Table of Contents their interests with our own and with those of the investors in these funds. Profit sharing expense is part of our compensation and benefits expense and is generally based upon a fixed percentage of private equity and capital markets carried interest income on a pre-tax and a pre-consolidated basis. Profit sharing expense can reverse during periods when there is a decline in carried interest income that was previously recognized. Profit sharing amounts are normally distributed to employees after the corresponding investment gains have been realized and generally before preferred returns achieved for the investors. Therefore, changes in our unrealized gains (losses) for investments have the same effect on our profit sharing expense. Profit sharing expense increases when unrealized gains increase. Realizations only impact profit sharing expense to the extent that the effects on investments have not been recognized previously. If losses on other investments within a fund are subsequently realized, the profit sharing amounts previously distributed are normally subject to a general partner obligation to return cried interest income previously distributed back to the funds. This general partner obligation due to the funds would be realized only when the fund is liquidated, which generally occurs at the end of the fund's term. However. indemnification clauses also exist for pre-reorganization realized gains. which, although our Managing Partners and Contributing Partners would remain personally liable. may indemnify our Managing Partners and Contributing Partners for 17.5% to 100% of the previously distributed profits regardless of the funds future performance. Refer to note 15 to our consolidated financial statements for further discussion of indemnification. Salary expense for services rendered by our Managing Partners is limited to $100,000 per year for a five-year period that commenced in July 2007 and may likely increase subsequent to September 2012. Additionally. our Managing Partners can receive other forms of compensation. In connection with the Reorganization. the Managing Partners and Contributing Partners received AOG Units with a vesting period of five to six years and certain employees were granted RSUs that typically have a vesting period of six years. Managing Partners. Contributing Partners and certain employees have also been granted AAA RDUs, or incentive units that provide the right to receive AAA RDUs. which both represent common units of AAA and generally vest over three years for employees and are fully-vested for Managing Partners and Contributing Partners on the grant date. In addition. ARI RSUs. ARI restricted stock and AMTG RSUs have been granted to the Company and certain employees in the real estate and capital markets segments and generally vest over three years. In addition, the Company granted share options to certain employees that generally vest and become exercisable in quarterly installments or annual installments depending on the contract terms over the next two to six years. Refer to note 14 to our consolidated financial statements for further discussion of AOG Units and other equity-based compensation. Other Expenses. The balance of our other expenses includes interest, litigation settlement, professional fees, placement fees. occupancy. depreciation and amortization and other general operating expenses. Interest expense consists primarily of interest related to the AMH Credit Agreement which has a variable interest amount based on LIBOR and ABR interest rates as discussed in note 12 to our consolidated financial statements. Placement fees are incurred in connection with our capital raising activities. Occupancy expense represents charges related to office leases and associated expenses. such as utilities and maintenance Ices. Depreciation and amortization of fixed assets is normally calculated using the straight-line method over their estimated useful lives, ranging from two to sixteen years. taking into consideration any residual value. Leasehold improvements are amortized over the shorter of the useful life of the asset or the expected term of the lease. Intangible assets are amortized based on the future cash flows over the expected useful lives of the assets. Other general operating expenses normally include costs related to travel. information technology and administration. Other Income (Lass) Net Gains (Losses) from Investment Activities. The performance of the consolidated Apollo funds has impacted our net gains (losses) from investment activities. Net gains (losses) from investment activities include both realized gains and losses and the change in unrealized gains and losses in our investment portfolio between the opening balance sheet date and the closing balance sheet date. Net unrealized gains (losses) are a result of changes in the fair value of unrealized investmenb and reversal of unrealized gains (losses) due to dispositions of investments during the reporting period. Significant judgment and estimation goes into the assumptions that drive 100 EFTA00623492

Table of Contents these models and the actual values realized with respect to investments could be materially different from values obtained based on the use of those models. The valuation methodologies applied impact the reported value of investment company holdings and their underlying portfolios in our consolidated financial statements. Net Gains (Lasses) from Investment Activities of Consolidated Variable Interest Entities. Changes in the fair value of the consolidated VIEs' assets and liabilities arid related interest. dividend and other income and expenses subsequent to consolidation arc presented within net gains (losses) from investment activities of consolidated variable interest entities and arc attributable to Non-Controlling Interests in the consolidated statements of operations. Interest Income. The Company recognizes security transactions on the trade date. Interest income is recognized as earned on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized over the life of the respective securities using the effective interest method. Other Income (Loss), Net. Other income, net includes gains (losses) arising from the remeasurement of foreign currency denominated assets and liabilities of foreign subsidiaries and other miscellaneous income and expenses. Income Taxes. The Apollo Operating Group and its subsidiaries continue to generally operate in the U.S. as partnerships for U.S. Federal income tax purposes and generally as corporate entities in non-U.S. jurisdictions. Accordingly. these entities in some cases are subject to New York City unincorporated business tax. or in the case of non-U.S. entities, to non-U.S. corporate income taxes. In addition. APO Corp.. a wholly-owned subsidiary of the Company. is subject to U.S. Federal. state and local corporate income tax, and the Company's provision for income taxes is accounted for in accordance with U.S. GAAP. As significant judgment is required in determining tax expense and in evaluating tax positions. including evaluating uncertainties. we recognize the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. The tax benefit is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. 11 a tax position is not considered more likely than not to be sustained. then no benefits of the position arc recognized. The Company's tax positions are reviewed and evaluated quarterly to determine whether or not we have uncertain tax positions that require financial statement recognition. Deferred income taxes arc provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years. 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 Interest in the consolidated financial statements. The Non-Controlling Interests relating to Apollo Global Management. LLC primarily include the 65.9%. 71.0% and 71.5% ownership interest in the Apollo Operating Group held by the Managing Partners and Contributing Partners through their limited partner interests in Holdings as of December 31, 2011. 2010 and 2009. respectively. and other ownership interests in consolidated entities. which primarily consist of the approximate 98%. 97% and 97% ownership interest held by limited partners in AAA for the years ended December 31. 2011. 2010 and 2009. respectively. Non- Controlling Interests also include limited partner interests of Apollo managed funds in certain consolidated VIEs. The authoritative guidance for Non-Controlling Interests in the consolidated financial statements requires reporting entities to present Non-Controlling Interest as equity and provides guidance on the accounting for 101 EFTA00623493

Table of Contents transactions between an entity and Non-Controlling Interests. According to the guidance. (I) Non-Controlling Interests are presented as a separate component of shareholders' equity on the Company's consolidated statements of financial condition. (2) net income (loss) includes the net income (loss) attributed to the Non-Controlling Interest holders on the Company's consolidated statements of operations. (3) the primary components of Non-Controlling Interest are separately presented in the Company's consolidated statements of changes in shareholders equity to clearly distinguish the interests in the Apollo Operating Group and other ownership interests in the consolidated entities and (4) profits and losses are allocated to Non-Controlling Interests in proportion to their ownership interests regardless of their basis. On January 1. 2010. the Company adopted amended consolidation guidance issued by FASB on issues related to VIEs. The amended guidance significantly affects the overall consolidation analysis. changing the approach taken by companies in identifying which entities are VIEs and in determining which party is the primary beneficiary. The amended guidance requires continuous assessment of the reporting entity's involvement with such VIEs. The amended guidance also enhances the disclosure requirements for a reporting entity's involvement with V lEs, including presentation on the consolidated statements of financial condition of assets and liabilities of consolidated VIEs that meet the separate presentation criteria and disclosure of assets and liabilities recognized in the consolidated statements of financial condition and the maximum exposure to loss for those VIES in which a repotting entity is determined to not be the primary beneficiary but in which it has a variable interest. The guidance provides a limited scope deferral for a reporting entity's interest in an entity that meets all of the following conditions: (a) the entity has all the attributes of an investment company as defined under the AICPA Audit and Accounting Guide. Investment Companies. or does not have all the attributes of an investment company but is an entity for which it is acceptable based on industry practice to apply measurement principles that are consistent with the AICPA Audit and Accounting Guide. Investment Companies. (b) the reporting entity does not have explicit or implicit obligations to fund any losses of the entity that could potentially be significant to the entity and (c) the entity is not a securitization entity. asset-backed financing entity or an entity that was formerly considered a qualifying special-purpose entity. The reporting entity is required to perform a consolidation analysis for entities that qualify for the deferral in accordance with previously issued guidance on variable interest entities. Apollo's involvement with the funds it manages is such that all three of the above conditions arc met with the exception of certain vehicles which fail condition (c) above. As previously discussed, the incremental impact of adopting the amended consolidation guidance has resulted in the consolidation of certain VIES managed by the Company. Additional disclosures related to Apollo's involvement with VIES are presented in note 5 to our consolidated financial statements. 102 EFTA00623494

Table of Contents Results of Operations Below is a discussion of our consolidated results of operations for the years ended December 31. 2011. 2010 and 2009. respectively. For additional analysis of the factors that affected our results at the segment level. refer to "—Segment Analysis" below: Year Ended December 31. Amount Change Percentage Change Year Ended December 31. Amount Change Percentage Change 2011 2010 2010 2009 lin thousands) On thousands) Revenues: Advisory and transaction lees from affiliates S 81.933 $ 79.782 2.171 2.7% S 79.782 5 56,075 S 23.707 42.3% Management fees from affiliates 487339 431.096 56.463 13.1 431.096 406.257 24.839 6.1 Camed interest Boss) income Irma affiliates 1397.880) 1.59902(1 (1.996.900) NM 1.599.0_0 301.396 1094 624 217.0 Total Revenues 171.632 2.109.898 (1.938.266) (91.9) 2.109.898 966.728 1.143.170 118.3 Expenses: Compensation and benefits: kamityhased compensation 1.149.733 1.118.412 31.341 2.8 1.118,412 1.100.106 18.306 1.7 Salary. bonus and benefits 251.095 249.571 1324 0.6 249.571 227.356 22.215 9.8 Profit Manng expense (63.453) 555.225 (618.678) NM 555.225 161.935 393.290 242.9 Incentive fee compensation 3,383 20.142 116.759) (83.2) 20.142 5.613 14.529 258.8 Total Compensation and Benefits 1.340.778 1.943.350 (602.572) (31.0) 1.943.350 1.495.010 448.340 30.0 Interest expense 40.850 35.436 5.414 15.3 33.436 50.252 (14.816) (29.5) Nolen:tonal fees General. administrative and other Placement lees. Occupancy Ikpreciation and 3111011141111X1 59.277 75.538 3.911 35.816 16,260 61.919 65.107 4.258 23.067 24.249 (2.642) 10.451 (347) 12.749 2.011 (43) 16.1 (8.1) 55.3 8.3 61.919 65.107 4,258 21067 24,249 33.889 61.066 12,364 29.625 24.299 28.030 4.041 18.1(6) (6.5581 (501 82.7 6.6 (65.6) (221) 10.2) Total Expenses 1382.450 2.157.386 (574.936) (26.6) 2.157.386 1.706.505 450.881 26.4 Other Income: Na (losses) gains from insestment activities 029.827) 367.871 (497.698) NM 367.871 510.935 1143.064) (28.0) Net gains from investment activities ol consolidated variable interest entities Gain from repurchase of debt Income from equity method investments 24.111 — 13.923 48.206 — 69.812 124.005) — 153.889) (49.8) NM (80.1) 48.206 — 69.812 — 36,193 83.113 48,206 (36.193) (13.3)11 NM (100.0) (16.0) Interest income 4.731 1.528 3.203 209.6 1.528 IAS0 78 5.4 (kiwi income. net 205.520 195.032 10.488 5.4 195,032 41.410 153.622 371.0 Total Other Income 118.548 682.449 (563.901) (82.6) 682449 673.101 9.348 1.4 (fund income before income tax benelil (provision) Income lax provision Nei 'Loss) Income 0.292.2701 (11.929) 634.961 (91.737) (1.927.231) 79.808 NM (87.0) NM 634,961 191.737) (66.676) (28.714) 701.637 (63.023) NM 219.5 NM 11.304.199) 543.224 (1.847.423) 543,224 (95.390) 638.614 Na tuts (income) attributable to Non-Controlling humems 835,373 (448.6071 1.283.980 NM (448.607) (59.786) (388.821) NM Net (Loss) Income Attributable to Apollo Okkal Management. lit s (468.826) S 94.617 S (563.443) NM 5 94.617 5 (155.176) 5 249.793 NM 'NM" denotes not meaningful. Changes from negative to punitive amounts and posiu cc to negarme amount.. arc not considered meaningful. Increases or decTINISCI Irons .rero and changes greater than 50(Y.3 are also not considered meaningful. 103 EFTA00623495

Table of Contents Revenues Our revenues and other income include fixed components that result from measures of capital and asset valuations and variable components that result from realized and unrealized investment performance. as well as the value of successfully completed transactions. Year Ended December 31.2011 Compared to Year Ended December 31.2010 Advisory and transaction fees from affiliates, including directors' fees and reimbursed broken deal costs. increased by $2.2 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This increase was primarily attributable to an increase of advisory fees in the private equity segment during the period of $6.5 million. partially offset by a decline in transaction fees in the capital markets segment of $4.6 million. During the year ended December 31. 2011, gross and net advisory fees. including directors' fees, were $143.1 million and $56.1 million, respectively, and gross and net transaction fees were $62.9 million and $30.7 million, respectively. During the year ended December 31. 2010. gross and net advisory fees, including director:: fees, were $120.7 million and $43.4 million, respectively, and gross and net transaction fees were $102.0 million and $38.2 million, respectively. The net transaction and advisory fees were further offset by $4.8 million and $1.8 million in broken deal costs during the years ended December 31.2011 and 2010, respectively. primarily relating to Fund VII. Advisory and transaction fees are reported net of Management Fee Offsets as calculated under the terms of the respective limited partnership agreements. See'—Overview of Results of Operations—Revenues—Advisory and Transaction Fees from Affiliates" for a summary that addresses how the Management Fee Offsets am calculated for each fund. Management fees from affiliates increased by $56.5 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to an increase in management fees earned by our real estate, capital markets and private equity segments by $28.9 million. $26.4 million and $3.8 million respectively. as a result of corresponding increases in the net assets managed and fee-generating invested capital with respect to these segments during the period. The remaining change was attributable to $2.6 million of fees earned from VIEs eliminated in consolidation during the year ended December 31. 2011. Carried interest (loss) income from affiliates changed by $(1.996.9) million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. Carried interest income from affiliates is driven by investment gains and losses of unconsolidated funds. During the year ended December 31. 2011. there was $(1.087.0) million and $689.1 million of unrealized carried interest loss and realized carried interest income. respectively. which resulted in total carried interest loss from affiliates of $(397.9) million. During the year ended December 31. 2010. there was $1.355.4 million and $243.6 million of unrealized and realized carried interest income. respectively, which resulted in total carried interest income from affiliates of $1,599.0 million. The $2,442.4 million decrease in unrealized carried interest income was driven by significant declines in the fair value of portfolio investments held by certain of our private equity and capital markets funds. which resulted in reversals of previously recognized carried interest income, primarily by Fund VI. Fund VII. Fund IV. Fund V. COF 11. COF I. ACLF. A1E II and SOMA, which had decreased carried interest income of $1.371.2 million. $563.0 million. $254.1 million. $81.0 million. $59.5 million, $57.9 million. $49.9 million. $30.4 million and $27.8 million. respectively. Included in the above was a reversal of previously recognized carried interest income due to general partner obligations to return carried interest income that was previously distributed on Fund VI and SOMA of $75.3 million and $18.1 million. respectively, during the year ended December 31, 2011. The $445.5 million increase in realized carried interest income was attributable to increased dispositions along with higher interest and dividend income distributions from portfolio investments held by certain of our private equity and capital markets funds. primarily by Fund VII, Fund IV and Fund VI of $221.5 million. $204.7 million and $67.6 million respectively, during the year ended December 31. 2011 as compared to the same period during 2010. 104 EFTA00623496

Table of Contents Year Ended December 31. 2010 Compared to Year Ended December 31. 2009 Advisory and transaction fees from affiliates. including directors' fees and reimbursed broken deal costs. increased by $23.7 million for the year ended December 31. 2010 as compared to the year ended December 31. 2C09. This increase was primarily attributable to an increase in the number of acquisitions and divestitures during the period. Net advisory and transaction fees earned for the capital markets and private equity segments increased by $11.9 million and $11.8 million. respectively. During the year ended December 31. 2010. gross and net advisory fees. including directors' fees. were $120.7 million and $43.4 million, respectively. and gross and net transaction fees were $102.0 million and $38.2 million. respectively. During the year ended December 31. 2009. gross and net advisory fees. including directors' fees. were $108.5 million and $39.1 million. respectively. and gross and net transaction fees were $68.1 million and $22.9 million. respectively. The net transaction and net advisory fees were further offset by $1.8 million and $5.9 million in broken deal costs that the Company was obligated to repay during the year ended December 31. 2010 and 2009. respectively. primarily relating to Fund VII. Management fees from affiliates increased by $24.8 million for the year ended December 31.2010 as compared to the year ended December 31. 2C09. This change was primarily attributable to an increase in management fees earned by our capital markets and real estate segments by $15.7 million and $10.2 million. respectively, as a result of corresponding increases in the net assets managed during the period. These increases were partially offset by a decrease of $1.1 million in management fees earned from our private equity funds as a result of a decrease in the amount of fee-generating invested capital due to dispositions of investments subsequent to December 31. 2009. Carried interest income from affiliates changed by $1,094.6 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. Carried interest income from affiliates is driven by investment gains and losses of unconsolidated funds. During the year ended December 31. 2010. there was $1,355.4 million and $243.6 million of unrealized and realized carried interest income. respectively, which resulted in total carried interest income from affiliates of $1.599.0 million. During the year ended December 31. 2009. there was $383.0 million and $121.4 million of unrealized and realized carried interest income, respectively. which resulted in total carried interest income from affiliates of $504.4 million. The $972.4 million increase in unrealized carried interest income was driven by significant improvements in the fair value of portfolio investments held by certain of our private equity funds, primarily by Fund VI. Fund VII and Fund IV. which had increased carried interest income of $647.6 million. $249.6 million and $136.0 million, respectively, during the period. Based on the increase in fair value of the underlying portfolio investments, profits of Fund VI were such that the priority return to the fund investors was met and thereafter its general partner was allocated (480% of the fund's profits. or $602.6 million. pursuant to the catch up formula in the fund partnership agreement whereby the general partner earns a disproportionate return until the general partner's carried interest income equates to 20% of the cumulative profits of the fund, and (ii) $45.0 million. which was allocated to the general partner once its carried interest income equated to 20% of the cumulative profits of the fund. Similarly. Fund IV profits were such that the priority return to fund investors was met and thereafter its general partner was allocated 80% of the fund's profits. or $136.0 million, but did not have carried interest income that equated to 20% of the cumulative profits of the fund. The $122.2 million increase in realized carried interest income was attributable to increased dispositions of portfolio investments held by certain of our private equity and capital markets funds during the year ended December 31. 2010 as compared to the same period during 2009. Expenses Year Ended December 31.2011 Compared to Year Ended December 31.2010 Compensation and benefits decreased by $602.6 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to a reduction of profit sharing expense of $618.7 million driven by the change in carried interest income earned from certain of our private equity and capital markets funds due to the significant decline in the fair value of the underlying investments in 105 EFTA00623497

