portfolio level financings; for certain permanent capital vehicles in real assets, gross asset value plus available financing capacity;

(iii)the gross asset value associated with the reinsurance investments of the portfolio company assets we manage or advise; and

(iv)the fair value of any other assets that we manage or advise for the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related services, plus unused credit facilities, including capital commitments to such funds, partnerships and accounts for investments that may require pre-qualification or other conditions 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 nominal or zero fees. Our AUM measure also includes assets for which we do not have investment discretion, including certain assets for which we earn only investment-related service fees, rather than management or advisory fees. Our definition of AUM is not based on any definition of Assets Under Management contained in our governing documents 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. Our calculation also differs from the manner in which our affiliates registered with the SEC report “Regulatory Assets Under Management” on Form ADV and Form PF in various ways;

“Fee-Generating AUM” consists of assets of the funds, partnerships and accounts to which we provide investment management, advisory, or certain other investment-related services and on which we earn management fees, monitoring fees or other investment-related fees pursuant to management or other fee agreements on a basis that varies among the Apollo funds, partnerships and accounts. 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 or advise, 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;

“Non-Fee-Generating AUM” refers to AUM that does not produce management fees or monitoring fees. This measure generally includes 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 interests;

(iii)unused credit facilities;

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(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.

“Performance Fee-Eligible AUM” refers to the AUM that may eventually produce performance fees. All funds for which we are entitled to receive a performance fee allocation or incentive fee are included in Performance Fee-Eligible AUM, which consists of the following:

(i)     “Performance Fee-Generating AUM”, which refers to invested capital of the funds, partnerships and accounts we manage, advise, or to which we provide certain other investment-related services, that is currently above its hurdle rate or preferred return, and profit of such funds, partnerships and accounts is being allocated to, or earned by, the general partner in accordance with the applicable limited partnership agreements or other governing agreements;

(ii)     “AUM Not Currently Generating Performance Fees”, which refers to invested capital of the funds, partnerships and accounts we manage, advise, or to which we provide certain other investment-related services, that is currently below its hurdle rate or preferred return; and

(iii)     “Uninvested Performance Fee-Eligible AUM”, which refers to capital of the funds, partnerships and accounts we manage, advise, or to which we provide certain other investment-related services, that is available for investment or reinvestment subject to the provisions of applicable limited partnership agreements or other governing agreements, which capital is not currently part of the NAV or fair value of investments that may eventually produce performance fees allocable to, or earned by, the general partner.

“AUM with Future Management Fee Potential” refers to the committed uninvested capital portion of total AUM not

currently earning management fees. The amount depends on the specific terms and conditions of each fund;

We use AUM as a performance measure of our funds’ 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 performance fees;

“Advisory” refers to certain assets advised by Apollo Asset Management Europe PC LLP (“AAME PC”), a wholly-owned subsidiary of Apollo Asset Management Europe LLP (“AAME”). AAME PC and AAME are subsidiaries of Apollo and are collectively referred to herein as “ISGI”;

“Athene Holding” or “AHL” refers to Athene Holding Ltd. (together with its subsidiaries, “Athene”), a leading retirement services company that issues, reinsures and acquires retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs, and to which Apollo, through its consolidated subsidiary Apollo Insurance Solutions Group LP (formerly known as Athene Asset Management LLC) (“ISG”), provides asset management and advisory services;

“Athora Holding” refers to Athora Holding, Ltd. (“Athora Holding” and together with its subsidiaries, “Athora”), a strategic platform that acquires or reinsures blocks of insurance business in the German and broader European life insurance market (collectively, the “Athora Accounts”). The Company, through ISGI, provides investment advisory services to Athora. Athora Non-Sub-Advised Assets includes the Athora assets which are managed by Apollo but not sub-advised by Apollo nor invested in Apollo funds or investment vehicles. Athora Sub-Advised includes assets which the Company explicitly sub-advises as well as those assets in the Athora Accounts which are invested directly in funds and investment vehicles Apollo manages;

“capital deployed” or “deployment” represents (i) the aggregate amount of capital that has been invested during a given period (including leverage) by our commitment based funds and SIAs that have a defined maturity date, (ii) purchases of investments (net of sales) by our subscription and contribution based funds and mandates (including leverage), (iii) investments originated by certain of our platform companies, net of syndications to our other funds and accounts, but including syndications to third parties, and (iv) third-party investment activity in opportunities sourced by our teams for which we earn a fee and in which we participate. Deployment excludes offsetting short positions, certain credit derivatives, certain short-dated government securities, and involuntary repayment of loans and bonds;

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“Co-Founders” refer to Messrs. Leon Black, Joshua Harris and Marc Rowan collectively and, when used in reference to holdings of interests in Apollo or Holdings, includes certain related parties of such individuals;

“Contributing Partners” refer to those of our partners and their related parties (other than our Co-Founders) who indirectly beneficially own (through Holdings) Apollo Operating Group units;

“drawdown capital deployed” or “drawdown deployment” is the aggregate amount of capital that has been invested during a given period (which may, in certain cases, include leverage) by (i) our commitment-based funds, excluding certain funds in which permanent capital vehicles are the primary investor and (ii) SIAs that have a defined maturity date;

“Equity Plan” refers to the Company’s 2007 Omnibus Equity Incentive Plan, which effective as of July 22, 2019, was amended, restated and renamed the 2019 Omnibus Equity Incentive Plan;

“gross IRR” of a credit fund and the principal finance funds within the real assets segment represents the annualized return of a fund based on the actual timing of all cumulative fund cash flows before management fees, performance fees allocated to the general partner and certain other expenses. Calculations may include certain investors that do not pay fees. The terminal value is the net asset value as of the reporting date. Non-U.S. dollar denominated (“USD”) fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. In addition, gross IRRs at the fund level will differ from those at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor;

“gross IRR” of a private equity fund represents the cumulative investment-related cash flows (i) for a given investment for the fund or funds which made such investment, and (ii) for a given fund, in the relevant fund itself (and not any one investor in the fund), in each case, on the basis of the actual timing of investment inflows and outflows (for unrealized investments assuming disposition on September 30, 2021 or other date specified) aggregated on a gross basis quarterly, and the return is annualized and compounded before management fees, performance fees and certain other expenses (including interest incurred by the fund itself) and measures the returns on the fund’s investments as a whole without regard to whether all of the returns would, if distributed, be payable to the fund’s investors. In addition, gross IRRs at the fund level will differ from those at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor;

“gross IRR” of a real assets fund excluding the principal finance funds represents the cumulative investment-related cash flows in the fund itself (and not any one investor in the fund), on the basis of the actual timing of cash inflows and outflows (for unrealized investments assuming disposition on September 30, 2021 or other date specified) starting on the date that each investment closes, and the return is annualized and compounded before management fees, performance fees, and certain other expenses (including interest incurred by the fund itself) and measures the returns on the fund’s investments as a whole without regard to whether all of the returns would, if distributed, be payable to the fund’s investors. Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. In addition, gross IRRs at the fund level will differ from those at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Gross IRR does not represent the return to any fund investor;

“gross return” of a credit or real assets fund is the monthly or quarterly time-weighted return that is equal to the percentage change in the value of a fund’s portfolio, adjusted for all contributions and withdrawals (cash flows) before the effects of management fees, incentive fees allocated to the general partner, or other fees and expenses. Returns for credit funds are calculated for all funds and accounts in the respective strategies excluding assets for Athene, Athora and certain other entities where we manage or may manage a significant portion of the total company assets. Returns of CLOs represent the gross returns on assets. Returns over multiple periods are calculated by geometrically linking each period’s return over time;

“Holdings” means AP Professional Holdings, L.P., a Cayman Islands exempted limited partnership through which our Co-Founders and Contributing Partners indirectly beneficially own their interests in the Apollo Operating Group units;

“inflows” represents (i) at the individual segment level, subscriptions, commitments, and other increases in available capital, such as acquisitions or leverage, net of inter-segment transfers, and (ii) on an aggregate basis, the sum of inflows across the credit, private equity and real assets segments;

“net IRR” of a credit fund and the principal finance funds within the real assets segment represents the annualized return of a fund after management fees, performance fees allocated to the general partner and certain other expenses, calculated on investors that pay such fees. The terminal value is the net asset value as of the reporting date. Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. In addition, net IRR at the fund level will differ from that at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Net IRR does not represent the return to any fund investor;

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“net IRR” of a private equity fund means the gross IRR applicable to a fund, including returns for related parties which may not pay fees or performance fees, net of management fees, certain expenses (including interest incurred or earned by the fund itself) and realized performance fees all offset to the extent of interest income, and measures returns at the fund level on amounts that, if distributed, would be paid to investors of the fund. The timing of cash flows applicable to investments, management fees and certain expenses, may be adjusted for the usage of a fund’s subscription facility. To the extent that a fund exceeds all requirements detailed within the applicable fund agreement, 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 of such fund, thereby reducing the balance attributable to fund investors. In addition, net IRR at the fund level will differ from that at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Net IRR does not represent the return to any fund investor;

“net IRR” of a real assets fund excluding the principal finance funds represents the cumulative cash flows in the fund (and not any one investor in the fund), on the basis of the actual timing of cash inflows received from and outflows paid to investors of the fund (assuming the ending net asset value as of September 30, 2021 or other date specified is paid to investors), excluding certain non-fee and non-performance fee bearing parties, and the return is annualized and compounded after management fees, performance fees, and certain other expenses (including interest incurred by the fund itself) and measures the returns to investors of the fund as a whole.  Non-USD fund cash flows and residual values are converted to USD using the spot rate as of the reporting date. In addition, net IRR at the fund level will differ from that at the individual investor level as a result of, among other factors, timing of investor-level inflows and outflows. Net IRR does not represent the return to any fund investor;

“net return” of a credit or real assets fund represents the gross return after management fees, performance fees allocated to the general partner, or other fees and expenses. Returns over multiple periods are calculated by geometrically linking each period’s return over time;

“performance allocations”, “performance fees”, “performance revenues”, “incentive fees” and “incentive income” refer to interests granted to Apollo by an Apollo fund that entitle Apollo to receive allocations, distributions or fees which are based on the performance of such fund or its underlying investments;

“permanent capital vehicles” refers to (a) assets that are owned by or related to Athene or Athora, (b) assets that are owned by or related to MidCap FinCo Designated Activity Company (“MidCap”) and managed by Apollo, (c) assets of publicly traded vehicles managed by Apollo such as Apollo Investment Corporation (“AINV”), Apollo Commercial Real Estate Finance, Inc. (“ARI”), Apollo Tactical Income Fund Inc. (“AIF”), and Apollo Senior Floating Rate Fund Inc. (“AFT”), in each case that do not have redemption provisions or a requirement to return capital to investors upon exiting the investments made with such capital, except as required by applicable law and (d) a non-traded business development company from which Apollo earns certain investment-related service fees. The investment management agreements of AINV, AIF and AFT have one year terms, are reviewed annually and remain in effect only if approved by the boards of directors of such companies or by the affirmative vote of the holders of a majority of the outstanding voting shares of such companies, including in either case, approval by a majority of the directors who are not “interested persons” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, the investment management agreements of AINV, AIF and AFT may be terminated in certain circumstances upon 60 days’ written notice. The investment management agreement of ARI has a one year term and is reviewed annually by ARI’s board of directors and may be terminated under certain circumstances by an affirmative vote of at least two-thirds of ARI’s independent directors. The investment management or advisory arrangements between each of MidCap and Apollo, Athene and Apollo, and Athora and Apollo, may also be terminated under certain circumstances. The agreement pursuant to which Apollo earns certain investment-related service fees from a non-traded business development company may be terminated under certain limited circumstances;

“private equity fund appreciation (depreciation)” refers to gain (loss) and income for the traditional private equity funds (as defined below), Apollo Natural Resources Partners, L.P. (together with its alternative investment vehicles, “ANRP I”), Apollo Natural Resources Partners II, L.P. (together with its alternative investment vehicles, “ANRP II”), Apollo Natural Resources Partners III, L.P. (together with its parallel vehicles and alternative investment vehicles, “ANRP III”), Apollo Special Situations Fund, L.P., AION Capital Partners Limited (“AION”), Apollo Hybrid Value Fund, L.P. (together with its parallel funds and alternative investment vehicles, “HVF I”) and Apollo Hybrid Value Fund II, L.P. (together with its parallel funds and alternative investment vehicles, “HVF II”) for the periods presented on a total return basis before giving effect to fees and expenses. The performance percentage is determined by dividing (a) the change in the fair value of investments over the period presented, minus the change in invested capital over the period presented, plus the realized value for the period presented, by (b) the beginning unrealized value for the period presented plus the change in invested capital for the period presented. Returns over multiple periods are calculated by geometrically linking each period’s return over time;

“private equity investments” refer to (i) direct or indirect investments in existing and future private equity funds managed or sponsored by Apollo, (ii) direct or indirect co-investments with existing and future private equity funds managed or sponsored by Apollo, (iii) direct or indirect investments in securities which are not immediately capable of resale in a public market that

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Apollo identifies but does not pursue through its private equity funds, and (iv) investments of the type described in (i) through (iii) above made by Apollo funds;

“Realized Value” refers to all cash investment proceeds received by the relevant Apollo fund, including interest and dividends, but does not give effect to management fees, expenses, incentive compensation or performance fees to be paid by such Apollo fund;

“Redding Ridge” refers to Redding Ridge Asset Management, LLC and its subsidiaries, which is a standalone, self-managed asset management business established in connection with risk retention rules that manages CLOs and retains the required risk retention interests;

“Remaining Cost” represents the initial investment of the fund in a portfolio investment, reduced for any return of capital distributed to date on such portfolio investment;

“Total Invested Capital” refers to the aggregate cash invested by the relevant Apollo fund and includes capitalized costs relating to investment activities, if any, but does not give effect to cash pending investment or available for reserves and excludes amounts, if any, invested on a financed basis with leverage facilities;

“Total Value” represents the sum of the total Realized Value and Unrealized Value of investments;

“traditional private equity funds” refers to Apollo Investment Fund I, L.P. (“Fund I”), AIF II, L.P. (“Fund II”), a mirrored investment account established to mirror Fund I and Fund II for investments in debt securities (“MIA”), Apollo Investment Fund III, L.P. (together with its parallel funds, “Fund III”), Apollo Investment Fund IV, L.P. (together with its parallel fund, “Fund IV”), Apollo Investment Fund V, L.P. (together with its parallel funds and alternative investment vehicles, “Fund V”), Apollo Investment Fund VI, L.P. (together with its parallel funds and alternative investment vehicles, “Fund VI”), Apollo Investment Fund VII, L.P. (together with its parallel funds and alternative investment vehicles, “Fund VII”), Apollo Investment Fund VIII, L.P. (together with its parallel funds and alternative investment vehicles, “Fund VIII”) and Apollo Investment Fund IX, L.P. (together with its parallel funds and alternative investment vehicles, “Fund IX”);

“Unrealized Value” refers to the fair value consistent with valuations determined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), for investments not yet realized and may include payments in kind, accrued interest and dividends receivable, if any, and before the effect of certain taxes.  In addition, amounts include committed and funded amounts for certain investments; and

“Vintage Year” refers to the year in which a fund’s final capital raise occurred, or, for certain funds, the year of a fund’s effective date or the year in which a fund’s investment period commences pursuant to its governing agreements.

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

APOLLO GLOBAL MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020

(dollars in thousands, except share data)

	As of September 30, 2021		As of December 31, 2020
Assets:
Cash and cash equivalents	$	2,090,197	$	1,555,517
Restricted cash and cash equivalents	1,052,782		17,708
U.S. Treasury securities, at fair value	817,226		816,985
Investments (includes performance allocations of $2,598,693 and $1,624,156 as of September 30, 2021 and December 31, 2020, respectively)	7,986,606		4,995,411
Assets of consolidated variable interest entities:
Cash and cash equivalents	672,619		893,306
Investments, at fair value	13,188,128		13,316,016
Other assets	500,114		290,264
Incentive fees receivable	4,124		5,231
Due from related parties	519,219		462,383
Deferred tax assets, net	466,899		539,244
Other assets	496,519		364,963
Lease assets	379,251		295,098
Goodwill	116,958		116,958
Total Assets	$	28,290,642	$	23,669,084
Liabilities, Redeemable non-controlling interests and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	209,312	$	119,982
Accrued compensation and benefits	239,242		82,343
Deferred revenue	175,204		30,369
Due to related parties	634,470		608,469
Profit sharing payable	1,528,662		842,677
Debt	3,153,181		3,155,221
Liabilities of consolidated variable interest entities:
Debt, at fair value	8,022,747		8,660,515
Notes payable	2,498,134		2,471,971
Other liabilities	703,100		773,045
Other liabilities	474,962		295,612
Lease liabilities	427,529		332,915
Total Liabilities	18,066,543		17,373,119
Commitments and Contingencies (see note 15)
Redeemable non-controlling interests:
Redeemable non-controlling interests	1,750,054		782,702
Stockholders’ Equity:
Apollo Global Management, Inc. Stockholders’ Equity:
Series A Preferred Stock, 11,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020	264,398		264,398
Series B Preferred Stock, 12,000,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020	289,815		289,815

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Class A Common Stock, $0.00001 par value, 90,000,000,000 shares authorized, 245,393,192 and 228,873,449 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	—		—
Class B Common Stock, $0.00001 par value, 999,999,999 shares authorized, 1 share issued and outstanding as of September 30, 2021 and December 31, 2020	—		—
Class C Common Stock, $0.00001 par value, 1 share authorized, 1 share issued and outstanding as of September 30, 2021 and December 31, 2020	—		—
Additional paid in capital	1,017,939		877,173
Retained earnings	1,078,856		—
Accumulated other comprehensive loss	(3,102)		(2,071)
Total Apollo Global Management, Inc. Stockholders’ Equity	2,647,906		1,429,315
Non-Controlling Interests in consolidated entities	2,818,847		2,275,728
Non-Controlling Interests in Apollo Operating Group	3,007,292		1,808,220
Total Stockholders’ Equity	8,474,045		5,513,263
Total Liabilities, Redeemable non-controlling interests and Stockholders’ Equity	$	28,290,642	$	23,669,084

See accompanying notes to condensed consolidated financial statements.

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APOLLO GLOBAL MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(dollars in thousands, except share data)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues:
Management fees	$	474,537	$	433,570	$	1,401,814	$	1,240,127
Advisory and transaction fees, net	62,831		73,449		205,530		172,369
Investment income (loss):
Performance allocations	458,211		459,241		2,588,697		(350,483)
Principal investment income (loss)	78,283		50,722		536,674		(25,506)
Total investment income (loss)	536,494		509,963		3,125,371		(375,989)
Incentive fees	5,436		1,292		23,608		21,016
Total Revenues	1,079,298		1,018,274		4,756,323		1,057,523
Expenses:
Compensation and benefits:
Salary, bonus and benefits	182,576		163,197		538,505		453,485
Equity-based compensation	56,218		49,726		165,664		161,268
Profit sharing expense	262,874		191,809		1,279,601		(68,230)
Total compensation and benefits	501,668		404,732		1,983,770		546,523
Interest expense	34,820		34,889		104,433		98,422
General, administrative and other	111,597		90,822		327,285		259,073
Placement fees	822		612		1,950		1,380
Total Expenses	648,907		531,055		2,417,438		905,398
Other Income (Loss):
Net gains (losses) from investment activities	172,798		144,472		1,439,343		(851,412)
Net gains from investment activities of consolidated variable interest entities	142,455		122,119		400,452		14,061
Interest income	2,114		1,485		3,557		13,413
Other income (loss), net	(14,907)		10,161		(28,126)		(3,019)
Total Other Income (Loss)	302,460		278,237		1,815,226		(826,957)
Income (loss) before income tax (provision) benefit	732,851		765,456		4,154,111		(674,832)
Income tax (provision) benefit	(101,434)		(89,357)		(498,731)		66,173
Net Income (Loss)	631,417		676,099		3,655,380		(608,659)
Net (income) loss attributable to Non-Controlling Interests	(373,095)		(403,700)		(2,060,441)		331,169
Net Income (Loss) Attributable to Apollo Global Management, Inc.	258,322		272,399		1,594,939		(277,490)
Series A Preferred Stock Dividends	(4,382)		(4,382)		(13,148)		(13,148)
Series B Preferred Stock Dividends	(4,782)		(4,781)		(14,344)		(14,344)
Net Income (Loss) Attributable to Apollo Global Management, Inc. Class A Common Stockholders	$	249,158	$	263,236	$	1,567,447	$	(304,982)
Net Income (Loss) Per Share of Class A Common Stock:
Net Income (Loss) Available to Class A Common Stock – Basic	$	1.01	$	1.11	$	6.47	$	(1.41)
Net Income (Loss) Available to Class A Common Stock – Diluted	$	1.01	$	1.11	$	6.47	$	(1.41)
Weighted Average Number of Shares of Class A Common Stock Outstanding – Basic	239,451,921		227,771,678		233,539,355		227,395,847
Weighted Average Number of Shares of Class A Common Stock Outstanding – Diluted	239,451,921		227,771,678		233,539,355		227,395,847

See accompanying notes to condensed consolidated financial statements.

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APOLLO GLOBAL MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(dollars in thousands, except share data)

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Net Income (Loss)	$	631,417	$	676,099	$	3,655,380	$	(608,659)
Other Comprehensive Income (Loss), net of tax:
Currency translation adjustments, net of tax	(10,712)		19,524		(22,148)		20,652
Net gain from change in fair value of cash flow hedge instruments	49		52		151		153
Net gain (loss) on available-for-sale securities	21		106		691		(1,242)
Total Other Comprehensive Income (Loss), net of tax	(10,642)		19,682		(21,306)		19,563
Comprehensive Income (Loss)	620,775		695,781		3,634,074		(589,096)
Comprehensive (Income) Loss attributable to Non-Controlling Interests	(363,013)		(416,781)		(2,040,166)		318,906
Comprehensive Income (Loss) Attributable to Apollo Global Management, Inc.	$	257,762	$	279,000	$	1,593,908	$	(270,190)

See accompanying notes to condensed consolidated financial statements.

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APOLLO GLOBAL MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY (UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(dollars in thousands, except share data)

	Apollo Global Management, Inc. Stockholders
	Class A Common Stock	Class B Common Stock	Class C Common Stock	Series A Preferred Stock		Series B Preferred Stock		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Apollo Global Management, Inc. Shareholders’ Equity		Non- Controlling Interests in Consolidated Entities		Non- Controlling Interests in Apollo Operating Group		Total Stockholders’ Equity
Balance at July 1, 2020	229,189,715	1	1	$	264,398	$	289,815	$	1,032,442	$	(653,745)	$	(3,879)	$	929,031	$	2,107,870	$	1,205,036	$	4,241,937
Dilution impact of issuance of Class A Common Stock	—	—	—	—		—		(43)		—		—		(43)		—		—		(43)
Capital increase related to equity-based compensation	—	—	—	—		—		40,620		—		—		40,620		—		—		40,620
Capital contributions	—	—	—	—		—		—		—		—		—		8,240		—		8,240
Dividends/ Distributions	—	—	—	(4,382)		(4,781)		(116,083)		—		—		(125,246)		(538,513)		(99,974)		(763,733)
Payments related to issuances of Class A Common Stock for equity-based awards	118,587	—	—	—		—		—		(6,386)		—		(6,386)		—		—		(6,386)
Repurchase of Class A Common Stock	(561,000)	—	—	—		—		(27,412)		—		—		(27,412)		—		—		(27,412)
Net income (loss)	—	—	—	4,382		4,781		—		263,236		—		272,399		100,021		303,679		676,099
Currency translation adjustments, net of tax	—	—	—	—		—		—		—		6,510		6,510		11,288		1,726		19,524
Net gain from change in fair value of cash flow hedge instruments	—	—	—	—		—		—		—		28		28		—		24		52
Net income on available-for-sale securities	—	—	—	—		—		—		—		63		63		—		43		106
Balance at September 30, 2020	228,747,302	1	1	$	264,398	$	289,815	$	929,524	$	(396,895)	$	2,722	$	1,089,564	$	1,688,906	$	1,410,534	$	4,189,004
Balance at January 1, 2020	222,994,407	1	1	$	264,398	$	289,815	$	1,302,587	$	—	$	(4,578)	$	1,852,222	$	281,904	$	904,001	$	3,038,127
Equity transaction with Athene Holding	—	—	—	—		—		(54,868)		—		—		(54,868)		—		1,214,577		1,159,709
Consolidation of VIEs	—	—	—	—		—		—		—		—		—		1,895,095		—		1,895,095
Dilution impact of issuance of Class A Common Stock	—	—	—	—		—		8,286		—		—		8,286		—		—		8,286
Capital increase related to equity-based compensation	—	—	—	—		—		133,850		—		—		133,850		—		—		133,850
Capital contributions	—	—	—	—		—		—		—		—		—		190,093		—		190,093
Dividends/ Distributions	—	—	—	(13,148)		(14,344)		(428,721)		—		—		(456,213)		(666,083)		(384,274)		(1,506,570)
Payments related to issuances of Class A Common Stock for equity-based awards	3,270,490	—	—	—		—		28,991		(91,913)		—		(62,922)		—		—		(62,922)
Repurchase of Class A Common Stock	(2,755,095)	—	—	—		—		(91,617)		—		—		(91,617)		—		—		(91,617)
Exchange of AOG Units for Class A Common Stock	5,237,500	—	—	—		—		31,016		—		—		31,016		—		(16,967)		14,049
Net income (loss)	—	—	—	13,148		14,344		—		(304,982)		—		(277,490)		(23,320)		(307,849)		(608,659)
Currency translation adjustments, net of tax	—	—	—	—		—		—		—		7,891		7,891		11,217		1,544		20,652
Net gain from change in fair value of cash flow hedge instruments	—	—	—	—		—		—		—		82		82		—		71		153
Net loss on available-for-sale securities	—	—	—	—		—		—		—		(673)		(673)		—		(569)		(1,242)
Balance at September 30, 2020	228,747,302	1	1	$	264,398	$	289,815	$	929,524	$	(396,895)	$	2,722	$	1,089,564	$	1,688,906	$	1,410,534	$	4,189,004

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	Apollo Global Management, Inc. Stockholders
	Class A Common Stock	Class B Common Stock	Class C Common Stock	Series A Preferred Stock		Series B Preferred Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Apollo Global Management, Inc. Shareholders’ Equity		Non- Controlling Interests in Consolidated Entities		Non- Controlling Interests in Apollo Operating Group		Total Stockholders’ Equity
Balance at July 1, 2021	231,366,321	1	1	$	264,398	$	289,815	$	822,612	$	990,798	$	(2,542)	$	2,365,081	$	2,838,121	$	3,009,233	$	8,212,435
Deconsolidation of VIEs	—	—	—	—		—		—		—		—		—		(22,705)		—		(22,705)
Accretion of redeemable non-controlling interests	—	—	—	—		—		(6,911)		—		—		(6,911)		—		—		(6,911)
Issuance of Class A Common Stock related to equity transactions	361,037	—	—	—		—		22,150		—		—		22,150		—		—		22,150
Dilution impact of issuance of Class A Common Stock	—	—	—	—		—		(6,699)		—		—		(6,699)		—		—		(6,699)
Capital increase related to equity-based compensation	—	—	—	—		—		45,631		—		—		45,631		—		—		45,631
Capital contributions	—	—	—	—		—		—		—		—		—		176,878		—		176,878
Dividends/ Distributions	—	—	—	(4,382)		(4,782)		—		(125,843)		—		(135,007)		(276,561)		(118,444)		(530,012)
Payments related to issuances of Class A Common Stock for equity-based awards	1,164,390	—	—	—		—		33,225		(35,257)		—		(2,032)		—		—		(2,032)
Repurchase of Class A Common Stock	(1,300,000)	—	—	—		—		(77,902)		—		—		(77,902)		—		—		(77,902)
Exchange of AOG Units for Class A Common Stock	13,801,444	—	—	—		—		185,833		—		—		185,833		—		(143,396)		42,437
Net income	—	—	—	4,382		4,782		—		249,158		—		258,322		112,569		260,526		631,417
Currency translation adjustments, net of tax	—	—	—	—		—		—		—		(599)		(599)		(9,455)		(658)		(10,712)
Net gain from change in fair value of cash flow hedge instruments	—	—	—	—		—		—		—		27		27		—		22		49
Net income on available-for-sale securities	—	—	—	—		—		—		—		12		12		—		9		21
Balance at September 30, 2021	245,393,192	1	1	$	264,398	$	289,815	$	1,017,939	$	1,078,856	$	(3,102)	$	2,647,906	$	2,818,847	$	3,007,292	$	8,474,045
Balance at January 1, 2021	228,873,449	1	1	$	264,398	$	289,815	$	877,173	$	—	$	(2,071)	$	1,429,315	$	2,275,728	$	1,808,220	$	5,513,263
Deconsolidation of VIEs	—	—	—	—		—		—		—		—		—		(147,920)		—		(147,920)
Accretion of redeemable non-controlling interests	—	—	—	—		—		(49,554)		—		—		(49,554)		—		—		(49,554)
Issuance of Class A Common Stock related to equity transactions	361,037	—	—	—		—		22,150		—		—		22,150		—		—		22,150
Dilution impact of issuance of Class A Common Stock	—	—	—	—		—		(7,994)		—		—		(7,994)		—		—		(7,994)
Capital increase related to equity-based compensation	—	—	—	—		—		131,889		—		—		131,889		—		—		131,889
Capital contributions	—	—	—	—		—		—		—		—		—		1,189,296		—		1,189,296
Dividends/ Distributions	—	—	—	(13,148)		(14,344)		—		(389,661)		—		(417,153)		(778,529)		(402,068)		(1,597,750)
Payments related to issuances of Class A Common Stock for equity-based awards	2,981,780	—	—	—		—		36,439		(98,930)		—		(62,491)		—		—		(62,491)
Repurchase of Class A Common Stock	(3,444,713)	—	—	—		—		(200,605)		—		—		(200,605)		—		—		(200,605)
Exchange of AOG Units for Class A Common Stock	16,621,639	—	—	—		—		208,441		—		—		208,441		—		(158,754)		49,687
Net income	—	—	—	13,148		14,344		—		1,567,447		—		1,594,939		299,423		1,761,018		3,655,380
Currency translation adjustments, net of tax	—	—	—	—		—		—		—		(1,527)		(1,527)		(19,151)		(1,470)		(22,148)
Net gain from change in fair value of cash flow hedge instruments	—	—	—	—		—		—		—		82		82		—		69		151
Net income on available-for-sale securities	—	—	—	—		—		—		—		414		414		—		277		691
Balance at September 30, 2021	245,393,192	1	1	$	264,398	$	289,815	$	1,017,939	$	1,078,856	$	(3,102)	$	2,647,906	$	2,818,847	$	3,007,292	$	8,474,045

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See accompanying notes to condensed consolidated financial statements.

