RBC Financial Services Conference March 6, 2018 Information contained herein is as of December 31, 2017 unless otherwise noted. Not for distribution in whole or in part without the express consent of Apollo Global Management, LLC. It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments in this document.
Forward Looking Statements & Other Important Disclosures This presentation 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 Global Management, LLC’s (together with its subsidiaries, “Apollo”,”we”,”us”,”our” and the “Company”) expectations regarding the performance of its business, liquidity and capital resources and the other non-historical statements. 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 presentation, 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 private equity, credit or real asset funds, market conditions generally, our ability to manage our growth, fund performance, changes in our regulatory environment and tax status, the variability of our revenues, net income and cash flow, our use of leverage to finance our businesses and investments by funds we manage (“Apollo Funds”) and litigation risks, among others. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in the Company's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on February 13, 2017; 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 our 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. This presentation contains information regarding Apollo's financial results that is calculated and presented on the basis of methodologies other than in accordance with accounting principles generally accepted in the United States ("non-GAAP measures"). Refer to slides endnotes for the definitions of EI, ENI, FRE and DE, non-GAAP measures presented herein, and to the reconciliation of GAAP financial measures to the applicable Non-GAAP measures. This presentation is for informational purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy, any security, product, service of Apollo as well as any Apollo fund, whether an existing or contemplated fund, for which an offer can be made only by such fund's Confidential Private Placement Memorandum and in compliance with applicable law. Unless otherwise noted, information included herein is presented as of the dates indicated. This presentation is not complete and the information contained herein may change at any time without notice. Except as required by applicable law, Apollo does not have any responsibility to update the presentation to account for such changes. Apollo makes no representation or warranty, express or implied, with respect to the accuracy, reasonableness or completeness of any of the information contained herein, including, but not limited to, information obtained from third parties. The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Past performance is not indicative nor a guarantee of future returns. 2
Observations within the current market environment
Global Macro Dynamics Remain Solid United States Eurozone Japan China Stronger GDP Growth 2016 2017 6.9% 2.5% 1.6% 2.3% 6.7% 1.8% 1.5% 0.9% Signs of Inflation Picking Up One Year Ago Three Months Prior Today 1.9% 1.2% 1.5% 1.1% 1.0% 2.1% 1.4% 1.6% 0.9% 1.5% 0.7% 0.3% Improving Unemployment One Year Ago Today 4.8% 9.7% 3.1% 4.1% 4.0% 4.0% 8.7% 2.8% Source: Bloomberg, as of February 22, 2018. Inflation represents Core PCE for United States and Core Inflation (excluding food & energy) for the European Union; headline inflation for other geographies. 4
Recent Market Sell-off is Consistent with Historical Cycles Equity Markets Sell-off, but Volatility Spikes, then Recedes US Treasury Yields Rise Remain Flat YTD US 10-Year yields are approaching 3%, Despite recent sell-off, equities are still trading at YE The recent spike in volatility appears less drastic but remain below prior peaks 2017 levels, with the S&P 500 up nearly $3 trillion when compared to historical periods since early 2017, and have had one of the 5.0% strongest rallies on record 74 ($ trillions) (2008 30 80 Financial Crisis) 70 25 4.0% 60 20 +$3 TN 43 50 (2011 European Sovereign Debt Crisis) 2.9% 3.0% 15 40 30 (2015 Commodities Sell-off ) 28 30 10 2.0% 20 20 5 10 0 0 1.0% '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 S&P 500 Total Market Capitalization VIX (Volatility of the S&P 500) Source: Deutsche Bank and Barclays research, Bloomberg, as of February 28, 2018.
Signs of Inflation, But Still Below Fed’s Target Wage Inflation Nearing 3% Inflation Finally Set to Pick Up Wage inflation rose to 2.9% in the January US jobs report, Core PCE, excluding energy and food prices, has begun to rise and is set its highest level this cycle to continue its climb, projected to reach the Fed’s target of 2% by 2019 3.0% 2.9% 3.0% 2.5% 2.5% 2.0% 2.0% 2.0% 1.5% 1.5% 1.5% 1.0% 1.0% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 2019 2020 Market Core PCE Forecast Fed Core PCE Forecast Source: Bloomberg as of February 27, 2018. Wage inflation represents average hourly earnings. 6
Equity Valuations Seemingly Elevated, but are Skewed by Growth in Tech; Credit Yields Starting to Inflect US P/E Multiples Appear Elevated, but Look Much Closer to Average Adjusting for Tech Valuations 25.0x S&P P/E multiples reached a high of ~20.0x in January 2018, but fell to ~17.4x S&P 500 P/E in February, and are much closer to average adjusting for tech valuations Average +1 Std. Dev. -1 Std. Dev. 20.0x +1 Std. Dev. 16.8x Current: 17.4x 15.0x Average 14.7x Ex. FAANG: 14.5x -1 Std. Dev. 12.5x 10.0x 5.0x '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 US Credit Yields Remain Below Average, but Have Started to Move Away from Historic Lows Yields rose from 5.7% in December 2017 to 6.4% in February 2018, Barclays US Corp HY Index - YTW with most of the rise following the January US jobs report Average 25% +1 Std. Dev. -1 Std. Dev. 20% 15% +1 Std. Dev. 9.8% 10% Average 7.3% 5% -1 Std. Dev 4.8% Current: 6.4% 0% '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 7 Source: S&P 500 P / NTM Earnings as of February 20, 2018; Bloomberg, Barclays U.S. Corporate High Yield – Yield to Worst, as of February 20, 2018.
Private Equity Multiples Remain at All-Time Highs Private Equity valuations have surpassed pre-Crisis levels U.S. and European LBO Purchase Price Multiples U.S. and European LBO Leverage Levels Current multiple is 18% higher than average 11.0x 7.0x 10.7x 10.4x 6.7x 10.3x 10.3x 10.2x 10.1x 6.5x 10.0x 6.2x 6.0x 9.2x9.3x9.3x 5.9x 5.9x 6.0x 5.9x 9.1x 5.6x US & EU Average: 8.9x 8.9x 8.8x 9.0x 5.4x 5.5x US & EU Average: 5.3x 8.4x 5.2x 5.1x 5.1x 8.0x 5.0x 5.0x 8.0x 7.8x 5.0x 4.7x 4.7x 7.4x 7.3x 4.5x4.6x 4.6x 7.1x7.2x 4.5x 7.0x 4.2x 4.0x Fund VIII Average: 3.6x (1) Fund VIII Average: 5.7x (1) 6.0x 3.5x 5.0x 3.0x Source: S&P Capital IQ Leveraged Buyout Review, as of December 31, 2017. Represents U.S. and European LBO’s with transaction sizes of $500/€500 million or greater. Fund creation and leverage multiples may incorporate pro forma or other adjustments based on investment team’s estimates and/or calculations, including adjustments for follow-on acquisitions. Past performance is not indicative of future results. (1) Pro forma for Fund VIII’s equity commitments to Qdoba, Sun Country Airlines, One Main Financial and Northwoods Energy, each of which have signed, but not yet closed. 8
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