Table of Contents these funds during the period. In addition, incentive fee compensation decreased by $16.8 million as a result of the unfavorable performance of certain of our capital markets funds during the period. Management business compensation and benefits expense increased by $39.2 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily the result of increased headcount. partially offset by a decrease related to the performance based incentive arrangement discussed below. The Company currently intends to. over time. seek to more directly tie compensation of its professionals to realized performance of the Company's business, which will likely result in greater variability in compensation. As previously disclosed, in June 2011. the Company adopted a performance based incentive arrangement (the "Incentive Poor) whereby certain partners and employees earned discretionary compensation based on carried interest realizations earned by the Company during the year. which amounts arc reflected as profit sharing expense in the Company's consolidated financial statements. The Company adopted the Incentive Pool to attract and retain, and provide incentive to. partners and employees of the Company and to more closely align the overall compensation of partners and employees with the overall realized performance of the Company. Allocations to the Incentive Pool and to its participants contain both a fixed and a discretionary component and may vary year-to-year depending on the overall realized performance of the Company and the contributions and performance of each participant. There is no assurance that the Company will continue to compensate individuals through performance-based incentive arrangements in the future and there may be periods when the Executive Committee of the Company's manager determines that allocations of realized carried interest income are not sufficient to compensate individuals, which may result in an increase in salary. bonus and benefits expense. Interest expense increased by $5.4 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to higher interest expense incurred during 2011 on the AMH credit facility due to the margin rate increase once the maturity date was extended in December 2010. Professional fees decreased by $2.6 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was attributable to lower external accounting. tax, audit, legal and consulting fees incurred during the year ended December 31. 2011. as compared to the same period during 2010. General, administrative and other expenses increased by $10.5 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased travel, information technology. recruiting and other expenses incurred associated with the launch of our new funds and continued expansion of our global investment platform during the year ended December 31. 2011 as compared to the same period during 2010. Occupancy expense increased by $12.7 million for the year ended December 31, 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to additional expense incurred from the extension of existing leases along with additional office space leased as a result of the increase in our headcount to support the expansion of our global investment platform during the year ended December 31. 2011 as compared to the same period during 2010. Year Ended December 31,2010 Compared so Year Ended December 31.2009 Compensation and benefits increased by $448.3 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to an increase in profit sharing expense of $393.3 million, which was driven by the change in carried interest income earned from our private equity and capital markets funds during the period due to improved performance of their underlying portfolio investments. In addition. salary. bonus and benefits expense increased by $22.2 million, which was driven by an increase in headcount and bonus accruals during the period and non- cash equity-based compensation expense increased by $18.3 million, primarily related to additional grants of RSUs subsequent to December 31. 2009. 106 EFTA00623498

Table of Contents Furthermore. incentive fee compensation increased by $14.5 million as a result of the favorable performance of certain of our capital markets funds during the year ended December 31. 2010 as compared to the same period during 2009. Interest expense decreased by $14.8 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to lower interest expense incurred in respect of the AMH Credit Agreement due to the $90.9 million debt repurchase during April and May 2009 along with the expiration of interest rate swap agreements during May and November 2010. In addition. there were lower LIBOR and ABR interest rates during the year ended December 31. 2010 as compared to the same period during 2009 which resulted in lower interest expense incurred. Professional fees increased by $28.0 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to higher external accounting. tax, audit. legal and consulting fees incurred during the period which was primarily associated with incremental costs incurred to register the Company's Class A shares and the implementation of new information technology systems during the year ended December 31. 2010 as compared to the same period during 2009. General, administrative and other expenses increased by $4.0 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to increased travel, information technology. recruiting and other expenses incurred associated with the launch of our new real estate funds and continued expansion of our global investment platform during the year ended December 31.2010 as compared to the same period during 2009. Placement fees decreased by $8.1 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. Placement fees are incurred in connection with the raising of capital for new and existing funds. The fees are normally payable to placement agents. who are third panics that assist in identifying potential investors. securing commitments to invest from such potential investors. preparing or revising offering 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. This change was primarily attributable to decreased fundraising efforts during 2010 in connection with our capital markets and private equity funds resulting in lower placement fees incurred of $6.6 million and $1.5 million, respectively, during the year ended December 31.2010 as compared to the same period during 2009. Occupancy expense decreased by $6.6 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to cost savings resulting from negotiating new office leases and lower maintenance fees incurred on existing leased space during the year ended December 31. 2010 as compared to the same period during 2009. In addition, there was a loss incurred on subleases totaling $3.2 million during the year ended December 31, 2009. Other (Loss) Income Year Ended December 31.2011 Compared to Year Ended December 31.2010 Net gains from investment activities decreased by $497.7 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to a $494.1 million decrease in net unrealized gains related to changes in the fair value of AAA Investments portfolio investments during the period. In addition. there was a $5.9 million unrealized loss related to the change in the fair value of the investment in HFA during the year ended December 31. 2011. partially offset by $2.3 million of net unrealized and realized gains related to changes in the fair value of the Metals Trading Fund's portfolio investments during the year ended December 31. 2010. Net gains from investment activities of consolidated VIEs decreased by $24.0 million during the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to 107 EFTA00623499

Table of Contents a decrease in net realized and unrealized gains (losses) relating to the decrease in the fair value of investments held by the consolidated VIEs of $54.1 million. along with higher expenses of $37.9 million during the period primarily due to the acquisition of Gulf Stream in October 2011. These decreases were partially offset by higher net unrealized and realized gains relating to the debt held by the consolidated VIEs of $55.7 million and higher interest income of $12.3 million during the year ended December 31.2011 as compared to the same period during 2010. Income from equity method investments decreased by $55.9 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily driven by changes in the fair values of certain Apollo funds in which the Company has a direct interest. Fund VII. COF I. Anus. COF II and ACLF had the most significant impact and together generated $11.9 million of income from equity method investments during the year ended December 31.2011 as compared to $62.1 million of income from equity method investments during the year ended December 31.2010 resulting in a net decrease of income from equity method investments totaling $50.2 million. Refer to note 4 to our consolidated financial statements for a complete summary of income (loss) from equity method investments by fund for the years ended December 31. 2011 and 2010. Other income. net increased by $10.5 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to an increase in gains on acquisitions of $166.5 million driven by the $195.5 million bargain purchase gain recorded on the Gulf Stream acquisition during October 2011. partially offset by the bargain purchase gain on the CPI acquisition of $24.1 million during November 2010. This was offset by $162.5 million of insurance reimbursement received during the year ended December 31. 2010 relating to a $200.0 million litigation settlement incurred during 2008. along with $7.8 million of other income attributable to the change in the estimated tax receivable agreement liability as discussed in note 10 to our consolidated financial statements. During the year ended December 31. 2011. approximately $8.0 million of offering costs were reimbursed that were incurred during 2009 related to the launch of ARI. offset by approximately $8.0 million of offering costs incurred during the third quarter of 2011 related to the launch of AMTG. The remaining change was primarily attributable to gains resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries during the year ended December 31. 2011 as compared to the same period in 2010. Refer to note 10 of our consolidated financial statements for a complete summary of other income for the years ended December 31. 2011 and 2010. Year Ended December 31. 2010 Compared to Year Ended December 31.2009 Net gains from investment activities decreased by $143.1 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to a $101.7 million change in net unrealized gains (losses) related to changes in the fair value of AAA's portfolio investments during the period. This decrease was also a result of a change in net unrealized gains (losses) of $38.4 million related to the change in the fair value of Anus during 2009, where we. as the general partner. were allocated any negative equity of the fund. During the year ended December 31. 2009. the fair value of Anus increased. which resulted in the reversal of the previously recognized obligation. In addition, there was a $2.3 million change in net unrealized and realized gains (losses) related to changes in the fair value of the Metals Trading Funds portfolio investments during the year ended December 31.2010 as compared to the same period during 2009. Net gains from investment activities of consolidated VIEs were $48.2 million during the year ended December 31. 2010. This amount was attributable to interest and other income earned of $62.7 million along with net realized and unrealized gains relating to the changes in the fair values of investments held by the consolidated VIEs of $53.6 million. partially offset by other expenses of $34.3 million and net losses relating to the changes in the fair values of debt held by the consolidated VIEs of $33.8 million during the year ended December 31. 2010. Gain from repurchase of debt was $36.2 million for the year ended December 31.2009 and was attributable to the purchase of $90.9 million face value of AMU debt related to the AMR Credit Agreement for $54.7 million 108 EFTA00623500

Table of Contents in cash. As discussed in note 12 to our consolidated financial statements. the debt purchase was accounted for as if the debt was extinguished and the difference between the carrying amount and the re-acquisition price resulted in a gain on extinguishment of debt of 536.2 million. Income from equity method investments changed by 513.3 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This decrease was driven by changes in the fair values of certain Apollo funds or investments in which the Company has a direct interest. ACL.F. Vantium C. COP II. COP I and AIE II had the most significant impact and together generated $22.5 million of income from equity method investments during the year ended December 31.2010 compared to $49.5 million of income from equity method investments during the year ended December 31.2009 resulting in a net decrease of income from equity method investments totaling $27.0 million. This decrease was partially offset by an increase of income from equity method investments in Fund VII. Vantium A. Anus and EPF which together generated 544.0 million of income from equity method investments during the year ended December 31. 2010 compared to 530.3 million of income from equity method investments during the year ended December 31. 2009 resulting in a net increase of income from equity method investments totaling $13.7 million. Refer to note 4 to our consolidated financial statements for a complete summary of income (loss) from equity method investments by fund for the years ended December 31.2010 and 2009. Other income. net increased by $153.6 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to an additional 5125.0 million of insurance reimbursement received during the year ended December 31.2010 totaling 5162.5 million relating to the $200.0 million litigation settlement incurred during 2008. as compared to $37.5 million received during the year ended December 31. 2009. In addition. there was a net gain on acquisitions and dispositions of $29.7 million during 2010 and $14.2 million of the increase was attributable to the change in the estimated tax receivable agreement liability as discussed in note 10 to our consolidated financial statements. These increases were partially offset by impairment on fixed assets of $3.1 million and loss on assets held for sale of 52.8 million during 2010. The remaining change was primarily attributable to gains (losses) resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries. partially driven by the Euro weakening against the U.S. dollar during the year ended December 31. 2010 as compared to the same period in 2009. Refer to note 10 of our consolidated financial statements for a complete summary of other income for the years ended December 31.2010 and 2009. Income Tar Provision Year Ended December 31.2011 Compared to Year Ended December 31.2010 The income tax provision decreased by $79.8 million far the year ended December 31.2011 as compared to the year ended December 31. 2010. As discussed in note 11 to our consolidated financial statements, the Company's income tax provision primarily relates to the earnings generated by APO Corp.. a wholly-owned subsidiary of Apollo Global Management. LLC that is subject to U.S. federal, state and local taxes. APO Corp. had income before taxes of $1.7 million and $211.0 million for the years ended December 31.2011 and 2010. respectively. after adjusting for permanent tax differences. The $209.3 million change in income before taxes resulted in decreased federal. state and local taxes of $77.2 million utilizing a marginal corporate tax rate. The remaining decrease in the income tax provision of $2.6 million in 2011 as compared to 2010 was primarily affected by decreases in the New York City Unincorporated Business Tax ("NYC UBT"). as well as taxes on foreign subsidiaries. Year Ended December 31. 2010 Compared to Year Ended December 31.2009 The income tax provision increased by $63.0 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. As discussed in note 11 to our consolidated financial statements, the Company's income tax provision primarily relates to the earnings generated by APO Corp.. a wholly-owned subsidiary of Apollo Global Management. LLC that is subject to U.S. federal, state and local taxes. APO Corp. 109 EFTA00623501

Table of Contents had income before taxes of $211.0 million and $66.3 million for the years ended December 31.2010 and 2009. respectively, after adjusting for permanent tax differences and the special allocation of AMH income as discussed in note 15 to our consolidated financial statements. The $144.7 million change in income before taxes resulted in increased federal taxes of $50.6 million utilizing a 35% tax rate and state and local taxes of $8.7 million utilizing a combined 6% tax rate. The remaining change of $3.7 million in the income tax provision in 2010 compared to 2009 was primarily affected by decreases in the NYC UBT, as well as. taxes on foreign subsidiaries. Non-Controlling Interests Net loss (income) attributable to Non-Controlling Interests consisted of the following: Year Ended December 31. 2011 2010 2009 lin thousands) Ame" $ 123,400 $ (356,251) $ (452,408) Consolidated VIEs'-' (216.193) (48.206) Interest in management companies' (12.146) (16.258) (7.818) Net income attributable to Non-Controlling Interests in consolidated entities (104.939) (420.715) (460.226) Net loss (income) attributable to Non-Controlling Interests in Apollo Operating Group 940.312 (27.892) 400.440 Net loss (income) attributable to Non-Controlling Interests $ 835.373 $ (448.607) $ (59.786) (I) Reflects the Non-Controlling Interests in the net loss (income) of AAA and is calculated based on the Non-Controlling Interests ownership percentage in AAA. which was approximately 98% during the year ended December 31. 2011 and approximately 97% during the years ended December 31. 2010 and 2009. respectively. (2) Reflects the Non-Controlling Interests in the net loss (income) of the consolidated VIEs and includes $202.2 million and $11.4 million of gains recorded within appropriated partners' capital related to consolidated VIEs during the years ended December 31.2011 and 2010. respectively. (3) Reflects the remaining interest held by certain individuals who receive an allocation of income from certain of our capital markets management companies. Initial Public Offering—On April 4. 2011. the Company completed the initial public offering ("IPO") of its Class A shares, representing limited liability company interests of the Company. Apollo Global Management. LLC received net proceeds from the IPO of approximately $3823 million, which were used to acquire additional AOG Units. As a result. Holdings' ownership interest in the Apollo Operating Group decreased from 70.7% to 66.5% and the Company's ownership interest increased from 29.3% to 33.5%. As such, the difference between the fair value of the consideration paid for the Apollo Operating Group level ownership interest and the book value on the date of the IPO is reflected in Additional Paid in Capital. 110 EFTA00623502

Table of Contents Net loss attributable to Non-Controlling Interests in the Apollo Operating Group consisted of the following: Year Ended December 31. 2011 2010 2009 Cm thousands) Net (loss) income $ (1,304,199) S 543.224 $ (95.390) Net loss (income) attributable to Non-Controlling Interests in consolidated entities (104.939) (420.715) (460.226) Net (loss) income after Non-Controlling Interests in consolidated entities (1,409,138) 122,509 (555,616) Adjustments: Income tax provision"' 11929 91,737 28,714 NYC 1.111T and foreign tax provision"' (8.647) (II 255) (11.638) Capital increase related to equity-based compensation (22.797) Net loss in non-Apollo Operating Group entities 1.345 4.197 9.336 Total adjustments (18.170) 84.679 26.412 Net (loss) income after adjustments (1.427308) 207.188 (529.204) Approximate ownership percentage of Apollo Operating Group 65.9% 71.0% 713% Net (loss) income attributable to Apollo Operating Group before other adjustments(7) (940.312) 145.379 (378.381) AMH special allocatiot (117.487) (22,059) Net (loss) income attributable to Non-Controlling Interests in Apollo Operating Group $ (940.312) S 27.892 $ (400.440) (1) Reflects all taxes recorded in our consolidated statements of operations. Of this amount. U.S. Federal. state, and local corporate income taxes attributable to APO Corp. are added back to income (loss) of the Apollo Operating Group before calculating Non-Controlling Interests as the income (loss) allocable to the Apollo Operating Group is not subject to such taxes. (2) Reflects 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 (loss) attributable to the Apollo Operating Group. This amount is calculated by applying the weighted average ownership percentage range of approximately 67A%. 71.0% and 71.5% during the years ended December 31. 2011. 2010 and 2009. respectively, to the consolidated net income (loss) of the Apollo Operating Group before a corporate income tax provision and after allocations to the Non-Controlling Interests in consolidated entities. (4) These amounts represent special allocation of income to APO Corp. and reduction of income allocated to Holdings due to the amendment to the AMH partnership agreement as discussed in note 15 to our consolidated financial statements. There was no extension of the special allocation after December 31. 2010. Therefore as a result, the Company did not allocate any additional income from AMH to APO Corp. related to the special allocation. However, the Company will continue to allocate income to APO Corp. based on the current economic sharing percentage. (3) EFTA00623503

Table of Contents Segment Analysis Discussed below are our results of operations for each of our reportable segments. They represent the segment information available and utilized by our executive management. which consists of our Managing Partners, who operate collectively as our chief operating decision maker, to assess performance and to allocate resources. Management divides its operations into three reportable segments: private equity. capital markets and real estate. These segments were established based on the nature of investment activities in each fund, including the specific type of investment made, the frequency of trading. and the level of control over the investment. Segment results do not consider consolidation of funds, equity-based compensation expense comprising of AOG Units. income taxes, amortization of intangibles associated with 2007 Reorganization and acquisitions and Non-Controlling Interests with the exception of allocations of income to certain individuals. In addition to providing the financial results of our three reportable business segments. we further evaluate our individual reportable segments based on what we refer to as our Management and Incentive businesses. Our Management Business is generally characterized by the predictability of its financial metrics, including revenues and expenses. The Management Business includes management fee revenues. advisory and transaction revenues. carried interest income from certain of our mezzanine funds and expenses. each of which we believe arc more stable in nature. The financial performance of our Incentive Business is partially dependent upon quarterly mark-to-market unrealized valuations in accordance with U.S. GAAP guidance applicable to fair value measurements. The Incentive Business includes carried interest income, income from equity method investments and profit sharing expense that are associated with our general partner interests in the Apollo funds, which is generally less predictable and more volatile in nature. Our financial results vary. since carried interest. which generally constitutes a large portion of the income 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. 112 EFTA00623504

Table of Contents Private Equity The following tables set forth our segment statement of operations information and our supplemental performance measure. EN1. for our private equity segment for the years ended December 31. 2011. 2010 and 2009. respectively. ENI represents segment income (loss), excluding the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and equity-based compensation expense comprising amortization of AOG Units, income taxes, amortization of intangibles associated with the 2007 Reorganization and acquisitions and Non-Controlling Interest with the exception of allocations of income to certain individuals. In addition, segment data excludes the assets, liabilities and operating results of the Apollo funds and consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure. For the %'ear Ended December 31,2011 For the Year Ended December 31.2010 For the Year Ended December 31.2009 Management Incentive Total Nlanagement Incentive 'Iota) Nlanagement Incentive Total tin thousands) Edna. Equity: Revenues: Advisory and transaction fees from affiliates S 66.913 S 66.913 5 60,444 S — 5 60.444 5 48.612 S - 5 48.642 Management lees. (loin affiliates 263.212 263.212 259.395 259.395 2611.475 - 260.47$ Carried interest income (loss) from affiliates: Unrealized (kiss) gam" — 11 019.7481 11 019 7411) — 1.251526 1 151 526 — 262.690 262.890 Realized gains 570,540 570,540 69.587 69,587 47,981 47.981 'total Revenues 330.115 1449.208) 1119.083) 319.839 1.321.113 1.640.952 309.120 310‘871 619.991 Expenses Compensation and Benefits: Equity compensation 31378 31,778 16,152 16.182 2.721 2.721 Salary. bonus and bend its 125.145 125.145 133.999 133.999 127751 - 127.751 Profit sharing expense 000.267/ (100,267) 519469 519,669 - 124,048 124.048 Total conipensation and benelits 156.913 (100.267) 56.656 150.181 519,669 669.850 130.472 124.038 734.331 Other expenses 99.338 99.338 97.750 97.750 99.581 - 99.581 Total Expenses 156.261 (100.267) 155.994 247.931 519.669 767.6(X) 230.053 124,088 354.101 Other Income: Income I min equity method investments 7.963 7.960 50.632 50.632 54,639 54.639 Other income. net 7.081 81 162,213 162,213 58,701 584 59,285 Total Other Income 7.081 7.960 15.041 162.213 50,632 212.845 58.701 55,223 113.924 Economic Na Income (Loss) S 80.945 5 1340.9811 (26).036) 234.121 852.076 1.086.197 = 137.768 242.046 379.814 01 Included in unrealized earned in terest (loss) income I ono ZS IC% CI Oi plc% toUNI) realwyd.alizttl nth: lest due to the eenei al palm./ ol>bFatwo to gout II pies xou'ly distributed carried interest income of 5(75.3) million (or Fund ‘.'t (or the year aided December 31. 201 1. Ilw general pannei obligaiwo I. recognized based upon a hypothetical liquidation of the funds' net assets as of December 31.2011. The actual determination and any required payment of a genial pm toe: obIsFatton would not take place until the final disposition of a fund's investments based on the contractual temunation of the fund. 113 EFTA00623505