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APOLLO GLOBAL MANAGEMENT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(dollars in thousands, except share data)

	For the Nine Months Ended September 30,
	2021		2020
Cash Flows from Operating Activities:
Net income (loss)	$	3,655,380	$	(608,659)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity-based compensation	165,664		161,268
Depreciation and amortization	19,895		13,058
Unrealized (gains) losses from investment activities	(1,403,617)		839,902
Principal investment (income) loss	(536,674)		25,506
Performance allocations	(2,588,697)		350,483
Change in fair value of contingent obligations	20,408		3,629
Gain from change in tax receivable agreement liability	(1,941)		—
Deferred taxes, net	357,212		(114,399)
Non-cash lease expense	31,482		32,991
Other non-cash amounts included in net income (loss), net	(19,954)		(6,550)
Cash flows due to changes in operating assets and liabilities:
Incentive fees receivable	1,106		1,386
Due from related parties	(12,890)		(65,856)
Accounts payable and accrued expenses	89,330		49,300
Accrued compensation and benefits	156,899		155,865
Deferred revenue	144,835		38,805
Due to related parties	(15,260)		1,601
Profit sharing payable	537,572		(82,695)
Lease liability	(21,017)		(16,784)
Other assets and other liabilities, net	95,686		(57,898)
Cash distributions of earnings from principal investments	385,079		16,538
Cash distributions of earnings from performance allocations	1,332,893		220,948
Satisfaction of contingent obligations	(20,609)		(12,870)
Apollo Funds and VIE related:
Net realized and unrealized (gains) losses from investing activities and debt	(444,064)		154,613
Cash transferred from consolidated VIEs	—		502,153
Deconsolidation of VIEs	(47,601)		—
Purchases of investments	(2,886,717)		(1,557,686)
Proceeds from sale of investments	3,188,133		1,691,247
Changes in other assets and other liabilities, net	(45,538)		(221,180)
Net Cash Provided by Operating Activities	$	2,136,995	$	1,514,716
Cash Flows from Investing Activities:
Purchases of fixed assets	$	(27,729)	$	(48,084)
Acquisitions	—		48,518
Proceeds from sale of investments	88,595		21,855
Purchase of investments	(369,716)		(528,462)
Purchase of U.S. Treasury securities	—		(1,056,827)
Proceeds from maturities of U.S. Treasury securities	—		1,598,357
Cash contributions to equity method investments	(255,495)		(194,374)
Cash distributions from equity method investments	247,798		141,684

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Issuance of related party loans	(121,605)		(315)
Repayment of related party loans	96,308		9,040
Other investing activities	(1,387)		1,141
Apollo Funds and VIE related:
Purchase of U.S. Treasury securities	(1,634,259)		—
Proceeds from maturities of U.S. Treasury Securities	1,633,886		—
Net Cash Used in Investing Activities	$	(343,604)	$	(7,467)
Cash Flows from Financing Activities:
Principal repayments of debt	$	—	$	(16,990)
Dividends to Preferred Stockholders	(27,492)		(27,492)
Issuance of debt	—		518,756
Satisfaction of tax receivable agreement	(39,884)		(48,195)
Repurchase of Class A Common Stock	(200,605)		(91,617)
Payments related to deliveries of Class A Common Stock for RSUs	(98,930)		(91,913)
Dividends paid	(389,661)		(428,721)
Distributions paid to Non-Controlling Interests in Apollo Operating Group	(402,068)		(384,274)
Issuance of related party loans	—		28,280
Repayment of related party loans	—		(28,280)
Other financing activities, net	(3,118)		(9,890)
Apollo Funds and VIE related:
Issuance of debt	842,299		830,838
Principal repayment of debt	(1,539,457)		(828,975)
Issuances of debt within other liabilities of consolidated VIEs	—		68,819
Distributions paid to Non-Controlling Interests in consolidated entities	(774,876)		(146,867)
Contributions from Non-Controlling Interests in consolidated entities	1,188,691		189,831
Proceeds from issuance of Class A Units of SPAC	1,035,000		—
Payment of underwriting discounts	(34,223)		—
Net Cash Used in Financing Activities	$	(444,324)	$	(466,690)
Net Increase in Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities	1,349,067		1,040,559
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities, Beginning of Period	2,466,531		1,621,310
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities, End of Period	$	3,815,598	$	2,661,869
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	95,912	$	88,953
Interest paid by consolidated variable interest entities	321,520		134,460
Income taxes paid	79,071		28,107
Supplemental Disclosure of Non-Cash Investing Activities:
Non-cash contributions to principal investments	$	57,911	$	—
Non-cash distributions from principal investments	92,402		(4,678)
Non-cash purchases of investments	—		1,153,316
Non-cash loss on Athene equity swap	—		(61,261)
Acquisition of goodwill	—		663
Contingent consideration	—		(6,208)
Supplemental Disclosure of Non-Cash Financing Activities:
Capital increases related to equity-based compensation	$	131,889	$	133,850
Issuance of restricted shares	36,439		28,991
Non-cash issuance of AOG units to Athene	—		1,214,577
Other non-cash financing activities	(7,994)		8,286

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Table of Contents

Non-cash distributions paid to Non-Controlling Interests in consolidated variable interest entities	—		(515,558)
Net Assets Transferred from Consolidated Variable Interest Entity:
Investments, at fair value	$	—	$	9,061,907
Other assets	—		130,907
Debt, at fair value	—		(7,344,884)
Other liabilities	—		(967,575)
Non-Controlling interest in consolidated entities related to acquisition	—		(1,382,509)
Adjustments related to exchange of Apollo Operating Group units:
Deferred tax assets	$	292,844	$	76,580
Due to related parties	(243,157)		(62,531)
Additional paid in capital	(49,687)		(14,049)
Non-Controlling Interest in Apollo Operating Group	158,754		16,967
Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Statements of Financial Condition:
Cash and cash equivalents	$	2,090,197	$	1,838,646
Restricted cash and cash equivalents	1,052,782		17,694
Cash and cash equivalents held at consolidated variable interest entities	672,619		805,529
Total Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities	$	3,815,598	$	2,661,869

See accompanying notes to condensed consolidated financial statements.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

1. ORGANIZATION

Apollo Global Management, Inc. (“AGM Inc.”, together with its consolidated subsidiaries, the “Company” or “Apollo”) is a global alternative investment manager whose predecessor was founded in 1990. Its primary business is to raise, invest and manage credit, private equity and real assets funds as well as strategic investment accounts, on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. For these investment management services, Apollo receives management fees generally related to the amount of assets managed, transaction and advisory fees, incentive fees and performance allocations related to the performance of the respective funds that it manages. Apollo has three primary business segments:

•Credit—primarily invests in non-control corporate and structured debt instruments including performing, stressed and distressed investments across the capital structure;

•Private equity—primarily invests in control equity and related debt instruments, convertible securities and distressed debt investments; and

•Real assets—primarily invests in (i) real estate equity and infrastructure equity for the acquisition and recapitalization of real estate and infrastructure assets, portfolios, platforms and operating companies, (ii) real estate and infrastructure debt including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities and (iii) European performing and non-performing loans, and unsecured consumer loans.

Organization of the Company

As of September 30, 2021, the Company owned, through five intermediate holding companies that include APO Corp., a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes, APO Asset Co., LLC, a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes, APO (FC), LLC, an Anguilla limited liability company that is a disregarded entity for U.S. federal income tax purposes, APO (FC II), LLC, an Anguilla limited liability company that is a disregarded entity for U.S. federal income tax purposes, and APO (FC III), LLC, a Cayman Islands limited liability company that is a disregarded entity for U.S. federal income tax purposes (collectively, the “Intermediate Holding Companies”), 56.7% of the economic interests of, and operated and controlled all of the businesses and affairs of, the Apollo Operating Group.

AP Professional Holdings, L.P., a Cayman Islands exempted limited partnership (“Holdings”), is an entity through which the Co-Founders and certain of the Company’s other current and former partners (the “Contributing Partners”) indirectly beneficially own interests in each of the entities that comprise the Apollo Operating Group. As of September 30, 2021, Holdings owned 36.6% of the economic interests in the Apollo Operating Group. The Company consolidates the financial results of the Apollo Operating Group and its consolidated subsidiaries. Holdings’ ownership interest in the Apollo Operating Group is reflected as a Non-Controlling Interest in the accompanying condensed consolidated financial statements.

Athene and Apollo Strategic Transaction

On February 28, 2020, pursuant to a transaction agreement (the “Transaction Agreement”) between Athene Holding, AGM Inc. and the entities that form the Apollo Operating Group, the Apollo Operating Group issued 29,154,519 non-voting equity interests of the Apollo Operating Group to Athene. As a result, as of September 30, 2021, Athene owned 6.7% of the economic interests in the Apollo Operating Group. See note 14 for further disclosure regarding the Transaction Agreement.

As noted further in note 14, Apollo purchased a 17% incremental equity ownership stake in Athene, bringing Apollo’s beneficial ownership in Athene to 28%, at the close of the transaction. This has resulted in Apollo’s indirect ownership in certain VIEs, through Athene, being considered significant such that the Company has the power to direct the activities that most significantly impact the economic performance of these VIEs.

Apollo and Athene Merger and Corporate Conversion

On March 8, 2021, AGM Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) with AHL, Tango Holdings, Inc., a Delaware corporation and a direct wholly-owned subsidiary of AGM Inc. (“HoldCo”), Blue Merger Sub, Ltd., a Bermuda exempted company and a direct wholly-owned subsidiary of HoldCo (“AHL Merger Sub”), and Green

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of HoldCo (“AGM Merger Sub” and together with AHL Merger Sub, the “Merger Subs”).

At the closing of the transaction (the “Closing”), AHL Merger Sub will merge with and into AHL (the “AHL Merger”), with AHL as the surviving entity in the AHL Merger and a direct wholly-owned subsidiary of HoldCo (the “AHL Surviving Entity”), and AGM Merger Sub will merge with and into Apollo (the “AGM Merger” and, together with the AHL Merger, the “Mergers”) with AGM as the surviving entity in the AGM Merger and a direct wholly-owned subsidiary of HoldCo (the “AGM Surviving Entity”). Upon consummation of the Mergers, AGM and AHL will be direct wholly-owned subsidiaries of HoldCo, which will be renamed “Apollo Global Management, Inc.” The transaction is expected to close in January of 2022. The transaction requires the approval of stockholders of both Apollo and AHL, and is subject to, among other things, regulatory approvals, and other customary closing conditions. See note 14 for further disclosure regarding the Merger Agreement.

In addition, on March 9, 2021, AGM Inc. entered into a binding governance term sheet with the Co-Founders pursuant to which it was agreed, among other things, that the Company will convert its corporate structure to a single class of common stock with one vote per share. The change will take effect at closing of the Mergers, subject to regulatory and stockholder approvals, and will result in the exchange of Apollo Operating Group units held by AP Professional Holdings, L.P. for a combination of Class A shares (which will be converted into HoldCo shares at the closing of the AGM Merger) and cash in connection with the conversion of the corporate structure, and the reorganization of Apollo Global Management, Inc. from an umbrella partnership C corporation (“Up-C”) structure to a C-corporation with a single class of common stock.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and instructions to Form 10-Q. The condensed consolidated financial statements and these notes are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments (consisting only of normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing its condensed consolidated financial statements are reasonable and prudent. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These condensed consolidated financial statements should be read in conjunction with the annual financial statements included in the 2020 Annual Report.

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned or majority-owned subsidiaries, the consolidated entities which are considered to be variable interest entities (“VIEs”) and for which the Company is considered the primary beneficiary, and certain entities which are not considered VIEs but which the Company controls through a majority voting interest. Intercompany accounts and transactions, if any, have been eliminated upon consolidation.

Certain reclassifications, when applicable, have been made to the prior periods’ condensed consolidated financial statements and notes to conform to the current period’s presentation and are disclosed accordingly.

Consolidation

The types of entities with which Apollo is involved generally include subsidiaries (e.g., general partners and management companies related to the funds the Company manages), entities that have all the attributes of an investment company (e.g., funds), special purpose acquisition companies (“SPACs”) and securitization vehicles (e.g., CLOs). Each of these entities is assessed for consolidation on a case by case basis depending on the specific facts and circumstances surrounding that entity.

Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity. Fees that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. Apollo factors in all economic interests, including proportionate interests through related parties, to determine if such interests are considered a variable interest. As Apollo’s interests in many of these entities are solely through market rate fees and/or insignificant indirect interests through related parties, Apollo is not considered to have a variable interest in many of these entities and no further consolidation analysis is performed. For entities

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

where the Company has determined that it does hold a variable interest, the Company performs an assessment to determine whether each of those entities qualify as a VIE.

The determination as to whether an entity qualifies as a VIE depends on the facts and circumstances surrounding each entity and therefore certain of Apollo’s funds may qualify as VIEs under the variable interest model whereas others may qualify as voting interest entities (“VOEs”) under the voting interest model. The granting of substantive kick-out rights is a key consideration in determining whether a limited partnership or similar entity is a VIE and whether or not that entity should be consolidated.

Under the variable interest model, Apollo consolidates those entities where it is determined that the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it has a controlling financial interest in the VIE, which is defined as possessing both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant. When Apollo alone is not considered to have a controlling financial interest in the VIE but Apollo and its related parties under common control in the aggregate have a controlling financial interest in the VIE, Apollo will be deemed the primary beneficiary if it is the party that is most closely associated with the VIE. When Apollo and its related parties not under common control in the aggregate have a controlling financial interest in the VIE, Apollo would be deemed to be the primary beneficiary if substantially all the activities of the entity are performed on behalf of Apollo.

Apollo determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. Investments and redemptions (either by Apollo, related parties of Apollo or third parties) or amendments to the governing documents of the respective entity may affect an entity’s status as a VIE or the determination of the primary beneficiary.

Assets and liabilities of the consolidated VIEs are primarily shown in separate sections within the condensed consolidated statements of financial condition. Changes in the fair value of the consolidated VIEs’ assets and liabilities and related interest, dividend and other income and expenses are presented within net gains from investment activities of consolidated variable interest entities in the condensed consolidated statements of operations. The portion attributable to Non-Controlling Interests is reported within net income attributable to Non-Controlling Interests in the condensed consolidated statements of operations. For additional disclosures regarding VIEs, see note 5.

Under the voting interest model, Apollo consolidates those entities it controls through a majority voting interest. Apollo does not consolidate those VOEs in which substantive kick-out rights have been granted to the unrelated investors to either dissolve the fund or remove the general partner.

Cash and Cash Equivalents

Apollo considers all highly liquid short-term investments with original maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents include money market funds and U.S. Treasury securities with original maturities of three months or less when purchased. Interest income from cash and cash equivalents is recorded in interest income in the condensed consolidated statements of operations. The carrying values of the money market funds and U.S. Treasury securities were $1.6 billion and $1.2 billion as of September 30, 2021 and December 31, 2020, respectively, which represent their fair values due to their short-term nature and are categorized as Level I within the fair value hierarchy. Substantially all of the Company’s cash on deposit is in interest bearing accounts with major financial institutions and exceed insured limits.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents includes cash held in reserve accounts used to make required payments in respect of the 2039 Senior Secured Guaranteed Notes. Restricted cash and cash equivalents also includes cash deposited at a bank, which is pledged as collateral in connection with leased premises.

Restricted cash and cash equivalents of Apollo Strategic Growth Capital II (“APSG II”), a consolidated SPAC, are held in a trust account and include money market funds that were purchased with funds raised through the initial public offering of the consolidated entity. The $690.1 million in funds as of September 30, 2021 are restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in APSG II’s trust agreement. Restricted cash and cash equivalents of Acropolis Infrastructure Acquisition Corp. (“Acropolis”), a consolidated SPAC, are held in a trust account and include U.S. Treasury bills with original maturities of three months or less when purchased, that

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

were purchased with funds raised through the initial public offering of the consolidated entity. The $345.0 million in funds as of September 30, 2021 are restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in Acropolis’s trust agreement

U.S. Treasury securities, at fair value

U.S. Treasury securities, at fair value includes U.S. Treasury bills with original maturities greater than three months when purchased. These securities are recorded at fair value. Interest income on such securities is separately presented from the overall change in fair value and is recognized in interest income in the condensed consolidated statements of operations. Any remaining change in fair value of such securities, that is not recognized as interest income, is recognized in net gains (losses) from investment activities in the condensed consolidated statements of operations.

U.S. Treasury securities, at fair value of Apollo Strategic Growth Capital (“APSG”), a consolidated SPAC, are held in a trust account and consist of U.S Treasury bills with original maturities of greater than three months when purchased, that were purchased with funds raised through the initial public offering of the consolidated entity. The $817.2 million in funds as of September 30, 2021 are restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in APSG’s trust agreement.

Fair Value of Financial Instruments

Apollo has elected the fair value option for the Company’s investment in Athene Holding, the assets and liabilities of certain of its consolidated VIEs (including CLOs), the Company’s U.S. Treasury securities with original maturities greater than three months when purchased, and certain of the Company’s other investments. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.

Except for the Company’s debt obligations, financial instruments are generally recorded at fair value or at amounts whose carrying values approximate fair value. The actual realized gains or losses will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may ultimately differ significantly from the assumptions on which the valuations were based.

Fair Value Hierarchy

U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows:

Level I - Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments included in Level I include listed equities and debt. The Company does not adjust the quoted price for these financial instruments, even in situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price.

Level II - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments that are generally included in this category include corporate bonds and loans, less liquid and restricted equity securities and certain over-the-counter derivatives where the fair value is based on observable inputs. These financial instruments exhibit higher levels of liquid market observability as compared to Level III financial instruments.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Level III - Pricing inputs are unobservable for the financial instrument and includes situations where there is little observable market activity for the financial instrument. The inputs into the determination of fair value may require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partner interests in corporate private equity and real assets funds, opportunistic credit funds, distressed debt and non-investment grade residual interests in securitizations and CDOs and CLOs where the fair value is based on observable inputs as well as unobservable inputs.

When a security is valued based on broker quotes, the Company subjects those quotes to various criteria in making the determination as to whether a particular financial instrument would qualify for classification as Level II or Level III. These criteria include, but are not limited to, the number and quality of the broker quotes, the standard deviations of the observed broker quotes, and the percentage deviation from external pricing services.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument when the fair value is based on unobservable inputs.

Equity Method Investments

For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation and for which the Company has not elected the fair value option, the Company uses the equity method of accounting, whereby the Company records its share of the underlying income or loss of such entities. The Company’s share of the underlying net income or loss of such entities is recorded in principal investment income (loss) in the condensed consolidated statements of operations.

The carrying amounts of equity method investments are recorded in investments in the condensed consolidated statements of financial condition. Generally, the underlying entities that the Company manages and invests in are, for U.S. GAAP purposes, investment companies which reflect their investments at estimated fair value. For such entities, the carrying value of the Company’s equity method investments approximates fair value.

Financial Instruments held by Consolidated VIEs

The Company measures both the financial assets and financial liabilities of the consolidated CLOs in its condensed consolidated financial statements using the fair value of the financial assets or financial liabilities of the consolidated CLOs, whichever are more observable.

Where financial assets are more observable, the financial assets of the consolidated CLOs are measured at fair value and the financial liabilities are measured in consolidation as: (i) the sum of the fair value of the financial assets and the carrying value of any nonfinancial assets that are incidental to the operations of the CLOs less (ii) the sum of the fair value of any beneficial interests retained by the Company (other than those that represent compensation for services) and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interest retained by the Company) using a reasonable and consistent methodology.

Where financial liabilities are more observable, the financial liabilities of the consolidated CLOs are measured at fair value and the financial assets are measured in consolidation as: (i) the sum of the fair value of the financial liabilities, and the carrying value of any nonfinancial liabilities that are incidental to the operations of the CLOs less (ii) the carrying value of any nonfinancial assets that are incidental to the operations of the CLOs. The resulting amount is allocated to the individual financial assets using a reasonable and consistent methodology.

Under the measurement alternative, net income attributable to Apollo Global Management, Inc. reflects the Company’s own economic interests in the consolidated CLOs including (i) changes in the fair value of the beneficial interests retained by the Company and (ii) beneficial interests that represent compensation for collateral management services.

The consolidated VIEs hold investments that could be traded over-the-counter. Investments in securities that are traded on a securities exchange or comparable over-the-counter quotation systems are valued based on the last reported sale price at that date. If no sales of such investments are reported on such date, and in the case of over-the-counter securities or

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

other investments for which the last sale date is not available, valuations are based on independent market quotations obtained from market participants, recognized pricing services or other sources deemed relevant, and the prices are based on the average of the “bid” and “ask” prices, or at ascertainable prices at the close of business on such day. Market quotations are generally based on valuation pricing models or market transactions of similar securities adjusted for security-specific factors such as relative capital structure priority and interest and yield risks, among other factors. When market quotations are not available, a model based approach is used to determine fair value.

Certain consolidated VIEs have applied the fair value option for certain investments in private debt securities that otherwise would not have been carried at fair value with gains and losses in net income.

Deferred Revenue

Apollo records deferred revenue, which is a type of contract liability, when consideration is received in advance of management services provided.

Apollo also earns management fees subject to the Management Fee Offset (described below). When advisory and transaction fees are earned by the management company, the Management Fee Offset reduces the management fee obligation of the fund. When the Company receives cash for advisory and transaction fees, a certain percentage of such advisory and/or transaction fees, as applicable, is allocated as a credit to reduce future management fees, otherwise payable by such fund. Such credit is recorded as deferred revenue in the condensed consolidated statements of financial condition. A portion of any excess advisory and transaction fees may be required to be returned to the limited partners of certain funds upon such fund’s liquidation. As the management fees earned by the Company are presented on a gross basis, any Management Fee Offsets calculated are presented as a reduction to advisory and transaction fees in the condensed consolidated statements of operations.

Additionally, Apollo earns advisory fees pursuant to the terms of the advisory agreements with certain of the portfolio companies that are owned by the funds Apollo manages. When Apollo receives a payment from a portfolio company that exceeds the advisory fees earned at that point in time, the excess payment is recorded as deferred revenue in the condensed consolidated statements of financial condition. The advisory agreements with the portfolio companies vary in duration and the associated fees are received monthly, quarterly or annually.

Deferred revenue is reversed and recognized as revenue over the period that the agreed upon services are performed. There was $23.8 million of revenue recognized during the nine months ended September 30, 2021 that was previously deferred as of January 1, 2021.

Under the terms of the funds’ partnership agreements, Apollo is normally required to bear organizational expenses over a set dollar amount and placement fees or costs in connection with the offering and sale of interests in the funds it manages to investors. The placement fees are payable to placement agents, who are independent third parties that assist in identifying potential investors, securing commitments to invest from such potential investors, preparing or revising offering and marketing materials, developing strategies for attempting to secure investments by potential investors and/or providing feedback and insight regarding issues and concerns of potential investors, when a limited partner either commits or funds a commitment to a fund. In cases where the limited partners of the funds are determined to be the customer in an arrangement, placement fees may be capitalized as a cost to acquire a customer contract, and amortized over the life of the customer contract. Capitalized placement fees are recorded within other assets in the condensed consolidated statements of financial condition, while amortization is recorded within placement fees in the condensed consolidated statements of operations. In certain instances, the placement fees are paid over a period of time. Based on the management agreements with the funds, Apollo considers placement fees and organizational costs paid in determining if cash has been received in excess of the management fees earned. Placement fees and organizational costs are normally the obligation of Apollo but can be paid for by the funds. When these costs are paid by the fund, the resulting obligations are included within deferred revenue. The deferred revenue balance will also be reduced during future periods when management fees are earned but not paid.

Redeemable non-controlling interests

Redeemable non-controlling interests represent the shares issued by APSG, APSG II and Acropolis, the consolidated SPACs, that are redeemable for cash by the public shareholders in connection with the SPACs’ failure to complete a business combination or tender offer/stockholder approval provisions. The redeemable non-controlling interests are initially recorded at their original issue price, net of issuance costs and the initial fair value of separately traded warrants. The carrying

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

amount is accreted to its redemption value over the period from the date of issuance to the earliest redemption date of the instrument. These increases are recorded against additional paid-in capital.

Revenues

The Company’s revenues are reported in four separate categories that include (i) management fees; (ii) advisory and transaction fees, net; (iii) investment income, which is comprised of performance allocations and principal investment income; and (iv) incentive fees.

The revenue guidance requires that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services (i.e., the transaction price). When determining the transaction price under the revenue guidance, an entity may recognize variable consideration only to the extent that it is probable to not be significantly reversed. The revenue guidance also requires disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized.

Performance allocations are accounted for under guidance applicable to equity method investments, and therefore not within the scope of the revenue guidance. The Company recognizes performance allocations within investment income along with the related principal investment income (as further described below) in the condensed consolidated statements of operations and within the investments line in the condensed consolidated statements of financial condition.

Refer to disclosures below for additional information on each of the Company’s revenue streams.

Management Fees

Management fees are recognized over time during the periods in which the related services are performed in accordance with the contractual terms of the related agreement. Management fees are generally based on (1) a percentage of the capital committed during the commitment period, and thereafter based on the remaining invested capital of unrealized investments, or (2) net asset value, gross assets or as otherwise defined in the respective agreements. Included in management fees are certain expense reimbursements where the Company is considered the principal under the agreements and is required to record the expense and related reimbursement revenue on a gross basis.

Advisory and Transaction Fees, Net

Advisory fees, including management consulting fees and directors’ fees, are generally recognized over time as the underlying services are provided in accordance with the contractual terms of the related agreement. The Company receives such fees in exchange for ongoing management consulting services provided to portfolio companies of funds it manages. Transaction fees, including structuring fees and arranging fees related to the Company’s funds, portfolio companies of funds and third parties are generally recognized at a point in time when the underlying services rendered are complete.

The amounts due from fund portfolio companies are recorded in due from related parties on the condensed consolidated statements of financial condition, which is discussed further in note 14. Under the terms of the limited partnership agreements for certain funds, the management fee payable by the funds may be subject to a reduction based on a certain percentage of such advisory and transaction fees, net of applicable broken deal costs (“Management Fee Offset”). Advisory and transaction fees are presented net of the Management Fee Offset in the condensed consolidated statements of operations.

Underwriting fees, which are also included within advisory and transaction fees, net, include gains, losses and fees, arising from securities offerings in which one of the Company’s subsidiaries participates in the underwriter syndicate. Underwriting fees are recognized at a point in time when the underwriting is completed. Underwriting fees recognized but not received are recorded in other assets on the condensed consolidated statements of financial condition.

During the normal course of business, the Company incurs certain costs related to certain transactions that are not consummated (“broken deal costs”). These costs (e.g., research costs, due diligence costs, professional fees, legal fees and other related items) are determined to be broken deal costs upon management’s decision to no longer pursue the transaction. In accordance with the related fund agreement, in the event the deal is deemed broken, all of the costs are reimbursed by the funds and then included as a component of the calculation of the Management Fee Offset. If a deal is successfully completed, Apollo is reimbursed by the fund or fund’s portfolio company for all costs incurred and no offset is generated. As the Company acts as an agent for the funds it manages, any transaction costs incurred and paid by the Company on behalf of the respective funds

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

relating to successful or broken deals are recorded net on the Company’s condensed consolidated statements of operations, and any receivable from the respective funds is recorded in due from related parties on the condensed consolidated statements of financial condition.

Investment Income

Investment income is comprised of performance allocations and principal investment income.

Performance Allocations

Performance allocations are a type of performance revenue (i.e., income earned based on the extent to which an entity’s performance exceeds predetermined thresholds). Performance allocations are generally structured from a legal standpoint as an allocation of capital in which the Company’s capital account receives allocations of the returns of an entity when those returns exceed predetermined thresholds. The determination of which performance revenues are considered performance allocations is primarily based on the terms of an agreement with the entity.

The Company recognizes performance allocations within investment income along with the related principal investment income (as described further below) in the condensed consolidated statements of operations and within the investments line in the condensed consolidated statements of financial condition.

When applicable, the Company may record a general partner obligation to return previously distributed performance allocations. The general partner obligation is based upon an assumed liquidation of a fund’s net assets as of the reporting date and is reported within due to related parties on the condensed consolidated statements of financial condition. The actual determination and any required payment of any such general partner obligation would not take place until the final disposition of a fund’s investments based on the contractual termination of the fund or as otherwise set forth in the respective limited partnership agreement or other governing document of the fund.

Principal Investment Income

Principal investment income includes the Company’s income or loss from equity method investments and certain other investments in entities in which the Company is generally eligible to receive performance allocations. Income from equity method investments includes the Company’s share of net income or loss generated from its investments, which are not consolidated, but in which the Company exerts significant influence.

Incentive Fees

Incentive fees are a type of performance revenue. Incentive fees differ from performance allocations in that incentive fees do not represent an allocation of capital but rather a contractual fee arrangement with the entity.

Incentive fees are considered a form of variable consideration as they are subject to clawback or reversal and therefore must be deferred until the fees are probable to not be significantly reversed. Accrued but unpaid incentive fees are reported within incentive fees receivable in the Company’s condensed consolidated statements of financial condition. The Company’s incentive fees primarily relate to the credit segment and are generally received from CLOs, managed accounts and AINV.

Compensation and Benefits

Salaries, Bonus and Benefits

Salaries, bonus and benefits include base salaries, discretionary and non-discretionary bonuses, severance and employee benefits. Bonuses are generally accrued over the related service period.

Equity-Based Compensation

Equity-based awards granted to employees and non-employees as compensation are measured based on the grant date fair value of the award. Equity-based awards that do not require future service (i.e., vested awards) are expensed immediately. Equity-based employee awards that require future service are expensed over the relevant service period. In addition, certain restricted share units (“RSUs”) granted by the Company vest based on both continued service and the Company’s receipt of performance revenues, within prescribed periods, sufficient to cover the associated equity-based

-26-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

compensation expense. In accordance with U.S. GAAP, equity-based compensation expense for such awards, if and when granted, will be recognized on an accelerated recognition method over the requisite service period to the extent the performance revenue metrics are met or deemed probable. The Company accounts for forfeitures of equity-based awards when they occur.

Profit Sharing

Profit sharing expense and profit sharing payable primarily consist of a portion of performance revenues earned from certain funds that are allocated to employees and former employees. Profit sharing amounts are recognized as the related performance revenues are earned. Accordingly, profit sharing amounts can be reversed during periods when there is a decline in performance revenues that were previously recognized.

Profit sharing amounts are generally not paid until the related performance revenue is distributed to the general partner upon realization of the fund’s investments. Under certain profit sharing arrangements, the Company requires that a portion of certain of the performance revenues distributed to its employees be used to purchase restricted Class A Common Stock issued under the Company’s Equity Plan. Prior to distribution of the performance revenue, the Company records the value of the equity-based awards expected to be granted in other assets and other liabilities within the condensed consolidated statements of financial condition. Such equity-based awards are recorded as equity-based compensation expense over the relevant service period once granted.

Additionally, profit sharing amounts previously distributed may be subject to clawback from employees and former employees. When applicable, the accrual for potential clawback of previously distributed profit sharing amounts, which is a component of due from related parties on the condensed consolidated statements of financial condition, represents all amounts previously distributed to employees and former employees that would need to be returned to the general partner if the Apollo funds were to be liquidated based on the fair value of the underlying funds’ investments as of the reporting date. The actual general partner receivable, however, would not become realized until the final disposition of a fund’s investments based on the contractual termination of the fund or as otherwise set forth in the respective limited partnership agreement or other governing document of the fund.

Profit sharing payable also includes contingent consideration obligations that were recognized in connection with certain Apollo acquisitions. Changes in the fair value of the contingent consideration obligations are reflected in the Company’s condensed consolidated statements of operations as profit sharing expense.

The Company has a performance-based incentive arrangement for certain Apollo partners and employees designed to more closely align compensation on an annual basis with the overall realized performance of the Company. This arrangement enables certain partners and employees to earn discretionary compensation based on performance revenue earned by the Company in a given year, which amounts are reflected in profit sharing expense in the accompanying condensed consolidated financial statements. The Company may also use dividends it receives from investments in MidCap, ARI and AINV to compensate employees. These amounts are recorded as profit sharing expense in the Company’s condensed consolidated statements of operations.

401(k) Savings Plan

The Company sponsors a 401(k) savings plan (the “401(k) Plan”) whereby U.S.-based employees are entitled to participate in the 401(k) Plan based upon satisfying certain eligibility requirements. The Company matches 50% of eligible annual employee contributions up to 3% of the eligible employees’ annual compensation. Matching contributions vest after three years of service.

General, Administrative and Other

General, administrative and other primarily includes professional fees, occupancy, depreciation and amortization, travel, information technology and administration expenses.

Income Taxes

Effective September 5, 2019, Apollo Global Management, LLC converted from a Delaware limited liability company to a Delaware corporation named Apollo Global Management, Inc. Subsequent to the conversion, generally all of the income it earns from the Apollo Operating Group (“AOG”) entities is subject to U.S. corporate income taxes. Certain of the

-27-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

AOG entities operate as partnerships for U.S. income tax purposes and are subject to New York City unincorporated business taxes (“NYC UBT”). Certain non-U.S. entities are also subject to non-U.S. corporate income taxes.

Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties. The Company recognizes the tax benefit of uncertain tax positions only where the position is “more likely than not” to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. If a tax position is not considered more likely than not to be sustained, then no benefits of the position are recognized. The Company’s tax positions are reviewed and evaluated quarterly to determine whether the Company has uncertain tax positions that require financial statement recognition.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amount of assets and liabilities and their respective tax basis using currently enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period during which the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized.

Non-Controlling Interests

For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than Apollo. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in Non-Controlling Interests in the condensed consolidated financial statements. The Non-Controlling Interests relating to Apollo Global Management, Inc. include the ownership interest in the Apollo Operating Group held by Co-Founders and Contributing Partners through their limited partner interests in Holdings. Additionally, Athene holds Non-Controlling Interests in the Apollo Operating Group as a result of the Transaction Agreement. Non-Controlling Interests also include ownership interests in certain consolidated funds and VIEs.

Non-Controlling Interests are presented as a separate component of stockholders’ equity on the Company’s condensed consolidated statements of financial condition. The primary components of Non-Controlling Interests are separately presented in the Company’s condensed consolidated statements of changes in stockholders’ equity to clearly distinguish the interest in the Apollo Operating Group and other ownership interests in the consolidated entities. Net income includes the net income attributable to the holders of Non-Controlling Interests on the Company’s condensed consolidated statements of operations. Profits and losses are allocated to Non-Controlling Interests in proportion to their relative ownership interests regardless of their basis.

Guarantees

See note 15 to the condensed consolidated financial statements for information related to our material guarantees.

Use of Estimates

The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Apollo’s most significant estimates include goodwill, intangible assets, income taxes, performance allocations, incentive fees, contingent consideration obligation related to an acquisition, non-cash compensation, and fair value of investments and debt. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company is unable to predict the adverse impact the COVID-19 pandemic will ultimately have. While such impact may change considerably over time, the estimates and assumptions affecting the Company’s condensed consolidated financial statements are based on information available as of September 30, 2021. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued guidance intended to simplify the accounting for income taxes. The new guidance eliminates certain exceptions to the existing approach in ASC 740, and clarifies other guidance within the standard; it is effective for the Company on January 1, 2021. Based on the Company’s current

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

application of ASC 740, the guidance did not have a material impact on the condensed consolidated financial statements of the Company.

3. INVESTMENTS

The following table presents Apollo’s investments: 

	As of September 30, 2021		As of December 31, 2020
Investments, at fair value	$	4,076,767	$	2,360,434
Equity method investments	1,311,146		1,010,821
Performance allocations	2,598,693		1,624,156
Total Investments	$	7,986,606	$	4,995,411

Investments, at Fair Value

Investments, at fair value, consist of investments for which the fair value option has been elected and primarily include the Company’s investment in Athene Holding and investments in debt of unconsolidated CLOs. Changes in the fair value related to these investments are presented in net gains (losses) from investment activities except for certain investments for which the Company is entitled to receive performance allocations. For those investments, changes in fair value are presented in principal investment income.

