Apollo Global Management Mergers and Acquisitions Presentation Deck
Definitions
Apollo discloses the following financial measures that are calculated and presented on the basis of methodologies other thanin accordance with generally accepted accounting
principles in the United States of America ("Non-GAAP"):
"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. Managementuses Segment DE to make 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 eamed 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.
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Segment DE is the sum of (i) total management fees and advisory and transaction fees, (ii) other income (loss), (iii) realized performance fees, excluding realizations received in the
form of shares and (iv) realized investment income, net which includes dividends from our permanent capital vehicles, net of amounts to be distributed to certain employees as part of
a dividend compensation program, less (x) compensation expense, excluding the expense related to equity-based awards, (y) realized profit sharing expense, and (z) non-
compensation expenses. 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 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 VIEs that are included in the consolidated financial statements.
"Distributable Earnings" or "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 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 interpretations of tax law.
• "Fee Related Earnings", or "FRE", is derived from our segment reported results and refers to a component of 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, and Mid Cap 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.
APOLLO
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