Table of Contents For the Year F.nded December 31. Percentage Change For 11w Year Ended December 31. Percentage Change 2011 2010 Amount Change 2010 2009 Amount Change (in thousands) in thousands, Private Equity: Revenues: Admory and MillfaCh011 fees from affiliate, 66.913 $ 60.444 6.469 10.7% $ 60.444 $ 48.642 $ 11.802 24.3% Alanagemeni lees (win al liliates 263.212 259.395 3.817 1.5 259.395 260478 0 083) (0.4) Carried interest (loss) income horn affiliates: Unrealized (losses) gains (1.019.748) 1.251.526 11271.274) NM 1.251.526 262,890 988.636 376.1 Realized gains 570.540 69.587 500.953 NM 69.587 47.981 21.606 45.0 Total canied interest (losses) income hum al lihates (449.208) 1321.113 11.770.321) NM 1.321.113 31(1.871 1.010.242 325.0 Total Revenues (119.083) 1.640.952 (1.760.035) NM 1.640.952 619.991 1.020.961 160.7 Expenses': Compensation and benefits: Equity-based compensation 31.778 16.182 15.596 96.4 16.182 2,721 13.461 494.7 Salary. bonus and benefits 125.145 133.999 (8,850) (6.6) 133.999 127.751 6,248 0.9 Profit Oaring expense (100.267) 519.669 (619.936) NM 519.669 124.048 395.621 318.9 Total compensation and bone tits expense 56.656 669.850 (613.194) (91.5) 669.850 254.520 415.330 163.2 Other nrcoses 99.338 97.750 1.588 1.6 97.75(1 99.381 (1.831) (1.8) Total Expenses 155.994 767.600 (611.606) (79.7) 767.600 354.101 413.499 116.8 Other Income: Income from equity method Investments 7.960 50.632 (02.672) (84.3) 50.632 54.639 (4.007) (7.3) Other income. net 7.081 161113 (155.132) (95.6) 162.213 59,285 1(12.928 173.6 Total Other Income 15.041 212,845 (l97.804) (92.9)% 212.845 113.924 98.921 86.8 ECODOIMC Net (Loni) Income (260.0361 5 1.086.197 5 11.346.2331 NM S 1.056.197 S 379.514 S 706.353 186.0% (I) Included in unrealized carried interest (lass) income from affiliates is reversal of previously realized carried interest income due to the general partner obligation to return previously distributed carried interest income of $(75.3) million for Fund VI for the year ended December 31. 2011. respectively. The general partner obligation is recognized based upon a hypothetical liquidation of the fund? net assets as of December 31. 2011. The actual determination and any required payment of any such general partner obligation would not take place until the final disposition of a funds investments based on the contractual termination of the fund. Revenues Year Ended December 31,2011 Compared so Year Ended December 31.2010 Advisory and transaction fees from affiliates. including director? fees and reimbursed broken deal costs, increased by $6.5 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to an increase in advisory services rendered during the period. primarily with respect to AAA and managed accounts. Gross advisory and transaction fees. including directors fees, were $164.5 million and $162.9 million for the year ended December 31. 2011 and 2010. respectively. an increase of $1.6 million or 1.0%. The transaction fees earned during 2011 primarily related to five portfolio investment transactions, specifically Alcan Engineered Products. Ascometal SA. Athens Holding Ltd. and associates. Brit Insurance and CKX Inc.. which together generated $35.5 million and $18.4 million of the gross and net transaction fees. respectively. as compared to transaction fees primarily earned during 2010 from four portfolio investment transactions, specifically Lyondelfilasell Industries. Noranda Aluminum Inc.. CKE Restaurants Inc. and Evertec Inc.. which together generated $58.4 million and $20.1 million of the gross and net transaction fees. The advisory fees earned during 2011 were primarily generated by advisory and monitoring 114 EFTA00623506

Table of Contents arrangements with six portfolio investments including Athens Holding Ltd. and associates, Berry Plastics Group. Caesars Entertainment. CEVA Group plc. LeverageSource and Realogy Corporation. which generated gross and net fees of $78.1 million and $34.9 million. respectively. The advisory fees earned during 2010 were primarily generated by advisory and monitoring arrangements with several portfolio investments including Caesars Entertainment. LeverageSource and Realogy Corporation which generated gross and net fees of $55.7 million and $20.9 million, respectively. Advisory and transaction fees, including directors' fees. are reported net of Management Fee Offsets totaling $92.8 million and $100.6 million for the year ended December 31. 2011 and 2010. respectively. a decrease of $7.8 million or 7.8%. The net transaction and advisory fees were further offset by $4.8 million and $1.8 million in broken deal costs during the years ended December 31.2011 and 2010. respectively, relating to Fund VII. Management fees from affiliates increased by $3.8 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased management fees earned from AAA Investments of $3.2 million as a result of increased adjusted gross assets managed during the period. In addition, management fees of $2.9 million were earned from ANRP which began earning fees during the third quarter of 2011 based on committed capital. These increases were partially offset by decreased management fees earned by Fund V of $1.8 million as a result of decreases in fee-generating invested capital. In addition. during the third quarter of 2010. Fund IV started its winding down and no longer earns management fees which resulted in a decrease in management fees of $0.7 million during the year ended December 31.2011 as compared to the same period during 2010. Carried interest (loss) income from affiliates changed by $(1370.3) million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributed to a decrease in net unrealized carried interest income of $2.271.2 million driven by significant declines in the fair values of the underlying portfolio investments held during the period which resulted in the reversal of previously recognized carried interest income, primarily by Fund VI. Fund VII. Fund IV and Fund V of $1.371.2 million. $563.0 million. $254.1 million and $81.0 million. respectively. Included in the above was a reversal of previously recognized carried interest income due to general partner obligations to return previously distributed carried interest income on Fund VI of $75.3 million during the year ended December 31. 2011. The remaining change relates to an increase in realized carried interest income of $500.9 million resulting from increased dispositions along with higher interest and dividend income distributions from portfolio investments held by certain of our private equity funds. primarily by Fund VII. Fund IV and Fund VI and Fund V of $221.5 million. $204.7 million. $67.6 million and $7.1 million. a LspLaively. during the year ended December 31.2011 as compared to the same period during 2010. Year Ended December 31. 2010 Compared so Year Ended December 31.2009 Advisory and transaction fees from affiliates, including directors' fees and reimbursed broken deal costs, increased by $11.8 million for the year ended December 31.2010 as compared to the year ended December 31. 2M)9. This change was attributable to an increase in the number of acquisitions and divestitures during the period. primarily by AAA. Fund VII. Fund V and Fund VI of $3.7 million. $3.5 million. $1.9 million and $1.9 million, respectively. Gross advisory and transaction fees, including directors fees. were $162.9 million and $148.1 million for the year ended December 31.2010 and 2009. respectively, an increase of $14.8 million or 10.0%. The transaction fees earned during the year ended December 31. 2010 primarily related to four portfolio investment transactions, specifically Lyondelllia.sell Industries. Noranda Aluminum Inc.. CKE Restaurants Inc. and Evertec Inc.. which together generated $58.4 million and $20.1 million of the grass and net transaction fees. respectively. The transaction fees earned during the year ended December 31.2009 primarily related to two portfolio investment transactions, specifically Infineon Technologies AG and Charter Communications Inc.. which generated $51.0 million and $16.3 million of the gross and net transaction fees. respectively. The advisory fees earned during both periods were primarily generated by advisory and monitoring arrangements with several portfolio investments including LeverageSource. Caesars Entertainment and Realogy. which generated gross and net fees of $55.7 million and $20.9 million. respectively, during the year ended December 31. 2010 gross and net 115 EFTA00623507

Table of Contents fees of $53.7 million and $20.3 million. respectively. during the year ended December 31. 2009. Advisory and transaction fees. including directors fees. are reported net of Management Fee Offsets totaling $100.6 million and $93.8 million for the year ended December 31.2010 and 2009. respectively. an increase of $6.8 million or 7.2%. Management fees from affiliates decreased by $1.1 million for the year ended December 31. 2010 as compared to the year ended December 31. 20119. This change was primarily attributable to decreased management fees earned as a result of decreased values of fee-generating invested capital due to dispositions of investments, primarily by Fund VI and Fund V. resulting in decreased management fees of $2.4 million and $1.4 million. respectively. In addition, during the third quarter of 2010. Fund IV started its winding down and no longer earns management fees which resulted in a decrease in management fees of $2.0 million during the period. These decreases were partially offset by increased management fees earned from AAA Investments of $5.1 million as a result of increased adjusted gross assets managed during the year ended December 31. 2010 as compared to the same period during 2009. Carried interest income from affiliates changed by $1,010.2 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to an increase in net unrealized gains of $988.6 million driven by improvements in the fair value of the underlying portfolio investments held. primarily by Fund VI. Fund VII and Fund IV of $647.6 million, $249.6 million and $136.0 million. respectively. Based on the increase in fair value of the underlying portfolio investments. profits of Fund VI were such that the priority return to the fund investors was met and thereafter its general partner was allocated (i) 80% of the fund's profits. or $602.6 million, pursuant to the catch up formula in the fund partnership agreement whereby the general partner earns a disproportionate return until the general partner's carried interest income equates to 20% of the cumulative profits of the fund, and (ii) $45.0 million, which was allocated to the general partner once its carried interest income equated to 20% of the cumulative profits of the fund. Similarly. Fund IV profits were such that the priority return to fund investors was met and thereafter its general partner was allocated 80% of the fund's profits. or $136.0 million, but did not have carried interest income that equated to 20% of the cumulative profits of the fund. These increases were partially offset by a decrease of unrealized carried interest income in Fund V of $56.0 million primarily due to dispositions of portfolio investments along with a lower net change in the fair value of investments held by this fund during the period. The remaining change relates to an increase in net realized gains of $21.6 million resulting from dispositions of portfolio investments held during the period. primarily by Fund V and Fund VII totaling $31.2 million. partially offset by a decrease in net realized gains of $7.6 million in Fund VI during the year ended December 31.2010 as compared to the same period during 2009. In 2010. the improved market conditions impacted the valuation across all Apollo investment classes. which is further discussed in "Item I. Business." Expenses Year Ended December 31,2011 Compared so Year Ended December 31.2010 Compensation and benefits expense decreased by $613.2 million for the year ended December 31. 2011 as compared to the year ended December 31, 2010. This change was primarily a result of a $619.9 million decrease in profit sharing expense primarily attributable to a change in carried interest income earned by our funds during the period and a $8.9 million decrease in salary. bonus and benefits expense. The performance-based incentive arrangement the Company adopted in lune 2011 for certain Apollo partners and employees also contributed to the decrease in salary. bonus and benefits expense during the period. These decreases were partially offset by increased non-cash equity-based compensation expense of $15.6 million primarily related to additional grants of RSUs subsequent to December 31, 2010. Other expenses increased by $1.6 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased occupancy expense of $4.0 million due to additional office space leased as a result of an increase in our headcount to support the 116 EFTA00623508

Table of Contents expansion of our investment platform during the period, along with increased interest expense incurred of $3.7 million in connection with the margin rate increase under the AMH Credit Agreement once the maturity date was extended in December 2010. These increases were partially offset by decreased professional fees of $6.7 million due to lower external accounting. tax. audit, legal and consulting fees incurred during the period. Year Ended December 31.2010 Compared to Year Ended December 31.2009 Compensation and benefits increased by $415.3 million for year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to a $395.6 million increase in profit sharing expense. driven by the change in carried interest income earned from our private equity funds due to improved performance of their underlying portfolio investments during the period. In addition, salary. bonus and benefits expense increased by $6.2 million, driven by an increase in headcount and bonus amounts during the year ended December 31. 2010 as compared to the same period during 2009. Additionally. there was increased non-cash equity-based compensation expense of $13.5 million primarily related to additional grants of RSUs subsequent to December 31. 2009. Other expenses decreased by $1.8 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to lower interest expense incurred of $9.7 million primarily in respect of the AMR Credit Agreement due to the $90.9 million debt repurchase during April and May 2009. the expiration of interest rate swap agreements during May and November 2010 and lower LIBOR and ABR interest rates incurred during the period. Additionally. there were decreases in occupancy of $2.1 million, primarily attributable to cost savings resulting from negotiating new office leases and lower maintenance fees incurred on existing leased space during the period. a $1.5 million decrease in placement fees and a $1.2 million decrease in depreciation and amortization expense from the prior year. These decreases were partially offset by increased professional fees of $8.0 million driven by higher external accounting. tax. audit. legal and consulting fees incurred during the period. In addition, general. administrative and other expenses increased by $4.6 million primarily attributable to increases in expenses incurred such as travel. information technology, recruiting and other general expenses. Other (Loss) Income Year Ended December 31.2011 Compared to Year Ended December 31.2010 Income from equity method investments decreased by $42.7 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was driven by decreases in the fair values of our private equity investments held, primarily relating to Apollo's ownership interest in Fund VII and AAA units which resulted in decreased income from equity method investments of $27.3 million and $14.2 million. respectively. during the year ended December 31. 2011 as compared to the same period during 2010. Other income net, decreased by $155.1 million for the year ended December 31. 2011 as compared to the year ended December 31, 2010. This change was primarily attributable to $162.5 million of insurance reimbursement received during the year ended December 31.2010 relating to the $200.0 million litigation settlement incurred during 2008. The remaining change was primarily attributable to gains (losses) resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries during the year ended December 31. 2011 as compared to the same period during 2010. Year Ended December 31.2010 Compared to Year Ended December 31.2009 Income from equity method investments decreased by $4.0 million far the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was driven by lower net changes in the fair values of our private equity investments held. primarily relating to Apollo's ownership interest in Vantium C and AAA units, which resulted in a decrease of income from equity method investments of $6.7 million and $6.1 million. 117 EFTA00623509

Table of Contents respectively, during the year ended December 31.2010 as compared to the same period during 2009. These decreases were partially offset by an increase of income from equity method investments relating to Fund VII and Vantium A of $6.0 million and $2.8 million, respectively, during the year ended December 31. 2010 as compared to the same period during 2009. Other income, net increased by $102.9 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was primarily attributable to an additional $125.0 million of insurance reimbursement received during the year ended December 31.2010 totaling $162.5 million relating to the $200.0 million litigation settlement incurred during 2008. as compared to $37.5 million received during the year ended December 31. 2009. This increase was partially offset by the gain from repurchase of debt of $20.5 million during the year ended December 31. 2009. which was attributable to the purchase of AMH debt related to the AMH Credit Agreement. As discussed in note 12 to our consolidated financial statements, the debt purchase was accounted for as if the debt was extinguished and the difference between the carrying amount and the reacquisition price resulted in a gain on extinguishment of debt. of which $20.5 million was allocated to the private equity segment. The remaining decrease was primarily attributable to gains (losses) resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries in part due to the Euro weakening against the U.S. dollar during the year ended December 31.2010 as compared to the same period during 2009. 118 EFTA00623510

Table of Contents Capital Markets The following tables set forth segment statement of operations information and EM. for our capital markets segment for the years ended December 31. 2011. 2010 and 2009. respectively. ENI represents segment income (loss), excluding the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and equity-based compensation expense comprising amortization of AOG Units, income taxes, amortization of intangibles associated with the 2007 Reorganization and acquisitions and Non-Controlling Interest with the exception of allocations of income to certain individuals. In addition, segment data excludes the assets, liabilities and operating results of the Apollo funds and consolidated VIEs that are included in the consolidated financial statements. EM is not a U.S. GAAP measure. Capital Markets Revenues: Year Ended December 31.2011 Year Ended December 31.2010 Year Ended December 31.2009 %h a Incentive Total Management Incentive Total Management Incentive Total On thousands) Advisory and transaction fees from affiliates 14.699 3 — 8 14.699 $ 19338 3 — 3 193313 $ 7433 8 — S 7,433 Management lees (ruin al Mutes Carried interest income (loss) from affiliates: Unrealized (losses) gains Realized gains Total Revenues 186.700 - 44,540 (66.852) 74 113 186.700 166.852) 118.653 160.318 - 47,385 — 160.318 103.918 103.918 126.604 173989 144.578 - 50404 12(1.126 22,995 144.578 120.126 73.399 245.939 7.261 253.200 227.041 230.522 457.563 202415 143.121 345.536 &pew= Compensation and Benefits: Equity.baied compensation 23283 23283 9,879 9379 2,921 2,921 Salary. bonus and benell6 92.898 92.898 93.884 93.888 88.686 88.686 Profit shanng expense 35.461 35461 35.556 35.556 37.387 37.887 Incentive fee compensation 3.383 3383 20.142 20.142 5.613 5.613 Total compensation and benefits 116.181 38.844 155.025 103263 55.698 159.461 91.607 43.500 135.107 MCI extremes 94.995 94.995 80380 80,880 83.318 - 83.318 Total Eapnises 211.176 38.844 250.020 184.643 55.698 240.341 174925 43.500 218423 Other Il.osal Income: Net loss from investment aetiviaes mu!) (5381) Income hum equity method investments 2.143 2,143 30.678 30.678 46384 46.384 Other (loss) income. net (1.978) (1.978) 10.928 10928 19309 38478 57.787 Total Other (lanai Income (1.978) (3.738) (5.716) 10.928 30.678 41.606 19.309 84,862 104.171 Non-Controlling Interests (12.146) (12.146) 06.258) — (16.258) 0.818) (7.818) Economic Net Income (Loss) 20.639 3 (35.321i S 4.682) 5 37(168 5 105.502 S 241.570 S 38.981 S 114.483 5 123.464 II I Included in unrealized carried interest income from affiliates is reversal of previously realized carnal interest immix. due to the general partner obligation to return pity mush distributed earned interest income or fees 0( 5(18.1) million for SOMA for the year ended December 31. 2011. The general partilel obligation is recognized based upon a hypothetical liquidation 0) the fundt: net assets as of December 31.200. 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. 119 EFTA00623511