The Company’s equity investment in Athene Holding, for which the fair value option was elected, met the significance criteria as defined by the SEC for the three and nine months ended September 30, 2021 and 2020. As such, the following tables present summarized financial information of Athene Holding:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
	(in millions)
Statements of Operations
Revenues	$	8,724	$	3,275	$	19,538	$	6,124
Benefits and expenses	8,004		2,251		16,689		5,401
Income before income taxes	720		1,024		2,849		723
Income tax expense (benefit)	(50)		140		196		124
Net income	770		884		2,653		599
Less: Net income (loss) attributable to non-controlling interests	37		232		(111)		151
Net income available to Athene Holding Ltd. shareholders	$	733	$	652	$	2,764	$	448
Less: Preferred stock dividends	35		30		106		67
Net income available to Athene Holding Ltd. common shareholders	$	698	$	622	$	2,658	$	381

Net Gains (Losses) from Investment Activities

The following table presents the realized and net change in unrealized gains (losses) reported in net gains (losses) from investment activities: 

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Realized gains (losses) on sales of investments, net	$	(197)	$	155	$	996	$	2,031
Net change in unrealized gains (losses) due to changes in fair value	172,995		144,317		1,438,347		(853,443)
Net gains (losses) from investment activities	$	172,798	$	144,472	$	1,439,343	$	(851,412)

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Equity Method Investments

Apollo’s equity method investments include its investments in the credit, private equity and real assets funds it manages, which are not consolidated, but in which the Company exerts significant influence. Apollo’s share of net income generated by these investments is recorded in principal investment income in the condensed consolidated statements of operations.

Equity method investments consisted of the following:

	Equity Held as of
	September 30, 2021		(4)	December 31, 2020		(4)
Credit(1)	$	189,962		$	258,952
Private Equity(2)	1,037,132			672,430
Real Assets	84,052			79,439
Total equity method investments(3)	$	1,311,146		$	1,010,821

(1)    The equity method investment in AINV was $40.1 million and $40.4 million as of September 30, 2021 and December 31, 2020, respectively. The value of the Company’s investment in AINV was $35.8 million and $30.8 million based on the quoted market price of AINV as of September 30, 2021 and December 31, 2020, respectively.

(2)    The equity method investment in Fund VIII was $279.5 million and $343.3 million as of September 30, 2021 and December 31, 2020, respectively, representing an ownership percentage of 2.2% and 2.2% as of September 30, 2021 and December 31, 2020, respectively. The equity method investment in Fund IX was $469.9 million and $134.4 million as of September 30, 2021 and December 31, 2020, respectively, representing an ownership percentage of 1.9% and 1.9% as of September 30, 2021 and December 31, 2020, respectively.

(3)    Certain funds invest across multiple segments. The presentation in the table above is based on the classification of the majority of such funds’ investments.

(4)    Some amounts included are a quarter in arrears.

Performance Allocations

Performance allocations receivable recorded within investments in the condensed consolidated statements of financial condition from credit, private equity and real assets funds consisted of the following: 

	As of September 30, 2021		As of December 31, 2020
Credit	$	551,575	$	465,153
Private Equity	1,866,292		1,040,827
Real Assets	180,826		118,176
Total performance allocations	$	2,598,693	$	1,624,156

The table below provides a roll forward of the performance allocations balance:

	Credit		Private Equity		Real Assets		Total
Performance allocations, January 1, 2021	$	465,153	$	1,040,827	$	118,176	$	1,624,156
Change in fair value of funds	360,488		1,840,585		106,357		2,307,430
Fund distributions to the Company	(274,066)		(1,015,120)		(43,707)		(1,332,893)
Performance allocations, September 30, 2021	$	551,575	$	1,866,292	$	180,826	$	2,598,693

The change in fair value of funds excludes the general partner obligation to return previously distributed performance allocations, which is recorded in due to related parties in the condensed consolidated statements of financial condition. See note 14 for further disclosure regarding the general partner obligation.

The timing of the payment of performance allocations due to the general partner or investment manager varies depending on the terms of the applicable fund agreements. Generally, performance allocations with respect to the private equity funds and certain credit and real assets funds are payable and are distributed to the fund’s general partner upon realization of an investment if the fund’s cumulative returns are in excess of the preferred return.

-30-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

4. PROFIT SHARING PAYABLE

Profit sharing payable consisted of the following:

	As of September 30, 2021		As of December 31, 2020
Credit	$	466,850	$	356,375
Private Equity	967,921		422,079
Real Assets	93,891		64,223
Total profit sharing payable	$	1,528,662	$	842,677

The table below provides a roll-forward of the profit sharing payable balance:

	Credit		Private Equity		Real Assets		Total
Profit sharing payable, January 1, 2021	$	356,375	$	422,079	$	64,223	$	842,677
Profit sharing expense	231,145		930,187		54,882		1,216,214
Payments/other	(120,670)		(384,345)		(25,214)		(530,229)
Profit sharing payable, September 30, 2021	$	466,850	$	967,921	$	93,891	$	1,528,662

     Profit sharing expense includes (i) changes in amounts payable to employees and former employees entitled to a share of performance revenues in Apollo’s funds and (ii) changes to the fair value of the contingent consideration obligations recognized in connection with certain Apollo acquisitions. Profit sharing expense excludes the potential return of profit sharing distributions that would be due if certain funds were liquidated, which is recorded in due from related parties in the condensed consolidated statements of financial condition. See note 14 for further disclosure regarding the potential return of profit sharing distributions.

As discussed in note 2, under certain profit sharing arrangements, the Company requires that a portion of certain of the performance revenues distributed to its employees be used to purchase restricted shares of Class A Common Stock issued under its Equity Plan. Prior to distribution of the performance revenues, the Company records the value of the equity-based awards expected to be granted in other assets and other liabilities within the condensed consolidated statements of financial condition. See note 7 for further disclosure regarding deferred equity-based compensation.

5. VARIABLE INTEREST ENTITIES

As described in note 2, the Company consolidates entities that are VIEs for which the Company has been designated as the primary beneficiary.

Consolidated Variable Interest Entities

As noted further in note 14, Apollo purchased a 17% incremental equity ownership stake in Athene on February 28, 2020, bringing Apollo’s beneficial ownership in Athene to approximately 28.4% as of September 30, 2021. This has resulted in Apollo’s indirect ownership through Athene in several VIEs being considered significant and therefore Apollo has consolidated the financial positions and results of operations of such VIEs given that the Company also has the power to direct the activities that most significantly impact the economic performance of these VIEs.

Consolidated VIEs include certain CLOs as well as certain funds managed by the Company. Through its role as collateral manager, investment manager or general partner of these VIEs, the Company has the power to direct the activities that most significantly impact the economic performance of these VIEs. In addition, the Company’s combined interests in these VIEs are significant. The assets are not available to creditors of the Company, and the investors in these consolidated VIEs have no recourse against the assets of the Company. There is no recourse to the Company for the consolidated VIEs’ liabilities.

The Company measures the fair value of the financial assets and the financial liabilities of the CLOs using the fair value of either the financial assets or financial liabilities, whichever is more observable (see note 2 for further discussion). The Company has elected the fair value option for financial instruments held by its consolidated CLOs, which includes investments in loans and corporate bonds, as well as debt obligations and contingent obligations. Other assets include amounts due from

-31-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

brokers and interest receivables. Other liabilities include payables for securities purchased, which represent open trades within the consolidated CLOs and primarily relate to corporate loans that are expected to settle within 60 days.

The consolidated funds managed by the Company are investment companies and their investments, which include equity securities as well as debt securities, are held at fair value. Other assets of the consolidated funds include interest receivables and receivables from affiliates. Other liabilities include debt held at amortized cost as well as short-term payables.

Included within liabilities of the consolidated VIEs are notes payable related to certain funds managed by the Company. Each series of notes in a respective consolidated VIE participates in distributions from the VIE, including principal and interest from underlying investments, in accordance with the terms of the note series. Amounts allocated to the noteholders reflect amounts that would be distributed if the VIE’s affairs were wound up and its assets sold for cash equal to their respective carrying values, its liabilities satisfied in accordance with their terms, and all the remaining amounts distributed to the noteholders. The respective VIEs that issue the notes payable are marked at their prevailing net asset value, which approximates fair value.

Results from certain funds managed by the Company are reported on a three month lag based upon the availability of financial information.

Net Gains from Investment Activities of Consolidated Variable Interest Entities

The following table presents net gains from investment activities of the consolidated VIEs:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021		(1)	2020		(1)	2021		(1)	2020		(1)
Net gains (losses) from investment activities	$	104,885		$	142,247		$	460,459		$	(358,497)
Net gains (losses) from debt	(4,210)			24,249			(15,737)			205,518
Interest and other income	162,815			81,663			525,573			317,714
Interest and other expenses	(121,035)			(126,040)			(569,843)			(150,674)
Net gains from investment activities of consolidated variable interest entities	$	142,455		$	122,119		$	400,452		$	14,061

(1)Amounts reflect consolidation eliminations.

Senior Secured Notes, Subordinated Notes and Secured Borrowings

Included within debt, at fair value and other liabilities are amounts due to third-party institutions by the consolidated VIEs. The following table summarizes the principal provisions of those amounts:

	As of September 30, 2021						As of December 31, 2020
	Principal Outstanding		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years	Principal Outstanding		Weighted Average Interest Rate			Weighted Average Remaining Maturity in Years
Senior Secured Notes(2)	$	7,557,029	3.13	%		15.5	$	8,104,973	3.11	%		11.1
Subordinated Notes(2)	608,083		N/A		(1)	90.4	634,600		N/A		(1)	21.8
Secured Borrowings(2)(3)	20,357		2.13	%		0.4	236,698		2.41	%		0.3
Total	$	8,185,469					$	8,976,271

(1)The principal outstanding balance of the subordinated notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the VIEs.

(2)The notes and borrowings of the consolidated VIEs are collateralized by assets held by each respective vehicle and assets of one vehicle may not be used to satisfy the liabilities of another vehicle. As of September 30, 2021 and December 31, 2020, the fair value of these consolidated VIEs’ assets were $8.8 billion and $9.6 billion, respectively.

(3)As of September 30, 2021 and December 31, 2020, secured borrowings consist of consolidated VIEs’ obligations through a repurchase agreement redeemable at maturity with third party lenders. The fair value of the secured borrowings as of September 30, 2021 and

-32-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

December 31, 2020 approximates principal outstanding due to the short term nature of the borrowings. These secured borrowings are classified as a Level III liability within the fair value hierarchy.

The consolidated VIEs’ debt obligations contain various customary loan covenants. As of September 30, 2021, the Company was not aware of any instances of non-compliance with any of these covenants.

As of September 30, 2021, except for the secured borrowings, the contractual maturities for debt of the consolidated VIEs are greater than 9 years.

Variable Interest Entities Which are Not Consolidated

The Company holds variable interests in certain VIEs which are not consolidated, as it has been determined that Apollo is not the primary beneficiary.

The following table presents the carrying amounts of the assets and liabilities of the VIEs for which Apollo has concluded that it holds a significant variable interest, but that it is not the primary beneficiary. In addition, the table presents the maximum exposure to losses relating to these VIEs.

	As of September 30, 2021		(2)	As of December 31, 2020
Assets:
Cash	$	191,573		$	354,109
Investments	4,691,223			4,154,057
Receivables	100,735			34,800
Total Assets	$	4,983,531		$	4,542,966
Liabilities:
Debt and other payables	$	1,703,882		$	1,229,345
Total Liabilities	$	1,703,882		$	1,229,345
Apollo Exposure(1)	$	196,627		$	155,273

(1)Represents Apollo’s direct investment in those entities in which Apollo holds a significant variable interest and certain other investments. Additionally, cumulative performance allocations are subject to reversal in the event of future losses, as discussed in note 15.

(2)Some amounts included are a quarter in arrears.

-33-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

6. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

The following tables summarize the Company’s financial assets and financial liabilities recorded at fair value by fair value hierarchy level:

	As of September 30, 2021
	Level I		Level II		Level III			Total		Cost
Assets
U.S. Treasury securities, at fair value	$	2,107,175	$	—	$	—		$	2,107,175	$	2,107,064
Investments, at fair value:
Investment in Athene Holding	—		3,356,796		—			3,356,796		2,092,247
Other investments	46,407		47,231		626,333		(1)	719,971		602,605
Total investments, at fair value	46,407		3,404,027		626,333			4,076,767		2,694,852
Investments of VIEs, at fair value	4,686		1,043,832		11,739,125			12,787,643
Investments of VIEs, valued using NAV	—		—		—			400,485
Total investments of VIEs, at fair value	4,686		1,043,832		11,739,125			13,188,128
Due from related parties(5)	—		—		46,079			46,079
Derivative assets(2)	—		5,446		—			5,446
Total Assets	$	2,158,268	$	4,453,305	$	12,411,537		$	19,423,595
Liabilities
Debt of VIEs, at fair value	$	—	$	853,430	$	7,169,317		$	8,022,747
Other liabilities of VIEs, at fair value	—		2,185		25,468			27,653
Contingent consideration obligations(3)	—		—		119,587			119,587
Other liabilities(4)	35,024		—		—			35,024
Derivative liabilities(2)	—		(160)		—			(160)
Total Liabilities	$	35,024	$	855,455	$	7,314,372		$	8,204,851

	As of December 31, 2020
	Level I		Level II		Level III			Total		Cost
Assets
U.S. Treasury securities, at fair value	$	1,816,958	$	—	$	—		$	1,816,958	$	1,816,635
Investments, at fair value:
Investment in Athene Holding	—		1,942,574		—			1,942,574		2,092,247
Other investments	—		48,088		369,772		(1)	417,860		354,010
Total investments, at fair value	—		1,990,662		369,772			2,360,434		2,446,257
Investments of VIEs, at fair value	2,558		2,140,135		10,962,980			13,105,673
Investments of VIEs, valued using NAV	—		—		—			210,343
Total investments of VIEs, at fair value	2,558		2,140,135		10,962,980			13,316,016
Derivative assets(2)	—		17		—			17
Total Assets	$	1,819,516	$	4,130,814	$	11,332,752		$	17,493,425
Liabilities
Debt of VIEs, at fair value	$	—	$	1,580,097	$	7,080,418		$	8,660,515
Other liabilities of VIEs, at fair value	—		3,874		20,202			24,076
Contingent consideration obligations(3)	—		—		119,788			119,788
Derivative liabilities(2)	—		100		—			100
Total Liabilities	$	—	$	1,584,071	$	7,220,408		$	8,804,479

(1)    Other investments as of September 30, 2021 and December 31, 2020 excludes $112.7 million and $44.4 million, respectively, of performance allocations classified as Level III related to certain investments for which the Company has elected the fair value option. The Company’s policy is to account for performance allocations as investments.

(2)    Derivative assets and derivative liabilities are presented as a component of Other assets and Other liabilities, respectively, in the condensed consolidated statements of financial condition.

-34-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

(3)    Profit sharing payable includes contingent obligations classified as Level III.

(4)    Other liabilities includes the publicly traded warrants of APSG and APSG II.

(5)    Due from related parties represents a receivable from a credit fund.

The following tables summarize the changes in financial assets measured at fair value for which Level III inputs have been used to determine fair value:

	For the Three Months Ended September 30, 2021
	Other Investments		Investments of Consolidated VIEs		Total
Balance, Beginning of Period	$	389,787	$	11,877,952	$	12,267,739
Transfer out due to deconsolidation	—		(924)		(924)
Purchases	204,587		284,605		489,192
Sales of investments/distributions	—		(344,659)		(344,659)
Net realized gains	16,488		16,616		33,104
Changes in net unrealized gains	19,766		79,212		98,978
Cumulative translation adjustment	(1,873)		(10,166)		(12,039)
Transfer into Level III(1)	—		31,444		31,444
Transfer out of Level III(1)	(2,422)		(194,955)		(197,377)
Balance, End of Period	$	626,333	$	11,739,125	$	12,365,458
Change in net unrealized gains included in net gains from investment activities related to investments still held at reporting date	$	19,766	$	—	$	19,766
Change in net unrealized gains included in net gains (losses) from investment activities of consolidated VIEs related to investments still held at reporting date	—		79,514		79,514

	For the Three Months Ended September 30, 2020
	Other Investments		Investments of Consolidated VIEs		Total
Balance, Beginning of Period	$	267,353	$	8,015,580	$	8,282,933
Purchases	18,507		95,943		114,450
Sale of investments/distributions	(12,477)		(185,327)		(197,804)
Settlements	—		(196,746)		(196,746)
Net realized gains (losses)	—		(328)		(328)
Changes in net unrealized gains	6,700		74,291		80,991
Cumulative translation adjustment	10,239		27,366		37,605
Transfer into Level III(1)	641		8,829		9,470
Transfer out of Level III(1)	—		(7,887)		(7,887)
Balance, End of Period	$	290,963	$	7,831,721	$	8,122,684
Change in net unrealized gains included in net gains from investment activities related to investments still held at reporting date	$	6,700	$	—	$	6,700
Change in net unrealized gains included in net gains (losses) from investment activities of consolidated VIEs related to investments still held at reporting date	—		(57,888)		(57,888)

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

	For the Nine Months Ended September 30, 2021
	Other Investments		Investments of Consolidated VIEs		Total
Balance, Beginning of Period	$	369,772	$	10,962,980	$	11,332,752
Transfer out due to deconsolidation	—		(230,641)		(230,641)
Purchases	204,587		1,967,028		2,171,615
Sale of investments/distributions	(3,235)		(1,150,592)		(1,153,827)
Net realized gains	17,556		29,591		47,147
Changes in net unrealized gains	48,882		411,359		460,241
Cumulative translation adjustment	(9,513)		(24,414)		(33,927)
Transfer into Level III(1)	706		41,329		42,035
Transfer out of Level III(1)	(2,422)		(267,515)		(269,937)
Balance, End of Period	$	626,333	$	11,739,125	$	12,365,458
Change in net unrealized gains included in principal investment income related to investments still held at reporting date	$	48,882	$	—	$	48,882
Change in net unrealized gains included in net gains (losses) from investment activities of consolidated VIEs related to investments still held at reporting date	—		278,471		278,471

	For the Nine Months Ended September 30, 2020
	Other Investments		Investments of Consolidated VIEs		Total
Balance, Beginning of Period	$	113,410	$	321,069	$	434,479
Transfer in due to consolidation	—		7,794,128		7,794,128
Purchases	178,462		955,523		1,133,985
Sale of investments/distributions	(21,855)		(369,204)		(391,059)
Settlements	—		(634,694)		(634,694)
Net realized gains (losses)	1,751		(207)		1,544
Changes in net unrealized gains (losses)	5,519		(260,265)		(254,746)
Cumulative translation adjustment	13,309		23,582		36,891
Transfer into Level III(1)	641		79,465		80,106
Transfer out of Level III(1)	(274)		(77,676)		(77,950)
Balance, End of Period	$	290,963	$	7,831,721	$	8,122,684
Change in net unrealized losses included in principal investment income related to investments still held at reporting date	$	5,519	$	—	$	5,519
Change in net unrealized losses included in net gains (losses) from investment activities of consolidated VIEs related to investments still held at reporting date	—		(105,191)		(105,191)

(1)Transfers between Level II and III were a result of subjecting the broker quotes on these financial assets to various criteria which include the number and quality of broker quotes, the standard deviation of obtained broker quotes and the percentage deviation from external pricing services.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table summarizes the changes in fair value in financial liabilities measured at fair value for which Level III inputs have been used to determine fair value:

	For the Three Months Ended September 30, 2021
	Contingent Consideration Obligations		Debt and Other Liabilities of Consolidated VIEs		Total
Balance, Beginning of Period	$	128,984	$	7,206,174	$	7,335,158
Issuances	—		15,980		15,980
Repayments	(7,495)		(29,510)		(37,005)
Net realized gains	—		(1,681)		(1,681)
Changes in net unrealized (gains) losses(1)	(1,902)		13,859		11,957
Cumulative translation adjustment	—		(10,293)		(10,293)
Transfer into Level III(2)	—		256		256
Balance, End of Period	$	119,587	$	7,194,785	$	7,314,372
Change in net unrealized losses included in net gains (losses) from investment activities of consolidated VIEs related to debt and other liabilities still held at reporting date	$	—	$	4,672	$	4,672

	For the Three Months Ended September 30, 2020
	Contingent Consideration Obligations		Debt and Other Liabilities of Consolidated VIEs		Total
Balance, Beginning of Period	$	99,097	$	4,258,747	$	4,357,844
Issuances	—		24,690		24,690
Repayments	—		(42,025)		(42,025)
Net realized gains	—		(1,245)		(1,245)
Changes in net unrealized (gains) losses(1)	4,176		(97,736)		(93,560)
Cumulative translation adjustment	—		23,273		23,273
Balance, End of Period	$	103,273	$	4,165,704	$	4,268,977
Change in net unrealized gains included in net gains (losses) from investment activities of consolidated VIEs related to debt and other liabilities still held at reporting date	$	—	$	(87,501)	$	(87,501)

	For the Nine Months Ended September 30, 2021
	Contingent Consideration Obligations		Debt and Other Liabilities of Consolidated VIEs		Total
Balance, Beginning of Period	$	119,788	$	7,100,620	$	7,220,408
Issuances	—		327,388		327,388
Repayments	(20,609)		(301,414)		(322,023)
Net realized losses	—		9,049		9,049
Changes in net unrealized losses(1)	20,408		83,005		103,413
Cumulative translation adjustment	—		(24,316)		(24,316)
Transfer into Level III(2)	—		453		453
Balance, End of Period	$	119,587	$	7,194,785	$	7,314,372
Change in net unrealized losses included in net gains (losses) from investment activities of consolidated VIEs related to debt and other liabilities still held at reporting date	$	—	$	93,743	$	93,743

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

	For the Nine Months Ended September 30, 2020
	Contingent Consideration Obligations		Debt and Other Liabilities of Consolidated VIEs		Total
Balance, Beginning of Period	$	112,514	$	—	$	112,514
Transfer in due to consolidation	—		4,291,286		4,291,286
Issuances	—		327,618		327,618
Repayments	(12,870)		(240,775)		(253,645)
Net realized losses	—		2,214		2,214
Changes in net unrealized (gains) losses(1)	3,629		(239,779)		(236,150)
Cumulative translation adjustment	—		25,140		25,140
Balance, End of Period	$	103,273	$	4,165,704	$	4,268,977
Change in net unrealized gains included in net gains (losses) from investment activities of consolidated VIEs related to debt and other liabilities still held at reporting date	$	—	$	(312,764)	$	(312,764)

(1)Changes in fair value of contingent consideration obligations are recorded in profit sharing expense in the condensed consolidated statements of operations.

(2)Transfers between Level II and III were a result of subjecting the broker quotes on these financial assets to various criteria which include the number and quality of broker quotes, the standard deviation of obtained broker quotes and the percentage deviation from independent pricing services.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following tables summarize the quantitative inputs and assumptions used for financial assets and liabilities categorized as Level III under the fair value hierarchy:

	As of September 30, 2021
	Fair Value		Valuation Techniques	Unobservable Inputs	Ranges	Weighted Average (1)
Financial Assets
Other investments	$	264,803	Embedded value	N/A	N/A	N/A
	152,790		Discounted cash flow	Discount rate	15.0% - 52.8%	27.8%
	208,740		Adjusted transaction value	N/A	N/A	N/A
Due from related parties	46,079		Discounted cash flow	Discount rate	16.0%	16.0%
Investments of consolidated VIEs:
Equity securities	4,113,183		Discounted cash flow	Discount rate	3.1% - 18.5%	7.7%
			Dividend discount model	Discount rate	10.7% - 13.7%	11.9%
			Market comparable companies	NTAV multiple	1.25x	1.25x
			Adjusted transaction value	Purchase multiple	1.25x	1.25x
Bank loans	4,007,051		Discounted cash flow	Discount rate	1.8% - 15.6%	4.3%
Profit participating notes	2,672,664		Discounted cash flow	Discount rate	8.7% - 12.5%	12.4%
Real estate	481,315		Discounted cash flow	Capitalization rate	4.5% - 6.0%	5.7%
			Discounted cash flow	Discount rate	6.8% - 12.5%	8.3%
			Discounted cash flow	Terminal capitalization rate	8.3%	8.3%
			Direct capitalization	Capitalization rate	5.5% - 8.5%	6.3%
			Direct capitalization	Terminal capitalization rate	6.0% - 12.0%	6.9%
Bonds	95,148		Discounted cash flow	Discount rate	4.0% - 7.1%	6.1%
Convertible securities	26,853		Dividend discount model	Discount rate	13.7%	13.7%
Warrants	3,440		Option model	Volatility	37.0% - 54.0%	43.3%
Other equity investments	339,471		Adjusted transaction value	N/A	N/A	N/A
Total Investments of Consolidated VIEs	11,739,125
Total Financial Assets	$	12,411,537
Financial Liabilities
Liabilities of Consolidated VIEs:
Secured loans	$	3,997,323	Discounted cash flow	Discount rate	1.4% - 9.6%	2.7%
Subordinated notes	3,149,872		Discounted cash flow	Discount rate	4.5% - 11.6%	5.7%
Participating equity	22,129		Discounted cash flow	Discount rate	15.0%	15.0%
Other liabilities	25,461		Discounted cash flow	Discount rate	2.2% - 8.6%	4.9%
Total liabilities of Consolidated VIEs:	7,194,785
Contingent Consideration Obligation	119,587		Discounted cash flow	Discount rate	18.5%	18.5%
Total Financial Liabilities	$	7,314,372

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

	As of December 31, 2020
	Fair Value		Valuation Techniques	Unobservable Inputs	Ranges	Weighted Average (1)
Financial Assets
Other investments	$	254,655	Embedded value	N/A	N/A	N/A
	107,652		Discounted cash flow	Discount rate	16% - 47.5%	23.4%
	7,465		Third party pricing	N/A	N/A	N/A
Investments of consolidated VIEs:
Equity securities	4,339,244		Discounted cash flow	Discount rate	4.4% - 15.6%	7.2%
			Discounted cash flow	Disposition timeline	8 - 52 months	28.8
			Discounted cash flow	2 year home price index forecast	(14%) - 9.6%	(2.5%)
			Dividend discount model	Discount rate	9.7% - 13.8%	11.2%
			Market comparable companies	NTAV multiple	1.2x	1.2x
			Market comparable companies	P/E multiple	9.8x	9.8x
			Market comparable companies	TBV multiple	0.56x	0.56x
			Adjusted transaction value	Purchase multiple	1.1x	1.1x
			Adjusted transaction value	N/A	N/A	N/A
Bank loans	3,501,384		Discounted cash flow	Discount rate	1.8% - 27.0%	3.4%
			Recoverability	Recoverability rate	14.0% - 75.0%	57.8%
			Third party pricing	N/A	N/A	N/A
Profit participating notes	2,577,596		Discounted cash flow	Discount rate	7.5% - 15.0%	14.6%
Real estate	422,123		Discounted cash flow	Capitalization rate	5.8% - 6.0%	5.8%
			Discounted cash flow	Discount rate	6.3% - 12.5%	8.4%
			Discounted cash flow	Terminal capitalization rate	8.3%	8.3%
			Direct capitalization	Capitalization rate	5.5% - 8.5%	6.6%
			Direct capitalization	Terminal capitalization rate	5.8% - 12%	7.6%
Bonds	97,209		Discounted cash flow	Discount rate	5.5% - 7.0%	6.5%
			Third party pricing	N/A	N/A	N/A
Convertible securities	16,581		Discounted cash flow	Discount rate	12.4%	12.4%
			Dividend discount model	Discount rate	13.8%	13.8%
			Market comparable companies	P/E multiple	9.8x	9.8x
			Market comparable companies	TBV multiple	0.56x	0.56x
Warrants	2,676		Option model	Volatility	50.0% - 64.4%	53.1%
Other equity investments	6,167		Third party pricing	N/A	N/A	N/A
Total Investments of Consolidated VIEs	10,962,980
Total Financial Assets	$	11,332,752
Financial Liabilities
Liabilities of Consolidated VIEs:
Secured loans	$	3,822,475	Discounted cash flow	Discount rate	1.8% - 9.3%	2.7%
Subordinated notes	3,044,437		Discounted cash flow	Discount rate	7.7% - 14.0%	9.9%
			Adjusted transaction value	N/A	N/A	N/A
Preferred equity	213,506		Discounted cash flow	Discount rate	15%	15%
Other liabilities	20,202		Discounted cash flow	Discount rate	1.8% - 7.9%	5.7%
			Adjusted transaction value	N/A	N/A	N/A
			Third party pricing	N/A	N/A	N/A
Total liabilities of Consolidated VIEs:	7,100,620
Contingent Consideration Obligation	119,788		Discounted cash flow	Discount rate	17.5%	17.5%
Total Financial Liabilities	$	7,220,408

N/A        Not applicable

EBITDA        Earnings before interest, taxes, depreciation, and amortization

NTAV        Net tangible asset value

P/E        Price-to-Earnings

TBV        Total book value

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

(1)      Unobservable inputs were weighted based on the fair value of the investments included in the range.

Fair Value Measurement of Investment in Athene Holding

As of September 30, 2021, the fair value of Apollo’s Level II investment in Athene Holding was estimated using the closing market price of Athene Holding shares of $68.87 less a DLOM of 10.7%. The DLOM was derived based on the average remaining lock up restrictions on the shares of Athene Holding held by Apollo (36 months from the closing date of the transactions contemplated by the Transaction Agreement) and the estimated volatility in such shares of Athene Holding. The historical share price volatility of a representative set of Athene Holding’s publicly traded insurance peers was calculated over a three year period equivalent to the lock up on the shares of Athene Holding held by Apollo and used as a proxy to estimate the projected volatility in Athene Holding’s shares. As of December 31, 2020, the fair value of Apollo’s Level II investment in Athene Holding was estimated using the closing market price of Athene Holding shares of $43.14 less a DLOM of 17.5%.

Discounted Cash Flow Model

When a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of an investment and the contingent consideration obligations; conversely decreases in the discount rate can significantly increase the fair value of an investment and the contingent consideration obligations.

Consolidated VIEs

Investments

The significant unobservable inputs used in the fair value measurement of the equity securities include the discount rate applied, purchase multiple and net tangible asset value in the valuation models. These unobservable inputs in isolation can cause significant increases or decreases in fair value. The discount rate is determined based on the market rates an investor would expect for a similar investment with similar risks.

The significant unobservable inputs used in the fair value measurement of bank loans are discount rates. Significant increases (decreases) in any discount rates would result in a significantly lower (higher) fair value measurement.

The significant unobservable inputs used in the fair value measurement of bonds and profit participating notes are discount rates. Significant increases (decreases) in discount rates would result in a significantly lower (higher) fair value measurements.

The significant unobservable inputs used in the fair value measurement of real estate are discount rates and capitalization rates. Significant increases (decreases) in any discount rates or capitalization rates in isolation would result in a significantly lower (higher) fair value measurement.

The significant unobservable inputs used in the fair value measurement of convertible securities are discount rates. Significant increases (decreases) in any discount rates would result in a significantly lower (higher) fair value measurement.

The significant unobservable inputs used in the fair value measurement of warrants are volatility rates. Significant increases (decreases) in volatility rates would result in a significantly higher (lower) fair value measurement.

Certain investments are valued using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value.

Liabilities

The debt obligations of certain consolidated VIEs, that are CLOs, were measured on the basis of the fair value of the financial assets of those CLOs as the financial assets were determined to be more observable and, as a result, categorized as Level II in the fair value hierarchy.

The significant unobservable inputs used in the fair value measurement of the Company’s liabilities of consolidated VIEs are discount rates. Significant increases (decreases) in discount rates would result in a significantly lower (higher) fair value measurement.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Contingent Consideration Obligations

The significant unobservable input used in the fair value measurement of the contingent consideration obligations is the discount rate applied in the valuation models. This input in isolation can cause significant increases or decreases in fair value. The discount rate was based on the hypothetical cost of equity in connection with the acquisition of Stone Tower. See note 15 for further discussion of the contingent consideration obligations.

Valuation of Underlying Investments of Equity Method Investees

As discussed previously, the underlying entities that the Company manages and invests in are primarily investment companies which account for their investments at estimated fair value.

On a quarterly basis, Apollo utilizes valuation committees consisting of members from senior management, to review and approve the valuation results related to the investments of the funds it manages. For certain publicly traded vehicles managed by the Company, a review is performed by an independent board of directors. The Company also retains external valuation firms to provide third-party valuation consulting services to Apollo, which consist of certain limited procedures that management identifies and requests them to perform. The limited procedures provided by the external valuation firms assist management with validating their valuation results or determining fair value. The Company performs various back-testing procedures to validate their valuation approaches, including comparisons between expected and observed outcomes, forecast evaluations and variance analyses. However, because of the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

    Credit Investments

The majority of investments in Apollo’s credit funds are valued based on quoted market prices and valuation models. Quoted market prices are valued based on the average of the “bid” and the “ask” quotes provided by multiple brokers wherever possible without any adjustments. Apollo will designate certain brokers to use to value specific securities. In order to determine the designated brokers, Apollo considers the following: (i) brokers with which Apollo has previously transacted, (ii) the underwriter of the security and (iii) active brokers indicating executable quotes. In addition, when valuing a security based on broker quotes wherever possible Apollo tests the standard deviation amongst the quotes received and the variance between the concluded fair value and the value provided by a pricing service. When broker quotes are not available Apollo considers the use of pricing service quotes or other sources to mark a position. When relying on a pricing service as a primary source, Apollo (i) analyzes how the price has moved over the measurement period, (ii) reviews the number of brokers included in the pricing service’s population, if available, and (iii) validates the valuation levels with Apollo’s pricing team and traders.

Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing a model based approach to determine fair value. Valuation approaches used to estimate the fair value of illiquid credit investments also may include the market approach and the income approach, as described below. The valuation approaches used consider, as applicable, market risks, credit risks, counterparty risks and foreign currency risks.

    Private Equity Investments

The majority of the illiquid investments within our private equity funds are valued using the market approach, which provides an indication of fair value based on a comparison of the subject company to comparable publicly traded companies and transactions in the industry.

    Market Approach

The market approach is driven by current market conditions, including actual trading levels of similar companies and, to the extent available, actual transaction data of similar companies. Judgment is required by management when assessing which companies are similar to the subject company being valued. Consideration may also be given to any of the following factors: (1) the subject company’s historical and projected financial data; (2) valuations given to comparable companies; (3) the size and scope of the subject company’s operations; (4) the subject company’s individual strengths and weaknesses; (5) expectations relating to the market’s receptivity to an offering of the subject company’s securities; (6) applicable restrictions on transfer; (7) industry and market information; (8) general economic and market conditions; and (9) other factors deemed relevant. Market approach valuation models typically employ a multiple that is based on one or more of the factors described above. Enterprise value as a multiple of EBITDA is common and relevant for most companies and industries, however, other

-42-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

industry specific multiples are employed where available and appropriate. Sources for gaining additional knowledge related to comparable companies include public filings, annual reports, analyst research reports, and press releases. Once a comparable company set is determined, Apollo reviews certain aspects of the subject company’s performance and determines how its performance compares to the group and to certain individuals in the group. Apollo compares certain measurements such as EBITDA margins, revenue growth over certain time periods, leverage ratios and growth opportunities. In addition, Apollo compares the entry multiple and its relation to the comparable set at the time of acquisition to understand its relation to the comparable set on each measurement date.

    Income Approach

For investments where the market approach does not provide adequate fair value information, Apollo relies on the income approach. The income approach is also used to validate the market approach within our private equity funds. The income approach provides an indication of fair value based on the present value of cash flows that a business or security is expected to generate in the future. The most widely used methodology for the income approach is a discounted cash flow method. Inherent in the discounted cash flow method are significant assumptions related to the subject company’s expected results, the determination of a terminal value and a calculated discount rate, which is normally based on the subject company’s weighted average cost of capital, or “WACC.” The WACC represents the required rate of return on total capitalization, which is comprised of a required rate of return on equity, plus the current tax-effected rate of return on debt, weighted by the relative percentages of equity and debt that are typical in the industry. The most critical step in determining the appropriate WACC for each subject company is to select companies that are comparable in nature to the subject company and the credit quality of the subject company. Sources for gaining additional knowledge about the comparable companies include public filings, annual reports, analyst research reports, and press releases. The general formula then used for calculating the WACC considers the after-tax rate of return on debt capital and the rate of return on common equity capital, which further considers the risk-free rate of return, market beta, market risk premium and small stock premium, if applicable. The variables used in the WACC formula are inferred from the comparable market data obtained. The Company evaluates the comparable companies selected and concludes on WACC inputs based on the most comparable company or analyzes the range of data for the investment.

Debt securities that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing a model based approach to determine fair value. Valuation approaches used to estimate the fair value of hybrid capital investments also may include the market approach and the income approach, as previously described above. The valuation approaches used consider, as applicable, market risks, credit risks, counterparty risks and foreign currency risks.

The value of liquid investments, where the primary market is an exchange (whether foreign or domestic), is determined using period end market prices. Such prices are generally based on the close price on the date of determination.

Real Assets Investments

The estimated fair value of commercial mortgage-backed securities (“CMBS”) in Apollo’s real assets funds is determined by reference to market prices provided by certain dealers who make a market in these financial instruments. Broker quotes are only indicative of fair value and may not necessarily represent what the funds would receive in an actual trade for the applicable instrument. Additionally, the loans held-for-investment are stated at the principal amount outstanding, net of deferred loan fees and costs for certain investments. The loans in Apollo’s real assets funds are evaluated for possible impairment on a quarterly basis. For Apollo’s real assets funds, valuations of non-marketable underlying investments are determined using methods that include, but are not limited to (i) discounted cash flow estimates or comparable analysis prepared internally, (ii) third party appraisals or valuations by qualified real estate appraisers and (iii) contractual sales value of investments/properties subject to bona fide purchase contracts. Methods (i) and (ii) also incorporate consideration of the use of the income, cost, or sales comparison approaches of estimating property values.

Certain of the credit, private equity, and real assets funds may also enter into foreign currency exchange contracts, total return swap contracts, credit default swap contracts, and other derivative contracts, which may include options, caps, collars and floors. Foreign currency exchange contracts are marked-to-market by recognizing the difference between the contract exchange rate and the current market rate as unrealized appreciation or depreciation. If securities are held at the end of the period, the changes in value are recorded in income as unrealized. Realized gains or losses are recognized when contracts are settled. Total return swap and credit default swap contracts are recorded at fair value as an asset or liability with changes in fair value recorded as unrealized appreciation or depreciation. Realized gains or losses are recognized at the termination of the contract based on the difference between the close-out price of the total return or credit default swap contract and the original

-43-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

contract price. Forward contracts are valued based on market rates obtained from counterparties or prices obtained from recognized financial data service providers.

7. OTHER ASSETS

Other assets consisted of the following:

	As of September 30, 2021		As of December 31, 2020
Fixed assets	$	219,746	$	191,853
Less: Accumulated depreciation and amortization	(124,751)		(111,821)
Fixed assets, net	94,995		80,032
Deferred equity-based compensation(1)	249,987		137,777
Prepaid expenses	61,326		46,639
Intangible assets, net	16,458		23,586
Tax receivables	16,951		42,979
Other	56,802		33,950
Total Other Assets	$	496,519	$	364,963

(1)Deferred equity-based compensation relates to the value of equity-based awards that have been or are expected to be granted in connection with the settlement of certain profit sharing arrangements. A corresponding amount for awards expected to be granted of $209.5 million and $114.6 million, as of September 30, 2021 and December 31, 2020, respectively, is included in other liabilities on the condensed consolidated statements of financial condition.

Depreciation expense was $4.8 million and $2.7 million for the three months ended September 30, 2021 and 2020, respectively, and $13.1 million and $7.6 million for the nine months ended September 30, 2021 and 2020, respectively, and is presented as a component of general, administrative and other expense in the condensed consolidated statements of operations.

8. LEASES

Apollo has operating leases for office space, data centers, and certain equipment under various lease agreements.

The table below presents operating lease expenses:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease cost	$	10,916	$	9,587	$	33,930	$	35,566

The following table presents supplemental cash flow information related to operating leases:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Operating cash flows for operating leases	$	10,971	$	5,404	$	23,465	$	19,360

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

As of September 30, 2021, the Company’s total lease payments by maturity are presented in the following table:

	Operating Lease Payments
Remaining 2021	$	11,210
2022	47,423
2023	42,482
2024	38,881
2025	37,979
Thereafter	335,698
Total lease payments	$	513,673
Less imputed interest	(86,144)
Present value of lease payments	$	427,529

The Company has undiscounted future operating lease payments of $197.6 million related to leases that have not commenced that were entered into as of September 30, 2021. Such lease payments are not yet included in the table above or the Company’s condensed consolidated statements of financial condition as lease assets and lease liabilities. These operating leases are anticipated to commence by 2022 with lease terms of approximately 16 years.

Supplemental information related to leases is as follows:

	As of September 30, 2021		As of September 30, 2020
Weighted average remaining lease term (in years)	13.3		13.7
Weighted average discount rate	2.9	%	3.1	%

9. INCOME TAXES

The Company’s income tax (provision) benefit totaled $(101.4) million and $(89.4) million for the three months ended September 30, 2021 and 2020, respectively, and $(498.7) million and $66.2 million for the nine months ended September 30, 2021 and 2020, respectively. The Company’s effective tax rate was approximately 13.8% and 11.7% for the three months ended September 30, 2021 and 2020, respectively, and 12.0% and 9.8% for the nine months ended September 30, 2021 and 2020, respectively.

Under U.S. GAAP, a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Based upon the Company’s review of its federal, state, local and foreign income tax returns and tax filing positions, the Company determined that no material unrecognized tax benefits for uncertain tax positions were required to be recorded. In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits within the next twelve months.

The primary jurisdictions in which the Company operates and in which it incurs income taxes are the United States and the United Kingdom. There are no unremitted earnings with respect to the United Kingdom and other foreign entities.

In the normal course of business, the Company is subject to examination by federal, state, local and foreign tax authorities. As of September 30, 2021, the Company’s U.S. federal, state, local and foreign income tax returns for the years 2017 through 2019 are open under the general statute of limitations provisions and therefore subject to examination. Currently, the Internal Revenue Service is examining the tax returns of the Company and certain subsidiaries for the 2019 tax year. The State and City of New York are examining certain subsidiaries’ tax returns for tax years 2011 to 2018. The United Kingdom and India tax authorities are currently examining certain subsidiaries’ tax returns for tax year 2017. No provisions with respect to these examinations have been recorded.

The Company records deferred tax assets as a result of the step-up in the tax basis of assets and intangibles resulting from exchanges of AOG Units for Class A Common Stock by the Co-Founders and Contributing Partners. A related liability is recorded in due to related parties in the condensed consolidated statements of financial condition for the expected payments under the tax receivable agreement entered into by and among APO Corp., the Co-Founders, the Contributing

-45-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Partners, and other parties thereto (as amended, the “tax receivable agreement”) (see note 14). The benefit the Company obtains from the difference in the tax asset recognized and the related liability results in an increase to additional paid in capital. The amortization period for the portion of the increase in tax basis related to intangibles is 15 years. The realization of the remaining portion of the increase in tax basis relates to the disposition of the underlying assets to which the step-up is attributed. The associated deferred tax assets reverse at the time of the corresponding asset disposition.

The table below presents the impact to the deferred tax asset, tax receivable agreement liability and additional paid in capital related to the exchange of AOG Units for Class A Common Stock.

Exchange of AOG Units for Class A Common Stock	Increase in Deferred Tax Asset		Increase in Tax Receivable Agreement Liability		Increase to Additional Paid In Capital
For the Nine Months Ended September 30, 2021	$	292,844	$	243,157	$	49,687
For the Nine Months Ended September 30, 2020	$	76,580	$	62,531	$	14,049

On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act is an emergency economic stimulus package in response to the coronavirus outbreak which, among other things, contains numerous income tax provisions. The provisions of the CARES Act have not had a material impact on the Company’s condensed consolidated financial statements or related disclosures.

10. DEBT

Debt consisted of the following:

	As of September 30, 2021							As of December 31, 2020
	Outstanding Balance		Fair Value			Annualized Weighted Average Interest Rate		Outstanding Balance		Fair Value			Annualized Weighted Average Interest Rate
2024 Senior Notes(1)	$	498,306	$	541,066	(4)	4.00	%	$	497,817	$	553,633	(4)	4.00	%
2026 Senior Notes(1)	497,602		563,511		(4)	4.40		497,217		581,898		(4)	4.40
2029 Senior Notes(1)	674,779		779,597		(4)	4.87		674,757		804,768		(4)	4.87
2030 Senior Notes(1)	494,779		504,429		(4)	2.65		494,375		513,362		(4)	2.65
2039 Senior Secured Guaranteed Notes(1)	317,749		370,385		(5)	4.77		317,042		376,472		(5)	4.77
2048 Senior Notes(1)	296,726		386,118		(4)	5.00		296,633		379,953		(4)	5.00
2050 Subordinated Notes(1)	296,645		313,500		(4)	4.95		296,557		307,500		(4)	4.95
Secured Borrowing I(2)	18,504		18,492		(3)	1.84		19,526		19,527		(3)	1.84
Secured Borrowing II(2)	19,681		19,668		(3)	1.70		20,767		20,773		(3)	1.71
2016 AMI Term Facility I(2)	19,530		19,530		(3)	1.30		20,608		20,608		(3)	1.30
2016 AMI Term Facility II(2)	18,880		18,880		(3)	1.40		19,922		19,922		(3)	1.40
Total Debt	$	3,153,181	$	3,535,176				$	3,155,221	$	3,598,416

(1)Includes amortization of note discount, as applicable. Outstanding balance is presented net of unamortized debt issuance costs:

	As of September 30, 2021		As of December 31, 2020
2024 Senior Notes	$	1,427	$	1,841
2026 Senior Notes	2,193		2,545
2029 Senior Notes	4,797		5,282
2030 Senior Notes	3,937		4,231
2039 Senior Secured Guaranteed Notes	7,251		7,958
2048 Senior Notes	2,988		3,073
2050 Subordinated Notes	3,355		3,443
Total	$	25,948	$	28,373

-46-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

(2)Apollo Management International LLP (“AMI”), a subsidiary of the Company, entered into several credit facilities (collectively referred to as the “AMI Facilities”) to fund the Company’s investment in certain European CLOs it manages:

Facility	Date	Loan Amount
Secured Borrowing I	December 19, 2019	€	15,984
Secured Borrowing II	March 5, 2020	€	17,000
2016 AMI Term Facility I	January 18, 2016	€	16,870
2016 AMI Term Facility II	June 22, 2016	€	16,308

The Secured Borrowings consist of obligations through repurchase agreements redeemable at maturity with third party lenders. The weighted average remaining maturity of Secured Borrowing I and II is 9.9 years.

(3)Fair value is based on obtained broker quotes. These notes are classified as a Level III liability within the fair value hierarchy based on the number and quality of broker quotes obtained, the standard deviations of the observed broker quotes and the percentage deviation from external pricing services. For instances where broker quotes are not available, a discounted cash flow method is used to obtain a fair value.

(4)Fair value is based on obtained broker quotes. These notes are classified as a Level II liability within the fair value hierarchy based on the number and quality of broker quotes obtained, the standard deviations of the observed broker quotes and the percentage deviation from external pricing services.

(5)Fair value is based on a discounted cash flow method. These notes are classified as a Level III liability within the fair value hierarchy.

AMH Credit Facility—On November 23, 2020, AMH as borrower (the “Borrower”) entered into a new credit agreement (the “AMH Credit Facility”) with the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent for the lenders. The AMH Credit Facility refinanced the 2018 AMH Credit Facility listed below. The AMH Credit Facility provides for a $750 million revolving credit facility to the Borrower with a final maturity date of November 23, 2025. The AMH Credit Facility is to remain available until its maturity, and any undrawn revolving commitments bear a commitment fee. The interest rate on the AMH Credit Facility is based on adjusted London Inter-Bank Offered Rate (“LIBOR”) and the applicable margin as of September 30, 2021 was 1.00%. The commitment fee on the $750 million undrawn AMH Credit Facility as of September 30, 2021 was 0.09%.

Borrowings under the AMH Credit Facility may be used for working capital and general corporate purposes, including, without limitation, permitted acquisitions. The Borrower may incur incremental facilities in respect of the AMH Credit Facility in an aggregate amount not to exceed $250 million plus additional amounts so long as the Borrower is in compliance with a net leverage ratio not to exceed 4.00 to 1.00. As of September 30, 2021, the AMH Credit Facility was undrawn.

2018 AMH Credit Facility—On July 11, 2018, AMH as borrower (the “Borrower”) entered into a credit agreement (the “2018 AMH Credit Facility”) with the lenders and issuing banks party thereto and Citibank, N.A., as administrative agent for the lenders. The AMH Credit Facility refinanced the 2018 AMH Credit Facility at substantially the same terms. The 2018 AMH Credit Facility and all related loan documents were terminated as of November 23, 2020.

2024 Senior Notes—On May 30, 2014, AMH issued $500 million in aggregate principal amount of its 4.000% Senior Notes due 2024 (the “2024 Senior Notes”), at an issue price of 99.722% of par. Interest on the 2024 Senior Notes is payable semi-annually in arrears on May 30 and November 30 of each year. The 2024 Senior Notes will mature on May 30, 2024. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2024 Senior Notes. The Company is obligated to settle the 2024 Senior Notes for the face amount of $500 million.

2026 Senior Notes—On May 27, 2016, AMH issued $500 million in aggregate principal amount of its 4.400% Senior Notes due 2026 (the “2026 Senior Notes”), at an issue price of 99.912% of par. Interest on the 2026 Senior Notes is payable semi-annually in arrears on May 27 and November 27 of each year. The 2026 Senior Notes will mature on May 27, 2026. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2026 Senior Notes. The Company is obligated to settle the 2026 Senior Notes for the face amount of $500 million.

2029 Senior Notes—On February 7, 2019, AMH issued $550 million in aggregate principal amount of its 4.872% Senior Notes due 2029, at an issue price of 99.999% of par. On June 11, 2019, AMH issued an additional $125 million in aggregate principal amount of its 4.872% Senior Notes due 2029 (the “Additional Notes”), at an issue price of 104.812% of par. The Additional Notes constitute a single class of securities with the previously issued senior notes due 2029 (collectively, the “2029 Senior Notes”). Interest on the 2029 Senior Notes is payable semi-annually in arrears on February 15 and August 15 of

-47-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

each year. The 2029 Senior Notes will mature on February 15, 2029. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2029 Senior Notes. The Company is obligated to settle the 2029 Senior Notes for the face amount of $675 million.

2030 Senior Notes—On June 5, 2020, AMH issued $500 million in aggregate principal amount of its 2.65% Senior Notes due 2030 (the “2030 Senior Notes”), at an issue price of 99.704% of par. Interest on the 2030 Senior Notes is payable semi-annually in arrears on June 5 and December 5 of each year. The 2030 Senior Notes will mature on June 5, 2030. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2030 Senior Notes. The Company is obligated to settle the 2030 Senior Notes for the face amount of $500 million.

2039 Senior Secured Guaranteed Notes—On June 10, 2019, APH Finance 1, LLC (the “Issuer”), a subsidiary of the Company, issued $325 million in aggregate principal amount of its 4.77% Series A Senior Secured Guaranteed Notes due 2039 (the “2039 Senior Secured Guaranteed Notes”). The 2039 Senior Secured Guaranteed Notes are secured by a lien on the Issuer’s and the guarantors’ participation interests in the rights to distributions in relation to a portfolio of equity investments owned by affiliates of the Company in certain existing and future funds managed or advised by subsidiaries of the Company. Interest on the 2039 Senior Secured Guaranteed Notes is payable on a quarterly basis. The 2039 Senior Secured Guaranteed Notes will mature in July 2039, but, unless prepaid to the extent permitted under the indenture governing the 2039 Senior Secured Guaranteed Notes, the anticipated repayment date will be in July 2029. If the Issuer has not repaid or refinanced the 2039 Senior Secured Guaranteed Notes prior to the anticipated repayment date an additional 5.0% per annum will accrue on the 2039 Senior Secured Guaranteed Notes. The issuance costs are amortized into interest expense on the condensed consolidated statements of operations over the expected term of the 2039 Senior Secured Guaranteed Notes.

2048 Senior Notes—On March 15, 2018, AMH issued $300 million in aggregate principal amount of its 5.000% Senior Notes due 2048 (the “2048 Senior Notes”), at an issue price of 99.892% of par. Interest on the 2048 Senior Notes is payable semi-annually in arrears on March 15 and September 15 of each year. The 2048 Senior Notes will mature on March 15, 2048. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2048 Senior Notes. The Company is obligated to settle the 2048 Senior Notes for the face amount of $300 million.

2050 Subordinated Notes—On December 17, 2019, AMH issued $300 million in aggregate principal amount of its 4.950% Fixed-Rate Resettable Subordinated Notes due 2050 (the “2050 Subordinated Notes”), at an issue price of 100.000% of par. Interest on the 2050 Subordinated Notes is payable semi-annually in arrears on June 17 and December 17 of each year. The 2050 Subordinated Notes will mature on January 14, 2050. The discount is amortized into interest expense on the condensed consolidated statements of operations over the term of the 2050 Subordinated Notes. The Company is obligated to settle the 2050 Subordinated Notes for the face amount of $300 million.

As of September 30, 2021, the indentures governing the 2024 Senior Notes, the 2026 Senior Notes, the 2029 Senior Notes, the 2030 Senior Notes, the 2048 Senior Notes and the 2050 Subordinated Notes (the “Indentures”) include covenants that restrict the ability of AMH and, as applicable, the guarantors of the notes under the Indentures to incur indebtedness secured by liens on voting stock or profit participating equity interests of their respective subsidiaries, or merge, consolidate or sell, transfer or lease assets. The Indentures also provide for customary events of default.

As of September 30, 2021, the indenture governing the 2039 Senior Secured Guaranteed Notes includes a series of covenants and restrictions customary for transactions of this type, including covenants that (i) require the Issuer to maintain specified reserve accounts to be used to make required payments in respect of the 2039 Senior Secured Guaranteed Notes, (ii) relate to prepayments and related payments of specified amounts, including specified make-whole payments under certain circumstances and (iii) relate to recordkeeping, access to information and similar matters.

-48-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table presents the interest expense incurred related to the Company’s debt:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Interest Expense:(1)
2018 AMH Credit Facility	$	—	$	316	$	—	$	945
AMH Credit Facility	329		—		972		—
2024 Senior Notes	5,163		5,163		15,489		15,489
2026 Senior Notes	5,628		5,628		16,885		16,885
2029 Senior Notes	8,229		8,229		24,687		24,687
2030 Senior Notes	3,462		3,465		10,384		4,428
2039 Senior Secured Guaranteed Notes	4,111		4,111		12,334		12,334
2048 Senior Notes	3,781		3,781		11,343		11,343
2050 Subordinated Notes	3,742		3,742		11,226		11,228
AMI Term Facilities/ Secured Borrowings	375		454		1,113		1,083
Total Interest Expense	$	34,820	$	34,889	$	104,433	$	98,422

(1)Debt issuance costs incurred are amortized into interest expense over the term of the debt arrangement, as applicable.

11. NET INCOME (LOSS) PER SHARE OF CLASS A COMMON STOCK

The table below presents basic and diluted net income (loss) per share of Class A Common Stock using the two-class method for the three and nine months ended September 30, 2021 and 2020:

	Basic and Diluted
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator:
Net Income (Loss) Attributable to Apollo Global Management, Inc. Class A Common Stockholders	$	249,158	$	263,236	$	1,567,447	$	(304,982)
Dividends declared on Class A Common Stock(1)	(121,983)		(112,075)		(376,657)		(413,858)
Dividends on participating securities(2)	(3,860)		(4,008)		(13,004)		(14,863)
Earnings allocable to participating securities	(4,399)		(5,853)		(43,005)		—		(3)
Undistributed income (loss) attributable to Class A Common Stockholders: Basic and Diluted	118,916		141,300		1,134,781		(733,703)
Denominator:
Weighted average number of shares of Class A Common Stock outstanding: Basic and Diluted	239,451,921		227,771,678		233,539,355		227,395,847
Net Income (Loss) per share of Class A Common Stock: Basic and Diluted(4)
Distributed Income	$	0.50	$	0.49	$	1.60	$	1.80
Undistributed Income (Loss)	0.51		0.62		4.87		(3.21)
Net Income (Loss) per share of Class A Common Stock: Basic and Diluted	$	1.01	$	1.11	$	6.47	$	(1.41)

(1)See note 13 for information regarding the quarterly dividends declared and paid during 2021 and 2020.

(2)Participating securities consist of vested and unvested RSUs that have rights to dividends and unvested restricted shares.

(3)No allocation of undistributed 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 Common Stockholders.

(4)For the three and nine months ended September 30, 2021 and September 30, 2020, all of the classes of securities were determined to be anti-dilutive.

-49-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The Company has granted RSUs that provide the right to receive, subject to vesting during continued employment, shares of Class A Common Stock pursuant to the Equity Plan. The Company has three types of RSU grants, which we refer to as Plan Grants, Bonus Grants and Performance Grants. “Plan Grants” vest over time (generally one to six years) and may or may not provide the right to receive dividend equivalents on vested RSUs on an equal basis with the Class A Common Stockholders any time a dividend is declared. “Bonus Grants” vest over time (generally three years) and generally provide the right to receive dividend equivalents on both vested and unvested RSUs on an equal basis with the Class A Common Stockholders any time a dividend is declared. “Performance Grants” generally vest over time (three to five years), subject to the Company’s receipt of performance revenues, within prescribed periods, sufficient to cover the associated equity-based compensation expense. Performance Grants provide the right to receive dividend equivalents on vested RSUs and may also provide the right to receive dividend equivalents on unvested RSUs.

Any dividend 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 dividend 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. The RSU participating securities do not have a mandatory redemption amount and the holders of the participating securities are not obligated to fund losses; therefore, neither the vested RSUs nor the unvested RSUs are subject to any contractual obligation to share in losses of the Company.

Certain holders of AOG Units are subject to the transfer restrictions set forth in the agreements with the respective holders and may, upon notice (subject to the terms of an exchange agreement), exchange their AOG Units for shares of Class A Common Stock on a one-for-one basis. An AOG Unit holder must exchange one unit in each of the Apollo Operating Group partnerships to effectuate an exchange for one share of Class A Common Stock.

Apollo Global Management, Inc. has one share of Class B common stock, $0.00001 par value per share, of the Company (“Class B Common Stock”) outstanding, which is held by BRH Holdings GP, Ltd. (“BRH”). The voting power of the share of Class B Common Stock is reduced on a one vote per one AOG Unit basis in the event of an exchange of AOG Units for shares of Class A Common Stock, subject to the terms of the AGM Inc. Certificate of Incorporation. The Class B Common Stock has no net income (loss) per share as it does not participate in Apollo’s earnings (losses) or dividends. The Class B Common Stock has no dividend rights and only a de minimis liquidation right. The Class B Common Stock represented 43.4% and 47.2% of the total voting power of the Company’s Class A Common Stock and Class B Common Stock with respect to the matters upon which they were entitled to vote together as a single class pursuant to the Company’s governing documents as of September 30, 2021 and 2020, respectively.

The following table summarizes the anti-dilutive securities for the three and nine months ended September 30, 2021 and 2020, respectively.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2021	2020	2021	2020
Weighted average vested RSUs	647,966	137,606	666,044	600,651
Weighted average unvested RSUs	7,322,877	8,149,823	7,434,469	7,831,201
Weighted average AOG Units outstanding(1)	163,292,411	174,873,808	169,865,872	175,447,257
Weighted average unvested restricted shares	886,940	1,148,241	750,035	1,212,620

(1)Excludes AOG Units owned by Athene. Athene can only redeem their AOG Units by selling to Apollo or to a different buyer with Apollo’s agreement as detailed in the Liquidity Agreement (see note 14). As these AOG Units are not convertible into shares of Class A Common Stock, they are excluded when calculating diluted net income per share.

12. EQUITY-BASED COMPENSATION

Equity-based awards granted to employees and non-employees as compensation are measured based on the grant date fair value of the award. Equity-based awards that do not require future service (i.e., vested awards) are expensed immediately. Equity-based employee awards that require future service are expensed over the relevant service period. Equity-based awards that require performance metrics to be met are expensed only when the performance metric is met or deemed probable.

-50-

APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

RSUs

The Company grants RSUs under the Equity Plan. The fair value of all grants is based on the grant date fair value, which considers the public share price of the Company’s Class A Common Stock subject to certain discounts, as applicable. The following table summarizes the weighted average discounts for Plan Grants, Bonus Grants and Performance Grants.

The estimated total grant date fair value for Plan Grants and Bonus Grants is charged to compensation expense on a straight-line basis over the vesting period, which for Plan Grants is generally one to six years, with the first installment vesting one year after grant and quarterly vesting thereafter, and for Bonus Grants is generally annual vesting over three years.

During the nine months ended September 30, 2021 and September 30, 2020, the Company awarded Performance Grants of 2.1 million and 2.1 million RSUs to certain employees with a grant date fair value of $97.6 million and $81.5 million, respectively, which vest subject to continued employment and the Company’s receipt of performance revenues, within prescribed periods, sufficient to cover the associated equity-based compensation. In accordance with U.S. GAAP, equity-based compensation expense for these and other Performance Grants will be recognized on an accelerated recognition method over the requisite service period to the extent the performance revenue metrics are met or deemed probable.

Additionally, the Company entered into an agreement in 2018 with several employees under which RSUs would be granted starting in 2020 if year-over-year growth in certain discretionary earnings metrics were attained prior to grant and they remained employed at the grant date. Once granted, the awards vest subject to continued employment and the Company’s receipt of performance revenues sufficient to cover the associated equity-based compensation expense. In connection with these agreements, the Company granted 0.2 million RSUs with a grant date fair value of $7.5 million that fully vested and were expensed during the nine months ended September 30, 2021, and granted 0.3 million RSUs with a grant date fair value of $11.7 million that were fully vested and were expensed during the nine months ended September 30, 2020.

The following table summarizes the equity-based compensation expense recognized relating to Performance Grants:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Equity-based compensation	$	21,093	$	19,925	$	64,958	$	77,255

The fair value of all RSU grants made during the nine months ended September 30, 2021 and 2020 was $215.0 million and $185.1 million, respectively.

The following table presents the actual forfeiture rates and equity-based compensation expense recognized:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Actual forfeiture rate	0.5		%	0.5		%	1.3		%	6.8		%
Equity-based compensation	$	45,439		$	40,473		$	131,411		$	133,273

The following table summarizes RSU activity:

	Unvested		Weighted Average Grant Date Fair Value		Vested	Total Number of RSUs Outstanding
Balance at January 1, 2021	8,978,393		$	31.89	1,833,332	10,811,725	(1)
Granted	4,451,110		48.29		—	4,451,110
Forfeited	(160,705)		$	43.44	(12,134)	(172,839)
Vested	(2,574,598)		34.38		2,574,598	—
Issued	—		$	—	(4,141,843)	(4,141,843)
Balance at September 30, 2021	10,694,200	(2)	$	37.95	253,953	10,948,153	(1)

(1)Amount excludes RSUs which have vested and have been issued in the form of Class A Common Stock.

(2)Includes 6,383,483 Performance Grant RSUs, 3,235,905 Bonus Grant RSUs and 1,074,812 Plan Grant RSUs.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

As of September 30, 2021, there was $240.4 million of total unrecognized equity-based compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average term of 2.11 years.

Equity-Based Compensation Allocation

Equity-based compensation is allocated based on ownership interests. Therefore, the amortization of equity-based compensation is allocated to stockholders’ equity attributable to AGM Inc. and the Non-Controlling Interests, which results in a difference in the amounts charged to equity-based compensation expense and the amounts credited to stockholders’ equity attributable to AGM Inc. in the Company’s condensed consolidated financial statements.

Below is a reconciliation of the equity-based compensation allocated to AGM Inc.:

	For the Nine Months Ended September 30, 2021
	Total Amount		Non-Controlling Interest % in Apollo Operating Group		Allocated to Non-Controlling Interest in Apollo Operating Group(1)		Allocated to Apollo Global Management, Inc.
RSUs, share options and restricted share awards	$	148,213	—	%	$	—	$	148,213
Other equity-based compensation awards	17,451		43.3		7,561		9,890
Total equity-based compensation	$	165,664			7,561		158,103
Less other equity-based compensation awards(2)					(7,561)		(26,214)
Capital increase related to equity-based compensation					$	—	$	131,889

	For the Nine Months Ended September 30, 2020
	Total Amount		Non-Controlling Interest % in Apollo Operating Group		Allocated to Non-Controlling Interest in Apollo Operating Group(1)		Allocated to Apollo Global Management, Inc.
RSUs, share options and restricted share awards	$	152,998	—	%	$	—	$	152,998
Other equity-based compensation awards	8,270		47.1		3,898		4,372
Total equity-based compensation	$	161,268			3,898		157,370
Less other equity-based compensation awards(2)					(3,898)		(23,520)
Capital increase related to equity-based compensation					$	—	$	133,850

(1)Calculated based on average ownership percentage for the period considering issuances of Class A shares or Class A Common Stock, as applicable, during the period.

(2)Includes equity-based compensation reimbursable by certain funds.

13. EQUITY

Common Stock

Holders of Class A Common Stock are entitled to participate in dividends from the Company on a pro rata basis.

During the three and nine months ended September 30, 2021 and 2020, the Company issued shares of Class A Common Stock in settlement of vested RSUs. The Company has generally allowed holders of vested RSUs and exercised share options to settle their tax liabilities by reducing the number of shares of Class A Common Stock issued to them, which the Company refers to as “net share settlement.” Additionally, the Company has generally allowed holders of share options to settle their exercise price by reducing the number of shares of Class A Common Stock issued to them at the time of exercise by an amount sufficient to cover the exercise price. The net share settlement results in a liability for the Company and a corresponding accumulated deficit adjustment.