Table of Contents For the lieer Ended. December 31. Peretnint Cl ii.r. Fur !he 1 var Luikt!. th. 'MIN.:. 31. PVCOXIdage r2grl_ 2011 2010 Amount Change 2010 2009 AMOUIII Change tm thomands) tm thousand%) Capita] Merkels Nevenes: Advisory and uansaction fees kom affiliates 14.699 5 19.338 $ (4.639) (24.0)% .5 19.338 S 7.433 S 11.905 160.2% Management lees front al libates 186.700 160318 26.382 16.5 160.318 144.578 15,740 10.9 Camed interest interne from af (Motet.: Unrealized (Ima) garn 166.852) 103.918 1170.770) NM 103.918 120.126 116.208) (133) Realind gains 118.653 173.989 (55.336) (31.8) 173.989 73.399 100.590 137.0 Total canied interest maalre (rum allihates 51.801 277,907 1226.106) (81.4) 277.907 193.525 14.382 43.6 Total Revenues 253.200 457363 (204.363) (44.7) 457.563 345.536 112027 32.4 Expent: Compensation and benfis Nutty-hawd compensatoir 23.283 9,879 13,44/4 135.7 9.879 2.921 6,958 238.2 Salsvy. bonus and benefits 92.898 93.884 (986) (1.1) 93.884 88.686 5.198 5.9 Profit shanng expense 35.461 35356 195) (0.3) 35.556 37.887 (2.331) 16.2) Incentive fee compensation 3.383 20.142 (16.759) (43.2) 20.142 5.613 14.529 258.8 'knal eumperwation and benefit. 155.025 159.461 (4.436) (2.8) 159.461 135.107 24.354 18.0 Other expreses 94.995 80.880 14.115 17.5 80.880 83.318 (2.438) (2.9) Total Expemes 250.020 240.341 9.679 4.0 240.141 218.425 10.0 Other (Lont) Interne: Net loos from investmem aas vines (5.881) 15.881) NM NM Interne from equity merhad invemments 2.143 30.678 (28.535) (93.0) 30.678 46.384 (15.706) (33.9) aller Ilsus) intome. rel (1.978) 10,928 (12.906) NM 10.9214 57.787 146.859) (81.1) Total Other (Los%) Income (5.716) 41.606 (47.322) NM 41.606 104.171 (62365) (60.1) Non-C:omruiling Interest,. 12.146) 116.258) 4.112 (25.3) (16.2581 (7.8)8) 18.440) 108.0 Economie Nel (Luis) Inamme 5 14.682) S 242.370 5 (257.252) NM S 242.570 S 223.464 5 19.106 8.5% Included in unrealized tamed interest interne hom alfiliates rs reversal of premously realuzed eamed interest income due to the general partner obligation to return pin rously distributed interest interne or tees of 5(18.1) million for SOMA for die yeaz ended December 31.2011. Tre general partner obligation n recognited bassut upon a hypothetical hquidanon of the funds net assets as of December 31. 2011. The actual deternunahon and any n-quired payment of a general partner obligaten would not take platgi muil the final disposition of a funt.fis meest:nart% based on the conuadual termanation of die fund. Revenues Year £nded December 31.201i Compared so Year £nded December 31. 2010 Advisory and transaction (ces from affiliates decreased by S4.6 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. Cross advisory and tranaction fees. including directors' fees. war 541.2 million and $59.8 million for the year ended December 31. 2011 and 2010. respectively. a decicase of 518.6 million or 31.1%. The tranaction (ces camel dwing 2011 war primarily relatcd to two portfolio investment tranactions of FCI and EPF which together genrate( gross and net fees of S9.6 million and $5.7 million. respectively. The tranaction rees carning during 2010 weer primarily related to certain portfolio investment tranaction of EPF which together generated gross and net (ces of $11.0 million and $3.9 million. respectively. In addition. a termination fee was earned from KBC Life Settlements of 57.1 million during the year ended December 31. 2010. The advisory (ces eamed during both periods weer primarily genemted by deal activity related to investments in LeverageSource. which resulted in gross and net advisory rees of 525.9 million and $3.3 million. respectively. during 2011 and gross and net fees of $25.3 million and 53.4 million. respectively. dwing 2010. Advisory and transaction fees. including directors rees. are repond net of Management Fee Offsets tesaling 526.5 million and 540.5 million for the year ended December 31.2011 and 2010. respectively. a decreasc of $14.0 million or 34.6%. 120 EFTA00623512

Table of Contents Management fees from affiliates increased by $26.4 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased asset allocation fees earned from Athene of $9.4 million during the year. These fees arc partially offset by a corresponding expense categorized as sub-advisory fees and included within professional fees expense. In addition, management fees of $3.4 million were earned from AFT. $1.7 million from FCI and $1.4 million from AMTG, which all began earning management fees during the first quarter of 2011. Gulf Stream CLOs generated $2.5 million of fees and two new Senior Credit Funds. Apollo European Strategic Investment L.P. ("AESI") and Palmetto Loan. generated fees of $1.2 million and $1.0 million. respectively. during the year ended December 31. 2011. Furthermore an increase in fee-generating invested capital in COF II. gross adjusted assets managed by AINV and increased value of commitments in EPF resulted in increased management fees earned of $2.6 million. $2.0 million and $1.4 million, respectively, during the period. These increases were partially offset by decreased management fees earned by ACLF of $1.8 million as a result of a decrease in fee-generating invested capital and by AIE I of $1.4 million as a result of sales of investments and resulting decrease in net assets managed during the period. The remaining change was attributable to overall increased assets managed by the remaining capital markets funds, which collectively contributed to the increase of management fees by $3.0 million during the period. Carried interest income from affiliates changed by $(226.1) million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to a decrease in net unrealized carried interest income of $170.8 million driven by decreased net asset values. primarily with respect to COF II. COF I. ACLF. AIE ll and SOMA which collectively resulted in decreased net unrealized carried interest income of $225.4 million, partially offset by increased unrealized carried interest income earned in 2011 by EPP of $53.2 million due to increased valuation of investments. During the year ended December 31. 2011. there was a reversal of previously recognized carried interest income from SOMA due to general partner obligations to return carried interest income that was previously distributed of $18.1 million. The remaining change was attributable to a decrease in net realized gains of $55.3 million resulting primarily from a decrease in dividend and interest income on portfolio investments held by certain of our capital markets. primarily by SOMA. during the year ended December 31. 2011 as compared to the same period during 2010. Year Ended December 31. 2010 Compared to Year Ended December 31.2009 Advisory and transaction fees from affiliates increased by $11.9 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This increase was primarily attributable to a termination fee earned from KBC Life Settlements of $7.1 million during the year ended December 31. 2010. Gross advisory and transaction fees. including directors fees. were $59.8 million and $28.4 million for the year ended December 31. 2010 and 2009. respectively. an increase of $31.4 million or 110.6%. The transaction fees tamed during both periods were primarily related to certain portfolio investment transactions of EPF which together generated gross and net fees of $11.0 million and $3.9 million. respectively. during the year ended December 31. 2010 and gross and net fees of $5.6 million and $1.9 million. respectively. during the year ended December 31. 2009. The advisory fees earned during both periods were primarily generated by deal activity related to investments in LeverageSource. which generated gross and net fees of $25.3 million and $3.4 million. respectively. during the year ended December 31. 2010 and gross and net fees of $19.2 million and $4.7 million. respectively. during the year ended December 31. 2009. Advisory and transaction fees. including directors fees. are reported net of Management Fee Offsets totaling $40.5 million and $21.0 million for the years ended December 31. 2010 and 2009. respectively. an increase of $19.5 million or 92.9%. Management Fee Offsets increased in 2010 primarily due to COF I Management Pee Offsets increasing to 100% from 80% of advisory fees between 2010 and 2009. Management fees from affiliates increased by $15.7 million for the year ended December 31.2010 as compared to the year ended December 31. 2CO9. This change was primarily attributable to increased net assets managed by certain capital markets funds including SVF. AIC and AIE II. which collectively resulted in increased management fees of $15.9 million during the period along with an increase in fee-generating invested 121 EFTA00623513

Table of Contents capital in COP II. which resulted in increased management fees earned of $5.8 million during the period. In addition, asset allocation fees earned from Athene increased by $6.8 million as it began earning fees during the third quarter of 2009. This increase is offset by a corresponding expense for subadvisory fees. presented in professional fees expense. These increases were partially offset by a decrease in management fees from EPF of $10.9 million which was attributable to additional fees earned during 2009 from limited partners that committed to the fund late and as such. owed management fees retroactively from inception. In addition, there was a decrease in net assets managed by AAOP due to redemptions resulting in decreased management fees of $2.0 million during the year ended December 31. 2010 as compared to the same period during 2009. Carried interest income from affiliates changed by $84.4 million for the year ended December 31. 2010 compared to the year ended December 31. 2009. This change was attributable to an increase in net realized gains of $100.6 million driven by an increase in net asset value, primarily by COP I. SOMA. COP 11, AIE II and SVF resulting in an increase of carried interest income of $34.0 million. $25.2 million. $22.7 million. $12.7 million and $11.2 million. respectively, during the period. This increase was partially offset by a decrease in net unrealized gains of $16.2 million due to the reversal of unrealized gains due to dispositions of investments held by certain of our capital markets funds during the period. primarily COP I. COP 11. SVF. and VIP. of $25.1 million. $22.2 million. $5.6 million and $4.8 million, respectively. These decreases were partially offset by an increase of net unrealized gains by ACLF. AIE II and SOMA of $25.0 million. $11.7 million and $4.8 million, respectively. during the year ended December 31. 2010 as compared to the same period during 2009. Expenses Year Ended December 31.2011 Compared to Year Ended December 31.2010 Compensation and benefits expense decreased by $4.4 million for the ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily a result of a $16.8 million decrease in incentive fee compensation due to unfavorable performance of certain of our capital market funds during the period and a $1.0 million decrease in salary. bonus and benefits. The performance-based incentive arrangement the Company adopted in June 2011 for certain Apollo partners and employees also contributed to the decrease in salary. bonus and benefits expense during the period. These decreases were partially offset by increased non-cash equity-based compensation expense of $13.4 million primarily related to additional grants of RSUs subsequent to December 31. 2010. Other expenses increased by $14.1 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased professional fees of $5.3 million primarily driven by structuring fees associated with AFT totaling $3.6 million incurred during 2011. In addition, general. administrative and other expenses increased by $6.3 million due to higher travel. information technology. recruiting and other expenses incurred. along with increased occupancy expense of $3.5 million due to additional office spaced leased as a result of an increase in our headcount to support the expansion of our investment platform during the period. These increases were partially offset by decreased placement fees of $1.0 million due to decreased fundraising efforts related to one of our funds during the year ended December 31.2011 as compared to the same period during 2010. Year Ended December 31. 2010 Compared to Year Ended December 31.2009 Compensation and benefits expense increased by $24.4 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to increased incentive fee compensation expense of $14.5 million due to the favorable performance of certain of our capital markets funds during the period. Additionally. there was increased non-cash equity-based compensation expense of $7.0 million primarily related to additional grants of RSUs subsequent to December 31. 2009 along with increased salary bonus and benefits expense of $5.2 million which was driven by an increase in headcount and bonuses during the period. These increases were partially offset by decreased profit sharing expense of $2.3 million 122 EFTA00623514

Table of Contents driven by the change in carried interest income of COF I and COF II due to a decline in the performance of their underlying portfolio investments during the year ended December 31. 2010 as compared to the same period during 2009. Other expenses decreased by $2.4 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was partially attributable to lower interest expense incurred of $7.0 million primarily in respect of the AMH Credit Agreement due to the $90.9 million debt repurchase during April and May 2009, the expiration of interest rate swap agreements during May and November 2010 and lower LIBOR and ABR interest rates during the period. resulting in lower interest expense incurred. In addition, placement fees decreased by $6.6 million primarily attributable to decreased fundraising efforts during 2010. Furthermore, occupancy expense decreased by $5.6 million primarily attributable to cost savings resulting from negotiating new office leases and lower maintenance fees incurred on existing leased space during the period. These decreases were partially offset by increased professional fees of $14.5 million driven by higher external accounting. tax, audit, legal and consulting fees incurred during the year ended December 31. 2010 as compared to the same period during 2009. Other Income (Loss) Year Ended December 31, 2011 Compared to Year Ended December 31.2010 Net losses from investment activities were $5.9 million for the year ended December 31. 2011. This amount was related to an unrealized loss on the change in the fair value of the investment in HFA during the year ended December 31. 2011. Income from equity method investments decreased by $28.5 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was driven by decreases in the fair values of investments held by certain of our capital markets funds, primarily COF I. Anus, COF II. and ACLF. which resulted in a decrease in income from equity method investments of $10.2 million. $4.5 million $4.3 million and $3.7 million. respectively, during the year ended December 31. 2011 as compared to the same period during 2010. Other (loss) incomc, net decreased by $12.9 million for the year ended December 31. 2011 as compared to the year ended December 31. 2010. During the year ended December 31. 2011. approximately $8.0 million of offering costs were incurred related to the launch of AMTG. The remaining change was primarily attributable to gains (losses) resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries during the year ended December 31.2011 as compared to the same period in 2010. Year Ended December 31. 2010 Compared to Year Ended December 31. 2009 Income from equity method investments changed by $15.7 million for the year ended December 31. 2010 as compared to the year ended December 31. 2009. This decrease was driven by changes in the fair values of our capital markets investments held. primarily by ACLF. COF II. COF I and AIE II. which collectively resulted in a decrease of income from equity method investments of $20.3 million during the year ended December 31.2010 as compared to the same period during 2009. These decreases were partially offset by an increase in income from equity method investments relating to Anus and EN' of $2.6 million and $2.2 million. a LspLaively. during the year ended December 31.2010 as compared to the same period during 2009. Other income, net decreased by $46.9 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to net gains from investment activities of $38.4 million during the year ended December 31. 2009 related to an unrealized loss from Anus, where we. as the general partner. were allocated the negative equity of the fund. During the year ended December 31. 2009. the fair value of Anus increased which resulted in the reversal of the previously recognized obligation. In 123 EFTA00623515

Table of Contents addition, gain from repurchase of debt was $14.7 million during the year ended December 31.2009 and was attributable to the purchase of AMH debt related to the AMU Credit Agreement. As discussed in note 12 to our consolidated financial statements, the debt purchase was accounted for as if the debt was extinguished and the difference between the carrying amount and the re-acquisition price resulted in a gain on extinguishment of debt. of which $14.7 million was allocated to the capital markets segment. The remaining change was primarily attributable to lower gains resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries partially driven by the Euro weakening against the U.S. dollar during the year ended December 31. 2010 as compared to the same period during 2009. Real Estate The following tables set forth our segment statement of operations information and our supplemental performance measure. ENI. for our real estate segment for the years ended December 31, 2011. 2010 and 2009. respectively. ENI represents segment income (lass), excluding the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and equity-based compensation expense comprising amortization of AOG Units, income taxes and Non-Controlling Interests. In addition, segment data excludes the assets, liabilities and operating results of the Apollo funds and consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure. Real Estate: Revenues: For the Year Ended December 31, NM Fur the Year Ended lk.cember 31.2010 For the Year Ended December 31. 2009 Management Incentive Total Management Incentive Total Management illtelltite Total lm thousands) Advisory and transaction fees from affiliate.. 698 - S 698 - - $ - - %Image:nein lees bun allihates 40.279 40.279 11.383 11.383 1.201 1.201 Canted interest income from affiliates Baal Revenue.. 40.977 40.977 11.383 11.383 1.201 1.201 Expense Compensation and Benda: Equity.baiml compensation 13.111 13,111 4.408 1.408 1452 1,652 Salary. bums and bend in 33.052 - 33.052 21.688 21.688 10.919 10.919 Profit sharing expense 1.353 1.353 Total compensation and benefits 46.163 1.353 47.516 26,096 26.096 12.571 12.571 Other expenses 29.663 - 29463 19.93$ 19.938 13421 13.621 Total Expenses 75.826 1.353 s 46.034 46(134 26,192 - 26.192 Other Income: Income I loss) from equity method investments Other income. net Total Other Income fl.otal - 9,694 726 - 726 9.694 - 2L622 (391) - (391) 23.622 - 1443 (743) - 1743) 1 043 9.694 726 It/ PO 23 .6-'2 $‘91, 'I +II 1 043 t 7431 410 liconomie Net Loss (25.153) S 0271 S t 25.752i S (11,11291 S 13911 S (11.4201 S 1223945, S t 7431 S 124.6911 124 EFTA00623516

Table of Contents Real Estate: Revenues: For the Year Ended December 31. Percentage Change For the fear Ended December 31. Percentage Change Amount 2011 2010 Change 2010 2009 Amount Change _ (In thousands) Advisory and transaction fees from affiliates $ 698 $ — $ 698 NM $ — $ — $ — Management fees from affiliates 40.279 11.383 28.896 253.9% 11 .383 1.201 10.182 NM Carried interest income from affiliates Total Revenues 40.977 11.383 29.594 260.0 11.383 1.201 10.182 NM Expenses: Compensation and Benefits Equity-based compensation 13,111 4,408 8,703 197.4 4,408 1,652 2.756 166.8% Salary. bonus and benefits 33.052 21.688 11.364 52.4 21.688 10.919 10.769 98.6 Profit sharing expense 1.353 1.353 NM Total compensation and benefits Other expenses Total Expenses 47.516 26.096 29,663 19,938 21.420 9.725 82.1 48.8 67.7 26.096 12.571 19,938 13.621 13.525 6.317 107.6 46.4 75.8 77.179 46.034 31.145 46.034 26.192 19.842 Other Income (Loss): Income (loss) from equity method investments Other income. net Total Other Income Economic Net Loss 726 (391) 9.694 23.622 1.117 (13.928) NM (59.0) (55.1) 125.8% (391) (743) 23.622 1.043 352 22.579 (47.4) NM NM (53.7)% 10.420 23.231 (12.811) 23231 300 22.931 S (25.782) $ (11.420) $ (14,362) $ (11.420) S (24.691) $ 13.271 Revenues Year Ended December 31.2011 Compared to Year Ended December 31.2010 Advisory and transaction fees from affiliates were $0.7 million for the year ended December 31.2011 which were earned from a new fund. ACRE Debt Fund I. L.P. Management fees increased by $28.9 million for the year ended December 31.2011 as compared to the year ended December 31. 2010. This change was primarily attributable to an increase of 522.8 million of fees earned from CPI Funds that were acquired during November 2010. therefore. 2011 included a full year of management fees earned in comparison to 2010. CPI Capital Partners Europe. CPI Capital Partners Asia Pacific and CPI Capital Partners North America earned increased fees of $8.1 million. $7.4 million and $7.3 million, respectively, during the year ended December 31.2011 as compared to 2010. In addition, increased net assets managed by ARI. AGRE CMBS Accounts. ACRE U.S. Real Estate Fund and ACRE Debt Fund I. L.P. account resulted in increased management fees earned of $2.7 million. $1.8 million. $1.5 million and $0.2 million, respectively, during the year ended December 31.2011 as compared to the same period during 2010. Year Ended December 31.2010 Compared to Year Ended December 31.2009 Management fees increased by $10.2 million for the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily attributable to $4.3 million of fees earned from CPI during the fourth quarter of 2010. In addition, increased net assets managed by ARI and the AGRE CMBS Accounts resulted in increased management fees earned of $3.7 million and 52.2 million. respectively. during the year ended December 31. 2010 as compared to the same period during 2009. 125 EFTA00623517

Table of Contents Expenses Year Ended December 31.2011 Compared so Year Ended December 31.2010 Compensation and benefits increased by $21.4 million during the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to a $11.4 million increase in salary. bonus and benefits expense primarily driven by an increase in headcount as a result of the CPI Funds that were acquired during November 2010 and expansion of our real estate funds during the year ended December 31. 2011 as compared to the same period during 2010. Additionally. non-cash equity-based compensation expense increased by $8.7 million primarily related to additional grants of RSUs subsequent to December 31. 2010. along with an increase in profit sharing expense of $1.4 million primarily due to the performance based incentive arrangement the Company adopted in June 2011 for certain Apollo partners and employees. Other expenses increased by $9.7 million during the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to increased occupancy expense of $5.3 million due to additional office space leased as a result of an increase in our headcount to support the expansion of our real estate funds during the year ended December 31. 2011 as compared to the same period during 2010 and an increase in general. administrative and other expenses of $3.7 million driven by increased travel. information technology. recruiting and other expenses incurred associated with the launch of our new real estate funds during the period. These increases were partially offset by decreased professional fees of $1.2 million due to lower external accounting. tax. audit. legal and consulting fees incurred during the period. Year Ended December 31.2010 Compared to Year Ended December 31.2009 Compensation and benefits increased by $13.5 million during the year ended December 31. 2010 as compared to the year ended December 31. 2009. This change was attributable to an increase in salary. bonus and benefits expense of $10.8 primarily driven by an increase in headcount during the period as a result of the CPI acquisition. Additionally, there was increased non-cash equity-based compensation expense of $2.7 million primarily related to additional grams of RSUs subsequent to December 31. 2009. Other expenses increased by $6.3 million during the year ended December 31. 2010 as compared to the year ended December 31. 2009. The majority of these expenses were incurred to establish our investment platform that will target real estate investment opportunities. Professional fees increased by $5.1 million primarily due to higher external accounting. tax, audit, legal and consulting fees incurred during the year ended December 31.2010 as compared to the same period during 2009. This increase was partially offset by decreased general. administrative and other expenses of $2.7 million which was primarily comprised of 48.0 million of offering costs that were expensed during the year ended December 31. 2009 related to the launch of ARI during the third quarter of 2009. Other Income (Loss) Year Ended December 31.2011 Compared so Year Ended December 31.2010 Total other income decreased by $12.8 million during the year ended December 31. 2011 as compared to the year ended December 31. 2010. This change was primarily attributable to a gain of $24.1 million that was recognized on the acquisition of CPI during November 2010. partially offset by the reimbursement during 2011 of approximately 48.0 million of offering costs incurred during 2009 related to the launch of ARI. The remaining change was primarily attributable to gains (losses) resulting from fluctuations in exchange rates of foreign denominated assets and liabilities of subsidiaries during the year ended December 31.2011 as compared to the same period during 2010. 126 EFTA00623518

Table of Contents Year Ended December 31. 2010 Compared to Year Ended December 31. 2009 Total other income increased by $22.9 million during the year ended December 31.2010 as compared to the year ended December 31. 2009. This change was primarily due to a gain of $24.1 million that was recognized on the acquisition of CPI during November 2010. Summary Combined Segment Results for Management Business and Incentive Business The following tables combine our reportable segments' statements of operations information and supplemental performance measure. EN1. for our Management and Incentive businesses for the years ended December 31. 2011. 2010 and 2009. respectively. ENI represents segment income floss). excluding the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and equity-based compensation expense comprising amortization of AOG Units, income taxes. amortization of intangibles associated with the 2007 Reorganization and acquisitions and Non-Controlling with the exception of allocations of income to certain individuals. In addition, segment data excludes the assets. liabilities and operating results of the Apollo funds and consolidated VIES that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure. In addition to providing the financial results of our three reportable business segments. we evaluate our reportable segments based on what we refer to as our Management and Incentive Businesses. Our Management Business is generally characterized by the predictability of its financial metrics, including revenues and expenses. This business includes management fee revenues. advisory and transaction fee revenues. carried interest income from certain of our mezzanine funds and expenses. each of which we believe are more stable in nature. Management Business Revenues: Year Ended December 31. 2011 2010 2009 (in Ihoaan0s) Advisory and transaction fees from affiliates 82,310 S 79,782 S 56,075 Management fees from affiliates 490.191 431.096 406.257 Carried interest income from affiliates 44.540 47.385 50.404 Total Revenues 617,041 558,263 512,736 Expenses: Equity-based compensation 68.172 30.469 7.294 Salary. bonus and benefits 251,095 249,571 227,356 Interest expense Professional fees'" General, administrative and other' 40.850 58,315 73.972 35.436 60,870 63.466 50.252 33,220 59.437 Placement fees 3,911 4,258 12,364 Occupancy Depreciation Total Expenses 35.816 11,132 23.067 11,471 29.625 11,622 543.263 478.608 431.170 Other Income: Gain from debt repurchase 36.193 Interest income 4.731 1,508 1,450 Other income, net 10.066 195.255 41.410 Total Other Income 14.797 196.763 79.053 Non-Controlling Interests (12.146) (16.258) (7.818) Economic Net Income S 76.4'9 S 260.160 S 152.801 (I) Excludes professional fees related to the consolidated funds. 127 EFTA00623519

Table of Contents (2) (3) Excludes general and administrative expenses related to the consolidated funds. Includes $162.5 million and $37.5 million of insurance proceeds related to a litigation settlement included in other income during the years ended December 31. 2010 and 2009. respectively. The financial performance of our Incentive Business, which is dependent upon quarterly mark-to-market unrealized valuations in accordance with U.S. GAAP guidance applicable to fair value measurements, includes carried interest income. income from equity method investments. profit sharing expenses and incentive foe compensation that are associated with our general partner interests in the Apollo funds, which are generally less predictable and more volatile in nature. Incentive Business Revenues: Year Ended December 31, 2011 2010 2009 tin thoutands) Carried interest (loss) income from affiliates: Unrealized (losses) gains $ (I 086 600) $ 1 355 444 $ 383,016 Realized gains 644,653 196.191 70.976 Total Revenues (441,947) 1.551.635 453.992 Expenses: Compensation and benefits: Profit sharing expense: Unrealized profit sharing expense"' (370.485) 504.537 143.475 Realized profit sharing expense 307.032 50.688 18.460 Total Profit Sharing Expense (63.453) 555.225 161.935 Incentive fee compensation ,an 20,142 5,613 Total Compensation and Benefits (60.070) 575.367 167.548 Other Income: Net (I ms) gains from investment activities (5.881) 39.062 Income from equity method investments 10.829 80.919 100.280 Total Other Income 4.948 80.919 139.342 Economic Net (Loss) Income (376.929) $ 1.057.187 $ 425,786 (I) Included in unrealized carried interest (loss) income from affiliates is reversal of previously realized carried interest income due to the general partner obligation to return previously distributed carried interest income or fees of $(75.3) million and $(18.1) million for Fund VI and SOMA. respectively. for the year ended December 31. 2011. Included in unrealized profit sharing expense is reversal of previously realized profit sharing expense for the amounts receivable from Contributing Partners and certain employees due to the general partner obligation to return previously distributed carried interest income of $(22.1) million for Fund VI for the year ended December 31. 2011. The general partner obligation is recognized based upon a hypothetical liquidation of the funds' net assets as of December 31. 2011. 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. (2) Excludes investment income and net gains (losses) from investment activities related to consolidated funds and the consolidated VIEs. 128 EFTA00623520

Table of Contents Summary below is the summary of our total reportable segments including management and incentive businesses and a reconciliation of ENI to Net Loss attributable to Apollo Global Management. LLC reported in our consolidated statements of operations: Year Faded December 31. 2.011 2010 2009 On aims:west Revenues $ 175,094 $ 2,109,898 $ 966,728 Expenses 483.193 1.053.975 598.718 Other income 19,745 277,682 218395 Non-Controlling Interests (12.146) (16.258) 17.818) Economic Net (Loss) Income (300.500) 1,317,347 578,587 Non-cash charges related to equity-based compensation (1.081.581) (1.087.943) (1.092.812) Income tax provision (11,929) (91,737) (28,714) Net loss (income) attributable to Non-Controlling Interests in Apollo Operating Group 940312 (27.892) 400.440 Net loss of Metals Trading Fund (2.380) Amortization of intangible assets (15.128i (12.778) 112.6771 Net (Loss) Income Attributable to Apollo Global Management. LLC S (468.826) $ 94.617 S (155.176) Liquidity and Capital Resources Historical Although we have managed our historical liquidity needs by looking at deconsolidated cash flows, our historical consolidated statement of cash flows reflects the cash flows of Apollo. as well as those of our consolidated Apollo funds. The primary cash flow activities of Apollo are: . Generating cash flow from operations: . Making investments in Apollo funds: . Meeting financing needs through credit agreements: and . Distributing cash flow to equity holden and Non-Controlling Interests. Primary cash flow activities of the consolidated Apollo funds am: Raising capital from their investors, which have been reflected historically as Non-Controlling Interests of the consolidated subsidiaries in our financial statements: Using capital to make investments: Generating cash flow from operations through distributions interest and the realization of investments: and Distributing cash flow to investors. 129 EFTA00623521

Table of Contents While primarily met by cash flows generated through fee income and carried interest income received, working capital needs have also been met (to a limited extent) through borrowings as follows: December 31. 2011 December 31. 2010 Annualized Weighted Annualized Weighted Average Outstanding Average Oubliateala Balance Interest Rale lialanee Interest Rate (in thousands AMH Credit Agreement $ 728,273 5.39%(I) $ 728.273 3.78%") CIT secured loan agreement 10.243 3.39 23.252 3.50 Total Debt 738.516 5.35% 751.525 3.77% ( I ) Includes the effect of interest rate swaps. We determine whether to make capital commitments to our private equity funds in excess of our minimum required amounts based on a variety of factors. including estimates regarding our liquidity resources over the estimated time period during which commitments will have to be funded estimates regarding the amounts of capital that may be appropriate for other funds that we are in the process of raising or are considering raising. and our general working capital requirements. We have made one or more distributions to our managing partners and contributing partners. representing all of the undistributed earnings generated by the businesses contributed to the Apollo Operating Group prior to the Private Offering Transactions. For this purpose. income attributable to carried interest on private equity funds related to either carry-generating transactions that closed prior to the Private Offering Transactions which closed in July 2007 or carry- generating transactions to which a definitive agreement was executed. but that did not close. prior to the Private Offering Transactions arc treated as having been earned prior to the Private Offering Transactions. On December 20. 2010. the Company repurchased approximately $180.8 million of AMH debt in connection with the extension of the maturity date of such loans and had a remaining outstanding balance of $728.3 million. The Company determined that debt modification resulted in debt extinguishment. which did not result in any gain or loss recognized in the consolidated financial statements. Cash Flows Significant amounts from our consolidated statements of cash flows for the years ended December 31. 2011. 2010 and 2009 are summarized and discussed within the table and corresponding commentary below: Year Ended December 31, 2011 Compared to the Years Ended December 31. 2010 and 2009 Year Ended December 31. 2011 2010 2009 tin thoutands) Operating Activities $ 743,821 $ (218,051) S 107,993 Investing Activities (129.536) (9.667) (16.870) Financing Activities (251.823) 243.761 (106.264) Net Increase (Decrease) in Cash and Cash Equivalents 362.462 $ 16.043 $ (15.149 130 EFTA00623522

Table of Contents Operating Activities Net cash provided by operating activities was $743.8 million during the year ended December 31. 2011. During this period. there was $1.304.2 million in net losses. to which $1.149.8 million of equity-based compensation and $196.2 million gain on business acquisitions. non-cash expenses were added to reconcile net loss to net cash provided by operating activities. Additional adjustments to reconcile cash provided by operating activities during the year ended December 31. 2011 included $1.530.2 million in proceeds from sales of investments held by the consolidated VIES, $113.1 million in net unrealized losses from investments held by the consolidated funds and VIEs. a $43.8 million increase in due to affiliates and $998.5 million decrease in carried interest receivable. The decrease in our carried interest receivable balance during the year ended December 31. 2011 was driven primarily by $304.5 million of carried interest losses from the change in fair value of funds for which we act as general partner, along with fund cash distributions of $692.6 million. These favorable cash adjustments were offset by $1.294.5 million of purchases of investments held by the consolidated VIEs. $325.2 million decrease in profit sharing payable and $41.8 million of realized gains on debt of the consolidated VIEs. Net cash used in operating activities was $218.1 million during the year ended December 31. 2010. During this period. there was $543.2 million in net income. to which $87.6 million of cash held by the consolidated VIEs. $1.240.8 million in net purchases of investments primarily by the consolidated VIEs and $416.6 million of net unrealized gains from investment activities of consolidated funds and consolidated VIEs were each added to reconcile net income to net cash used in operating activities. Additional adjustments to reconcile cash used in operating activities during the year ended December 31.2010 included a $1,383.2 million increase in our carried interest receivables. The increase in our carried interest receivable balance during the year ended December 31.2010 was driven by a $1,585.9 million increase in the fair value of the funds for which we act as general partner. offset by fund cash distributions of $204.4 million. These adjustments were offset by $1.118.4 million of equity-based compensation. a non-cash expense. as well as $503.6 million increase in our profit sharing payable. which was also primarily driven by increases in the fair value of the funds for which we act as general partner. Additional offsets include $627.3 million of sales of investments held by the consolidated VIEs. and a $107.9 million increase in other liabilities of the consolidated VIEs. which is primarily due to the refinancing of a portfolio investment. Net cash provided by operating activities was $108.0 million during the year ended December 31. 2009. During this period there was a $95.4 million net loss, to which $1.1 billion of equity-based compensation. a non-cash expense. was added to reconcile net loss to net cash provided by operating activities. Additional adjustments to reconcile cash provided by operating activities during the year ended December 31. 2009 included $471.9 million of unrealized gains on investments held by AAA. a $406.8 million increase in our carried interest receivable and $83.1 million of income from equity method investments. The increase in our carried interest receivable balance during the year ended December 31.2009 was driven by a $504.4 million increase in the fair value of the funds for which we act as general partner. offset by fund cash distributions of $97.6 million. There was also a $45.3 million change in deferred revenue and a $40.0 million change in net purchases of investments. These unfavorable cash adjustments were offset by a $144.5 million increase in our profit sharing payable. which was also primarily driven by increases in the fair value of the funds for which we act as general partner. The operating cash flow amounts from the Apollo funds and consolidated VIEs represent the significant variances between net income (loss) and cash flow from operations and were classified as operating activities pursuant to the American Institute of Certified Public Accountants, or "A1CPA.- Audit and Accounting Guide. Investment Companies. or "Investment Company Guide." The increasing capital needs reflect the growth of our business while the fund- related requirements vary based upon the specific investment activities being conducted at a point in time. These movements do not adversely affect our liquidity or earnings trends because we currently have sufficient cash reserves compared to planned expenditures. 131 EFTA00623523

Table of Contents Investing Activities Net cash used in investing activities was $129.5 million for the year ended December 31. 2011. which was primarily comprised of $21.3 million in purchases of fixed assets. $64.2 million of cash contributions to equity method investments. a $52.1 million investment in HFA. the $29.6 million for the acquisition of Gulf Stream and $26.0 million for the acquisition of investments in the Scnior Loan Fund. partially offset by $64.8 million of cash distributions from equity method investments. Cash contributions to equity method investments were primarily related to EPF. Fund VII and ACRE U.S. Real Estate Fund. Cash distributions from equity method investments were primarily related to Fund VII. ACLF. COF I. COF II. Anus. EPF and Vantium C. Net cash used in investing activities was $9.7 million for the year ended December 31. 2010. which was primarily comprised of $63.5 million of cash contributions to equity method investments and $5.6 million of fixed asset purchases. offset by $21.6 million in cash received from business acquisitions and dispositions and $38.9 million of cash distributions from equity method investments. Cash contributions to equity method investments were primarily related to Fund VII. COF I. COF II. Palmetto and EPF. Cash distributions from equity method investments were primarily related to Fund VII. ACLF. COF I. COF II and Vantium C. Net cash used in investing activities was $16.9 million for the year ended December 31. 2009. which was primarily comprised of $42.5 million of cash contributions to equity method investments and $15.8 million of fixed asset purchases. offset by $42.5 million of cash distributions from equity method investments. Cash contributions to equity method investments were primarily related to Fund VII. ARI. COF II and EPF. Cash distributions from equity method investments were primarily related to COP I. Fund VII. EPF and ACLF. Financing Activities Net cash used in financing activities was $251.8 million for the year ended December 31. 2011. which was primarily comprised of $415.9 million in repayment of term loans by consolidated VIEs. $308.8 million in distributions by consolidated VIEs. $199.2 million of distributions paid to Non-Controlling Interests in the Apollo Operating Group. $27.3 million of distributions paid to Non-Controlling Interests in consolidated funds. $102.6 million in distributions and $17.1 million related to employee tax withholding payments in connection with deliveries of Class A shares in settlement of RSUs. These cash outflows were offset by $384.0 million in proceeds from the issuance of Class A shares and $454.4 million of debt issued by consolidated VIEs. Net cash provided by financing activities was $243.8 million for the year ended December 31. 2010. which was primarily comprised of $1.050.4 million related to the issuance of debt by consolidated VIEs. This amount was offset by $331.1 million in repayment of term loans by consolidated VIEs. $146.7 million in distributions by consolidated VIEs. $182.3 million in repayments and repurchases of debt primarily with respect to the AMH Credit Agreement and $48.8 million in purchases of AAA units. In addition. there were $13.6 million of distributions to Non-Controlling Interests in the consolidated entities and $21.3 million and $50.4 million of distributions paid to Class A shareholders and Non-Controlling Interests in the Apollo Operating Group. respectively. Net cash used in financing activities was $106.3 million for the year ended December 31. 2009. which was primarily comprised of $55.8 million in repurchases of debt related to the AMH Credit Agreement and principal repayments on debt. $18.0 million of distributions to Non-Controlling Interests in the Apollo Operating Group. $12.4 million of distributions to Non-Controlling Interests in consolidated entities and $4.9 million and $12.0 million of distributions paid to Class A shareholders and Non-Controlling Interests in the Apollo Operating Group. respectively. 132 EFTA00623524

Table of Contents Distributions The table below presents the declaration. payment and determination of the amount of quarterly distributions which arc at the sole discretion of the Company (in millions, except per share amounts): Distributions Declaration Date Distributions per ebbs A Shan AMAMI Distributions Payment Date Distributions to ACM Class A Sbareholden Distributions to Non.Controlling Intemt Holders in the Apollo Operating Group Total Distributions (rant Apollo Operating Croup Distribution Equitalents on Pa rr i iiiiiiiii Securities January 8. 2009 $ 0.05 January 15. 2009 $ 4.9 $ 12.0 S 16.9 $ 0.3 May 27.2010 $ 0.07 June IS. 2010 $ 6.7 $ 16.8 S 23.5 $ 1.0 August 2, 2010 $ 0.07 August 25.2010 $ 6.9 $ 16.8 $ 23.7 $ 1.4 November 1. 2010 $ 0.07 November 23.2010 $ 6.9 $ 16.8 23.7 $ 1.3 January 4, 2011 $ 0.17 January 14,2011 $ 16.6 $ 40.8 $ 57.4 $ 3.3 May 12.2011 0.22 June 1.2011 26.8 $ 52.8 79.6 $ 4.7 August 9, 2011 $ 0.24 August 29, 2011 $ 29.5 $ 57.6 $ 87.1 $ 5.1 November 3. 2011 $ 0.20 December 2. 2011 $ 24.8 $ 48.0 72.8 $ 4.3 Future Cash Flows Our ability to execute our business strategy. particularly our ability to increase our AUM. depends on our ability to establish new funds and to raise additional investor capital within such funds. Our liquidity will depend on a number of factors, such as our ability• to project our financial performance. which is highly dependent on our funds and our ability to manage our projected costs. fund performance, having access to credit facilities. being in compliance with existing credit agreements. as well as industry and market trends. Also during economic downturns the funds we manage might experience cash flow issues or liquidate entirely. In these situations we might be asked to reduce or eliminate the management fee and incentive fees we charge. As was the situation with AIE I. this could adversely impact our cash flow in the future. For example. the investment performance of AIE I was adversely impacted due to market conditions in 2008 and early 2009. and on July 10. 2009. its shareholders subsequently approved a monetization plan. The primary objective of the monetization plan is to maximize shareholder recovery value by (i) opportunistically selling AIE l's assets over a three-year period from July 2009 to July 2012 and (ii) reducing the overall costs of the fund. The Company waived management fees of $12.6 million for the year ended December 31. 2008 and an additional $2.0 million for the year ended December 31. 2009 to limit the adverse impact that deteriorating market conditions were having on AIE l's performance. As a result of the monetization plan. we expect AIE Ito have adequate cash flow to satisfy its obligations as they come due. therefore, we do not anticipate any additional fee waivers for AIE I in the future. The Company continues to charge AIE I management fees at a reduced rate of 1.5% of the net assets of AIE I. Prior to the monetization plan. the management fees were based on 2.0% of the gross assets of AIE I. The Company has no future plans to waive additional management fees charged to AIE I or to lower the current management fee arrangement. Management currently intends to proceed with the plan for the orderly wind down of AIE I as approved by the shareholders. However, these plans are subject to revision in the event future facts and circumstances present a more favorable solution for AIE I and its shareholders, as determined in good faith by management. In addition, in April 2010 we announced a strategic relationship agreement with CaIPERS. whereby we agreed to reduce management fees and other fees charged to CalPERS on funds we manage. or in the future will manage. solely for CaIPERS by $125.0 million over a five-year period or as close a period as required to provide CalPERS with that benefit. An increase in the fair value of our funds investments, by contrast, could favorably impact our liquidity through higher management fees where the management fees arc calculated based on the net asset value, gross assets and adjusted assets. Additionally. higher carried interest income would generally result when investments appreciate over their cost basis which would not have an impact on the Company's cash flow. 133 EFTA00623525