In January 2019, Apollo increased its authorized share repurchase amount by $250 million, bringing the total authorized repurchase amount to $500 million. On March 12, 2020, Apollo announced that the executive committee of the Company’s board of directors approved a new share repurchase authorization that allows the Company to repurchase up to

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

$500 million of its Class A common stock. This new authorization increased the Company’s capacity to repurchase shares from $80 million of unused capacity under the Company’s previously approved the share repurchase plan authorization. The share repurchase plan authorization may be used to repurchase outstanding shares of Class A Common Stock as well as to reduce the number of shares of Class A Common Stock to be issued to employees to satisfy associated tax obligations in connection with the settlement of equity-based awards granted under the Equity Plan (or any successor equity plan thereto). Shares of Class A Common Stock may be repurchased from time to time in open market transactions, in privately negotiated transactions, pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act, or otherwise, with the size and timing of these repurchases depending on legal requirements, price, market and economic conditions and other factors. Apollo is not obligated under the terms of the program to repurchase any of its shares of Class A Common Stock. The repurchase program has no expiration date and may be suspended or terminated by the Company at any time without prior notice.

The table below summarizes the issuance of shares of Class A Common Stock for equity-based awards:

	For the Nine Months Ended September 30,
	2021	2020
Shares of Class A Common Stock issued in settlement of vested RSUs and share options exercised(1)	4,141,843	4,661,031
Reduction of shares of Class A Common Stock issued(2)	(1,786,021)	(1,972,369)
Shares of Class A Common Stock purchased related to share issuances and forfeitures(3)	(270,985)	581,828
Issuance of shares of Class A Common Stock for equity-based awards	2,084,837	3,270,490

(1)The gross value of shares issued was $226.2 million and $216.8 million for the nine months ended September 30, 2021 and 2020, respectively, based on the closing price of a Class A Common Stock at the time of issuance.

(2)Cash paid for tax liabilities associated with net share settlement was $98.9 million and $91.9 million for the nine months ended September 30, 2021 and 2020, respectively.

(3)Certain Apollo employees receive a portion of the profit sharing proceeds of certain funds in the form of (a) restricted Class A Common Stock that they are required to purchase with such proceeds or (b) RSUs, in each case which equity-based awards generally vest over three years. These equity-based awards are granted under the Company's 2007 Equity Plan. To prevent dilution on account of these awards, Apollo may, in its discretion, repurchase Class A Common Stock on the open market and retire them. During the nine months ended September 30, 2021 and 2020, we issued 625,958 and 636,425 of such restricted shares and 270,985 and 168,591 of such RSUs under the Equity Plan, respectively, and repurchased 896,943 and 19,549 shares of Class A Common Stock in open-market transactions not pursuant to a publicly-announced repurchase plan or program, respectively. In addition, there were 0 and 54,597 restricted shares forfeited during the nine months ended September 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021 and 2020, 2,547,770 and 2,735,546 shares of Class A Common Stock were repurchased in open market transactions as part of the publicly announced share repurchase program discussed above, respectively, and such shares were subsequently canceled by the Company. The Company paid $149.6 million and $90.7 million for these open market share repurchases during the nine months ended September 30, 2021 and 2020, respectively.

Preferred Stock Issuance

On March 7, 2017, Apollo issued 11,000,000 6.375% Series A Preferred shares (the “Series A Preferred shares”) for gross proceeds of $275.0 million, or $264.4 million net of issuance costs and on March 19, 2018, Apollo issued 12,000,000 6.375% Series B Preferred shares (the “Series B Preferred shares” and collectively with the Series A Preferred shares, the “Preferred shares”) for gross proceeds of $300.0 million, or $289.8 million net of issuance costs.

As a result of the conversion to a corporation, (i) each Series A Preferred share representing limited liability company interests of Apollo Global Management, LLC (“AGM LLC”) outstanding immediately prior to the effective time of the conversion converted into one issued and outstanding, fully paid and nonassessable share of Series A Preferred Stock, having a liquidation preference of $25.00 per share, of the Company and (ii) each Series B Preferred share representing limited liability company interests of AGM LLC outstanding immediately prior to the effective time of the conversion converted into one issued and outstanding, fully paid and nonassessable share of Series B Preferred Stock, having a liquidation preference of $25.00 per share, of the Company (the Series A Preferred Stock and the Series B Preferred Stock collectively, the “Preferred Stock”).

When, as and if declared by the executive committee of the board of directors of AGM Inc., dividends on the Preferred Stock will be payable quarterly on March 15, June 15, September 15 and December 15 of each year, beginning on June 15, 2018 for the Series B Preferred Stock, at a rate per annum equal to 6.375%. Dividends on the Preferred Stock are

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

discretionary and non-cumulative. During 2021, quarterly cash dividends were $0.398438 per share of Series A Preferred Stock and Series B Preferred Stock.

Subject to certain exceptions, unless dividends have been declared and paid or declared and set apart for payment on the Preferred Stock for a quarterly dividend period, during the remainder of that dividend period Apollo may not declare or pay or set apart payment for dividends on any shares of Class A Common Stock or any other equity securities that the Company may issue in the future ranking as to the payment of dividends, junior to the Preferred Stock (“Junior Stock”) and Apollo may not repurchase any Junior Stock.

The Series A Preferred Stock and the Series B Preferred Stock may be redeemed at Apollo’s option, in whole or in part, at any time on or after March 15, 2022 and March 15, 2023, respectively, at a price of $25.00 per share of Preferred Stock, plus declared and unpaid dividends to, but excluding, the redemption date, without payment of any undeclared dividends. Holders of the Preferred Stock will have no right to require the redemption of the Preferred Stock and there is no maturity date.

If a certain change of control event or a certain tax redemption event occurs prior to March 15, 2022 and March 15, 2023 for the Series A Preferred Stock and the Series B Preferred Stock, respectively, the Preferred Stock may be redeemed at Apollo’s option, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such change of control event or such tax redemption event, as applicable, at a price of $25.25 per share of Preferred Stock, plus declared and unpaid dividends to, but excluding, the redemption date, without payment of any undeclared dividends. If a certain rating agency event occurs prior to March 15, 2023, the Series B Preferred Stock may be redeemed at Apollo’s option, in whole but not in part, upon at least 30 days’ notice, within 60 days of the occurrence of such rating agency event, at a price of $25.50 per share of Series B Preferred Stock, plus declared and unpaid dividends to, but excluding, the redemption date, without payment of any undeclared dividends. If (i) a change of control event occurs (whether before, on or after March 15, 2022 and March 15, 2023 for the Series A Preferred Stock and the Series B Preferred Stock, respectively) and (ii) Apollo does not give notice prior to the 31st day following the change of control event to redeem all the outstanding Preferred Stock, the dividend rate per annum on the Preferred Stock will increase by 5.00%, beginning on the 31st day following such change of control event.

The Preferred Stock are not convertible into Class A Common Stock and have no voting rights, except in limited circumstances as provided in the Company’s certificate of incorporation. In connection with the issuance of the Preferred Stock, certain Apollo Operating Group entities issued for the benefit of Apollo a series of preferred units with economic terms that mirror those of the Preferred Stock.

Dividends and Distributions

The table below presents information regarding the quarterly dividends and distributions which were made at the sole discretion of the executive committee of the board of directors (in millions, except per share data). Certain subsidiaries of AGM Inc. may be subject to U.S. federal, state, local and non-U.S. income taxes at the entity level and may pay taxes and/or make payments under the tax receivable agreement in a given fiscal year; therefore, the net amounts ultimately distributed by AGM Inc. to its Class A Common Stockholders in respect of each fiscal year are generally expected to be less than the net amounts distributed to AOG Unitholders.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Dividend Declaration Date	Dividend per share of Class A Common Stock		Payment Date	Dividend to Class A Common Stockholders		Distribution to Non-Controlling Interest Holders in the Apollo Operating Group			Total Distributions from Apollo Operating Group		Distribution Equivalents on Participating Securities
January 30, 2020	$	0.89	February 28, 2020	$	205.6	$	155.6		$	361.2	$	7.2
N/A	—		April 15, 2020	—		43.0		(1)	43.0		—
May 1, 2020	0.42		May 29, 2020	96.2		85.7			181.9		3.6
July 30, 2020	0.49		August 31, 2020	112.1		100.0			212.1		4.0
October 29, 2020	0.51		November 30, 2020	116.7		104.0			220.7		4.1
For the Year Ended December 31, 2020	$	2.31		$	530.6	$	488.3		$	1,018.9	$	18.9
February 3, 2021	$	0.60	February 26, 2021	$	139.2	$	121.4		$	260.6	$	5.1
N/A	—		April 14, 2021	—		41.8		(1)	41.8		—
May 4, 2021	0.50		May 28, 2021	115.5		100.9			216.4		4.0
N/A	—		June 15, 2021	—		19.5		(1)	19.5		—
August 4, 2021	0.50		August 31, 2021	122.0		94.4			216.4		3.9
N/A	—		September 15, 2021	—		24.1		(1)	24.1		—
For the Nine Months Ended September 30, 2021	$	1.60		$	376.7	$	402.1		$	778.8	$	13.0

(1)    On April 14, 2021 and April 15, 2020 the Company made a $0.15 and $0.21 per AOG Unit pro rata distribution, respectively, to the Non-Controlling Interest holders in the Apollo Operating Group, in connection with payments made under the tax receivable agreement. See note 14 for more information regarding the tax receivable agreement. On April 14, 2021, June 15, 2021, and September 15, 2021 the Company made a $0.03, $0.08 and $0.10 per AOG Unit pro rata distribution, respectively, to the Non-Controlling Interest holders in the Apollo Operating Group, in connection with U.S. corporate tax payments.

Non-Controlling Interests

As discussed in note 1, Athene acquired 29,154,519 non-voting equity interests of the Apollo Operating Group, which as of September 30, 2021 represented a 6.7% economic interest in the Apollo Operating Group. The table below presents equity interests in Apollo’s consolidated, but not wholly-owned, subsidiaries and funds. Net income and comprehensive income attributable to Non-Controlling Interests consisted of the following: 

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020
Net income (loss) attributable to Non-Controlling Interests in consolidated entities:
Interest in management companies and a co-investment vehicle(1)	$	1,866		$	1,037		$	4,464		$	2,316
Other consolidated entities	110,703			98,984			294,959			(25,636)
Net income (loss) attributable to Non-Controlling Interests in consolidated entities	$	112,569		$	100,021		$	299,423		$	(23,320)
Net income (loss) attributable to Non-Controlling Interests in the Apollo Operating Group:
Net income (loss)	$	631,417		$	676,099		$	3,655,380		$	(608,659)
Net income (loss) attributable to Non-Controlling Interests in consolidated entities	(112,569)			(100,021)			(299,423)			23,320
Net income (loss) after Non-Controlling Interests in consolidated entities	518,848			576,078			3,355,957			(585,339)
Adjustments:
Income tax provision (benefit)(2)	101,434			89,357			498,731			(66,173)
NYC UBT and foreign tax benefit(3)	(11,213)			(11,966)			(24,694)			(22,609)
Net income in non-Apollo Operating Group entities	1,099			46			1,103			64
Series A Preferred Stock Dividends	(4,382)			(4,382)			(13,148)			(13,148)
Series B Preferred Stock Dividends	(4,782)			(4,781)			(14,344)			(14,344)
Total adjustments	82,156			68,274			447,648			(116,210)
Net income (loss) after adjustments	601,004			644,352			3,803,605			(701,549)
Weighted average ownership percentage of Apollo Operating Group	44.1		%	47.1		%	45.8		%	46.7		%
Net income (loss) attributable to Non-Controlling Interests in Apollo Operating Group	$	260,526		$	303,679		$	1,761,018		$	(307,849)
Net income (loss) attributable to Non-Controlling Interests	$	373,095		$	403,700		$	2,060,441		$	(331,169)
Other comprehensive income (loss) attributable to Non-Controlling Interests	(10,082)			13,081			(20,275)			12,263
Comprehensive Income (Loss) Attributable to Non-Controlling Interests	$	363,013		$	416,781		$	2,040,166		$	(318,906)

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

(2)Reflects all taxes recorded in our condensed consolidated statements of operations. Of this amount, U.S. federal, state, and local corporate income taxes attributable to AGM Inc. and its subsidiaries are added back to income of the Apollo Operating Group before calculating Non-Controlling Interests as the income allocable to the Apollo Operating Group is not subject to such taxes.

(3)Reflects New York City Unincorporated Business Tax (“NYC UBT”) and foreign taxes that are attributable to the Apollo Operating Group and its subsidiaries related to its operations in the U.S. as partnerships and in non-U.S. jurisdictions as corporations. As such, these amounts are considered in the income attributable to the Apollo Operating Group.

14. RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED ENTITIES

Management fees, transaction and advisory fees and reimbursable expenses from the funds the Company manages and their portfolio companies are included in due from related parties in the condensed consolidated statements of financial condition. The Company also typically facilitates the payment of certain operating costs incurred by the funds that it manages as well as their related parties. These costs are normally reimbursed by such funds and are included in due from related parties. Other related party transactions include loans to employees and periodic sales of ownership interests in Apollo funds to employees. Due from related parties and due to related parties are comprised of the following:

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

	As of September 30, 2021		As of December 31, 2020
Due from Related Parties:
Due from credit funds(1)	$	270,987	$	183,992
Due from private equity funds	52,515		21,169
Due from real assets funds	38,315		28,231
Due from portfolio companies	72,511		80,122
Due from Contributing Partners, employees and former employees	84,891		148,869
Total Due from Related Parties	$	519,219	$	462,383
Due to Related Parties:
Due to Co-Founders and Contributing Partners	$	511,562	$	310,230
Due to credit funds	28,096		34,280
Due to private equity funds	64,996		216,899
Due to real assets funds	29,816		47,060
Total Due to Related Parties	$	634,470	$	608,469

(1) Due from credit funds includes $46.1 million related to a receivable from a credit fund in connection with the Company’s sale of a platform investment to such fund during the three months ended September 30, 2021. The amount is payable to the Company over 5 years and is held at fair value.

Tax Receivable Agreement

Subject to certain restrictions, each of the Co-Founders and Contributing Partners has the right to exchange his vested AOG Units for the Company’s Class A Common Stock. The Apollo Operating Group entities have made, or will make, 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 the basis of underlying assets that will reduce the amount of taxable gain or increase the amount of taxable loss that AGM Inc. and its subsidiaries will otherwise recognize in the future.

The tax receivable agreement provides for the payment to the Co-Founders and Contributing Partners of 85% of the amount of cash savings, if any, in U.S. federal, state, local and foreign income taxes that AGM Inc. and its subsidiaries realizes as a result of the increases in tax basis of assets that resulted from the 2007 Reorganization, the Conversion, and other exchanges of AOG Units for Class A Common Stock that have occurred in prior years. AGM Inc. and its subsidiaries retain the benefit from the remaining 15% of actual cash tax savings. 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.

As a result of the exchanges of AOG Units for Class A Common Stock during the nine months ended September 30, 2021 and 2020, a $243.2 million and $62.5 million liability was recorded, respectively, to estimate the amount of the future expected payments to be made by AGM Inc. and its subsidiaries to the Co-Founders and Contributing Partners pursuant to the tax receivable agreement. In April 2021, Apollo made a $39.9 million cash payment pursuant to the tax receivable agreement resulting from the realized tax benefit for the 2020 tax year. In connection with this payment, the Company made a corresponding pro rata distribution of $34.7 million ($0.15 per AOG Unit) to the Non-Controlling Interest holders in the Apollo Operating Group. In April 2020, Apollo made a $48.2 million cash payment pursuant to the tax receivable agreement resulting from the realized tax benefit for the 2019 tax year. In connection with this payment, the Company made a corresponding pro rata distribution of $43.0 million ($0.21 per AOG Unit) to the Non-Controlling Interest holders in the Apollo Operating Group.

Pursuant to the binding governance term sheet the Company entered into with the Co-Founders, all AOG Units beneficially owned by each holder of AOG Units (other than Athene) will be transferred to a wholly-owned subsidiary of a newly formed holding company (“NewCo”) and one or more of its affiliates in a series of transactions in exchange for (i) such number of shares of Class A common stock of NewCo equal to the aggregate number of AOG Units beneficially owned by such AOG Unit owners as of immediately prior to the mandatory exchange (such AOG Units, the “Outstanding AOG Units”) and (ii) an aggregate amount in cash equal to the product of (a) number of Outstanding AOG Units multiplied by (b) $3.66, payable over a period of four years in equal quarterly installments (the “AOG Unit Payment”); provided, however, that in the event that the Company consummates the transactions contemplated by the Merger Agreement simultaneously with the mandatory exchange, the AOG Unit Payment will be payable over the period between the date on which the transactions

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

contemplated by the Merger Agreement are consummated and the third anniversary of the Mandatory Exchange Date in equal quarterly installments (such transactions collectively, the “mandatory exchange”).

The term sheet also states that the tax receivable agreement will not be applicable for the mandatory exchange, but will remain in effect for any exchanges occurring prior to the mandatory exchange date.

Due from Contributing Partners, Employees and Former Employees

As of September 30, 2021 and December 31, 2020, due from Contributing Partners, Employees and Former Employees includes various amounts due to the Company including employee loans and return of profit sharing distributions. As of September 30, 2021 and December 31, 2020, the balance included interest-bearing employee loans receivable of $11.1 million and $17.5 million, respectively. The outstanding principal amount of the loans as well as all accrued and unpaid interest is required to be repaid at the earlier of the eighth anniversary of the date of the relevant loan or at the date of the relevant employee’s resignation from the Company.

The Company recorded a receivable from the Contributing Partners and certain employees and former employees for the potential return of profit sharing distributions that would be due if certain funds were liquidated as of September 30, 2021 and December 31, 2020 of $64.8 million and $124.1 million, respectively.

Indemnity

Performance revenues from certain funds can be distributed to the Company on a current basis, but are subject to repayment by the subsidiaries of the Apollo Operating Group that act as general partners of the funds in the event that certain specified return thresholds are not ultimately achieved. The Co-Founders, Contributing Partners and certain other investment professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several and not joint and are limited to a particular Co-Founders’ or Contributing Partner’s distributions. Pursuant to an existing shareholders agreement, the Company has agreed to indemnify each of the Company’s Co-Founders 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 Co-Founders and Contributing Partners have contributed or sold to the Apollo Operating Group.

Accordingly, in the event that the Company’s Co-Founders, 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 with respect to Fund IV, Fund V and Fund VI, the Company will be obligated to reimburse the Company’s Co-Founders 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. The Company recorded an indemnification liability of $13.2 million and $12.8 million as of September 30, 2021 and December 31, 2020, respectively.

Due to Credit, Private Equity and Real Assets Funds

Based upon an assumed liquidation of certain of the credit, private equity and real assets funds the Company manages, the Company has recorded a general partner obligation to return previously distributed performance allocations, which represents amounts due to these funds. The general partner obligation is recognized based upon an assumed liquidation of a fund’s net assets as of the reporting date. The actual determination and any required payment of any such general partner obligation would not take place until the final disposition of a fund’s investments based on the contractual termination of the fund or as otherwise set forth in the respective limited partnership agreement or other governing document of the fund.

The following table presents the general partner obligation to return previously distributed performance allocations related to certain funds by segment:

	As of September 30, 2021		As of December 31, 2020
Credit	$	—	$	—
Private Equity	64,781		215,011
Real Assets	29,660		46,860
Total general partner obligation	$	94,441	$	261,871

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Athene

Athene Holding, through its subsidiaries, is a leading retirement services company that issues, reinsures and acquires retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. The products and services offered by Athene include fixed and fixed indexed annuity products, reinsurance services offered to third-party annuity providers; and institutional products, such as funding agreements. Athene Holding is currently listed on the New York Stock Exchange under the symbol “ATH”.

The Company provides asset management and advisory services to Athene, including asset allocation services, direct asset management services, asset and liability matching management, mergers and acquisitions, asset diligence hedging and other asset management services. On September 20, 2018, Athene and Apollo agreed to revise the existing fee arrangements (the “amended fee agreement”) between Athene and Apollo. The Company began recording fees pursuant to the amended fee agreement on January 1, 2019. The amended fee agreement provides for sub-allocation fees which vary based on portfolio allocation differentiation, as described below.

The amended fee agreement provides for a monthly fee to be payable by Athene to the Company in arrears, with retroactive effect to the month beginning on January 1, 2019, in an amount equal to the following, to the extent not otherwise payable to the Company pursuant to any one or more investment management or sub-advisory agreements or arrangements:

(i)    The Company, through its consolidated subsidiary Apollo Insurance Solutions Group LP, or ISG, earns a base management fee of 0.225% per year on the aggregate market value of substantially all of the assets in substantially all of the investment accounts of or relating to Athene (collectively, the “Athene Accounts”) up to $103.4 billion (the level of assets in the Athene Accounts as of January 1, 2019, excluding certain assets, the “Backbook Value”) and 0.150% per year on all assets in excess of $103.4 billion (the “Incremental Value”), respectively; plus

(ii)    with respect to each asset in an Athene Account, subject to certain exceptions, that is managed by the Company and that belongs to a specified asset class tier (“core,” “core plus,” “yield,” and “high alpha”), a sub-allocation fee as follows, which will, in the case of assets acquired after January 1, 2019, be subject to a cap of 10% of the applicable asset’s gross book yield:

	As of September 30, 2021
Sub-Allocation Fees:
Core Assets(1)	0.065	%
Core Plus Assets(2)	0.130	%
Yield Assets(3)	0.375	%
High Alpha Assets(4)	0.700	%
Other Assets (5)	—	%

(1)Core assets include public investment grade corporate bonds, municipal securities, agency residential or commercial mortgage backed securities and obligations of any governmental agency or government sponsored entity that is not expressly backed by the U.S. government.

(2)Core plus assets include private investment grade corporate bonds, fixed rate first lien commercial mortgage loans and obligations issued or assumed by a financial institution (such an institution, a “financial issuer”) and determined by Apollo to be “Tier 2 Capital” under the Basel III recommendations developed by the Basel Committee on Banking Supervision (or any successor to such recommendations).

(3)Yield assets include non-agency residential mortgage-backed securities, investment grade collateralized loan obligations, certain asset-backed securities, commercial mortgage-backed securities, emerging market investments, below investment grade corporate bonds, subordinated debt obligations, hybrid securities or surplus notes issued or assumed by a financial issuer, as rated preferred equity, residential mortgage loans, bank loans, investment grade infrastructure debt and certain floating rate commercial mortgage loans.

(4)High alpha assets include subordinated commercial mortgage loans, below investment grade collateralized loan obligations, unrated preferred equity, debt obligations originated by MidCap, below investment grade infrastructure debt, certain loans originated directly by Apollo and agency mortgage derivatives.

(5)Other Assets include cash, treasuries, equities and alternatives. With respect to equities and alternatives, Apollo earns performance revenues of 0% to 20%.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Athene and Apollo Strategic Transaction

On October 28, 2019 Athene Holding, AGM Inc. and the entities that form the Apollo Operating Group entered into a Transaction Agreement, pursuant to which, among other things:

•(i) Athene Holding issued, on February 28, 2020 (the “Closing Date”), 35,534,942 Class A common shares of Athene Holding (the “AHL Class A Common Shares”) to certain subsidiaries of the Apollo Operating Group in exchange for (i) issuance by the Apollo Operating Group of 29,154,519 non-voting equity interests of the Apollo Operating Group to Athene and (ii) $350 million in cash (“Share Issuance”);

•Athene Holding granted to AGM Inc. the right to purchase additional AHL Class A Common Shares from the Closing Date until 180 days thereafter to the extent the issued and outstanding AHL Class A Common Shares beneficially owned by Apollo and certain of its related parties and employees (collectively, the “Apollo Parties”) (inclusive of AHL Class A Common Shares over which any such persons have a valid proxy) do not equal at least 35% of the issued and outstanding AHL Class A Common Shares, on a fully diluted basis;

•A representative of the Apollo Operating Group has the right to purchase up to that number of AHL Class A Common Shares that would increase by up to 5% the percentage of the issued and outstanding AHL Class A Common Shares beneficially owned by the Apollo Parties (inclusive of AHL Class A Common Shares over which any such persons have a valid proxy), calculated on a fully diluted basis;

•Athene Holding amended and restated its Twelfth Amended and Restated Bye-laws of Athene Holding to, among other items, eliminate Athene Holding’s multi-class share structure (“Multi-Class Share Elimination”). In connection with the Multi-Class Share Elimination, (i) all of the Class B common shares of Athene Holding would be converted into an equal number of AHL Class A Common Shares on a one-for-one basis and (ii) all of the Class M common shares of Athene Holding were converted into a combination of AHL Class A Common Shares and warrants to purchase AHL Class A Common Shares.

On February 28, 2020, Apollo and Athene closed on the strategic transaction discussed above. In connection with the transaction, Apollo purchased a 17% incremental equity stake in Athene at a premium, bringing Apollo’s beneficial ownership in Athene to 28%, or 35% including shares and warrants owned by related parties and employees, on a fully diluted basis, at the close of the transaction. Apollo entered into a lock-up agreement restricting transfers of Apollo’s existing and newly acquired shares of Athene for three years from the Closing Date.

As of September 30, 2021 and December 31, 2020, the Company held a 28.4% and an 28.5% ownership interest in the AHL Class A Common Shares, respectively.

Liquidity Agreement

In connection with the consummation of the Share Issuance and the Multi-Class Share Elimination, AGM Inc. also entered into a Liquidity Agreement, dated as of the Closing Date, with Athene Holding (the “Liquidity Agreement”), pursuant to which, once each quarter, Athene Holding is entitled to request to sell a number of AOG Units or request AGM Inc. to sell a number of shares of AGM Inc. Class A Common Stock or AOG Units representing at least $50 million, in each case, in exchange for payment of the Cash Amount (as defined below). If Athene Holding intends to exercise such sale request, it will provide a notice of such intent to sell such AOG Units to AGM Inc. Upon receipt of such notice, subject to certain restrictions described below, AGM Inc. will consummate, or, in the case of an AOG Transaction (as defined below), permit the consummation of, one of the following transactions:

•a transaction whereby AGM Inc. purchases AOG Units from Athene Holding at a price agreed upon, in good faith, by AGM Inc. and Athene Holding (a “Purchase Transaction”);

•if Athene Holding and AGM Inc. do not agree to consummate a Purchase Transaction, AGM Inc. will use its best efforts to consummate a public offering of AGM Inc. Class A Common Stock, the proceeds (net of certain commissions, fees and expenses consistent with customary and prevailing market practices for similar offerings) of which will be used to fund the purchase of AOG Units from Athene Holding (a “Registered Sale”);

•if AGM Inc. notifies Athene Holding that it cannot consummate a Registered Sale, upon Athene Holding’s request, AGM Inc. will use its best efforts to consummate a sale of AGM Inc. Class A Common Stock pursuant to an

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NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

exemption from the registration requirements of the Securities Act, the proceeds (net of certain commissions, fees and expenses consistent with customary and prevailing market practices for similar offerings) of which will be used to fund the purchase of AOG Units from Athene Holding (a “Private Placement,” and collectively with a Purchase Transaction and a Registered Sale, a “Sale Transaction”); or

•if AGM Inc. elects (in its sole discretion) not to consummate a Sale Transaction, Athene Holding will be permitted to sell AOG Units in one or more transactions that are exempt from the registration requirements of the Securities Act, subject to certain restrictions (an “AOG Transaction”).

For purposes of this description, “Cash Amount” means (i) in the case of a Registered Sale, the cash proceeds that AGM Inc. receives upon the consummation of a Registered Sale after deducting a capped amount of documented commissions, fees and expenses, (ii) in the case of a Purchase Transaction, the cash proceeds to which AGM Inc. and Athene Holding agree, (iii) in the case of a Private Placement, the cash proceeds that AGM Inc. receives upon the consummation of a Private Placement after deducting a capped amount of documented commissions, fees and expenses and (iv) in the case of an AOG Transaction, the cash proceeds to which the purchaser and Athene Holding agree. Each of the Purchase Transaction, Private Placement, Registered Sale and AOG Transaction are subject to the terms and conditions set forth in the Liquidity Agreement.

In the event that an AOG Transaction is consummated, the buyer of such AOG Units will be prohibited from exchanging such AOG Units into AGM Inc. Class A Common Stock for at least 30 days after such purchase. Athene Holding is prohibited from consummating an AOG Transaction with any purchaser (i) who would, after giving effect to such transfer, own more than 3.5% of the issued and outstanding AGM Inc. Class A Common Stock (on a fully-diluted basis) or (ii) who is a “bad actor” (as defined in Regulation D of the Act) or otherwise a prohibited transferee, as described in the Liquidity Agreement.

Athene Holding’s liquidity rights are subject to certain other limitations and obligations, including that in a Registered Sale or a Private Placement, AGM Inc. will not be required to sell any AGM Inc. Class A Common Stock at a price that is less than 90% of the volume-weighted average price of the AGM Inc. Class A Common Stock for the 10 consecutive business days prior to the day Athene Holding submits a notice for sale of AOG Units.

The Liquidity Agreement also provides that Athene Holding is prohibited from transferring its AOG Units other than to an affiliate or pursuant to the options set forth above. AGM Inc. has the right not to consummate a Registered Sale or a Private Placement if the recipient of the Class A Common Stock would receive more than 2.0% of the outstanding and issued shares of AGM Inc. Class A Common Stock. Additionally, AGM Inc. has the right not to consummate an AOG Transaction if the recipient would, following such AOG Transaction, be the beneficial owner of greater than 3.5% of the AOG Units.

Merger Agreement

On March 8, 2021, AGM Inc. entered into the Merger Agreement with AHL, HoldCo, AHL Merger Sub, and AGM Merger Sub.

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, AGM Inc. and AHL will effect an all-stock merger transaction to combine their respective businesses through: (a) the AHL Merger, with AHL as the surviving entity in the AHL Merger and a direct wholly owned subsidiary of HoldCo and (b) the AGM Merger with AGM as the surviving entity in the AGM Merger and a direct wholly owned subsidiary of HoldCo. The Mergers are intended to become effective concurrently and, upon the consummation of the Mergers, AGM Inc. and AHL will be direct wholly owned subsidiaries of HoldCo. Following the Mergers and the closing of the transactions contemplated by the Merger Agreement, HoldCo will be renamed “Apollo Global Management, Inc.” The transaction is expected to close in January of 2022. The transaction requires the approval of stockholders of both Apollo and AHL, and is subject to, among other things, antitrust and regulatory approvals, and other customary closing conditions.

Upon the terms and subject to the conditions of the Merger Agreement, which has been approved by the boards of directors of both companies, as well as the conflicts committee of AGM’s board and a special committee of certain disinterested members of the board of directors of AHL, at the effective time of the AHL Merger, each issued and outstanding share of AHL Class A common stock, par value $0.001 per share (“AHL shares”) (other than AHL shares held by AHL as treasury shares (including HoldCo, AHL Merger Sub, AGM Merger Sub and the respective controlled funds of AGM Inc. or any direct or indirect wholly owned subsidiary of AGM Inc.)), will be converted automatically into the right to receive 1.149 duly authorized, validly issued, fully paid and nonassessable shares of Class A common stock, par value $0.00001 per share, of HoldCo (such shares, “HoldCo Shares”) and any cash paid in lieu of fractional HoldCo Shares. The exchange ratio is fixed and

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NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

will not be adjusted for changes in the market value of the AGM Class A Shares or the AHL Shares. No fractional HoldCo Shares will be issued in connection with the AHL Merger, and AHL’s shareholders will receive cash in lieu of any fractional HoldCo Shares.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the AGM Merger, each issued and outstanding share of AGM Inc. Class A shares (other than Class A shares (a) held by AGM Inc. as treasury shares or (b) by AGM Merger Sub or any direct or indirect wholly owned subsidiary of AGM Inc.) will be converted automatically into one (1) HoldCo Share.

At the effective time of the AGM Merger, each of the issued and outstanding series of preferred shares of AGM Inc. will remain issued and outstanding as preferred shares of the AGM Surviving Entity, and at the effective time of the AHL Merger, each of the issued and outstanding preferred shares of AHL will remain issued and outstanding as preferred shares of the AHL Surviving Entity, in each case as described further in the Merger Agreement.

At the effective time of the AHL Merger, each of the issued and outstanding warrants of AHL that is outstanding immediately prior to the effective time of the AHL Merger will, automatically and without any action on the part of the holder of an AHL warrant, remain outstanding in accordance with its terms, or, alternatively, be exchanged for such consideration from HoldCo in connection with the transactions contemplated by the Merger Agreement as may be agreed in writing by AGM Inc. and AHL prior to the effective time of the AHL Merger.

At the effective time of the AHL Merger, each outstanding option to purchase AHL Shares, award of restricted AHL Shares and award of AHL restricted share units will be converted into a similar award (with the same terms and conditions) with respect to HoldCo Shares based on the exchange ratio, in each case, as described further in the Merger Agreement; except that outstanding awards of restricted AHL Shares and AHL restricted share units, in each case, that are subject to performance-based vesting conditions, will convert into time-based awards with respect to HoldCo Shares based on the applicable target-level of performance and will vest at the end of the applicable performance period.

At the effective time of the AGM Merger, each outstanding option to purchase AGM Inc. Class A shares, award of restricted AGM Inc. Class A shares and award of AGM Inc. restricted share units will be converted into a similar award (with the same terms and conditions, including any performance conditions) with respect to HoldCo Shares, in each case, as described further in the Merger Agreement.

The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement, AGM Inc. will be obligated to pay AHL a cash termination fee of $81.9 million if: (i) the board of directors of AGM Inc. withdraws, suspends, withholds or in any manner adverse to AHL amends its recommendation of approval of the AGM Merger and the Merger Agreement by AGM stockholders, and (ii) AGM Inc. stockholder approval of the AGM Merger and the Merger Agreement is not obtained at the AGM Inc. stockholder meeting at which the AGM Merger and the Merger Agreement is submitted for approval.

Athora

The Company, through ISGI, provides investment advisory services to certain portfolio companies of Apollo funds and Athora, a strategic platform that acquires or reinsures blocks of insurance business in the German and broader European life insurance market (collectively, the “Athora Accounts”). The Company had commitments to make additional equity investments in Athora of $289.4 million as of September 30, 2021, subject to certain conditions.

Athora Sub-Advised

The Company, through ISGI, provides sub-advisory services with respect to a portion of the assets in certain portfolio companies of Apollo funds and the Athora Accounts. The Company broadly refers to “Athora Sub-Advised” assets as those assets in the Athora Accounts which the Company explicitly sub-advises as well as those assets in the Athora Accounts which are invested directly in funds and investment vehicles Apollo manages.

The Company earns a base management fee on the aggregate market value of substantially all of the investment accounts of or relating to Athora and also a sub-advisory fee on the Athora Sub-Advised assets, which varies depending on the specific asset class.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table presents the revenues earned in aggregate from Athene and Athora:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues earned in aggregate from Athene and Athora, net(1)(2)	$	420,932	$	363,746	$	2,217,048	$	(297,924)

(1)    Consisting of management fees, sub-advisory fees, performance revenues (net of related profit sharing expense) and changes in the market value of the Athene Holding shares owned directly by Apollo.

(2)    Gains (losses) on the market value of the shares of Athene Holding owned directly by Apollo were $147.8 million and $145.0 million for the three months ended September 30, 2021 and 2020, respectively, and $1.4 billion and $(851.4) million for the nine months ended September 30, 2021 and 2020, respectively.

AINV Amended and Restated Investment Advisory Management Agreement

On May 17, 2018, the board of directors of AINV approved an amended and restated investment advisory management agreement with Apollo Investment Management, L.P., the Company’s consolidated subsidiary, which reduced the base management fee and revised the incentive fee on income to include a total return requirement. Effective April 1, 2018, the base management fee was reduced from 2.0% to 1.5% of the average value of AINV’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters; provided, however, the base management fee would be 1.0% of the average value of AINV’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) that exceeds the product of (i) 200% and (ii) the value of AINV’s net asset value at the end of the most recently completed calendar quarter. In addition, beginning January 1, 2019, the incentive fee on income calculation included a total return requirement with a rolling twelve quarter look-back starting from April 1, 2018. The incentive fee rate remained 20% and the performance threshold remained 1.75% per quarter (7% annualized).

Regulated Entities

Apollo Global Securities, LLC (“AGS”) is a registered broker dealer with the 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 September 30, 2021. From time to time, this entity is involved in transactions with related parties of Apollo, including portfolio companies of the funds Apollo manages, as well as third parties, whereby AGS earns underwriting and transaction fees for its services.

Investment in SPACs

On October 6, 2020, APSG, a SPAC, completed an initial public offering, ultimately raising total gross proceeds of $817 million, including the underwriters’ subsequent partial exercise of their over-allotment option. In a private placement concurrent with the initial public offering, APSG sold warrants to APSG Sponsor, L.P., a subsidiary of Apollo, for total gross proceeds of $18.3 million. APSG Sponsor, L.P. also holds Class B ordinary shares of APSG. Apollo currently consolidates APSG as a voting interest entity, and thus all private placement warrants and Class B ordinary shares are eliminated in consolidation.

On February 12, 2021, APSG II, a SPAC, completed an initial public offering, raising total gross proceeds of $690 million, including the underwriters’ exercise in full of their over-allotment option. In a private placement concurrent with the initial public offering, APSG II sold warrants to APSG Sponsor II, L.P., a subsidiary of Apollo, for total gross proceeds of $15.6 million. APSG Sponsor II, L.P. also holds Class B ordinary shares of APSG II. Apollo currently consolidates APSG II as a voting interest entity, and thus all private placement warrants and Class B ordinary shares are eliminated in consolidation.

On July 13, 2021, Acropolis, a SPAC, completed an initial public offering, ultimately raising total gross proceeds of $345 million, including the underwriters’ subsequent exercise in full of their over-allotment option. In a private placement concurrent with the initial public offering, Acropolis sold warrants to Acropolis Infrastructure Acquisition Sponsor, L.P., a subsidiary of Apollo, for total gross proceeds of $8.8 million. Acropolis Infrastructure Acquisition Sponsor, L.P. also holds Class B ordinary shares of Acropolis. Apollo currently consolidates Acropolis as a voting interest entity, and thus all private placement warrants and Class B ordinary shares are eliminated in consolidation.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

15. COMMITMENTS AND CONTINGENCIES

Investment Commitments—As a limited partner, general partner and manager of the Apollo funds, Apollo had unfunded capital commitments as of September 30, 2021 and December 31, 2020 of $0.9 billion and $1.0 billion, respectively, of which $212.7 million and $348.0 million, respectively, related to Fund IX.

Debt Covenants—Apollo’s debt obligations contain various customary loan covenants. As of September 30, 2021, the Company was not aware of any instances of non-compliance with the financial covenants contained in the documents governing the Company’s debt obligations.

Litigation and Contingencies—Apollo is, from time to time, party to various legal actions arising in the ordinary course of business including claims and lawsuits, reviews, investigations or proceedings by governmental and self-regulatory agencies regarding its business.

On August 3, 2017, a complaint was filed in the United States District Court for the Middle District of Florida against AGM Inc., a senior partner of Apollo and a former principal of Apollo by Michael McEvoy on behalf of a purported class of employees of subsidiaries of CEVA Group, LLC (“CEVA Group”) who purchased shares in CEVA Investment Limited (“CIL”), the former parent company of CEVA Group. The complaint alleged that the defendants breached fiduciary duties to and defrauded the plaintiffs by inducing them to purchase shares in CIL and subsequently participating in a debt restructuring of CEVA Group in which shareholders of CIL did not receive a recovery. On February 9, 2018, the Bankruptcy Court for the Southern District of New York held that the claims asserted in the complaint were assets of CIL, which is a chapter 7 debtor, and that the complaint was null and void as a violation of the automatic stay. McEvoy subsequently revised his complaint to attempt to assert claims that do not belong to CIL. The amended complaint no longer named any individual defendants, but Apollo Management VI, L.P. and CEVA Group were added as defendants. The amended complaint sought damages of approximately €30 million and asserts, among other things, claims for violations of the Investment Advisers Act of 1940, breach of fiduciary duties, and breach of contract. On December 7, 2018, after receiving permission from the Bankruptcy Court, McEvoy filed his amended complaint in the District Court in Florida. On January 18, 2019, Apollo filed a motion to dismiss the amended complaint. A hearing on that motion was held December 3, 2019. On January 6, 2020, the Florida court granted in part Apollo’s motion to dismiss, dismissing McEvoy’s Investment Advisers Act claim with prejudice, and denying without prejudice Apollo’s motion with respect to the remaining claims, and directing the parties to conduct limited discovery, and submit new briefing, solely with respect to the statute of limitations. On July 30, 2020, Apollo and CEVA filed a joint motion for summary judgment on statute of limitations grounds. On June 29, 2021, the District Court issued a decision denying the defendants’ joint motion for summary judgment on statute of limitations grounds, and set deadlines on July 23, 2021 for the plaintiff to file an amended complaint and August 20, 2021 for defendants to answer or move to dismiss the amended complaint. Plaintiff filed his second amended complaint on July 23, 2021 which added alleged grounds for tolling the statute of limitations. Also on July 23, 2021, the defendants filed a joint motion for reconsideration with respect to aspects of the District Court’s June 29, 2021 decision. Defendants filed their reply to the motion for reconsideration on September 10, 2021. Apollo’s deadline to respond to the amended complaint has been stayed pending resolution of defendants’ motion for reconsideration. Apollo believes the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

On December 21, 2017, Harbinger Capital Partners II, LP, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., Harbinger Capital Partners Special Situations GP, LLC, Harbinger Capital Partners Offshore Manager, L.L.C., Global Opportunities Breakaway Ltd. (in voluntary liquidation), and Credit Distressed Blue Line Master Fund, Ltd. (collectively, “Harbinger”) commenced an action in New York Supreme Court captioned Harbinger Capital Partners II LP et al. v. Apollo Global Management LLC, et al. (No. 657515/2017). The complaint named as defendants (i) AGM Inc., (ii) the funds managed by Apollo that invested in SkyTerra Communications, Inc. (“SkyTerra”) equity before selling their interests to Harbinger under an April 2008 agreement that closed in 2010, and (iii) six former SkyTerra directors, five of whom are current or former Apollo employees. The complaint alleged that during the period of Harbinger’s various equity and debt investments in SkyTerra, from 2004 to 2010, the defendants concealed from Harbinger material defects in SkyTerra technology that was to be used to create a new mobile wi-fi network. The complaint alleged that Harbinger would not have made investments in SkyTerra totaling approximately $1.9 billion had it known of the defects, and that the public disclosure of these defects ultimately led to SkyTerra filing for bankruptcy in 2012 (after it had been renamed LightSquared). The complaint asserted claims against (i) all defendants for fraud, civil conspiracy, and negligent misrepresentation, (ii) AGM Inc. and the Apollo-managed funds only for breach of fiduciary duty, breach of contract, and unjust enrichment, and (iii) the SkyTerra director defendants only for aiding and abetting breach of fiduciary duty. The complaint sought $1.9 billion in damages, as well as punitive damages, interest, costs, and fees. This action was stayed from

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

February 14, 2018, through June 12, 2019. On February 14, 2018, the defendants moved the United States Bankruptcy Court for the Southern District of New York to reopen the LightSquared bankruptcy proceeding for the limited purpose of enforcing Harbinger’s assignment and release in that bankruptcy of the claims that it asserted in the New York state court action (the “Bankruptcy Motion”). Briefing and hearing on the Bankruptcy Motion were adjourned while the state court stay was pending. On June 12, 2019, Harbinger voluntarily discontinued the state action without prejudice subject to a tolling agreement, and Apollo voluntarily withdrew the Bankruptcy Motion subject to a right to refile the motion if Harbinger were to refile the state court action. On June 8, 2020, Harbinger refiled its litigation in New York Supreme Court, captioned Harbinger Capital Partners II, LP et al. v. Apollo Global Management, LLC et al. (No. 652342/2020).  The complaint adds eight new defendants: two former SkyTerra executives, one former SkyTerra consultant, and five entities (four of whom have since been dismissed) that were Harbinger’s counterparties in a transaction involving TVCC One Six Holdings LLC (“TVCC”).  It also adds three new claims relating to Harbinger’s contention that the new defendants induced Harbinger to buy TVCC to support SkyTerra’s network even though they allegedly knew that the network had material defects. The parties agreed to stay this action until November 15, 2020. On November 23, 2020, Defendants refiled the Bankruptcy Motion, and on November 24, 2020, filed in the state court a motion to stay the state court proceedings pending a ruling by the Bankruptcy Court on the Bankruptcy Motion. On February 1, 2021, the Bankruptcy Court denied the Bankruptcy Motion. On March 31, 2021, Defendants filed their motions to dismiss the New York Supreme Court action. Harbinger opposed those motions on June 15, 2021. Defendants filed their replies on July 29, 2021. Apollo believes the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

On May 3, 2018, Caldera Holdings Ltd, Caldera Life Reinsurance Company, and Caldera Shareholder, L.P. (collectively, “Caldera”) filed a summons with notice in the Supreme Court of the State of New York, New York County, naming as defendants AGM Inc., Apollo Management, L.P., Apollo Advisors VIII, L.P., Apollo Capital Management VIII, LLC, Athene Asset Management, L.P., Athene Holding, Ltd., and Leon Black (collectively, “Defendants” and all but Athene Holding, Ltd., the “Apollo Defendants”). On July 12, 2018, Caldera filed a complaint, Index No. 652175/2018 (the “Complaint”), alleging three causes of action: (1) tortious interference with prospective business relations/prospective economic advantage; (2) defamation/trade disparagement/injurious falsehood; and (3) unfair competition. The Complaint sought damages of no less than $1.5 billion, as well as exemplary and punitive damages, attorneys’ fees, interest, and an injunction. Defendants moved to dismiss the Complaint on September 21, 2018 and Caldera filed an amended complaint on January 21, 2019 (the “Amended Complaint”). Defendants moved to dismiss the Amended Complaint, and the Apollo Defendants submitted to the Court a Final Arbitration Award issued on April 26, 2019 in a JAMS arbitration, finding Caldera, Imran Siddiqui, and Ming Dang liable for various causes of action, including breaches of fiduciary duty and/or aiding and abetting thereof. Oral argument on the motions to dismiss was held on May 31, 2019. On December 20, 2019, the Court issued a Decision and Order dismissing Caldera’s complaint in its entirety as against all Defendants. On December 23, 2019, the Apollo Defendants filed a Notice of Entry of the Decision and Order. On January 8, 2020, Caldera filed a Notice of Appeal. The time for plaintiffs to perfect their appeal has expired. This case is therefore concluded.

On November 1, 2019, plaintiff Benjamin Fongers filed a putative class action in Illinois Circuit Court, Cook County, against CareerBuilder, LLC (“CareerBuilder”) and AGM Inc. Plaintiff alleges that in March 2019, CareerBuilder changed its compensation plan so that sales representatives such as Fongers would (i) receive reduced commissions; and (ii) only be able to receive commissions for accounts they originated that were not reassigned to anyone else, a departure from the earlier plan.  Plaintiff also claims that the plan applied retroactively to deprive sales representatives of commissions to which they were earlier entitled.  Plaintiff alleges that AGM Inc. exercises complete control over CareerBuilder and thus, CareerBuilder acts as AGM Inc.’s agent.  Based on these allegations, Plaintiff alleges claims against both defendants for breach of written contract, breach of implied contract, unjust enrichment, violation of the Illinois Sales Representative Act, and violation of the Illinois Wage and Payment Collection Act. The defendants removed the action to the Northern District of Illinois on December 5, 2019, and Plaintiff moved to remand on January 6, 2020. On October 21, 2020, the District Court granted the motion to remand. On January 11, 2021, the District Court ordered the Clerk of Court to take the necessary steps to transfer the case back to Illinois Circuit Court, Cook County. On March 8, 2021, Plaintiff filed a motion under 28 U.S.C. § 1447(c) to recover attorneys’ fees of approximately $35,000 for the remand briefing. Defendants filed their opposition on March 31, 2021, and Plaintiff replied on April 14, 2021. Defendants filed motions to dismiss the complaint in the Illinois Circuit Court, Cook County on June 11, which were fully briefed on August 13, 2021. CareerBuilder has also filed a Motion for a Protective Order and to Stay Discovery pending the outcome of the motions to dismiss, which was fully briefed on July 26, 2021. Under the Court’s August 5, 2021 stipulated order, those motions have been continued, and the case stayed in its entirety, pending the parties’ October 21, 2021 mediation. The parties will update the Court by November 4, 2021 about the status of settlement discussion and the need, if any, to continue the stay. Apollo believes the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

In March 2020, Frank Funds, which claims to be a former shareholder of MPM Holdings, Inc. (“MPM”), commenced an action in the Delaware Court of Chancery, captioned Frank Funds v. Apollo Global Management, Inc., et al., C.A. No. 2020-0130, against AGM Inc., certain former MPM directors (including three Apollo officers and employees), and members of the consortium that acquired MPM in a May 2019 merger. The complaint asserts, on behalf of a putative class of former MPM shareholders, a claim against Apollo for breach of its fiduciary duties as MPM’s alleged controlling shareholder in connection with the May 2019 merger in which a consortium acquired MPM. Frank Funds seeks unspecified compensatory damages. Apollo believes the claims in this action are without merit. On July 1, 2020, Apollo moved to dismiss the complaint; briefing on that motion did not occur because the complaint was superseded, as described herein. On July 23, 2019, a group of former MPM shareholders filed an appraisal petition in Delaware Chancery Court seeking the fair value of their MPM shares that were purchased through MPM’s May 15, 2019 merger with a consortium of buyers, in an action captioned In re Appraisal of MPM Holdings, Inc., C.A. No. 2019-0519 (Del. Ch.). While Apollo was not a party to the appraisal action, it was served a document subpoena on October 22, 2019, to which it responded. On June 3, 2020, petitioners moved for leave to file a verified amended appraisal petition and class-action complaint that included claims for breach of fiduciary duty and/or aiding and abetting breaches of fiduciary duty against AGM Inc., the Apollo-affiliated fund that owned MPM’s shares before the merger, certain former MPM directors (including three Apollo employees), and members of the consortium that acquired MPM, based on alleged actions related to the May 2019 merger. The petitioners also sought to consolidate their appraisal proceeding with the Frank Funds action, and notified the Delaware Chancery Court via letter on September 23, 2020, that they had reached an agreement in principle with Frank Funds to consolidate the two cases. On November 13, 2020, the Chancery Court granted the parties’ stipulated order to consolidate the two matters, and on December 21, 2020, the Chancery Court granted petitioners’ motion for leave to file the proposed amended complaint. This new consolidated action is captioned In Re MPM Holdings Inc. Appraisal and Stockholder Litigation, C.A. No. 2019-0519 (Del Ch.). Defendants filed motions to dismiss the amended complaint on February 19, 2021, and the motions were fully briefed on July 26, 2021. A hearing on defendants’ motions to dismiss is set for January 13, 2022. Apollo believes the claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

On May 29, 2020, plaintiff Vrajeshkumar Patel filed a putative stockholder derivative and class action complaint in the Delaware Court of Chancery against Talos Energy, Inc. (“Talos”), all of the members of Talos’s board of directors (including two Apollo partners), Riverstone Holdings, LLC (“Riverstone”), AGM Inc., and Guggenheim Securities, LLC in connection with the acquisition of certain assets from Castex Energy 2014, LLC and ILX Holdings, LLC in February 2020. The complaint asserts, on behalf of a putative class of shareholders and Talos, direct and derivative claims against Apollo, Riverstone, and the individual defendants for breach of their fiduciary duties. The plaintiff alleges that Apollo and Riverstone comprise a controlling shareholder group. The complaint seeks, among other relief, class certification and unspecified money damages. On August 4, 2020, the defendants filed motions to dismiss the complaint in its entirety. The motion was fully briefed and oral argument was held on February 19, 2021. On May 17, 2021, Vice Chancellor Zurn sent a letter to counsel ordering that the Riverstone funds and Apollo funds that hold the relevant Talos stock be joined as necessary parties. The parties filed a stipulation, which was entered by the court on June 7, 2021, adding Riverstone Talos Energy Equityco LLC, Riverstone Talos Energy Debtco LLC, Apollo Talos Holdings, L.P., and AP Talos Energy Debtco LLC as defendants in the action. These parties adopted the arguments previously advanced by the Riverstone and Apollo defendants, and did not engage in any separate briefing or argument. On September 30, 2021, Vice Chancellor Zurn dismissed the complaint in its entirety against all defendants. 

On August 4, 2020, a putative class action complaint was filed in the United States District Court for the District of Nevada against PlayAGS Inc. (“PlayAGS”), all of the members of PlayAGS’s board of directors (including three directors who are affiliated with Apollo), certain underwriters of PlayAGS (including Apollo Global Securities, LLC), as well as AGM Inc., Apollo Investment Fund VIII, L.P., Apollo Gaming Holdings, L.P., and Apollo Gaming Voteco, LLC (these last four parties, together, the “Apollo Defendants”). The complaint asserts claims arising under the Securities Act of 1933 in connection with certain secondary offerings of PlayAGS stock conducted in August 2018 and March 2019, alleging that the registration statements issued in connection with those offerings did not fully disclose certain business challenges facing PlayAGS. Such claims are asserted against all defendants, including Apollo Global Securities, LLC and the Apollo Defendants, as well as all directors (including the directors affiliated with Apollo). The complaint further asserts a control person claim under Section 20(a) of the Securities Exchange Act of 1934 against the Apollo Defendants and the director defendants (including the directors affiliated with Apollo), alleging that the Apollo Defendants and the director defendants were responsible for certain misstatements and omissions by PlayAGS about its business during a putative class period from May 3, 2018 through August 7, 2019. Plaintiffs filed a consolidated amended complaint on January 21, 2021, and they filed a further amended complaint on March 25, 2021. On May 24, 2021, the Apollo Defendants filed a motion to dismiss the complaint in its entirety. Plaintiffs opposed this motion on July 23, 2021. The Apollo Defendants’ filed their reply on September 13, 2021. Apollo believes the

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

claims in this action are without merit. Because this action is in the early stages, no reasonable estimate of possible loss, if any, can be made at this time.

On October 19, 2021, a purported stockholder of AGM Inc. filed a complaint against AGM Inc. in the Court of Chancery of the State of Delaware seeking the disclosure of certain AGM Inc. books and records pursuant to Section 220 of the Delaware General Corporation Law. The complaint alleges that the stockholder seeks to investigate (a) whether wrongdoing or mismanagement occurred in connection with the decision of the AGM Inc. board of directors to pay, in connection with the elimination of the AGM Inc. Up-C structure, the members of AP Professional Holdings, L.P. (including the Co-Founders) a payment of cash equal to $3.66 per AOG Unit held, which the complaint characterizes as providing $640 million for “Tax Receivable Agreement” assets that the stockholder alleges are worth nothing; (b) the independence and disinterestedness of AGM Inc. directors and/or officers; and (c) potential damages. To the extent the complaint suggests that the AGM Inc. board of directors committed any wrongdoing or mismanagement in connection with the decision cited above, Apollo believes that any such claims would lack merit.

Commitments and Contingencies—Other long-term obligations relate to payments with respect to certain consulting agreements entered into by Apollo Investment Consulting LLC, a subsidiary of Apollo, as well as long-term service contracts. A significant portion of these costs are reimbursable by funds or portfolio companies. As of September 30, 2021, fixed and determinable payments due in connection with these obligations were as follows:

	Remaining 2021		2022		2023		2024		2025		Thereafter		Total
Other long-term obligations	$	14,441	$	13,626	$	1,972	$	801	$	695	$	695	$	32,230

Contingent Obligations—Performance allocations with respect to certain funds are subject to reversal in the event of future losses to the extent of the cumulative revenues recognized in income to date. If all of the existing investments became worthless, the amount of cumulative revenues that have been recognized by Apollo through September 30, 2021 and that would be reversed approximates $4.0 billion. Management views the possibility of all of the investments becoming worthless as remote. Performance allocations are affected by changes in the fair values of the underlying investments in the funds that Apollo manages. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, bond yields and industry trading multiples. Movements in these items can affect valuations quarter to quarter even if the underlying business fundamentals remain stable.

Additionally, at the end of the life of certain funds that the Company manages, there could be a payment due to a fund by the Company if the Company, as general partner, has received more performance allocations than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of each fund or as otherwise set forth in the respective limited partnership agreement of the fund. See note 14 to our condensed consolidated financial statements for further details regarding the general partner obligation.

Certain funds may not generate performance allocations as a result of unrealized and realized losses that are recognized in the current and prior reporting period. In certain cases, performance allocations will not be generated until additional unrealized and realized gains occur. Any appreciation would first cover the deductions for invested capital, unreturned organizational expenses, operating expenses, management fees and priority returns based on the terms of the respective fund agreements.

One of the Company’s subsidiaries, AGS, provides underwriting commitments in connection with securities offerings of related parties of Apollo, including portfolio companies of the funds Apollo manages, as well as third parties. As of September 30, 2021 and December 31, 2020, there were no open underwriting commitments.

As of September 30, 2021, one of the Company’s subsidiaries had unfunded contingent commitments of $23.8 million, to facilitate fundings at closing by the lead arrangers for syndicated term loans issued by portfolio companies of a fund managed by Apollo. The commitments expire on November 22, 2021. As of November 5, 2021, the unfunded commitments were approximately $1.7 million.

In connection with the launch of a non-traded business development company (“BDC”), the Company agreed to guarantee a commitment to purchase the underlying portfolio investment, in the event the BDC does not raise sufficient third party capital. The Company’s maximum commitment is $510 million, and is backstopped by an unconsolidated related party fund up to $500 million. The likelihood that performance under the guarantee arrangement will be required is determined to be remote.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

Merger Agreement Termination Fee—In connection with the merger with Athene Holding, the Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement, AGM Inc. will be obligated to pay AHL a cash termination fee of $81.9 million. See note 14 for further disclosure regarding the Merger Agreement and termination fee.

Contingent Consideration—In connection with the acquisition of Stone Tower in April 2012, the Company agreed to pay the former owners of Stone Tower a specified percentage of any future performance revenues earned from certain of the Stone Tower funds, CLOs, and strategic investment accounts. This contingent consideration liability was determined based on the present value of estimated future performance revenue payments, and is recorded in profit sharing payable in the condensed consolidated statements of financial condition. The fair value of the remaining contingent obligation was $119.6 million and $119.8 million as of September 30, 2021 and December 31, 2020, respectively.

The contingent consideration obligations will be remeasured to fair value at each reporting period until the obligations are satisfied and are characterized as Level III liabilities. The changes in the fair value of the contingent consideration obligations is reflected in profit sharing expense in the condensed consolidated statements of operations. See note 6 for further information regarding fair value measurements.

16. SEGMENT REPORTING

Apollo conducts its business primarily in the United States through three reportable segments: credit, private equity and real assets. Segment information is utilized by our chief operating decision maker to assess performance and to allocate resources. These segments were established based on the nature of investment activities in each underlying fund, including the specific type of investment made and the level of control over the investment.

The performance is measured by the Company’s chief operating decision maker on an unconsolidated basis because management makes operating decisions and assesses the performance of each of Apollo’s business segments based on financial and operating metrics and data that exclude the effects of consolidation of any of the affiliated funds.

Segment Distributable Earnings

Segment Distributable Earnings, or “Segment DE”, is the key performance measure used by management in evaluating the performance of Apollo’s credit, private equity and real assets segments. Management believes the components of Segment DE, such as the amount of management fees, advisory and transaction fees and realized performance fees, are indicative of the Company’s performance. Management uses Segment DE 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;

•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 stockholders by providing such individuals a profit sharing interest in the performance fees 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; and

•Decisions related to the amount of earnings available for dividends to Class A Common Stockholders, holders of RSUs that participate in dividends and holders of AOG Units that participate in dividends.

Segment DE is a measure of profitability and has certain limitations in that it does not take into account certain items included under U.S. GAAP. Segment DE represents the amount of Apollo’s net realized earnings, excluding the effects of the consolidation of any of the related funds and SPACs, taxes and related payables, transaction-related charges and any acquisitions. Transaction-related charges includes equity-based compensation charges, the amortization of intangible assets, contingent consideration, and certain other charges associated with acquisitions, and restructuring charges. In addition, Segment

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

DE excludes non-cash revenue and expense related to equity awards granted by unconsolidated related parties to employees of the Company, compensation and administrative related expense reimbursements, as well as the assets, liabilities and operating results of the funds and variable interest entities that are included in the condensed consolidated financial statements. Segment DE also excludes impacts of the remeasurement of the tax receivable agreement liability recorded in other income, which arises from changes in the associated deferred tax balance.

Segment DE may not be comparable to similarly titled measures used by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. We use Segment DE as a measure of operating performance, not as a measure of liquidity. Segment DE should not be considered in isolation or as a substitute for net income or other income data prepared in accordance with U.S. GAAP. The use of Segment DE without consideration of related U.S. GAAP measures is not adequate due to the adjustments described above. Management compensates for these limitations by using Segment DE as a supplemental measure to U.S. GAAP results, to provide a more complete understanding of our performance as management measures it. A reconciliation of Segment DE to its most directly comparable U.S. GAAP measure of income (loss) before income tax provision can be found in this footnote.

Fee Related Earnings

Fee Related Earnings (“FRE”) is derived from our segment reported results and refers to a component of Segment DE that is used as a supplemental performance measure to assess whether revenues that we believe are generally more stable and predictable in nature, primarily consisting of management fees, are sufficient to cover associated operating expenses and generate profits. FRE is the sum across all segments of (i) management fees, (ii) advisory and transaction fees, (iii) performance fees related to business development companies, Redding Ridge Holdings LP (“Redding Ridge Holdings”), an affiliate of Redding Ridge, and MidCap and (iv) other income, net, less (x) salary, bonus and benefits, excluding equity-based compensation, (y) other associated operating expenses and (z) non-controlling interests in the management companies of certain funds the Company manages.

The following tables present financial data for Apollo’s reportable segments.

	As of and for the Three Months Ended September 30, 2021
	Credit Segment		Private Equity Segment		Real Assets Segment		Total Reportable Segments
Management fees	$	278,928	$	119,716	$	67,374	$	466,018
Advisory and transaction fees, net	7,648		55,797		1,632		65,077
Performance fees(1)	19,856		—		—		19,856
Fee Related Revenues	306,432		175,513		69,006		550,951
Salary, bonus and benefits	(72,503)		(62,869)		(29,637)		(165,009)
General, administrative and other	(38,084)		(31,548)		(14,879)		(84,511)
Placement fees	(594)		(188)		—		(782)
Fee Related Expenses	(111,181)		(94,605)		(44,516)		(250,302)
Other income (loss), net of Non-Controlling Interest	(1,427)		109		733		(585)
Fee Related Earnings	193,824		81,017		25,223		300,064
Realized performance fees	23,264		565,738		19,128		608,130
Realized profit sharing expense	(13,054)		(273,897)		(8,935)		(295,886)
Net Realized Performance Fees	10,210		291,841		10,193		312,244
Realized principal investment income, net(2)	248,864		41,420		885		291,169
Net interest loss and other	(14,688)		(11,865)		(7,522)		(34,075)
Segment Distributable Earnings(3)	$	438,210	$	402,413	$	28,779	$	869,402
Total Assets(3)	$	6,451,728	$	5,081,183	$	923,362	$	12,456,273

(1)Represents certain performance fees related to business development companies, Redding Ridge Holdings and MidCap.

(2)Realized principal investment income, net includes dividends from our permanent capital vehicles, net of such amounts used to compensate employees.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

(3)Refer below for a reconciliation of total revenues, total expenses, other loss and total assets for Apollo’s total reportable segments to total consolidated revenues, total consolidated expenses, total consolidated other income (loss) and total assets.

	For the Three Months Ended September 30, 2020
	Credit Segment		Private Equity Segment		Real Assets Segment		Total Reportable Segments
Management fees	$	246,159	$	128,446	$	51,847	$	426,452
Advisory and transaction fees, net	51,376		20,108		878		72,362
Performance fees(1)	2,204		—		—		2,204
Fee Related Revenues	299,739		148,554		52,725		501,018
Salary, bonus and benefits	(61,975)		(53,451)		(29,513)		(144,939)
General, administrative and other	(40,367)		(25,099)		(11,869)		(77,335)
Placement fees	(425)		(188)		—		(613)
Fee Related Expenses	(102,767)		(78,738)		(41,382)		(222,887)
Other income (loss), net of Non-Controlling Interest	(780)		23		59		(698)
Fee Related Earnings	196,192		69,839		11,402		277,433
Realized performance fees	7,614		2,025		7,806		17,445
Realized profit sharing expense	(7,614)		(2,025)		(7,806)		(17,445)
Net Realized Performance Fees	—		—		—		—
Realized principal investment income, net(2)	928		1,598		356		2,882
Net interest loss and other	(14,010)		(14,580)		(6,216)		(34,806)
Segment Distributable Earnings (3)	$	183,110	$	56,857	$	5,542	$	245,509

(1)Represents certain performance fees related to business development companies and Redding Ridge Holdings and Midcap.

(2)Realized principal investment income, net includes dividends from our permanent capital vehicles, net of such amounts used to compensate employees.

(3)Refer below for a reconciliation of total revenues, total expenses and other income (loss) for Apollo’s total reportable segments to total consolidated revenues, total consolidated expenses and total consolidated other income (loss) and total assets.

     The following table reconciles total consolidated revenues to total revenues for Apollo’s reportable segments:

	For the Three Months Ended September 30,
	2021		2020
Total Consolidated Revenues	$	1,079,298	$	1,018,274
Equity awards granted by unconsolidated related parties, reimbursable expenses and other(1)	(34,940)		(27,479)
Adjustments related to consolidated funds and VIEs(1)	33,176		22,084
Performance fees(2)	(449,992)		(457,754)
Principal investment income	(76,591)		(54,107)
Total Fee Related Revenues	550,951		501,018
Realized performance fees	608,130		17,445
Realized principal investment income, net and other	291,169		1,198
Total Segment Revenues	$	1,450,250	$	519,661

(1)Represents advisory fees, management fees and performance fees earned from consolidated VIEs which are eliminated in consolidation. Includes non-cash revenues related to equity awards granted by unconsolidated related parties to employees of the Company and certain compensation and administrative related expense reimbursements.

(2)Excludes certain performance fees from business development companies, Redding Ridge Holdings and MidCap.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table reconciles total consolidated expenses to total expenses for Apollo’s reportable segments:

	For the Three Months Ended September 30,
	2021		2020
Total Consolidated Expenses	$	648,907	$	531,055
Equity awards granted by unconsolidated related parties, reimbursable expenses and other(1)	(39,691)		(26,339)
Reclassification of interest expenses	(34,820)		(34,889)
Transaction-related charges, net(1)	(13,693)		(10,835)
Charges associated with corporate conversion	—		(2,829)
Equity-based compensation	(19,538)		(17,962)
Total profit sharing expense(2)	(286,626)		(213,494)
Dividend-related compensation expense	(4,237)		(1,820)
Total Fee Related Expenses	250,302		222,887
Realized profit sharing expense	295,886		17,445
Total Segment Expenses	$	546,188	$	240,332

(1)Represents the addition of expenses of consolidated funds and VIEs, transaction-related charges, non-cash expenses related to equity awards granted by unconsolidated related parties to employees of the Company and certain compensation and administrative expenses. Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions, and restructuring charges.