Table of Contents The Company granted approximately 8.1 million RSUs to its employees during the year ended December 31. 2011. The avenge estimated fair value per share on the grant date was $14.45 with a total fair value of the grants of $116.6 million. This will impact the Company's compensation expense as these grants are amortized over their vesting term of three to six years. The Company expects to incur annual compensation expenses on all grants. net of forfeitures, of approximately $102.2 million. $73.2 million. $25.2 million. $9.4 million. $7.2 million and $1.1 million during the years ended December 31. 2012. 2013. 2014. 2015. 2016 and 2017. respectively. Although Apollo Global Management. LLC expects to pay distributions according to our distribution policy, we may not pay distributions according to our policy, or at all, if. among other things. we do not have the cash necessary to pay the intended distributions. To the extent we do not have cash on hand sufficient to pay distributions, we may have to borrow funds to pay distributions, or we may determine not to pay distributions. The declaration. payment and determination of the amount of our quarterly distributions is at the sok discretion of our manager. Carried interest income from our funds can be distributed to us on a current basis, but is subject to repayment by the subsidiary of the Apollo Operating Group that acts as general partner of the fund in the event that certain specified return thresholds are not ultimately achieved. The Managing Partners. Contributing Partners and certain other investment professionals have personally guaranteed. to the extent of their ownership interest. 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 Managing Partner's or Contributing Partner's distributions. Pursuant to the shareholders agreement dated July 13. 2CO7. we agreed to indemnify each of our Managing Partners and certain Contributing Partners against all amounts that they pay pursuant to any of these personal guarantees in favor of Fund IV. Fund V and Fund VI (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 our Managing Partners and Contributing Partners have contributed or sold to the Apollo Operating Group. Accordingly. in the event that our Managing Partners. Contributing Partners and certain investment professionals are required to pay amounts in connection with a general partner obligation for the return of previously distributed carried interest income with respect to Fund IV. Fund V and Fund VI. we will be obligated to reimburse our Managing Partners and certain Contributing Partners for the indemnifiable percentage of amounts that they are required to pay even though we did not receive the distribution to which that general partner obligation related. Distributions to Managing Partners and Contributing Partners The three Managing Partners who became employees of Apollo Global Management. LW on July 13. 2007. are each entitled to a $103.000 base salary. Additionally. our Managing Partners can receive other forms of compensation. Any additional consideration will be paid to them in their proportional ownership interest in Holdings. Additionally. 85% of any tax savings APO Corp. recognizes as a result of the tax receivable agreement will be paid to any exchanging or selling Managing Partners. It should be noted that subsequent to the Reorganization. the Contributing Partners retained ownership interests in subsidiaries of the Apollo Operating Group. Therefore, any distributions that flow up to management or general partner entities in which the Contributing Partners retained ownership interests are shared pro rata with the Contributing Partners who have a direct interest in such entities prior to flowing up to the Apollo Operating Group. These distributions are considered compensation expense post-Reorganization. The Contributing Partners are entitled to receive the following: Profit Sharing—private equity carried interest income. from direct ownership of advisory entities. Any changes in fair value of the underlying fund investments would result in changes to Apollo Global Management. LLC's profit sharing payable. 134 EFTA00623526

Table of Contents • Net Management Fee Income—distributable cash determined by the general partner of each management company. from direct ownership of the management company entity. The Contributing Partners will continue to receive net management fee income payments based on the interests they retained in management companies directly. Such payments are treated as compensation expense post-Reorganization as described above. . Any additional consideration will be paid to them based on their proportional ownership interest in Holdings. . No base compensation is paid to the Contributing Partners from the Company. but they are entitled to a monthly draw. . Additionally. 85% of any tax savings APO Corp. recognizes as a result of the tax receivable agreement will be paid to any exchanging or selling Contributing Partner. Potential Future Costs We may make grants of RSUs or other equity-based awards to employees and independent directors that we appoint in the future. Critical Accounting Policies This Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon the consolidated financial statements. which have been prepared in accordance with U.S. GAAP. We also report segment information from our consolidated statements of operations and include a supplemental performance measure. ENI. for our private equity. capital markets and real estate segments. UR represents segment income (loss) excluding the impact of non-cash charges related to RSUs granted in connection with the 2007 private placement and equity-based compensation expense comprising amortization of AOG Units, income taxes. amortization of intangibles associated with the 2007 Reorganization as well as acquisitions and Non-Controlling Interests excluding the remaining interest held by certain individuals who receive an allocation of income from certain of our capital markets management companies. In addition. segment data excludes the assets, liabilities and operating results of the Apollo funds and consolidated VIEs that are included in the consolidated financial statements. ENI is not a U.S. GAAP measure. The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from these estimates. A summary of our significant accounting policies is presented in our consolidated financial statements. The following is a summary of our accounting policies that are affected most by judgments. estimates and assumptions. Consolidation Apollo consolidates those entities it controls through a majority voting interest or through other means. including those funds for which the general partner is presumed to have control (AAA. Senior Credit Loan Fund). Apollo also consolidates entities that are VIEs for which Apollo is the primary beneficiary. Under the amended consolidation rules, an enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity's business and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Certain of our subsidiaries hold equity interests in and/or receive fees qualifying as variable interests from the funds that the Company manages. The amended consolidation rules require an analysis to determine whether 135 EFTA00623527

Table of Contents (a) an entity• in which Apollo holds a variable interest is a VIE and (b) Apollo's involvement. through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g.. carried interest and management fees). would give it a controlling financial interest. When the VIE has qualified for the deferral of the amended consolidation rules in accordance with U.S. GAAP. the analysis is based on previous consolidation rules, which require an analysis to determine whether (a) an entity• in which Apollo holds a variable interest is a VIE and (b) Apollo's involvement. through holding interests directly or indirectly in the entity• or contractually through other variable interests (e.g.. carried interest and management fees), would be expected to absorb a majority of the variability• of the entity. Under both guidelines. the determination of whether an entity• in which Apollo holds a variable interest is a VIE requires judgments which include determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support. evaluating whether the equity holders, as a group. can make decisions that have a significant effect on the success of the entity. determining whether two or more parties' equity interests should be aggregated. and determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity•. Under both guidelines. Apollo determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion continuously. The consolidation analysis can generally be performed qualitatively. However. if it is not readily apparent whether Apollo is the primary• beneficiary. a quantitative expected losses and expected residual returns calculation will be performed. Investments and redemptions (either by Apollo. affiliates of Apollo or third parties) or amendments to the governing documents of the respective Apollo fund may affect an entity's status as a VIE or the determination of the primary• beneficiary. Apollo assesses whether it is the primary beneficiary and will consolidate or deconsolidate the entity accordingly. Performance of that assessment requires the exercise of judgment. Where the variable interests have qualified for the deferral. judgments are made in estimating cash flows in evaluating which member within the equity group absorbs a majority of the expected profits or losses of the VIE. Where the variable interests have not qualified for the deferral. judgments are made in determining whether a member in the equity group has a controlling financial interest including power to direct activities that most significantly impact the VIE:: economic performance and rights to receive benefits or obligations to absorb losses that are potentially significant to the VIE. Under both guidelines, judgment is made in evaluating the nature of the relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE. The use of these judgments has a material impact to certain components of Apollo's consolidated financial statements. The only VIE formed prior to 2010. the adoption date of amended consolidation guidance. was consolidated as of the date of transition resulting in recognition of the assets and liabilities of the consolidated VIE at fair value and recognition of a cumulative effect transition adjustment presented as a component of Non-Controlling Interests in Consolidated Entities in the consolidated statement of changes in shareholders' equity for the year ended December 31. 2010. The transition adjustment is classified as a component of Non-Controlling Interest rather than an adjustment to appropriated partners' capital because the VIE is funded with equity and 100% of the equity• ownership of the VIE is held by unconsolidated Apollo funds and one unaffiliated third party. Changes in the fair value of assets and liabilities and the related interest. dividend and other income for this VIE are recorded within Non-Controlling Interests in consolidated entities in the consolidated statement of financial condition and within net gains from investment activities of consolidated VIES and net (income) loss attributable to Non-Controlling Interests in the consolidated statement of operations. Certain of the consolidated VIEs were formed to issue collateralized notes in the legal form of debt backed by financial assets. Changes in the fair value of the assets and liabilities of these VIEs and the related interest and other income are presented within appropriated partners' capital in the consolidated statements of financial condition as these VIEs are funded solely with debt and within net gains from investment activities of consolidated variable interest entities and net (income) loss attributable to Non- Controlling Interests in the 136 EFTA00623528

Table of Contents consolidated statement of operations. Such amounts are recorded within appropriated partners capital as. in each case, the VIEs note holders, not Apollo. will ultimately receive the benefits or absorb the losses associated with the VIE's assets and liabilities. Assets and liability amounts of the consolidated VIES arc shown in separate sections within the consolidated statement of financial condition as of December 31. 2011. Additional disclosures regarding VIEs are set forth in note 5 to our consolidated financial statements. Inter-company transactions and balances, if any. have been eliminated in the consolidation. Revenue Recognition Carried Interest Income from Affiliates. We earn carried interest income from our funds as a result of such funds achieving specified performance criteria. Such carried interest income generally is earned based upon a fixed percentage of realized and unrealized gains of various funds after meeting any applicable hurdle rate or threshold minimum. Carried interest income from pertain of the funds that we manage is subject to contingent repayment and is generally paid to us as particular investments made by the funds arc realized. If. however, upon liquidation of a fund, the aggregate amount paid to us as carried interest exceeds the amount actually due to us based upon the aggregate performance of the fund, the excess (in certain cases net of taxes) is required to be returned by us to that fund. ror a majority of our capital markets funds, once the annual carried interest income has been determined. there generally is no look-back to prior periods for a potential contingent repayment. however, carried interest income on pertain other capital markets funds can be subject to contingent repayment at the end of the life of the fund. We have elected to adopt Method 2 from U.S. GAAP guidance applicable to accounting for management fees based on a formula, and under this method we accrue carried interest income quarterly based on fair value of the underlying investments and separately assess if contingent repayment is necessary. The determination of carried interest income and contingent repayment considers both the terms of the respective partnership agreements and the current fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used. Refer to note IS to our consolidated financial statements for disclosure of the amounts of carried interest income (loss) income from affiliates that was generated from realized versus unrealized losses. See "Valuation of Investments below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments in our capital markets. private equity and real estate funds. Management Fees from Affiliates. The management fees related to our private equity funds are generally based on a fixed percentage of the committed capital or invested capital. The corresponding fee calculations that consider committed capital or invested capital arc both objective in nature and therefore do not require the use of significant estimates or assumptions. Management fees related to our capital markets funds by contrast can be based on net asset value. gross assets, adjusted cost of all unrealized portfolio investments, capital commitments adjusted assets, or capital contributions, all as defined in the respective partnership agreements. The capital markets management fee calculations that consider net asset value. gross assets, adjusted cost of all unrealized portfolio investments and adjusted assets. are normally based on the terms of the respective partnership agreements and the current fair value of the underlying investments within the funds. Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and could vary depending on the valuation methodology that is used. The management fees related to our real estate funds are generally based on a specific percentage of the funds stockholders' equity or committed or net invested capital or the capital accounts of the limited partners. See the Valuation of Investments section below for further discussion related to significant estimates and assumptions used for determining fair value of the underlying investments in our capital markets and private equity funds. 137 EFTA00623529

Table of Contents Investments, at Fair Value The Company follows U.S. GAAP attributable to fair value measurements, which among other things. requires enhanced disclosures about investments that are measured and reported at fair value. Investments, at fair value. represent investments of the consolidated funds, investments of the consolidated VIES and pertain financial instruments for which fair value option was elected and the unrealized gains and losses resulting from changes in the fair value are reflected as net gains (losses) from investment activities and net gains (lasses) from investment activities of the consolidated variable interest entities. respectively. in the consolidated statements of operations. In accordance with U.S. GAAP, investments measured and reported at fair value are classified and disclosed in one of the following categories: Level /—Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I include listed equities and listed derivatives. As required by U.S. GAAP. the Company does not adjust the quoted price for these investments. even in situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price. Level Il—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. Investments 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 investments exhibit higher levels of liquid market observability as compared to Level III investments. The Company subjects broker quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II investment. These criteria include. but are not limited to. the number and quality of broker quotes. the standard deviation of obtained broker quotes. and the percentage deviation from independent pricing services. Level Ill—Pricing inputs arc unobservable for the investment and includes situations where there is little observable market activity for the investment. The inputs into the determination of fair value may require significant management judgment or estimation. Investments that are included in this category generally include general and limited partnership interests in corporate private equity and real estate funds, mezzanine funds, funds of hedge funds. distressed debt and non-investment grade residual interests in securitizations and collateralized debt obligations 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 investment would qualify for treatment as a Level II or Level III investment. Some of the factors we consider include the number of broker quotes we obtain, the quality of the broker quotes. the standard deviations of the observed broker quotes and the corroboration of the broker quotes to independent 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, an investment'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 investment where the fair value is based on unobservable inputs. In cases where an investment or financial instrument measured and reported at fair value is transferred into or out of Level III of the fair value hierarchy. the Company accounts for the transfer as of the end of the reporting period. Equity Method Investments. For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation. the Company uses the equity method of accounting. whereby the Company records its share of the underlying income or loss of such entities. Income (loss) (mitt equity method investments is recognized as part of other income (loss) in the consolidated statements of operations and income (loss) on available-for-sale securities (from equity method investments) is recognized 138 EFTA00623530

Table of Contents as part of other comprehensive income (loss). net of tax in the consolidated statements of comprehensive income (loss). The carrying amounts of equity method investments are reflected in investments in the consolidated statements of financial condition. As the underlying entities that the Company manages and invests in are. for U.S. GAAP purposes. primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company's equity method investments in such entities are at fair value. Private Equity Investments. The majority of the 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: ( I) 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 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. 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. we review certain aspects of the subject company's performance and determine how its performance compares to the group and to certain individuals in the group. We compare certain measurements such as EBITDA margins. revenue growth over certain time periods. leverage ratios. and growth opportunities. In addition, we compare our 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. we rely on the income approach. The income approach is also used to value investments or 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 used in 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 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. 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. 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. Apollo utilizes a valuation committee consisting of members from senior management that reviews and approves the valuation results related to our private equity investments. Management also retains independent 139 EFTA00623531

Table of Contents 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 independent valuation firms assist management with validating their valuation results or determine fair value. 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. Capital Markets Investments. The majority of investments in Apollo's capital markets funds are valued based on valuation models and quoted market prices. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing recognized pricing services, market participants or other sources. The capital markets funds also enter into foreign currency exchange contracts. credit default swap contracts. and other derivative contracts. which may include options. caps. collars and floors. Foreign currency exchange contracts am 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 this period, the changes in value arc recorded in income as unrealized. Realized gains or losses are recognized when contracts arc settled. 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 arc recognized at the termination of the contract based on the difference between the close-out price of the credit default contract and the original contract price. Forward contracts are valued based on market rates obtained from counterparties or prices obtained from recognized financial data service providers. When determining fair value pricing when no observable market value exists, the value attributed to an investment is based on the enterprise value at 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. Valuation approaches used to estimate the fair value of illiquid investments included in Apollo's capital markets investments also may include the market approach and the income approach. as previously described above. Apollo also utilizes a valuation committee that reviews and approves the valuation results related to our capital markets investments. Management performs various back-testing procedures to validate their valuation approaches. including comparisons between expected and observed outcomcs, forecast evaluations and variance analysis. Real Estate Investments. For the CMBS portfolio of Apollo's Funds, the estimated fair value of the AAA-rated CMBS portfolio 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 AGRE's opportunistic and value added real estate 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. Apollo also utilizes a valuation committee that reviews and approves the valuation results related to our real estate investments. Management performs various back-testing procedures to validate their valuation approaches. including comparisons between expected and observed outcomes, forecast evaluations and variance analysis. The fair values of the investments in our private equity. capital markets and real estate funds can be impacted by changes to the assumptions used in the underlying valuation models. For further discussion on the 140 EFTA00623532

Table of Contents impact of changes to valuation assumptions refer to 'Item 7A. Quantitative and Qualitative Disclosures About Market Risk—Sensitivity. Them have been no material changes to the underlying valuation models during the periods that our financial results are presented. Fair Value of Financial Instruments U.S. GAAP guidance requires the disclosure of the estimated fair value of financial instruments. The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. other than in a forced or liquidation sale. Except for the Company's debt obligation related to the AMH Credit Agreement (as defined in note 12 to the consolidated financial statements). Apollo's financial instruments am recorded at fair value or at amounts whose carrying value approximates fair value. See "—Investments. at Fair Value' above. While Apollo's valuations of portfolio investments are based on assumptions that Apollo believes are reasonable under the circumstances, 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. Other financial instruments' carrying values generally approximate fair value because of the short-term nature of those instruments or variable interest rates related to the borrowings. As disclosed in note 12. the Company's long term debt obligation related to the AMH Credit Agreement is believed to have an estimated fair value of approximately $752.2 million based on a yield analysis using available market data of comparable securities with similar terms and remaining maturities as of December 31. 2011. However. the carrying value that is recorded on the consolidated statement of financial condition is the amount for which we expect to settle the long term debt obligation. Valuation of Financial Instruments held by Consolidated VIEs The consolidated VIEs hold investments that are traded over-the-counter. Investments in securities that am 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 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 am based on the avenge 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. The consolidated VIEs also have debt obligations that are recorded at fair value. The valuation approach used to estimate the fair values of debt obligations is the discounted cash flow method, which includes consideration of the cash flows of the debt obligation based on projected quarterly interest payments and quarterly amortization. Debt obligations are discounted based on the appropriate yield curve given the loan's respective maturity and credit rating. Management uses its discretion and judgment in considering and appraising relevant factors for determining the valuations of its debt obligations. Fair Value Option. Apollo has elected the fair value option for the assets and liabilities of the consolidated VIEs. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. Apollo has elected to separately present interest income in the Consolidated Statement of Operations from other changes in the fair value of the convertible notes issued by HFA. Apollo has elected to separately present interest income in the consolidated statements of operations from other changes in the fair value of the convertible notes issued by HFA. Apollo has applied the fair value option for certain corporate loans. other investments and debt obligations held by these entities that otherwise would not have been carried at fair value. Refer to note 5 to our consolidated financial statements for further disclosure on financial instruments of the consolidated VIEs for which the fair value option has been elected. 141 EFTA00623533

Table of Contents Goodwill and Intangible Assets—Goodwill and indefinite-life intangible assets must be reviewed annually for impairment or more frequently if circumstances indicate impairment may have occurred. Identifiable finite-life intangible assets. by contrast. are amortized over their estimated useful lives. which are periodically re-evaluated for impairment or when circumstances indicate an impairment may have occurred. Apollo amortizes its identifiable finite- life intangible assets using a method of amortization reflecting the pattern in which the economic benefits of the finite-life intangible asset are consumed or otherwise used up. If that pattern cannot be reliably determined. Apollo uses the straight-line method of amortization. At June 30. 2011. the Company performed its annual impairment testing and determined there was no impairment of goodwill or indefinite life intangible assets at such time. Compensation and Benefits Compensation and benefits include salaries, bonuses. profit sharing plans and the amortization of equity-based compensation. Bonuses are accrued over the service period. From time to time, the Company may distribute profits interests as a result of waived management fees to its investment professionals which are considered compensation. Additionally. certain employees have arrangements whereby they arc entitled to receive a percentage of carried interest income based on the fund's performance. To the extent that individuals are entitled to a percentage of the carried interest income and such entitlement is subject to potential forfeiture at inception. such arrangements are accounted for as profit sharing plans. and compensation expense is recognized as the related carried interest income is recognized. Profit Sharing Expense. Compensation expense related to our profit sharing payable is a result of agreements with our Contributing Partners and employees to compensate them based on the ownership interest they have in the general partners of the Apollo funds. Therefore, any movements in the fair value of the underlying investments in the funds we manage and advise affect the profit sharing expense. As of December 31. 2011. our total private equity investments were approximately 420.7 billion. The Contributing Partners and employees are allocated approximately 30% to 50% of the total carried interest income which is driven primarily by changes in fair value of the underlying fund's investments and is treated as compensation expense. Additionally. profit sharing expenses paid may be subject to clawback from employees, former employees and Contributing Partners. In lune 2011, the Company adopted 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 carried interest realizations earned by the Company in a given year. which amounts are reflected in profit sharing expense in the accompanying consolidated financial statements. Incentive Fee Compensation. Certain employees are entitled to receive a discretionary portion of incentive fee income from certain of our capital markets funds, based on performance for the year. Incentive fee compensation expense is recognized on accrual basis as the related carried interest income is earned. Equity-Based Compensation. Equity-based compensation is accounted for in accordance with U.S. GAAP. which requires that the cost of employee services received in exchange for an award of equity instruments is generally 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 recognized over the relevant service period. Further. as required under U.S. GAAP. the Company estimates forfeitures using industry• comparables or historical trends for equity-based awards that are not expected to vest. Apollo's equity-based compensation awards consist of. or provide rights with respect to AOG Units. RSUs. Share Options. AAA RDUs. ARI Restricted Stock Awards. ARI RSUs Awards and AMTG RSUs. The Company's assumptions made to determine the fair value on grant date and the estimated forfeiture rate arc embodied in the calculations of compensation expense. 142 EFTA00623534

Table of Contents Another significant part of our compensation expense is derived from amortization of the AOG Units subject to forfeiture by our Managing Partners and Contributing Partners. The estimated fair value was determined and recognized over the forfeiture period on a straight-line basis. We have estimated a 0% and 3% forfeiture rate for our Managing Partners and Contributing Partners. respectively. based on the Company's historical attrition rate for this level of staff as well as industry comparable rates. If either the Managing Partners or Contributing Partners are no longer associated with Apollo or if there is no turnover. we will revise our estimated compensation expense to the actual amount of expense based on the units vested at the balance sheet date in accordance with U.S. GAAP. Additionally. the value of the AOG Units have been reduced to reflect the transfer restrictions imposed on units issued to the Managing Partners and Contributing Partners as well as the lack of rights to participate in future Apollo Global Management. LLC equity offerings. These awards have the following characteristics: Awards granted to the Managing Partners (i) are not permitted to be sold to any parties outside of the Apollo Global Management. LLC control group and transfer restrictions lapse pro rata during the forfeiture period over 60 or 72 months, and (ii) allow the Managing Partners to initiate a change in control. Awards granted to the Contributing Partners (i) are not permitted to be sold or transferred to any parties except to the Apollo Global Management. LLC control group and (ii) the transfer restriction period lapses over six years (which is longer than the forfeiture period which lapses ratably over 60 months). As noted above, the AOG Units issued to the Managing Partners and Contributing Partners have different restrictions which affect the liquidity of and the discounts applied to each grant. We utilized the Finnerty Model to calculate a discount on the AOG Units granted to the Contributing Partners. The Finnerty Model provides for a valuation discount reflecting the holding period restriction embedded in a restricted stock preventing its sale over a certain period of time. Along with the Finnerty Model we applied adjustments to account for the existence of liquidity clauses specific to contributing partner units and a minority interest consideration as compared to units sold through the strategic investor transaction in 2007. The combination of these adjustments yielded a fair value estimate of the AOG Units granted to the Contributing Partners. The Finnerty Model proposes to estimate a discount for lack of marketability such as transfer restrictions by using an option pricing theory. This model has gained recognition through its ability to address the magnitude of the discount by considering the volatility of a company's stock price and the length of restriction. The concept underpinning the Finnerty Mock] is that restricted stock cannot be sold over a certain period of time. Further simplified, a restricted share of equity in a company can be viewed as having forfeited a put on the average price of the marketable equity over the restriction period (also known as an "Asian Put Option"). If we price an Asian Put Option and compare this value to that of the assumed fully marketable underlying stock, we can effectively estimate the marketability discount. The assumptions utilized in the model were 0) length of holding period. (ii) volatility, (iii) dividend yield and (iv) risk free rate. Our assumptions were as follows: (i) We assumed a maximum two year holding period. (ii) We concluded based on industry peers. that our volatility annualized would be approximately 40%. (iii) We assumed no distributions. (iv) We assumed a 428% risk free rate based on U.S. Treasuries with a two year maturity. For the Contributing Partners' grants. the Finnerty Model calculation, as detailed above. yielded a marketability discount of 25%. This marketability discount, along with adjustments to account for the existence 143 EFTA00623535

Table of Contents of liquidity clauses and consideration of non-controlling interests as compared to units sold through the strategic investors transaction in 2007. resulted in an overall discount for these grants of 29%. We determined a 14% discount for the grants to the Managing Partners based on the equity value per sham of $24. We determined that the value of the grants to the Managing Partners was supported by the 2007 sale of an identical security to Credit Suisse Management. LLC at $24 per share. Based on an equity value per sham of $24. the implied discount for the grants to the Managing Partners was 14%. The Contributing Partners yielded a larger overall discount of 29%. as they are unable to cause a change in control of Apollo. This results in a lower fair value estimate. as their units have fewer beneficial features than those of the Managing Partners. Income Taxes Apollo has historically generally operated in the U.S. as partnerships for U.S. Federal income tax purposes and generally as corporate entities in non- U.S. jurisdictions. As a result, income has not been subject to U.S. Federal and state income taxes. Taxes related to income earned by these entities represent obligations of the individual partners and members and have not been reflected in the consolidated financial statements. Income taxes presented on the consolidated statements of operations are attributable to the New York City unincorporated business tax and income taxes on certain entities located in non- U.S. jurisdictions. Following the Reorganization. the Apollo Operating Group and its subsidiaries continue to generally operate in the U.S. as partnerships for U.S. Federal income tax purposes and generally as corporate entities in non-U.S. jurisdictions. Accordingly. these entities in some cases am subject to NYC UBT. or in the case of non-U.S. entities. to non-U.S. corporate income taxes. In addition. APO Corp.. a wholly-owned subsidiary of the Company. is subject to U.S. Federal. state and local corporate income tax, and the Company's provision for income taxes is accounted for in accordance with U.S. GAAP. As significant judgment is required in determining tax expense and in evaluating tax positions. including evaluating uncertainties, we recognize the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. 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 arc recognized. The Company's tax positions are reviewed and evaluated quarterly to determine whether or not we have uncertain tax positions that require financial statement recognition. Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years. 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 when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. 144 EFTA00623536

Table of Contents Fair Value Measurements The Company follows U.S. GAAP attributable to fair value measurements, which among other things. requires enhanced disclosures about investments that are measured and reported at fair value. Investments, at fair value. represent investments of the consolidated funds, investments of the consolidated VIES and certain financial instruments for which fair value option was elected and the unrealized gains and losses resulting from changes in the fair value are reflected as net gains (losses) from investment activities and net gains (lasses) from investment activities of the consolidated variable interest entities. respectively, in the consolidated statements of operations. In accordance with U.S. GAAP, investments measured and reported at fair value are classified and disclosed in one of the following categories: Level /—Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I include listed equities and listed derivatives. As required by U.S. GAAP. the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price. Lew/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. Investments 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 investments exhibit higher levels of liquid market observability as compared to Level HI investments. The Company subjects broker quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II investment. These criteria include. but are not limited to. the number and quality of broker quotes. the standard deviation of obtained broker quotes. and the percentage deviation from independent pricing services. Level Ill—Pricing inputs are unobservable for the investment and includes situations where there is little observable market activity for the investment. The inputs into the determination of fair value may require significant management judgment or estimation. Investments that are included in this category generally include general and limited partnership interests in corporate private equity and real estate funds, mezzanine funds, funds of hedge funds. distressed debt and non-investment grade residual interests in securitizations and collateralized debt obligations 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 investment would qualify for treatment as a Level II or Level III investment. Some of the factors we consider include the number of broker quotes we obtain, the quality of the broker quotes. the standard deviations of the observed broker quotes and the corroboration of the broker quotes to independent 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, an investment'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 investment where the fair value is based on unobservable inputs. 145 EFTA00623537

Table of Contents Fair Value Measurements The following table summarizes the valuation of Apollo's investments in fair value hierarchy levels as of December 31.2011 and 2010: 1.evel I I.evel II Leve1111 Taak December 31. December 31. December 31. 2011 2010 2011 December 31. 21)10 December31. 2011 December 31. 2010 December31. 2011 December 31. 2010 Assets. al fair value: Investment an AAA Invo.lmeiab.. I..P. $ — $ S 1.480.152 5 1.637.091 S 1.480.152 $ 1.637.091 Invenmenta held by Senior Loan Fund 23.757 456 24.213 Invet.lmeiab. an WA and Other 47.757 47.757 Total — s — s 23.757 $ — 5 1.528.365 $ 1.637.091 5 1.552.122 3 1.637.091 level 1 Level 11 Level 111 Tank December31. December 31. 2011 2010 December31. December31. 2011 2010 December31. 2011 December 31. 2010 December31. 2011 December31. 2010 Lauballues. at far value: bitted rate swap agreement s — $ — $ 3.843 S 11.531 3 — s — s 3.843 5 11.531 Total — S — 3.843 S 11531 3943 3 11.531 There were no transfers between Level I. 11 or Ill during the year ended December 31.2011 and 2010 relating to assets and liabilities, at fair value. noted in the tables above, respectively. The following table summarizes the changes in AAA Investments, which is measured at fair value and characterized as a Level III investment: For the Year Ended December 31. 2011 2010 2009 Balance. Beginning of Penod 1.637.091 3 1.324.939 3 854.442 Pauchaaes 432 375 4.121 Dot:Muttons (33.425) (58.368) (5.497) Change an unrealised (losses) gains. nel 1123.9461 37(1345 471.573 Balance. End of Peeled 1.450.152 5 1.637.091 5 1.324.939 146 EFTA00623538

Table of Contents The following table summarizes the changes in the investment in HFA and Other Investments. which arc measured at fair value and characterized as Level III investments: For the Year Ended December 31. 2011 Balance. Beginning of Period S Purchases Change in unrealized losses. net Director Fees (1.802) Expenses incurred 57.509 (5,881) (2.069) 41.757 Balance. End of Period The change in unrealized losses. net has been recorded within the caption 'Net (losses) gains from investment activities" in the consolidated statements of operations. The following table summarizes the changes in the Senior Loan Fund, which is measured at fair value and characterized as a Level III investment: For the Year Ended December 31. 2011 Balance. Beginning of Period Acquisition Purchases Distributions Realized losses (gains) Change in unrealized (losses) gains 456 Balance. End of Period 456 The following table summarizes the changes in the Metals Trading Fund investment. which is measured at fair value and characterized as a Level Ill investment: For the Year Ended December 31. 2010 Balance. Beginning of Period 40,034 Purchases Distributions Realized losses Change in unrealized losses (37,760)1" (2.240) (34) Balance. End of Period (I) Refer to note I for a discussion regarding consolidation of the Metals Trading Fund. The change in unrealized gains (losses) and realized losses have been recorded within the caption "Net gains (losses) from investment activities'. in the consolidated statements of operations. 147 EFTA00623539

Table of Contents The following table summarizes a look-through of the Company's Level III investments by valuation methodology of the underlying securities held by AAA Investments: Private Equity December 31.2011 December 31.2010 % of Investment of AAA % of Investment of AAA Approximate values based on net asset value of the underlying funds, which are based on the funds underlying investments that are valued using the following: Comparable company and industry multiples $ 749,374 44.6% $ 782,775 42.6% Discounted cash flow models 643,031 38.4 490,024 26.6 Listed quotes 139.833 8.3 /4232 1.3 Broker quotes 179.621 10.7 504,917 27.5 Other net (liabilities) assets Total Investments Other net liabilities42" (33.330) (2.0) 37.351 2.0 1.678.529 (198.377i 100.0% 1.839,299 (202.208) 100.0% Total Net Assets $1.480.152 31.637.091 ( I) Balances include other assets and liabilities of certain funds in which AAA Investments has invested. Other assets and liabilities at the fund level primarily include cash and cash equivalents. broker receivables and payables and amounts due to and from affiliates. Carrying values approximate fair value for other assets and liabilities. and accordingly. extended valuation procedures are not required. (2) Balances include other assets, liabilities and general partner interests of AAA Investments and are primarily comprised of $402.5 million and $537.5 million in long-term debt offset by cash and cash equivalents at the December 31. 2011 and 2010 balance sheet dates, respectively. Carrying values approximate fair value for other assets and liabilities (except for debt), and. accordingly. extended valuation procedures are not required. Fair Value Measurements The following table summarizes the valuation of Apollo's consolidated VIEs in fair value hierarchy levels as of December 31. 2011 and 2010: Level I December 31. December 31. 2011 2010 $ — $ — $ 3,055,357 $ 1.172.242 $ 246.609 $ 170.369 $ 3.301.966 $ 1.342.611 Level II December 31. December 31. 2011 2010 Lev ell11 Totals December31. December31. December 31. December 31. 2011 2010 2011 2010 Investments, at fair value Level I December 31. December 31. 2011 2010 Lovell! December 31. December 31. 2011 2010 — s Level 111 December 31. December 31. 2011 2010 Totals December 31. December 31, 2011 2010 Liabilities. at fair value — $ — $ 3,189.837 $ 1.127.180 $ 3.189.837 $ 1,127,180 ) During the first quarter of 2011. one of the consolidated VIEs sold all of its investments. At December 31. 2010, the cost and fair value of the investments of this VIE were $719.5 million and $684.1 million. 148 EFTA00623540

Table of Contents respectively. The consolidated VIE had a net investment gain of $16.0 million relating to the sale for the year ended December 31. 2011. which is reflected in the net (losses) gains from investment activities of consolidated variable interest entities on the consolidated statement of operations. Level III investments include corporate loan and corporate bond investments held by the consolidated VIEs. while the Level Ill liabilities consist of notes and loans. the valuations of which are discussed further in note 2. All Level II and Ill investments were valued using broker quotes. Transfers of investments out of Level III and into Level II or Level I. if any. are recorded as of the quarterly period in which the transfer occurred. In certain cases. the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases. an investment's level within the 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 investment. The following table summarizes the changes in investments of consolidated VIEs, which are measured at fair value and characterized as Level III investments: For the Year Ended December 31. 2011 2010 Balance. Beginning of Period $ 170,369 $ Acquisition of VIE 335.353 Transition adjustment relating to consolidation of VIE — 1,102.114 Purchases 663.438 840.926 Sale of investments (273,719) (125,638) Net realized gains 980 131 Changes in net unrealized (losses) gains (7,669) 29,981 Deconsolidation of VIE (20,751) Transfers out of Level III (802,533) (1,663,755) Transfers into Level Ill 160.390 7,361 Balance. End of Period $ 246.609 $ 170.369 Changes in net unrealized (losses) gains included in Net (Losses) Gains from Investment Activities of consolidated VIEs related to investments still held at reporting date S (7.253) S t1.638) Investments were transferred out of Level III into Level II and into Level III out of Level II. respectively. as a result of subjecting the broker quotes on these investments 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. 149 EFTA00623541

Table of Contents The following table summarizes the changes in liabilities of consolidated VIE,, which are measured at fair value and characterized as Level III liabilities: For the Year Ended December 31. 2011 2010 Balance. Beginning of Period $1,127,180 S Acquisition of VIE 2.046.157 Transition adjustment relating to consolidation of VIE — 706,027 Borrowings 454,356 1 050 377 Repayments (415,869) (331,120) Net realized gains on debt (41.819) (21231) Changes in net unrealized losses from debt 19,880 55,040 Dcconsolidation of VIE — (329.836) Elimination of debt attributable to consolidated VIES (48) (2.077) Balance. End of Period 53.189.837 SI.127.180 Changes in net unrealized (gains) losses included in Net (Losses) Gains from Investment Activities of consolidated VIES related to liabilities still held at reporting date S (25.347) S 16.916 Recent Accounting Pronouncements A list of recent accounting pronouncements that are relevant to Apollo and its industry is included in note 2 to our consolidated financial statements. Off-Balance Sheet Arrangements In the normal course of business, we engage in off-balance sheet arrangements. including transactions in derivatives, guarantees. commitments. indemnifications and potential contingent repayment obligations. See note 16 to our consolidated financial statements for a discussion of guarantees and contingent obligations. Contractual Obligations, Commitments and Contingencies As of December 31, 2011. the Company's nuterial contractual obligations consist of lease obligations. contractual commitments as part of the ongoing operations of the funds and debt obligations. Fixed and determinable payments due in connection with these obligations are as follows: 2012 2013 2014 2015 2016 Thereafter Total tin lhout:ands) Operating lease obligations $ 31,175 $ 30,657 $ 30,242 $ 28,921 $ 28,871 $ 92A26 $ 242,292 Other long-term obligations 10.221 630 10.851 AMH Credit Agreement" 31.284 30.668 85.617 78.479 26.364 623.486 875.898 CIT secured loan agreement 1.032 9.626 10.658 Total Obligations as of December 31. 2011 73.712 S 71.581 S 115.859 5 107.400 S 55.235 S 715.912 5 1.139.699 I ) Includes (i) payments on management service agreements related to certain assets and (ii) payments with respect to certain consulting agreements entered into by the Company. Note that a significant portion of these costs arc reimbursable by funds. 150 EFTA00623542

Table of Contents (2) $723.3 million, net ($995.0 million portion less amount repurchased) of the AMI4 debt matures in January 2017 and $5.0 million matures in April 2014. Amounts represent estimated interest payments until the loan matures using an estimated weighted average annual interest rate of 4.24%. which includes the effects of the interest rate swap through its expiration in May 2012 and certain required repurchases of at least $50.0 million by December 31.2014 and at least $100.0 million (inclusive of the previously purchased $50.0 million) by December 31.2015 as described in note 12 to our consolidated financial statements. Note: Due to the fact that the timing of certain amounts to be paid cannot be determined or for other reasons discussed below, the following contractual commitments have not been presented in the table above. (i) Amounts do not include the senior secured term loan entered into by AAA Investments of which $402.5 million was utilized as of December 31. 2011. The term loan matures on June 30. 2015. AAA is consolidated by the Company in accordance with U.S. GAAP. The Company does not guarantee and has no legal obligation to repay amounts outstanding under the term loan. Accordingly. the $402.5 million outstanding balance was excluded from the table above. As noted previously. we have entered into a tax receivable agreement with our Managing Partners and Contributing Partners which requires us to pay to our Managing Partners and Contributing Partners 85% of any tax savings received by APO Corp. from our step-up in tax basis. The tax savings achieved may not ensure that we have sufficient cash available to pay this liability and we might be required to incur additional debt to satisfy this liability. (iii) Debt amounts related to the consolidated VIEs are not presented in the table above as the Company is not a guarantor of these non-recourse liabilities. 151 EFTA00623543