(2)Includes unrealized profit sharing expense, realized profit sharing expense and equity-based profit sharing expense and other.

The following table reconciles total consolidated other income (loss) to total other loss for Apollo’s reportable segments:

	For the Three Months Ended September 30,
	2021		2020
Total Consolidated Other Income	$	302,460	$	278,237
Adjustments related to consolidated funds and VIEs(1)	(158,487)		(121,425)
Net (gains) losses from investment activities	(156,460)		(144,839)
Interest income and other, net of Non-Controlling Interest	11,902		(12,671)
Other Loss, net of Non-Controlling Interest	(585)		(698)
Net interest loss and other	(34,075)		(33,122)
Total Segment Other Loss	$	(34,660)	$	(33,820)

(1)Represents the addition of other income of consolidated funds and VIEs.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table presents the reconciliation of income before income tax provision reported in the condensed consolidated statements of operations to Segment Distributable Earnings:

	For the Three Months Ended September 30,
	2021		2020
Income before income tax (provision) benefit	$	732,851	$	765,456
Transaction-related charges(1)	13,693		10,835
Charges associated with corporate conversion	—		2,829
Net income attributable to Non-Controlling Interests in consolidated entities	(112,569)		(100,021)
Unrealized performance fees	159,044		(440,310)
Unrealized profit sharing expense	(40,991)		168,368
Equity-based profit sharing expense and other(2)	31,731		27,681
Equity-based compensation	19,538		17,962
Unrealized principal investment (income) loss	218,816		(49,406)
Unrealized net (gains) losses from investment activities and other	(152,711)		(157,885)
Segment Distributable Earnings	$	869,402	$	245,509

(1)    Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions, and restructuring charges.

(2)    Equity-based profit sharing expense and other includes certain profit sharing arrangements in which a portion of performance fees distributed to the general partner are allocated by issuance of equity-based awards, rather than cash, to employees of Apollo. Equity-based profit sharing expense and other also includes non-cash expenses related to equity awards granted by unconsolidated related parties to employees of Apollo.

	As of and for the Nine Months Ended September 30, 2021
	Credit Segment		Private Equity Segment		Real Assets Segment		Total Reportable Segments
Management fees	$	820,266	$	365,090	$	191,567	$	1,376,923
Advisory and transaction fees, net	95,535		104,175		4,097		203,807
Performance fees(1)	36,702		—		—		36,702
Fee Related Revenues	952,503		469,265		195,664		1,617,432
Salary, bonus and benefits	(217,181)		(180,474)		(88,883)		(486,538)
General, administrative and other	(118,303)		(80,223)		(41,224)		(239,750)
Placement fees	(1,660)		(188)		—		(1,848)
Fee Related Expenses	(337,144)		(260,885)		(130,107)		(728,136)
Other income (loss), net of Non-Controlling Interest	(2,976)		1,528		482		(966)
Fee Related Earnings	612,383		209,908		66,039		888,330
Realized performance fees	141,424		998,452		43,764		1,183,640
Realized profit sharing expense	(92,978)		(484,678)		(22,539)		(600,195)
Net Realized Performance Fees	48,446		513,774		21,225		583,445
Realized principal investment income, net(2)	253,299		130,225		4,420		387,944
Net interest loss and other	(40,342)		(39,101)		(25,198)		(104,641)
Segment Distributable Earnings(3)	$	873,786	$	814,806	$	66,486	$	1,755,078
Total Assets(3)	$	6,451,728	$	5,081,183	$	923,362	$	12,456,273

(1)Represents certain performance fees related to business development companies, Redding Ridge Holdings and MidCap.

(2)Realized principal investment income, net includes dividends from our permanent capital vehicles, net of such amounts used to compensate employees.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

(3)Refer below for a reconciliation of total revenues, total expenses, other loss and total assets for Apollo’s total reportable segments to total consolidated revenues, total consolidated expenses, total consolidated other income (loss) and total assets.

	For the Nine Months Ended September 30, 2020
	Credit Segment		Private Equity Segment		Real Assets Segment		Total Reportable Segments
Management fees	$	679,109	$	381,306	$	150,227	$	1,210,642
Advisory and transaction fees, net	80,399		85,253		5,191		170,843
Performance fees(1)	8,048		—		—		8,048
Fee Related Revenues	767,556		466,559		155,418		1,389,533
Salary, bonus and benefits	(171,789)		(149,133)		(83,037)		(403,959)
General, administrative and other	(112,991)		(68,863)		(35,637)		(217,491)
Placement fees	(1,089)		(295)		—		(1,384)
Fee Related Expenses	(285,869)		(218,291)		(118,674)		(622,834)
Other income (loss), net of Non-Controlling Interest	(2,167)		48		154		(1,965)
Fee Related Earnings	479,520		248,316		36,898		764,734
Realized performance fees	37,834		6,717		49,477		94,028
Realized profit sharing expense	(37,530)		(7,021)		(49,477)		(94,028)
Net Realized Performance Fees	304		(304)		—		—
Realized principal investment income, net(2)	4,112		5,544		4,028		13,684
Net interest loss and other	(42,981)		(41,940)		(16,069)		(100,990)
Segment Distributable Earnings (3)	$	440,955	$	211,616	$	24,857	$	677,428

(1)Represents certain performance fees related to business development companies, Redding Ridge Holdings and Midcap.

(2)Realized principal investment income, net includes dividends from our permanent capital vehicles, net of such amounts used to compensate employees.

(3)Refer below for a reconciliation of total revenues, total expenses and other income (loss) for Apollo’s total reportable segments to total consolidated revenues, total consolidated expenses and total consolidated other income (loss) and total assets.

     The following table reconciles total consolidated revenues to total revenues for Apollo’s reportable segments:

	For the Nine Months Ended September 30,
	2021		2020
Total Consolidated Revenues	$	4,756,323	$	1,057,523
Equity awards granted by unconsolidated related parties, reimbursable expenses and other(1)	(102,614)		(88,167)
Adjustments related to consolidated funds and VIEs(1)	108,209		36,798
Performance fees(2)	(2,595,752)		358,188
Principal investment (income) loss	(548,734)		25,191
Total Fee Related Revenues	1,617,432		1,389,533
Realized performance fees	1,183,640		94,028
Realized principal investment income, net and other	387,944		10,315
Total Segment Revenues	$	3,189,016	$	1,493,876

(1)Represents advisory fees, management fees and performance fees earned from consolidated VIEs which are eliminated in consolidation. Includes non-cash revenues related to equity awards granted by unconsolidated related parties to employees of the Company and certain compensation and administrative related expense reimbursements.

(2)Excludes certain performance fees from business development companies, Redding Ridge Holdings and MidCap.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table reconciles total consolidated expenses to total expenses for Apollo’s reportable segments:

	For the Nine Months Ended September 30,
	2021		2020
Total Consolidated Expenses	$	2,417,438	$	905,398
Equity awards granted by unconsolidated related parties, reimbursable expenses and other(1)	(117,179)		(80,212)
Reclassification of interest expenses	(104,433)		(98,422)
Transaction-related charges, net(1)	(65,359)		(21,546)
Charges associated with corporate conversion (2)	—		(3,893)
Equity-based compensation	(55,187)		(49,779)
Total profit sharing expense(3)	(1,339,932)		(22,532)
Dividend-related compensation expense	(7,212)		(6,180)
Total Fee Related Expenses	728,136		622,834
Realized profit sharing expense	600,195		94,028
Total Segment Expenses	$	1,328,331	$	716,862

(1)Represents the addition of expenses of consolidated funds and VIEs, transaction-related charges, non-cash expenses related to equity awards granted by unconsolidated related parties to employees of the Company and certain compensation and administrative expenses. Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions, and restructuring charges.

(2)Represents expenses incurred in relation to the conversion to a corporation.

(3)Includes unrealized profit sharing expense, realized profit sharing expense and equity-based profit sharing expense and other.

The following table reconciles total consolidated other income (loss) to total other loss for Apollo’s reportable segments:

	For the Nine Months Ended September 30,
	2021		2020
Total Consolidated Other Income (Loss)	$	1,815,226	$	(826,957)
Adjustments related to consolidated funds and VIEs(1)	(413,550)		(11,157)
Loss from change in tax receivable agreement liability	(1,941)		—
Net (gains) losses from investment activities	(1,425,360)		849,293
Interest income and other, net of Non-Controlling Interest	24,659		(13,144)
Other Income (Loss), net of Non-Controlling Interest	(966)		(1,965)
Net interest loss and other	(104,641)		(97,621)
Total Segment Other Loss	$	(105,607)	$	(99,586)

(1)Represents the addition of other income of consolidated funds and VIEs.

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APOLLO GLOBAL MANAGEMENT, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands, except share data, except where noted)

The following table presents the reconciliation of income before income tax provision reported in the condensed consolidated statements of operations to Segment Distributable Earnings:

	For the Nine Months Ended September 30,
	2021		2020
Income (Loss) before income tax (provision) benefit	$	4,154,111	$	(674,832)
Transaction-related charges(1)	65,359		21,546
Charges associated with corporate conversion(2)	—		3,893
Loss from change in tax receivable agreement liability	(1,941)		—
Net (income) loss attributable to Non-Controlling Interests in consolidated entities	(299,423)		23,320
Unrealized performance fees	(1,411,205)		452,215
Unrealized profit sharing expense	646,142		(172,128)
Equity-based profit sharing expense and other(3)	93,595		100,632
Equity-based compensation	55,187		49,779
Unrealized principal investment (income) loss	(153,577)		45,054
Unrealized net (gains) losses from investment activities and other	(1,393,170)		827,949
Segment Distributable Earnings	$	1,755,078	$	677,428

(1)    Transaction-related charges include equity-based compensation charges, the amortization of intangible assets, contingent consideration and certain other charges associated with acquisitions, and restructuring charges.

(2)    Represents expenses incurred in relation to the conversion to a corporation.

(3)    Equity-based profit sharing expense and other includes certain profit sharing arrangements in which a portion of performance fees distributed to the general partner are allocated by issuance of equity-based awards, rather than cash, to employees of Apollo. Equity-based profit sharing expense and other also includes non-cash expenses related to equity awards granted by unconsolidated related parties to employees of Apollo.

The following table presents the reconciliation of Apollo’s total reportable segment assets to total assets:

	As of September 30, 2021		As of December 31, 2020
Total reportable segment assets	$	12,456,273	$	8,681,467
Adjustments(1)	15,834,369		14,987,617
Total assets	$	28,290,642	$	23,669,084

(1)    Represents the addition of assets of consolidated funds and VIEs and consolidation elimination adjustments.

17. SUBSEQUENT EVENTS

Dividends

On November 2, 2021, the Company declared a cash dividend of $0.50 per share of Class A Common Stock, which will be paid on November 30, 2021 to holders of record at the close of business on November 19, 2021.

On November 2, 2021, the Company declared a cash dividend of $0.398438 per share of Series A Preferred Stock and Series B Preferred Stock, which will be paid on December 15, 2021 to holders of record at the close of business on December 1, 2021.

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ITEM 1A. UNAUDITED SUPPLEMENTAL PRESENTATION OF STATEMENTS OF FINANCIAL CONDITION

APOLLO GLOBAL MANAGEMENT, INC.

CONSOLIDATING STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(dollars in thousands, except share data)

	As of September 30, 2021
	Apollo Global Management, Inc. and Consolidated Subsidiaries		Consolidated Funds and VIEs		Eliminations		Consolidated
Assets:
Cash and cash equivalents	$	2,086,845	$	3,352	$	—	$	2,090,197
Restricted cash and cash equivalents	17,687		1,035,095		—		1,052,782
U.S. Treasury securities, at fair value	—		817,226		—		817,226
Investments	8,278,685		457		(292,536)		7,986,606
Assets of consolidated variable interest entities:
Cash and cash equivalents	—		672,619		—		672,619
Investments, at fair value	—		13,568,170		(380,042)		13,188,128
Other assets	—		500,595		(481)		500,114
Incentive fees receivable	4,124		—		—		4,124
Due from related parties	612,004		(4,704)		(88,081)		519,219
Deferred tax assets, net	466,899		—		—		466,899
Other assets	493,820		3,193		(494)		496,519
Lease assets	379,251		—		—		379,251
Goodwill	116,958		—		—		116,958
Total Assets	$	12,456,273	$	16,596,003	$	(761,634)	$	28,290,642
Liabilities, Redeemable non-controlling interests and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	205,998	$	3,319	$	(5)	$	209,312
Accrued compensation and benefits	239,242		—		—		239,242
Deferred revenue	175,204		—		—		175,204
Due to related parties	636,927		10,800		(13,257)		634,470
Profit sharing payable	1,528,662		—		—		1,528,662
Debt	3,153,181		—		—		3,153,181
Liabilities of consolidated variable interest entities:
Debt, at fair value	—		8,170,997		(148,250)		8,022,747
Notes payable	—		2,600,639		(102,505)		2,498,134
Other liabilities	—		761,732		(58,632)		703,100
Due to related parties	—		31,815		(31,815)		—
Other liabilities	375,125		119,512		(19,675)		474,962
Lease liabilities	427,529		—		—		427,529
Total Liabilities	6,741,868		11,698,814		(374,139)		18,066,543
Redeemable non-controlling interests:
Redeemable non-controlling interests	—		1,742,302		7,752		1,750,054
Stockholders’ Equity:
Apollo Global Management, Inc. Stockholders’ Equity:
Series A Preferred Stock	264,398		—		—		264,398
Series B Preferred Stock	289,815		—		—		289,815
Additional paid in capital	1,067,493		(78,389)		28,835		1,017,939
Retained earnings (accumulated deficit)	1,081,842		425,937		(428,923)		1,078,856
Accumulated other comprehensive income (loss)	(2,967)		(4,976)		4,841		(3,102)
Total Apollo Global Management, Inc. Stockholders’ Equity	2,700,581		342,572		(395,247)		2,647,906
Non-Controlling Interests in consolidated entities	6,532		2,812,315		—		2,818,847
Non-Controlling Interests in Apollo Operating Group	3,007,292		—		—		3,007,292
Total Stockholders’ Equity	5,714,405		3,154,887		(395,247)		8,474,045
Total Liabilities, Redeemable non-controlling interests and Stockholders’ Equity	$	12,456,273	$	16,596,003	$	(761,634)	$	28,290,642

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APOLLO GLOBAL MANAGEMENT, INC.

CONSOLIDATING STATEMENTS OF FINANCIAL CONDITION (Unaudited)

(dollars in thousands, except share data)

	As of December 31, 2020
	Apollo Global Management, Inc. and Consolidated Subsidiaries		Consolidated Funds and VIEs		Eliminations		Consolidated
Assets:
Cash and cash equivalents	$	1,555,252	$	265	$	—	$	1,555,517
Restricted cash	17,708		—		—		17,708
U.S. Treasury securities, at fair value	—		816,985		—		816,985
Investments	5,244,465		334		(249,388)		4,995,411
Assets of consolidated variable interest entities:
Cash and cash equivalents	—		893,306		—		893,306
Investments, at fair value	—		13,878,603		(562,587)		13,316,016
Other assets	—		290,264		—		290,264
Incentive fees receivable	5,231		—		—		5,231
Due from related parties	543,169		(4)		(80,782)		462,383
Deferred tax assets, net	539,244		—		—		539,244
Other assets	364,342		1,118		(497)		364,963
Lease assets	295,098		—		—		295,098
Goodwill	116,958		—		—		116,958
Total Assets	$	8,681,467	$	15,880,871	$	(893,254)	$	23,669,084
Liabilities, Redeemable non-controlling interests and Stockholders’ Equity
Liabilities:
Accounts payable and accrued expenses	$	119,784	$	198	$	—	$	119,982
Accrued compensation and benefits	82,343		—		—		82,343
Deferred revenue	30,369		—		—		30,369
Due to related parties	608,455		1,871		(1,857)		608,469
Profit sharing payable	842,677		—		—		842,677
Debt	3,155,221		—		—		3,155,221
Liabilities of consolidated variable interest entities:
Debt, at fair value	—		9,022,414		(361,899)		8,660,515
Notes payable	—		2,574,879		(102,908)		2,471,971
Other liabilities	—		836,181		(63,136)		773,045
Due to related parties	—		23,898		(23,898)		—
Other liabilities	267,023		28,589		—		295,612
Lease liabilities	332,915		—		—		332,915
Total Liabilities	5,438,787		12,488,030		(553,698)		17,373,119
Redeemable non-controlling interests:
Redeemable non-controlling interests	—		782,702		—		782,702
Stockholders’ Equity:
Apollo Global Management, Inc. Stockholders’ Equity:
Series A Preferred stock	264,398		—		—		264,398
Series B Preferred stock	289,815		—		—		289,815
Additional paid in capital	877,173		(12,928)		12,928		877,173
Retained earnings (accumulated deficit)	—		334,998		(334,998)		—
Accumulated other comprehensive income (loss)	(2,044)		17,459		(17,486)		(2,071)
Total Apollo Global Management, Inc. Stockholders’ Equity	1,429,342		339,529		(339,556)		1,429,315
Non-Controlling Interests in consolidated entities	5,118		2,270,610		—		2,275,728
Non-Controlling Interests in Apollo Operating Group	1,808,220		—		—		1,808,220
Total Stockholders’ Equity	3,242,680		2,610,139		(339,556)		5,513,263
Total Liabilities, Redeemable non-controlling interests and Stockholders’ Equity	$	8,681,467	$	15,880,871	$	(893,254)	$	23,669,084

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with Apollo Global Management, Inc.’s condensed consolidated financial statements and the related notes included within this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. Actual results and the timing of events may differ significantly from those expressed or implied in such forward-looking statements due to a number of factors, including those in the section entitled “Risk Factors” in the 2020 Annual Report and Quarterly Report on Form 10-Q filed with the SEC on May 10, 2021. The highlights listed below have had significant effects on many items within our condensed consolidated financial statements and affect the comparison of the current period’s activity with those of prior periods.

General

Our Businesses

Founded in 1990, Apollo is a high-growth, global alternative asset manager. We are a contrarian, value-oriented asset manager in credit, private equity and real assets with significant distressed expertise and a flexible mandate in the majority of our funds which enables our funds to invest opportunistically across a company’s capital structure. We raise, invest and manage funds on behalf of some of the world’s most prominent pension, endowment and sovereign wealth funds as well as other institutional and individual investors. Apollo is led by Joshua Harris and Marc Rowan, who have worked together for more than 35 years and lead a team of 2,035 employees, including 631 investment professionals, as of September 30, 2021.

Apollo conducts its business primarily in the United States through the following three reportable segments:

(i)Credit—primarily invests in non-control corporate and structured debt instruments including performing, stressed and distressed instruments across the capital structure;

(ii)Private equity—primarily invests in control equity and related debt instruments, convertible securities and distressed debt instruments; and

(iii)Real assets—primarily invests in (i) real estate equity and infrastructure equity for the acquisition and recapitalization of real estate and infrastructure assets, portfolios, platforms and operating companies, (ii) real estate and infrastructure debt including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities and (iii) European performing and non-performing loans, and unsecured consumer loans.

These business segments are differentiated based on the varying investment strategies. The performance is measured by management on an unconsolidated basis because management makes operating decisions and assesses the performance of each of Apollo’s business segments based on financial and operating metrics and data that exclude the effects of consolidation of any of the managed funds.

Our financial results vary since performance fees, which generally constitute a large portion of the income we receive from the funds that we manage, as well as the transaction and advisory fees that we receive, can vary significantly from quarter to quarter and year to year. As a result, we emphasize long-term financial growth and profitability to manage our business.

In addition, the growth in our Fee-Generating AUM during the last year has primarily been in our credit segment driven by continued growth in traditional funds and managed accounts as well as growth in asset management services to the insurance industry and in performing credit products. The average management fee rate for these new credit products is at market rates for such products and in certain cases is below our historical rates. Also, due to the complexity of these new product offerings, the Company has incurred and will continue to incur additional costs associated with managing these products. To date, these additional costs have been offset by realized economies of scale and ongoing cost management.

As of September 30, 2021, we had total AUM of $481.1 billion across all of our businesses. Approximately 89% of our total AUM was in funds with a contractual life at inception of five years or more, and 60% of such AUM was in permanent capital vehicles.

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The following table presents the gross and net returns for Apollo’s credit segment by category type:

	Gross Returns		Net Returns
Category	For the Three Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021	For the Three Months Ended September 30, 2021	For the Nine Months Ended September 30, 2021
Corporate Credit	1.7%	6.4%	1.4%	5.4%
Structured Credit	2.9%	13.3%	2.5%	11.8%
Direct Origination	3.2%	12.7%	2.4%	9.9%

On December 31, 2017, Fund IX held its final closing, raising a total of $23.5 billion in third-party capital and approximately $1.2 billion of additional capital from Apollo and affiliated investors for total commitments of $24.7 billion. As of September 30, 2021, Fund IX had $11.4 billion of uncalled commitments remaining. On December 31, 2013, Fund VIII held a final closing raising a total of $17.5 billion in third-party capital and approximately $880 million of additional capital from Apollo and affiliated investors, and as of September 30, 2021, Fund VIII had $2.5 billion of uncalled commitments remaining. Additionally, Fund VII held a final closing in December 2008, raising a total of $14.7 billion, and as of September 30, 2021, Fund VII had $1.8 billion of uncalled commitments remaining. We have consistently produced attractive long-term investment returns in our traditional private equity funds, generating a 39% gross IRR and a 24% net IRR on a compound annual basis from inception through September 30, 2021. Apollo’s private equity fund appreciation was 4.8% and 40.0% for the three and nine months ended September 30, 2021, respectively.

For our real assets segment, there was a total gross return of 6.0% and 14.2% for the three and nine months ended September 30, 2021, respectively, which represents gross return for our real estate equity funds and their co-investment capital, the European principal finance funds, and infrastructure equity funds.

For further detail related to fund performance metrics across all of our businesses, see “—The Historical Investment Performance of Our Funds.”

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Holding Company Structure

The diagram below depicts our current organizational structure:

Note: The organizational structure chart above depicts a simplified version of the Apollo structure. It does not include all legal entities in the structure. Ownership percentages are as of November 3, 2021. As of November 3, 2021, there were 246,579,482 Class A shares, 1 Class B share and 1 Class C share issued and outstanding, and 157,065,879 AOG Units held by Holdings that are exchangeable for Class A shares on a one-for-one basis. In addition, as of November 3, 2021, Athene held 29,154,519 AOG Units that are non-voting equity interests of the Apollo Operating Group and are not exchangeable for Class A shares.

(1)As of November 3, 2021, the Class A shares represented 9.2% of the total voting power of the Class A shares, the Class B share and the Class C share, voting together as a single class, with respect to General Stockholder Matters. As of November 3, 2021, the Class A shares represented 56.9% of the total voting power of the Class A shares and the Class B share with respect to certain matters upon which they are entitled to vote pursuant to the certificate of incorporation of AGM Inc. (“COI”).

(2)Our Co-Founders own BRH Holdings GP, Ltd., which in turn holds our only outstanding Class B share. As of November 3, 2021, the Class B share represented 6.9% of the total voting power of the Class A shares, the Class B share and the Class C share, voting together as a single class, with respect to General Stockholder Matters, and a de minimus economic interest in AGM Inc. As of November 3, 2021, the Class B share represented 43% of the total voting power of the Class A shares and the Class B share with respect to certain matters upon which they are entitled to vote as a single class.

(3)Through BRH Holdings, L.P., our Co-Founders indirectly beneficially own through estate planning vehicles, limited partner interests in Holdings. Our Co-Founders’ economic interests are represented by their indirect beneficial ownership, through Holdings, of 32.5% of the limited partner interests in the Apollo Operating Group.

(4)Holdings owns 36.3% of the limited partner or limited liability company interests in each Apollo Operating Group entity. The AOG Units held by Holdings are exchangeable for Class A shares. Our Co-Founders, through their interests in BRH Holdings, L.P. and Holdings, beneficially own 32.5% of the AOG Units. Our Contributing Partners, through their interests in Holdings, beneficially own 3.8% of the AOG Units.

(5)BRH Holdings GP, Ltd. is the sole member of AGM Management, LLC, which in turns holds our only outstanding Class C share. The Class C share bestows to its holder certain management rights over AGM Inc. As of November 3, 2021, the Class C share represented 83.9% of the total voting power of the Class A shares, the Class B share and the Class C share, voting together as a single class, with respect to General Stockholder Matters, and a de minimus economic interest in AGM Inc.

(6)Represents 57% of the limited partner or limited liability company interests in each Apollo Operating Group entity, held through the intermediate holding companies. AGM Inc. also indirectly owns 100% of the general partner or managing member interests in each Apollo Operating Group entity.

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(7)Represents 6.7% of the limited partner or limited liability company interests in each Apollo Operating Group entity held by Athene Holding Ltd. and/or its affiliates. AOG Units held by Athene are non-voting equity interests of the Apollo Operating Group and are not exchangeable for Class A shares.

Each of the Apollo Operating Group entities holds interests in different businesses or entities organized in different jurisdictions.

Our structure is designed to accomplish a number of objectives, the most important of which are as follows:

•Historically, we were a holding company that was qualified as a partnership for U.S. federal income tax purposes. Our intermediate holding companies enabled us to maintain our partnership status and to meet the qualifying income exception. Effective September 5, 2019, Apollo Global Management, LLC converted from a Delaware limited liability company to a Delaware corporation named Apollo Global Management, Inc.

•We have historically used multiple management companies to segregate operations for business, financial and other reasons. Going forward, we may increase or decrease the number of our management companies, partnerships or other entities within the Apollo Operating Group based on our views regarding the appropriate balance between (a) administrative convenience and (b) continued business, financial, tax and other optimization.

On March 8, 2021, we announced that we entered into a binding governance term sheet with the Co-Founders. The term sheet sets forth a number of changes to our governance structure and a timeline for their implementation, including changes relating to:

• composition and size of our board of directors;

• Board committees, including to create a nominating and corporate governance committee, a compensation committee, and a new executive committee. The new executive committee will for the first year consist of at least three members, but no more than four members, including Jay Clayton, as the committee’s Chairman, Marc Rowan and Joshua Harris; and

• elimination of the Up-C structure – as promptly as practicable following the receipt of all required regulatory approvals:

• the single Class B share that is held by BRH Holdings GP, Ltd. will be converted into shares of Series I Preferred Stock of AGM Inc. equal in number to the outstanding AOG Units (other than those AOG Units held by the Company and Athene) and entitled to one vote per share on each matter properly presented to the stockholders of AGM Inc.;

• upon the issuance of the Series I Preferred Stock, the Co-Founders shall cause AGM Management, LLC to surrender to the Company the sole Class C share;

• on or prior to June 30, 2022, as designated by us, which date will coincide with the consummation of the transactions contemplated by the Merger Agreement, provided that if the transactions contemplated by the Merger Agreement have not been consummated by June 30, 2022, then the mandatory exchange date will be June 30, 2022 (such date, the “Mandatory Exchange Date”), a wholly-owned subsidiary of a newly formed holding company (“NewCo”) will merge with and into AGM Inc., with AGM Inc. to be the surviving company in the merger. Upon consummation of this merger, each holder of a share of Class A common stock will receive on a tax-free basis shares of Class A common stock of NewCo and will no longer hold any equity interests in the Company;

• on the Mandatory Exchange Date all AOG Units beneficially owned by each holder of AOG Units (other than those held by the Company and Athene) will be transferred to NewCo and one or more of its affiliates in a series of transactions in exchange for (i) such number of shares of Class A common stock of NewCo equal to the aggregate number of AOG Units beneficially owned by such AOG Unit owners as of immediately prior to the mandatory exchange (such AOG Units, the “Outstanding

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AOG Units”) and (ii) an aggregate amount in cash equal to the product of (a) number of Outstanding AOG Units multiplied by (b) $3.66, payable over a period of four years in equal quarterly installments (the “AOG Unit Payment”); provided, however, that in the event that we consummate the transactions contemplated by the Merger Agreement simultaneously with the mandatory exchange, the AOG Unit Payment will be payable over the period between the date on which the transactions contemplated by the Merger Agreement are consummated and the third anniversary of the Mandatory Exchange Date in equal quarterly installments (such transactions collectively, the “mandatory exchange”).

The term sheet also states that the tax receivable agreement will not be applicable for the mandatory exchange, but will remain in effect for any exchanges occurring prior to the Mandatory Exchange Date.

The parties to the term sheet agreed that, upon the surrender of the Class C share, the Company will provide each Co-Founder with certain stockholder rights set forth in a stockholder agreement, as provided in the term sheet.

Implementation of the provisions of the term sheet remains subject to regulatory and stockholder approvals, and there can be no certainty on the consummation or the timing of these changes.

Business Environment

As a global investment manager, we are affected by numerous factors, including the condition of financial markets and the economy. Price fluctuations within equity, credit, commodity, foreign exchange markets, as well as interest rates, which may be volatile and mixed across geographies, can significantly impact the valuation of our funds’ portfolio companies and related income we may recognize.

In the U.S., the S&P 500 Index increased by 0.2% during the third quarter of 2021, following an increase of 8.2% during the second quarter of 2021. Global equity markets depreciated during the quarter, with the MSCI All Country World ex USA Index decreasing 0.6% following an increase of 5.9% in the second quarter of 2021.

Conditions in the credit markets also have a significant impact on our business. Credit markets were positive in the third quarter of 2021, with the BofAML HY Master II Index increasing by 0.9%, while the S&P/LSTA Leveraged Loan Index increased by 1.0%. The U.S. 10-year Treasury yield increased during the quarter to 1.52%. The Federal Reserve kept the benchmark interest rate steady during the last twelve months at a target range of 0% to 0.25%.

Foreign exchange rates can materially impact the valuations of our investments and those of our funds that are denominated in currencies other than the U.S. dollar. Relative to the U.S. dollar, the Euro depreciated 2.4% during the quarter, after appreciating 1.1% in the second quarter of 2021, while the British pound depreciated 2.6% during the quarter, after appreciating 0.4% in the second quarter of 2021. The price of crude oil appreciated by 2.1% during the quarter, after appreciating by 24.2% during the second quarter of 2021.

In terms of economic conditions in the U.S., the Bureau of Economic Analysis reported real GDP increased at an annual rate of 2.0% in the third quarter of 2021, following an increase of 6.5% in the second quarter of 2021. As of October 2021, the International Monetary Fund estimated that the U.S. economy will expand by 6.0% in 2021 and 5.2% in 2022. The U.S. Bureau of Labor Statistics reported that the U.S. unemployment rate decreased to 4.8% as of September 30, 2021. In addition, the U.S. Bureau of Labor Statistics reported that the annual U.S. inflation rate was 5.4% as of September 30, 2021, continuing to be the highest rate since 2008 but relatively flat in comparison to the second quarter of 2021.

Regardless of the market or economic environment at any given time, Apollo relies on its contrarian, value-oriented approach to consistently invest capital on behalf of its fund investors by focusing on opportunities that management believes are often overlooked by other investors. As such, Apollo’s global integrated investment platform deployed $28.3 billion and $81.0 billion of capital through the funds it manages during the three and nine months ended September 30, 2021, respectively. Drawdown capital deployed was $7.4 billion and $16.7 billion during the three and nine months ended September 30, 2021, respectively. We believe Apollo’s expertise in credit and its focus on nine core industry sectors, combined with more than 31 years of investment experience, has allowed Apollo to respond quickly to changing environments. Apollo’s core industry sectors include chemicals, manufacturing and industrial, natural resources, consumer and retail, consumer services, business services, financial services, leisure, and media/telecom/technology. Apollo believes that these attributes have contributed to the success of its private equity funds investing in buyouts and credit opportunities during both expansionary and recessionary economic periods.

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In general, institutional investors continue to allocate capital towards alternative investment managers for more attractive risk-adjusted returns in a low interest rate environment, and we believe the business environment remains generally accommodative to raise larger successor funds, launch new products, and pursue attractive strategic growth opportunities, such as continuing to grow the assets of our permanent capital vehicles. As such, Apollo had $18.1 billion and $43.9 billion of capital inflows during the three and nine months ended September 30, 2021, respectively. Apollo returned $8.8 billion and $21.6 billion of capital and realized gains to the investors in the funds it manages during the three and nine months ended September 30, 2021, respectively.

On October 20, 2020, at a regularly scheduled meeting of AGM Inc.’s board of directors, Apollo’s former Chairman and Chief Executive Officer, Leon Black, requested that the conflicts committee of the board of directors (comprised of independent directors) retain outside counsel to conduct a thorough review of, and independently confirm, the information that Mr. Black has conveyed about his previous professional relationship with Mr. Jeffrey Epstein. The conflicts committee had retained Dechert LLP as outside counsel to conduct a thorough, independent review which included interviewing individuals and examining relevant documents.

On January 25, 2021, the Company announced that the conflicts committee of the board of directors had completed its previously announced independent review of Mr. Black’s previous professional relationship with Jeffrey Epstein and publicly released the review’s findings. The findings of the report are consistent with statements made by Mr. Black and Apollo regarding the prior relationship.

On January 25, 2021, the Company announced that, at a meeting of the executive committee of our board of directors on January 24, 2021, Mr. Black informed the executive committee members that he intends to retire from his position as Chief Executive Officer of the Company on or before July 31, 2021. Leon Black, Marc Rowan and Joshua Harris, on behalf of our Class C Stockholder, voted to appoint Mr. Rowan as our Chief Executive Officer to begin serving in such role effective upon Mr. Black’s retirement.

On March 21, 2021, Mr. Black stepped down from his position as Chief Executive Officer, Director and Chairman, and as a member of the executive committee of our board of directors. Mr. Rowan formally assumed the role of Chief Executive Officer of AGM Inc. The executive committee of our board of directors appointed Lead Independent Director Jay Clayton to serve as Non-Executive Chairman of the Board effective March 21, 2021.

On May 20, 2021, the Company announced that Co-Founder Joshua Harris will step down from his day-to-day role at Apollo effective upon the closing date of Apollo’s merger with Athene, while continuing to serve on our board of directors and the executive committee of our board of directors.

Managing Business Performance

We believe that the presentation of Segment DE supplements a reader’s understanding of the economic operating performance of each of our segments.

Segment Distributable Earnings and Distributable Earnings

Segment DE is the key performance measure used by management in evaluating the performance of Apollo’s credit, private equity and real assets segments. See note 16 to the condensed consolidated financial statements for more details regarding the components of Segment DE. DE represents Segment DE less estimated current corporate, local and non-U.S. taxes as well as the current payable under Apollo’s tax receivable agreement. DE is net of preferred dividends, if any, to the Series A and Series B preferred stockholders. DE excludes the impacts of the remeasurement of deferred tax assets and liabilities which arises from changes in estimated future tax rates. The economic assumptions and methodologies that impact the implied income tax provision are similar to those methodologies and certain assumptions used in calculating the income tax provision for Apollo’s condensed consolidated statements of operations under U.S. GAAP. Specifically, certain deductions considered in the income tax provision under U.S. GAAP, such as the deduction for transaction related charges and equity-based compensation, are taken into account for purposes of the implied tax provision. Management believes that excluding the remeasurement of the tax receivable agreement and deferred taxes from Segment DE and DE, respectively, is meaningful as it increases comparability between periods. Remeasurement of the tax receivable agreement and deferred taxes are estimates that may change due to changes in the interpretation of tax law.

We believe that Segment DE is helpful for an understanding of our business and that investors should review the same supplemental financial measure that management uses to analyze our segment performance. This measure supplements and should be considered in addition to and not in lieu of the results of operations discussed below in “—Overview of Results

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of Operations” that have been prepared in accordance with U.S. GAAP. See note 16 to the condensed consolidated financial statements for more details regarding management’s consideration of Segment DE.

Fee Related Earnings and Fee Related EBITDA

Fee Related Earnings, or “FRE”, is derived from our segment reported results and refers to a component of Segment DE that is used as a supplemental performance measure. See note 16 to the condensed consolidated financial statements for more details regarding the components of FRE.

Fee related EBITDA is a non-U.S. GAAP measure derived from our segment reported results and is used to assess the performance of our operations as well as our ability to service current and future borrowings. Fee related EBITDA represents FRE plus amounts for depreciation and amortization. “Fee related EBITDA +100% of net realized performance fees” represents Fee related EBITDA plus realized performance fees less realized profit sharing expense.

We use Segment DE, DE, FRE and Fee related EBITDA as measures of operating performance, not as measures of liquidity. These measures should not be considered in isolation or as a substitute for net income or other income data prepared in accordance with U.S. GAAP. The use of these measures without consideration of their related U.S. GAAP measures is not adequate due to the adjustments described above.

Operating Metrics

We monitor certain operating metrics that are common to the alternative investment management industry. These operating metrics include Assets Under Management, capital deployed and uncalled commitments.

Assets Under Management

The following presents Apollo’s Total AUM and Fee-Generating AUM by segment (in billions):

Note: Totals may not add due to rounding

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The following presents Apollo’s AUM with Future Management Fee Potential by segment (in billions):

Note: Totals may not add due to rounding

The following tables present the components of Performance Fee-Eligible AUM for each of Apollo’s three segments:

	As of September 30, 2021
	Credit(1)		Private Equity		Real Assets		Total
	(in millions)
Performance Fee-Generating AUM (1)	$	48,386	$	38,539	$	5,605	$	92,530
AUM Not Currently Generating Performance Fees	5,054		3,101		931		9,086
Uninvested Performance Fee-Eligible AUM	11,802		21,530		6,010		39,342
Total Performance Fee-Eligible AUM	$	65,242	$	63,170	$	12,546	$	140,958

	As of September 30, 2020
	Credit		Private Equity		Real Assets		Total
	(in millions)
Performance Fee-Generating AUM (1)	$	21,076	$	20,690	$	5,562	$	47,328
AUM Not Currently Generating Performance Fees	29,028		10,888		618		40,534
Uninvested Performance Fee-Eligible AUM	9,551		27,647		4,621		41,819
Total Performance Fee-Eligible AUM	$	59,655	$	59,225	$	10,801	$	129,681

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	As of December 31, 2020
	Credit		Private Equity		Real Assets		Total
	(in millions)
Performance Fee-Generating AUM (1)	$	34,685	$	29,296	$	4,886	$	68,867
AUM Not Currently Generating Performance Fees	16,791		5,035		821		22,647
Uninvested Performance Fee-Eligible AUM	9,847		27,214		5,709		42,770
Total Performance Fee-Eligible AUM	$	61,323	$	61,545	$	11,416	$	134,284

(1)Performance Fee-Generating AUM of $4.2 billion, $0.5 billion and $1.6 billion as of September 30, 2021, September 30, 2020 and December 31, 2020, respectively, are above the hurdle rates or preferred returns and have been deferred to future periods when the fees are probable to not be significantly reversed.

The following table presents AUM Not Currently Generating Performance Fees for funds that have invested capital for more than 24 months as of September 30, 2021 and the corresponding appreciation required to reach the preferred return or high watermark in order to generate performance fees:

Strategy / Fund	Invested AUM Not Currently Generating Performance Fees		Investment Period Active > 24 Months		Appreciation Required to Achieve Performance Fees(1)
	(in millions)
Credit:
Corporate Credit	$	1,462	$	1,268	2%
Structured Credit	3,483		3,483		6%
Direct Origination	109		108		30%
Total Credit	5,054		4,859		6%
Private Equity:
Hybrid Capital	544		524		>250bps
Other PE	2,557		2,196		45%
Total Private Equity	3,101		2,720		103%
Real Assets:
Total Real Assets	931		730		>250bps
Total	$	9,086	$	8,309

(1)All investors in a given fund are considered in aggregate when calculating the appreciation required to achieve performance fees presented above. Appreciation required to achieve performance fees may vary by individual investor. Funds with an investment period less than 24 months are “N/A”.

The components of Fee-Generating AUM by segment are presented below:

	As of September 30, 2021
	Credit		Private Equity			Real Assets		Total
	(in millions)
Fee-Generating AUM based on capital commitments	$	1,101	$	25,168		$	7,243	$	33,512
Fee-Generating AUM based on invested capital	3,170		12,798			2,354		18,322
Fee-Generating AUM based on gross/adjusted assets	239,969		577			30,807		271,353
Fee-Generating AUM based on NAV	35,250		642			2,214		38,106
Total Fee-Generating AUM	$	279,490	$	39,185	(1)	$	42,618	$	361,293

(1)The weighted average remaining life of the traditional private equity funds as of September 30, 2021 was 67 months.

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	As of September 30, 2020
	Credit		Private Equity			Real Assets		Total
	(in millions)
Fee-Generating AUM based on capital commitments	$	854	$	27,113		$	6,347	$	34,314
Fee-Generating AUM based on invested capital	2,816		15,220			2,278		20,314
Fee-Generating AUM based on gross/adjusted assets	226,760		1,119			25,871		253,750
Fee-Generating AUM based on NAV	26,241		469			1,057		27,767
Total Fee-Generating AUM	$	256,671	$	43,921	(1)	$	35,553	$	336,145

(1)    The weighted average remaining life of the traditional private equity funds at September 30, 2020 was 72 months.

	As of December 31, 2020
	Credit		Private Equity			Real Assets		Total
	(in millions)
Fee-Generating AUM based on capital commitments	$	922	$	25,168		$	6,580	$	32,670
Fee-Generating AUM based on invested capital	3,000		15,393			2,434		20,827
Fee-Generating AUM based on gross/adjusted assets	238,202		771			26,820		265,793
Fee-Generating AUM based on NAV	27,534		494			1,356		29,384
Total Fee-Generating AUM	$	269,658	$	41,826	(1)	$	37,190	$	348,674

(1)    The weighted average remaining life of the traditional private equity funds as of December 31, 2020 was 73 months.

The following presents the total AUM and Fee-Generating AUM amounts for our credit segment by category type (in billions):

Note: Totals may not add due to rounding

Apollo, through its consolidated subsidiary, ISG, provides asset management services to Athene with respect to assets in the Athene Accounts, including asset allocation services, direct asset management services, asset and liability matching management, mergers and acquisitions, asset diligence, hedging and other asset management services and receives management fees for providing these services. The Company, through ISG, also provides sub-allocation services with respect to a portion of

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the assets in the Athene Accounts. See note 14 to the condensed consolidated financial statements for more details regarding the fee rates of the investment management and sub-allocation fee arrangements with respect to the assets in the Athene Accounts.

The following table presents the aggregate Athene Sub-Allocated Total AUM by asset class (in billions):

Note: Totals may not add due to rounding

Other Assets include cash, treasuries, equities and alternatives. Total AUM includes $52.1 billion, $39.2 billion and $41.3 billion of gross assets related to Athene Co-Invest Reinsurance Affiliate 1A Ltd. and $2.0 billion, $2.5 billion and $2.5 billion of unfunded commitments related to Apollo/Athene Dedicated Investment Program (“ADIP”) as of September 30, 2021, September 30, 2020 and December 31, 2020 respectively.

Apollo, through ISGI, provides investment advisory services with respect to certain assets in certain portfolio companies of Apollo funds and sub-advises the Athora Accounts and broadly refers to “Athora Sub-Advised” assets as those assets in the Athora Accounts which the Company explicitly sub-advises as well as those assets in the Athora Accounts which are invested directly in funds and investment vehicles Apollo manages. The Company refers to the portion of the Athora AUM that is not Athora Sub-Advised AUM as “Athora Non-Sub Advised” AUM. See note 14 to the condensed consolidated financial statements for more details regarding the fee arrangements with respect to the assets in the Athora Accounts.

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The following table presents Athora Sub-Advised and Athora Non-Sub-Advised AUM (in billions):

Note: Totals may not add due to rounding

The following presents total AUM and Fee-Generating AUM amounts for our private equity segment by category type (in billions):

Note: Totals may not add due to rounding

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The following presents total AUM and Fee-Generating AUM amounts for our real assets segment by category type (in billions):

Note: Totals may not add due to rounding

The following tables summarize changes in total AUM for each of Apollo’s three segments:

	For the Three Months Ended September 30,
	2021								2020
	Credit		Private Equity		Real Assets		Total		Credit		Private Equity		Real Assets		Total
	(in millions)
Change in Total AUM(1):
Beginning of Period	$	331,028	$	88,469	$	52,278	$	471,775	$	300,454	$	73,301	$	39,851	$	413,606
Inflows	13,904		2,406		1,753		18,063		7,110		1,701		4,147		12,958
Outflows(2)	(1,882)		(7)		—		(1,889)		(4,959)		(108)		—		(5,067)
Net Flows	12,022		2,399		1,753		16,174		2,151		1,593		4,147		7,891
Realizations	(2,305)		(6,177)		(351)		(8,833)		(419)		(1,082)		(227)		(1,728)
Market Activity(3)	124		1,367		457		1,948		9,919		2,989		468		13,376
End of Period	$	340,869	$	86,058	$	54,137	$	481,064	$	312,105	$	76,801	$	44,239	$	433,145

(1)At the individual segment level, inflows include new subscriptions, commitments, capital raised, other increases in available capital, purchases, acquisitions, and portfolio company appreciation. Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income.

(2)Outflows for Total AUM include redemptions of $0.6 billion and $0.7 billion during the three months ended September 30, 2021 and 2020, respectively.

(3)Includes foreign exchange impacts of $(1.8) billion, $(91.5) million and $(142.1) million for credit, private equity and real assets, respectively, during the three months ended September 30, 2021 and foreign exchange impacts of $3.2 billion, $88.6 million and $172.3 million for credit, private equity and real assets, respectively, during the three months ended September 30, 2020.

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	For the Nine Months Ended September 30,
	2021								2020
	Credit		Private Equity		Real Assets		Total		Credit		Private Equity		Real Assets		Total
	(in millions)
Change in Total AUM(1):
Beginning of Period	$	328,560	$	80,716	$	46,210	$	455,486	$	215,530	$	76,788	$	38,787	$	331,105
Inflows	28,716		7,230		7,931		43,877		98,726		3,949		6,776		109,451
Outflows(2)	(11,408)		(721)		—		(12,129)		(11,585)		(169)		(517)		(12,271)
Net Flows	17,308		6,509		7,931		31,748		87,141		3,780		6,259		97,180
Realizations	(4,686)		(15,874)		(1,017)		(21,577)		(1,584)		(2,785)		(817)		(5,186)
Market Activity(3)	(313)		14,707		1,013		15,407		11,018		(982)		10		10,046
End of Period	$	340,869	$	86,058	$	54,137	$	481,064	$	312,105	$	76,801	$	44,239	$	433,145

(1)At the individual segment level, inflows include new subscriptions, commitments, capital raised, other increases in available capital, purchases, acquisitions and portfolio company appreciation. Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income.

(2)Outflows for Total AUM include redemptions of $1.9 billion and $1.9 billion during the nine months ended September 30, 2021 and 2020, respectively.

(3)Includes foreign exchange impacts of $(4.2) billion, $(92.4) million and $(234.3) million for credit, private equity and real assets, respectively, during the nine months ended September 30, 2021, and foreign exchange impacts of $2.7 billion, $119.2 million and $133.1 million for credit, private equity and real assets, respectively, during the nine months ended September 30, 2020.

    Three Months Ended September 30, 2021

Total AUM was $481.1 billion at September 30, 2021, an increase of $9.3 billion, or 2.0%, compared to $471.8 billion at June 30, 2021. The net increase was primarily due to growth of our retirement services assets under management. More specifically, the net increase was due to:

•Net flows of $16.2 billion primarily related to:

•a $12.0 billion increase related to funds we manage in the credit segment primarily consisting of (i) a $9.5 billion increase in AUM in the advisory and other category due to the growth of our retirement services clients and (ii) $3.4 billion of subscriptions driven by the corporate credit and structured credit funds we manage; offsetting these increases were $(1.1) billion of net segment transfers, primarily into real assets, and $(0.6) billion of redemptions;

•a $2.4 billion increase related to funds we manage in the private equity segment primarily consisting of $1.4 billion of subscriptions across the hybrid capital and traditional private equity funds we manage; and

•a $1.8 billion increase related to funds we manage in the real assets segment primarily consisting of $0.8 billion of net segment transfers, $0.7 billion of subscriptions and $0.3 billion of leverage across the real estate and infrastructure funds we manage; partially offset by

•Realizations of $(8.8) billion primarily related to:

•$(6.2) billion related to funds we manage in the private equity segment primarily consisting of distributions of $5.4 billion from the traditional private equity funds we manage; and

•$(2.3) billion related to funds we manage in the credit segment primarily consisting of distributions from the corporate credit funds we manage.

Nine Months Ended September 30, 2021

Total AUM was $481.1 billion at September 30, 2021, an increase of $25.6 billion, or 5.6%, compared to $455.5 billion at December 31, 2020. The net increase was primarily due to growth of our retirement services assets under management, appreciation in the private equity segment and fundraising across the platform. More specifically, the net increase was due to:

•Net flows of $31.7 billion primarily related to:

•a $17.3 billion increase related to funds we manage in the credit segment primarily consisting of (i) $9.8 billion of subscriptions driven by the corporate credit and structured credit funds we manage and (ii) a $16.8 billion net increase in AUM in the advisory and other category primarily due to the growth of our retirement services clients; offsetting these increases were $(5.3) billion of net segment transfers, primarily into real assets, and $1.8 billion of redemptions;

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•a $7.9 billion increase related to funds we manage in the real assets segment primarily consisting of $4.9 billion of net segment transfers, $1.8 billion of leverage and $1.2 billion of subscriptions across the real estate and infrastructure funds we manage; and

•a $6.5 billion increase related to funds we manage in the private equity segment primarily consisting of $4.5 billion of subscriptions and $1.3 billion of leverage across the hybrid capital and traditional private equity funds we manage.

•Market activity of $15.4 billion, primarily related to $14.7 billion of appreciation in the private equity segment driven by $4.2 billion, $3.8 billion, $1.2 billion, and $0.9 billion from Fund VIII, Fund IX, Fund VII, and Tech Data Co-Invest, respectively.

•Realizations of $(21.6) billion primarily related to:

•$(15.9) billion related to funds we manage in the private equity segment primarily consisting of distributions of $13.3 billion and $1.4 billion from the traditional private equity and hybrid capital funds we manage, respectively; and

•$(4.7) billion related to funds we manage in the credit segment primarily consisting of distributions from the corporate credit and direct origination funds we manage.

The following tables summarize changes in Fee-Generating AUM for each of Apollo’s three segments:

	For the Three Months Ended September 30,
	2021								2020
	Credit		Private Equity		Real Assets		Total		Credit		Private Equity		Real Assets		Total
	(in millions)
Change in Fee-Generating AUM(1):
Beginning of Period	$	272,139	$	39,541	$	41,880	$	353,560	$	254,332	$	43,840	$	31,606	$	329,778
Inflows	11,394		955		1,142		13,491		5,552		277		4,059		9,888
Outflows(2)	(3,457)		(197)		(272)		(3,926)		(7,069)		(229)		(185)		(7,483)
Net Flows	7,937		758		870		9,565		(1,517)		48		3,874		2,405
Realizations	(756)		(1,103)		(115)		(1,974)		(211)		(130)		(167)		(508)
Market Activity(3)	170		(11)		(17)		142		4,067		163		240		4,470
End of Period	$	279,490	$	39,185	$	42,618	$	361,293	$	256,671	$	43,921	$	35,553	$	336,145

(1)At the individual segment level, inflows include new subscriptions, commitments, capital raised, other increases in available capital, purchases, acquisitions and portfolio company appreciation. Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income.

(2)Outflows for Fee-Generating AUM include redemptions of $0.6 billion and $0.7 billion during the three months ended September 30, 2021 and 2020, respectively.

(3)Includes foreign exchange impacts of $(1.6) billion, $(15.7) million and $(109.3) million for credit, private equity and real assets, respectively, during the three months ended September 30, 2021, and foreign exchange impacts of $3.0 billion, $14.9 million and $129.8 million for credit, private equity and real assets, respectively, during the three months ended September 30, 2020.

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	For the Nine Months Ended September 30,
	2021								2020
	Credit		Private Equity		Real Assets		Total		Credit		Private Equity		Real Assets		Total
	(in millions)
Change in Fee-Generating AUM(1):
Beginning of Period	$	269,658	$	41,826	$	37,190	$	348,674	$	172,893	$	43,826	$	29,727	$	246,446
Inflows	24,930		2,158		6,116		33,204		93,807		1,723		6,785		102,315
Outflows(2)	(12,343)		(1,580)		(419)		(14,342)		(14,074)		(1,252)		(861)		(16,187)
Net Flows	12,587		578		5,697		18,862		79,733		471		5,924		86,128
Realizations	(2,238)		(3,271)		(329)		(5,838)		(681)		(676)		(368)		(1,725)
Market Activity(3)	(517)		52		60		(405)		4,726		300		270		5,296
End of Period	$	279,490	$	39,185	$	42,618	$	361,293	$	256,671	$	43,921	$	35,553	$	336,145

(1)At the individual segment level, inflows include new subscriptions, commitments, capital raised, other increases in available capital, purchases, acquisitions and portfolio company appreciation. Outflows represent redemptions, other decreases in available capital and portfolio company depreciation. Realizations represent fund distributions of realized proceeds. Market activity represents gains (losses), the impact of foreign exchange rate fluctuations and other income.

(2)Outflows for Fee-Generating AUM include redemptions of $1.8 billion and $1.8 billion during the nine months ended September 30, 2021 and 2020, respectively.

(3)Includes foreign exchange impacts of $(3.6) billion, $(13.2) million and $(209.5) million for credit, private equity and real assets, respectively, during the nine months ended September 30, 2021, and foreign exchange impacts of $2.6 billion, $2.1 million and $100.2 million for credit, private equity and real assets, respectively, during the nine months ended September 30, 2020.

    Three Months Ended September 30, 2021

Total Fee-Generating AUM was $361.3 billion at September 30, 2021, an increase of $7.7 billion, or 2.2%, compared to $353.6 billion at June 30, 2021. The net increase was primarily due to growth of our retirement services assets under management. More specifically, the net increase was due to:

Net flows of $9.6 billion primarily related to:

•a $7.9 billion increase related to funds we manage in the credit segment primarily consisting of (i) $8.6 billion increase in AUM in the advisory and other category due to the growth of our retirement services clients and (ii) $1.0 billion of subscriptions across the corporate credit funds we manage; offsetting these increases was $(1.8) billion of change in leverage.

Net flows were offset by realizations of $(2.0) billion primarily related to the traditional private equity funds we manage.

Nine Months Ended September 30, 2021

Total Fee-Generating AUM was $361.3 billion at September 30, 2021, an increase of $12.6 billion, or 3.6%, compared to $348.7 billion at December 31, 2020. The net increase was primarily due to growth of our retirement services assets under management. More specifically the net increase was due to:

•Net flows of $18.9 billion primarily related to:

•a $12.6 billion increase related to funds we manage in the credit segment primarily consisting of (i) a $15.4 billion increase in AUM in the advisory and other category due to the growth of our retirement services clients, (ii) $4.6 billion of fee-generating capital deployment and (iii) $3.4 billion of subscriptions primarily across the corporate credit funds we manage; offsetting these increases were (i) $(4.2) billion of net segment transfers, primarily into real assets, (ii) $(3.9) billion of change in leverage and (iii) $(2.1) billion of fee-generating capital reduction; and

•a $5.7 billion increase related to funds we manage in the real assets segment primarily consisting of $3.6 billion of net segment transfers and $1.3 billion of fee-generating capital deployment.

•Net flows were offset by realizations of $(5.8) billion primarily related to the traditional private equity funds we manage.

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Deployment, Drawdown Deployment and Uncalled Commitments

During the third quarter of 2020, the Company modified the definition of deployment to include net purchases, certain originations and net syndications to provide a more accurate representation of market activity across all the funds and accounts the Company manages. Prior period deployment figures have been recast to conform to this change in definition. The prior definition of deployment was limited to purchases in our commitment based funds, excluding certain funds in which permanent capital vehicles are the primary investor, and SIAs that have a defined maturity date, and has been renamed “drawdown deployment”.

Uncalled commitments, by contrast, represent unfunded capital commitments that certain of Apollo’s funds and SIAs have received from fund investors to fund future or current fund investments and expenses.

Deployment, drawdown deployment and uncalled commitments are indicative of the pace and magnitude of fund capital that is deployed or will be deployed, and which therefore could result in future revenues that include management fees, transaction fees and performance fees to the extent they are fee-generating. Deployment, drawdown deployment and uncalled commitments can also give rise to future costs that are related to the hiring of additional resources to manage and account for the additional capital that is deployed or will be deployed. Management uses deployment, drawdown deployment and uncalled commitments as key operating metrics since we believe the results are measures of our funds’ investment activities.

Deployment and Drawdown Deployment

The following presents deployment across all funds and drawdown deployment for funds and SIAs with a defined maturity date, by segment (in billions):

Note: Totals may not add due to rounding

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Uncalled Commitments

The following presents Apollo’s uncalled commitments by segment (in billions):

Note: Totals may not add due to rounding

As of September 30, 2021 and December 31, 2020, Apollo had $46.9 billion and $46.8 billion of dry powder, respectively, which represents the amount of capital available for investment or reinvestment subject to the provisions of the applicable limited partnership agreements or other governing agreements of the funds, partnerships and accounts we manage. These amounts exclude uncalled commitments which can only be called for fund fees and expenses and commitments from permanent capital vehicles.

The Historical Investment Performance of Our Funds

Below we present information relating to the historical performance of our funds, including certain legacy Apollo funds that do not have a meaningful amount of unrealized investments, and in respect of which the general partner interest has not been contributed to us.

When considering the data presented below, you should note that the historical results of our funds are not indicative of the future results that you should expect from such funds, from any future funds we may raise or from your investment in our Class A shares.

An investment in our Class A shares is not an investment in any of the Apollo funds, and the assets and revenues of our funds are not directly available to us. The historical and potential future returns of the funds we manage are not directly linked to returns on our Class A shares. Therefore, you should not conclude that continued positive performance of the funds we manage will necessarily result in positive returns on an investment in our Class A shares. However, poor performance of the funds that we manage would cause a decline in our revenue from such funds, and would therefore have a negative effect on our performance and in all likelihood the value of our Class A shares.

Moreover, the historical returns of our funds should not be considered indicative of the future results you should expect from such funds or from any future funds we may raise. There can be no assurance that any Apollo fund will continue to achieve the same results in the future.

Finally, our private equity IRRs have historically varied greatly from fund to fund. For example, Fund VI generated a 12% gross IRR and a 9% net IRR since its inception through September 30, 2021, while Fund V generated a 61% gross IRR and a 44% net IRR since its inception through September 30, 2021. Accordingly, the IRR going forward for any current or future fund may vary considerably from the historical IRR generated by any particular fund, or for our private equity funds as a whole. Future returns will also be affected by the applicable risks, including risks of the industries and businesses in which a

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particular fund invests. See “Item 1A. Risk Factors—Risks Related to Our Businesses—The historical returns attributable to our funds should not be considered as indicative of the future results of our funds or of our future results or of any returns expected on an investment in our Class A shares and our Preferred shares” and “Item 1A. Risk Factors—The COVID-19 pandemic has caused severe disruptions in the U.S. and global economy and is expected to continue to impact our business, financial condition and results of operations” in the 2020 Annual Report.

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Investment Record

The following table summarizes the investment record by segment of Apollo’s significant commitment-based funds that have a defined maturity date in which investors make a commitment to provide capital at the formation of such funds and deliver capital when called as investment opportunities become available. The funds included in the investment record table below have greater than $500 million of AUM and/or form part of a flagship series of funds.

All amounts are as of September 30, 2021, unless otherwise noted:

($ in millions)	Vintage Year	Total AUM		Committed Capital		Total Invested Capital		Realized Value		Remaining Cost		Unrealized Value		Total Value		Gross IRR		Net IRR
Private Equity:
Fund IX	2018	$	28,666	$	24,729	$	12,862	$	3,782	$	10,926	$	14,993	$	18,775	47	%	28	%
Fund VIII	2013	16,436		18,377		16,063		18,149		6,739		12,196		30,345		18		14
Fund VII	2008	2,250		14,677		16,461		33,970		184		282		34,252		33		25
Fund VI	2006	643		10,136		12,457		21,134		405		2		21,136		12		9
Fund V	2001	260		3,742		5,192		12,721		120		2		12,723		61		44
Fund I, II, III, IV & MIA(2)	Various	10		7,320		8,753		17,400		—		—		17,400		39		26
Traditional Private Equity Funds(3)		$	48,265	$	78,981	$	71,788	$	107,156	$	18,374	$	27,475	$	134,631	39		24
ANRP III	2020	1,485		1,400		393		75		393		479		554		NM1		NM1
ANRP II	2016	2,292		3,454		2,779		2,679		1,334		1,449		4,128		20		12
ANRP I	2012	342		1,323		1,149		1,091		554		123		1,214		2		(2)
AION	2013	453		826		700		407		365		353		760		3		(2)
Hybrid Value Fund II(8)	N/A	3,073		3,379		431		—		431		430		430		NM1		NM1
Hybrid Value Fund	2019	4,013		3,238		3,237		1,368		2,343		3,000		4,368		32		26
Total Private Equity		$	59,923	$	92,601	$	80,477	$	112,776	$	23,794	$	33,309	$	146,085
Credit:
Apollo Origination Partners(8)	N/A	$	1,820	$	1,818	$	267	$	1	$	267	$	273	$	274	NM1		NM1
FCI IV	2021	$	1,123	$	1,123	$	123	$	—	$	123	$	129	$	129	NM1		NM1
FCI III	2017	2,713		1,906		2,859		1,899		1,866		1,865		3,764		19	%	14	%
FCI II	2013	2,192		1,555		3,207		2,416		1,720		1,507		3,923		7		5
FCI I	2012	—		559		1,516		1,975		—		—		1,975		12		8
SCRF IV (6)	2017	2,510		2,502		5,183		4,325		1,266		1,434		5,759		9		8
SCRF III	2015	—		1,238		2,110		2,428		—		—		2,428		18		14
SCRF II	2012	—		104		467		528		—		—		528		15		12
SCRF I	2008	—		118		240		357		—		—		357		33		26
Accord IV	2020	2,410		2,337		784		494		356		367		861		NM1		NM1
Accord IIIB(7)	2020	—		1,758		691		762		—		—		762		23		18
Accord III(7)	2019	—		886		2,358		2,499		—		—		2,499		22		18
Accord II(7)	2018	—		781		801		843		—		—		843		16		12
Accord I(7)	2017	—		308		111		121		—		—		121		10		5
Total Credit		$	12,768	$	16,993	$	20,717	$	18,648	$	5,598	$	5,575	$	24,223
Real Assets:
European Principal Finance Funds
EPF III(4)	2017	$	5,224	$	4,558	$	3,924	$	2,113	$	2,263	$	3,247	$	5,360	21	%	11	%
EPF II(4)	2012	985		3,472		3,556		4,620		555		336		4,956		13		8
EPF I(4)	2007	241		1,499		1,970		3,315		—		—		3,315		23		17
U.S. RE Fund III(5)	2021	945		935		303		4		300		332		336		NM1		NM1
U.S. RE Fund II(5)	2016	1,195		1,264		1,000		574		729		869		1,443		14		11
U.S. RE Fund I(5)	2012	185		655		639		830		131		101		931		12		9
Asia RE Fund II(5)(8)	N/A	951		947		405		57		354		363		420		NM1		NM1
Asia RE Fund I(5)	2017	729		719		456		228		287		448		676		17		13
Apollo Infrastructure Opportunity Fund II(8)	N/A	1,583		1,517		394		—		394		471		471		NM1		NM1
Apollo Infrastructure Opportunity Fund I	2018	758		897		802		861		298		363		1,224		26		20
Total Real Assets		$	12,796	$	16,463	$	13,449	$	12,602	$	5,311	$	6,530	$	19,132

(1)Data has not been presented as the fund’s effective date is less than 24 months prior to the period indicated and such information was deemed not meaningful.

(2)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 did not receive the economics associated with these entities. The investment performance of these funds, combined with Fund IV, is presented to illustrate fund performance associated with Apollo’s Co-Founders and other investment professionals.

(3)Total IRR is calculated based on total cash flows for all funds presented.

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(4)Funds are denominated in Euros and historical figures are translated into U.S. dollars at an exchange rate of €1.00 to $1.16 as of September 30, 2021.

(5)U.S. RE Fund I, U.S. RE Fund II, U.S. RE Fund III, Asia RE Fund I and Asia RE Fund II had $158 million, $792 million, $260 million, $376 million and $515 million of co-investment commitments as of September 30, 2021, respectively, which are included in the figures in the table. A co-invest entity within U.S. RE Fund I is denominated in pound sterling and translated into U.S. dollars at an exchange rate of £1.00 to $1.35 as of September 30, 2021.

(6)Remaining cost for certain of our credit funds may include physical cash called, invested or reserved for certain levered investments.

(7)Gross and Net IRR have been presented for these funds as they have a defined maturity date of less than 24 months and have been liquidated.

(8)Vintage Year is not yet applicable as these funds have not had their final closings.

Private Equity

The following table summarizes the investment record for distressed investments made in our traditional private equity fund portfolios, since the Company’s inception. All amounts are as of September 30, 2021:

	Total Invested Capital		Total Value		Gross IRR
	(in millions)
Distressed for Control	$	7,795	$	18,873	29	%
Non-Control Distressed	5,963		10,202		71
Total	13,758		29,075		49
Corporate Carve-outs, Opportunistic Buyouts and Other Credit(1)	58,030		105,556		21
Total	$	71,788	$	134,631	39	%

(1)Other Credit is defined as investments in debt securities of issuers other than portfolio companies that are not considered to be distressed.

The following tables provide additional detail on the composition of the Fund IX, Fund VIII and Fund VII private equity portfolios based on investment strategy. Amounts for Fund I, II, III, IV, V and VI are included in the table above but not presented below as their remaining value is less than $100 million or the fund has been liquidated and such information was deemed not meaningful. All amounts are as of September 30, 2021:

Fund IX(1)

	Total Invested Capital		Total Value
	(in millions)
Corporate Carve-outs	$	2,768	$	3,274
Opportunistic Buyouts	9,689		13,763
Distressed(2)	405		1,738
Total	$	12,862	$	18,775

Fund VIII(1)

	Total Invested Capital		Total Value
	(in millions)
Corporate Carve-outs	$	2,704	$	6,905
Opportunistic Buyouts	12,792