Table of Contents Commitments Our management companies and general partners have committed that we. or our affiliates, will invest a certain percentage of capital into the funds we manage. While a small percentage of these amounts are funded by us. the majority of these amounts have historically been funded by our affiliates. including certain of our employees and certain Apollo funds. The table below presents the commitment and remaining commitment amounts of Apollo and its affiliates. the percentage of total fund commitments of Apollo and its affiliates. the commitment and remaining commitment amounts of Apollo only (excluding affiliates). and the percentage of total fund commitments of Apollo only (excluding affiliates) for each private equity fund, each capital markets fund and each real estate fund as of December 31, 2011 as follows ($ in millions): Fund Private Equity: Fund VII $ 467.210 3.18% $ 190.3 1.30% $ 201.9") S S2.7 Fund VI 246.3 2.43 6.1 0.06 24.3 0.6 Fund V 100.0 2.67 0.5 0.01 6.5 Fund IV 100.0 2.78 0.2 0.01 0.5 at Fund III 100.6 6.71 15.5 ANRP 164.001 28.61 9.0 1.57 138.2" 7.6 Capital l!tfarkets: EPF" 377.401 22.48 22.9 1.36 156.2' 10.8 EPF II 4.7 2.35 4.7 2.35 4.7 4.7 SOMA' ACLF Co-Invest COF I 477.6(6) 32.16 29.7 2.00 242.216) 4.2 COP II 70.5 4.45 23.4 1.48 1.8 0.6 ACLF 23.9 2.43 23.9 2.43 10.7 10.7 Palmetto 18.0 1.19 18.0 1.19 8.3 8.3 AIE 8.4 3.15 Si 1.94 0.8 0.5 A-A European Senior Debt Fund. L.P. 50.0 100.00 15.0 Fel 107.1 26.85 48.7 Apollo/3H Loan Portfolio 50.1 100.00 0.1 0.20 ApollolPalmetto Loan Portfolio. L.P. 300.001 100.00 120.0") Apollo/Palmetto Short-Maturity Loan Portfolio. L.P. 200.011 100.00 25.0" AESI"' 4.5 0.98 4.5 0.98 3.0 3.0 Apollo European Credit. L.P. Real Estate: AGRE U.S. Real Estate Fund 5.3 308.011 2.50 80.02 2.2 7.9 1.04 2.05 4.0 , 74.5") 1.7 2.0 CPI Capital Partners North America 7.5 1.25 2.0 0.33 1.8 0.5 CPI Capital Partners Europe 7.1 0.47 1.7 CPI Capital Partners Asia Pacific 6.9 0.53 0.5 0.04 0.9 Total S 3.205.1 $ 351.1 S 1.306.2 S 137.9 Apollo ()nly (Excluding Apollo Onl, Apollo Only Affiliates) Apollo and (Excluding Apollo and % of Total (Excluding % of Total Affiliati% Affiliates) AI/Hiatt% Fund Affiliates) Fund Remaining Remaining Commitments Containment?. Commitment:. C4IIIIIlliillItIth ct llllll fitments COMIlliillItIli, (1) As of December 31. 2011. Palmetto had commitments and remaining commitment amounts in Fund VII of 5110.0 million and $46.5 million. respectively. ANRP of $150.0 million and $126.3 million. respectively. 152 EFTA00623544

Table of Contents Apollo/Palmetto Loan Portfolio. LP. of $300.0 million and $120.0 million, respectively. Apollo/Palmetto Short-Maturity Loan Portfolio. L.P. of $200.0 million and $25.0 million, respectively. and ACRE U.S. Real Estate Fund. LP. of $300 million and $272.5 million, respectively. (2) As of December 31. 2011. Apollo had an immaterial amount of remaining commitments in Fund IV and Fund V. Accordingly. presentation of such remaining commitments was not deemed meaningful for inclusion in the table above. (3) Of the total commitment amount in EPF. AAA. SOMA and Palmetto have approximately f77.0 million. C75.0 million and C106.0 million. respectively. (4) Of the total remaining commitment amount in EPF, AAA. SOMA and Palmetto have approximately f31.1 million. C30.9 million and f42.9 million. respectively. (5) As of December 31. 2011. the general partner of AC1LF Co-Invest. a co-investment vehicle that invests alongside AC1LF, had committed an immaterial amount to ACLF Co-Invest. Accordingly. presentation of such commitment was not deemed meaningful for inclusion in the table above. (6) As of December 31. 2011. SOMA had commitments and remaining commitment amounts in COF I of $250.0 million and $202.0 million, respectively. (7) Apollo's commitment in these funds is denominated in Euros and translated into U.S. dollars at an exchange rate of C1.00 to $1.30 as of December 31. 2011. (8) Apollo and affiliated investors must maintain an aggregate capital balance in an amount not less than 19$ of total capital account balances of the partnership. As of December 31. 2011. Apollo and affiliates capital balances exceeded the 1% requirement and are not required to fund a capital commitment. As a limited partner, the general partner and manager of the Apollo private equity. capital markets and real estate funds. Apollo has unfunded capital commitments at December 31. 2011 and December 31.2010 of $137.9 million and $140.6 million, respectively. Apollo has an ongoing obligation to acquire additional common units of AAA in an amount equal to 25% of the aggregate after-tax cash distributions. if any. that are made to its affiliates pursuant to the carried interest distribution rights that are applicable to investments made through AAA Investments. The AMH Credit Agreement. which provides for a variable-rate term loan, will have future impacts on our cash uses. Borrowings under the AMH Credit Agreement originally accrued interest at a rate of (i) LIBOR loans (LIBOR plus 1.25%). or (ii) base rate loans (base rate plus 0.50%). The Company has hedged $167 million of the variable-rate loan with fixed rate swaps to minimize our interest rate risk as of December 31. 2011. The loan originally matured in April 2014. On December 20, 2010. Apollo amended the AMH Credit Agreement to extend the maturity date of $995 million of the term loans from April 20. 2014 to January 3.2017 and modified certain other terms of the Credit Agreement. Pursuant to this amendment. AMH or an affiliate was required to purchase from each lender that elected to extend the maturity date of its term loan a portion of such extended term loan equal to 20% thereof. In addition. AMH or an affiliate is required to repurchase at least $50 million aggregate principal amount of term loans by December 31.2014 and at least $100 million aggregate principal amount of term loans (inclusive of the previously purchased $50.0 million) by December 31.2015 at a price equal to par plus accrued interest. The sweep leverage ratio (which is a figure that varies over time that is used to determine the applicable level of certain carve-outs to the negative covenants as well as to determine the level of AMH's cash collateralization requirements) was extended to end at the new extended maturity date. The interest rate for the highest applicable margin for the loan portion extended changed to LIBOR plus 4.25% and base rate plus 3.25%. On December 20. 2010, an affiliate of AMH that is a guarantor under the AMH Credit Agreement repurchased approximately $180.8 million of term loans in connection with the extension of the maturity date of such loans and thus the AMH loans (excluding the portions held by AMH affiliates) had a remaining outstanding balance of $728.3 million. The Company determined that the amendments to the AMH Credit Agreement resulted in debt extinguishment which did not result in any gain or loss. The interest rate on the $723.3 million. net ($995.0 million portion less amount repurchased) of the loan at December 31. 2011 was 4.23% and the interest rate on the remaining $5.0 million portion of the loan at December 31.2011 was 1.48%. The estimated fair value of the Company's long-term debt obligation related to 153 EFTA00623545

Table of Contents the AMH Credit Agreement is believed to be approximately $752.2 million based on a yield analysis using available market data of comparable securities with similar terms and remaining maturities. The $728.3 million carrying value of debt that is recorded on the consolidated statement of financial condition at December 31. 2011 is the amount for which the Company expects to settle the AMH Credit Agreement. On June 30. 2008. the Company entered into a credit agreement with Fund VI. pursuant to which Fund VI advanced $18.9 million of carried interest income to the limited partners of Apollo Advisors VI. L.P.. who are also employees of the Company. The loan obligation accrues interest at an annual fixed rate of 3.45% and terminates on the earlier of June 30. 2017 or the termination of Fund VI. At December 31. 2010. the total outstanding loan aggregated $20.5 million, including accrued interest of $1.6 million. which approximated fair value, of which approximately $6.5 million was not subject to the indemnity discussed above and is a receivable from the Contributing Partners and certain employees. In March 2011. a right of offset for the indemnified portion of the loan obligation was established between the Company and Fund VI. therefore the loan was reduced in the amount of $10.9 million, which is offset in carried interest receivable on the consolidated statement of financial condition. During the year ended December 31. 2011. there was $0.9 million interest paid and $0.3 million accrued interest on the outstanding loan obligation. As of December 31. 2011. the total outstanding loan aggregated $9.0 million, including accrued interest of $1.0 million which approximated fair value, of which approximately $6.5 million was not subject to the indemnity discussed above and is a receivable from the Contributing Partners and certain employees. In accordance with the Managing Partners Shareholders Agreement dated July 13. 21307 as amended. and the above credit agreement. we have indemnified the Managing Partners and certain Contributing Partners (at varying percentages) for any carried interest income distributed from Fund IV. Fund V and Fund VI that is subject to contingent repayment by the general partner. As of December 31. 2011. the Company had not recorded an obligation for any previously made distributions. Contingent Obligations—Carried interest income in both private equity funds and certain capital markets funds is subject to reversal in the event of future losses to the extent of the cumulative carried interest recognized in income to date. If all of the existing investments became worthless. the amount of cumulative revenues that had been recognized by Apollo through December 31.2011 and that would be reversed approxinuites $1.3 billion. Management views the possibility of all of the investments becoming worthless as remote. Carried interest income is 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. The table below indicates the potential future reversal of carried interest income: December 31. 2011 Private Equity Funds: Fund VII 651.491 $ Fund V 246.656 Fund IV 57.104 AAA 22.090 Total Private Equity Funds Capital Markets Funds: Distressed and Event-Driven Hedge Funds (Value Funds. SOMA. AAOF) 977.341 12,625 Mezzanine Funds (ME II) 20,459 Non-Performing Loan Fund (EPF) 51.463 Senior Credit Funds (COF LON II. Gulf Stream. CLOs) 233.139 Total Capital Market Funds 317.686 Total 1.295.027 154 EFTA00623546

Table of Contents 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 carried interest income than was ultimately earned. This general partner obligation amount. if any. will depend on final realized values of investments at the end of the life of each fund. As discussed in note 15 to the consolidated financial statements, the Company has recorded a general partner obligation to return previously distributed carried interest income or fees of $75.3 million and $18.1 million relating to Fund VI and SOMA as of December 31. 2011. respectively. Certain funds may not generate carried interest income as a result of unrealized and realized losses that are recognized in the current and prior reporting period. In certain cases, carried interest income 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. Apollo Global Securities. provides underwriting commitments in connection with security offerings to the portfolio companies of the funds we manage. As of December 31. 2011. there were no underwriting commitments outstanding related to such offerings. In connection with the Gulf Stream acquisition. as discussed in Note 3 to the accompanying consolidated financial statements in this report. the Company will also make payments to the former owners of Gulf Stream under a contingent consideration obligation which requires the Company to transfer cash to the former owners of Gulf Stream based on a specified percentage of incentive fee revenue. The contingent consideration liability has an Acquisition Date fair value of approximately $4.7 million, which was determined based on the present value of the estimated range of undiscounted incentive fee payable cash flows between SO and approximately 48.7 million using a discount rate of 13.7%. In connection with the CPI acquisition. as discussed in Note 3 to the accompanying consolidated financial statements. Apollo received cash of $15.5 million and acquired general partner interests in. and advisory agreements with, various real estate investment funds and co-investment vehicles and added to its team of real estate professionals. The consideration transferred in the acquisition is a contingent consideration in the form of a liability incurred by Apollo to CPI. The liability is an obligation of Apollo to transfer cash to CPI based on a specified percentage of future earnings. The estimated fair value of the contingent liability is 51.2 million as of December 31. 2011. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our predominant exposure to market risk is related to our role as investment manager and general partner for our funds and the sensitivity to movements in the fair value of their investments and resulting impact on carried interest income and management fee revenues. Our direct investments in the funds also expose us to market risk whereby movements in the fair values of the underlying investments will increase or decrease both net gains (losses) from investment activities and income (loss) from equity method investments. For a discussion of the impact of market risk factors on our financial instruments refer to 'Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Consolidation— Valuation of Investments." The fair value of our financial assets and liabilities of our funds may fluctuate in response to changes in the value of investments. foreign exchange. commodities and interest rates. The net effect of these fair value changes impacts the gains and losses from investments in our consolidated statements of operations. However. the majority of these fair value changes are absorbed by the Non-Controlling Interests. The Company is subject to a concentration risk related to the investors in its funds. Although there are more than approximately 1.000 limited partner investors in Apollo's active private equity. capital markets and real estate funds. no individual investor accounts for more than 10% of the total committed capital to Apollo's active funds. 155 EFTA00623547

Table of Contents Risks are analyzed across funds from the "bottom up" and from the "top down" with a particular focus on asymmetric risk. We gather and analyze data. monitor investments and markets in detail, and constantly strive to better quantify. qualify and circumscribe relevant risks. Each segment mss its own investment and risk management process subject to our overall risk tolerance and philosophy: The investment process of our private equity funds involves a detailed analysis of potential acquisitions. and investment management teams assigned to monitor the strategic development, financing and capital deployment decisions of each portfolio investment. Our capital markets funds continuously monitor a variety of markets for attractive trading opportunities. applying a number of traditional and customized risk management metrics to analyze risk related to specific assets or portfolios, as well as. fund-wide risks. Impact on Management Fees—Our management fees are based on one of the following: • capital commitments to an Apollo fund: • capital invested in an Apollo fund: or • the gross, net or adjusted asset value of an Apollo fund. as defined. • otherwise defined in the respective agreements. Management fees could be impacted by changes in market risk factors and management could consider an investment permanently impaired as a result of (i) such market risk factors cause changes in invested capital or in market values to below cost, in the case of our private equity funds and certain capital markets funds. or (ii) such market risk factors causing changes in gross or net asset value. for the capital markets funds. The proportion of our management fees that arc based on NAV is dependent on the number and types of our funds in existence and the current stage of each funds life cycle. Impact on Advisory and Transaction Fees—We earn transaction fees relating to the negotiation of private equity. capital markets and real estate transactions and may obtain reimbursement for certain out-of-pocket expenses incurred. Subsequently. on a quarterly or annual basis. ongoing advisory fees. and additional transaction fees in connection with additional purchases or follow-on transactions. may be earned. Management Fee Offsets and any broken deal costs are reflected as a reduction to advisory and transaction fees from affiliates. Advisory and transaction fees will be impacted by changes in market risk factors to the extent that they limit our opportunities to engage in private equity. capital markets and real estate transactions or impair our ability to consummate such transactions. The impact of changes in market risk factors on advisory and transaction fees is not readily predicted or estimated. Impact on Carried Interest Income—We earn carried interest income from our funds as a result of such funds achieving specified performance criteria. Our carried interest income will be impacted by changes in market risk factors. However. several major factors will influence the degree of impact: the performance criteria for each individual fund in relation to how that funds results of operations are impacted by changes in market risk factors: whether such performance criteria are annual or over the life of the fund: to the extent applicable. the previous performance of each fund in relation to its performance criteria: and whether each funds' carried interest income is subject to contingent repayment. As a result, the impact of changes in market risk factors on carried interest income will vary widely from fund to fund. The impact is heavily dependent on the prior and future performance of each fund, and therefore is not readily predicted or estimated. 156 EFTA00623548

Table of Contents Market Risk—We are directly and indirectly affected by changes in market conditions. Market risk generally represents the risk that values of assets and liabilities or revenues and expenses will be adversely affected by changes in market conditions. Market risk is inherent in each of ow investments and activities. including equity investments. loans, short-term borrowings. long-term debt. hedging instruments. credit default swaps. and derivatives. Just a few of the market conditions that may shift from time to time. thereby exposing us to market risk. include fluctuations in interest and currency exchange rates. equity prices. changes in the implied volatility of interest rates and price deterioration. For example. subsequent to the second quarter of 2007. debt capital markets around the wodd began to experience significant dislocation, severely limiting the availability of new credit to facilitate new traditional buyouts. and the markets remain volatile. Volatility in debt and equity markets can impact our pace of capital deployment. the timing of receipt of transaction fee revenues. and the timing of realizations. These market conditions could have an impact on the value of investments and ow rates of return. Accordingly. depending on the instruments or activities impacted. market risks can have wide ranging. complex adverse affects on our results from operations and our overall financial condition. We monitor ow market risk using certain strategies and methodologies which management evaluates periodically for appropriateness. We intend to continue to monitor this risk going forward and continue to monitor our exposure to all market factors. Interest Rate Risk—Interest rate risk represents exposure we have to instruments whose values vary with the change in interest rates. These instruments include, but are not limited to. loans. borrowings and derivative instruments. We may seek to mitigate risks associated with the exposures by taking offsetting positions in derivative contracts. Hedging instruments allow us to seek to mitigate risks by reducing the effect of movements in the level of interest rates. changes in the shape of the yield curve. as well as. changes in interest rate volatility. Hedging instruments used to mitigate these risks may include related derivatives such as options. futures and swaps. Credit Risk—Certain of our funds are subject to certain inherent risks through their investments. Certain of our entities invest substantially all of their excess cash in open-end money market funds and money market demand accounts, which are included in cash and cash equivalents. The money market funds invest primarily in government securities and other short-term. highly liquid instruments with a low risk of loss. We continually monitor the funds performance in order to manage any risk associated with these investments. Certain of our entities hold derivatives instruments that contain an clement of risk in the event that the counterparties may be unable to meet the terms of such agreements. We seek to minimize our risk exposure by limiting the counterparties with which we enter into contracts to banks and investment banks who meet established credit and capital guidelines. We do not expect any counterparty to default on its obligations and therefore do not expect to incur any loss due to counterparty default. Foreign Exchange Risk—Foreign exchange risk represents exposures we have to changes in the values of current holdings and future cash flows denominated in other currencies and investments in non-U.S. companies. The types of investments exposed to this risk include investments in foreign subsidiaries, foreign currency-denominated loans, foreign currency-denominated transactions, and various foreign exchange derivative instruments whose values fluctuate with changes in currency exchange rates or foreign interest rates. Instruments used to mitigate this risk are foreign exchange options. currency swaps. futures and forwards. These instruments may be used to help insulate us against losses that may arise due to volatile movements in foreign exchange rates and/or interest rates. Non-U.S. Operations—We conduct business throughout the world and arc continuing to expand into foreign markets. We currently have offices outside the U.S. in London. Frankfurt. Luxembourg. Mumhai. Hong Kong and Singapore. and have been strategically growing our international presence. Our investments and revenues are primarily derived from our U.S. operations. With respect to our non-U.S. operations. we are subject to risk of loss from currency fluctuations, social instability. changes in governmental policies or policies of 157 EFTA00623549

Table of Contents central banks. expropriation. nationalization. unfavorable political and diplomatic developments and changes in legislation relating to non-U.S. ownership. We also invest in the securities of corporations which are located in non-U.S. jurisdictions. As we continue to expand globally. we will continue to focus on monitoring and managing these risk factors as they relate to specific non-U.S. investments. Sensitivity Our assets and unrealized gains, and our related equity and net income are sensitive to changes in the valuations of our funds' underlying investments and could vary materially as a result of changes in our valuation assumptions and estimates. See "Item 7. Management's Discussion and Analysis of Financial Conditions and Results of Operations—Critical Accounting Policies—Valuation of Investments" for details related to the valuation methods that are used and the key assumptions and estimates employed by such methods. We also quantify the Level III investments that are included on our consolidated statements of financial condition by valuation methodology in "Item 7. ManagemenCs Discussion and Analysis of Financial Conditions and Results of Operations—Fair Value Measurements? We employ a variety of valuation methods. Furthermore. the investments that we manage but are not on our consolidated statements of financial condition, and therefore impact carried interest. also employ a variety of valuation methods of which no single methodology is used more than any other. A 10% change in any single key assumption or estimate that is employed by any of the valuation methodologies that we use will generally not have a material impact on our financial results. Changes in fair value will have the following impacts before a reduction of profit sharing expense and Non- Controlling Interests in the Apollo Operating Group and on a pre-tax basis on our results of operations for the years ended December 31.2011 and 2010: • Management fees from the funds in our capital markets segment are based on the net asset value of the relevant fund. gross assets, capital commitments or invested capital. each as defined in the respective management agreements. Changes in the fair values of the investments in capital markets funds that earn management fees based on net asset value or gross assets will have a direct impact on the amount of management fees that are earned. Management fees earned from our capital markets segment that were dependent upon estimated fair value during the years ended December 31. 2011 and 2010 would decrease by approximately $11.1 million and $9.3 million. respectively, if the fair values of the investments held by such funds were 10% lower during the same respective periods. By contrast. a 10% increase in fair value would increase management fees for the years ended December 31. 2011 and 2010 by approximately $10.8 million and $9.3 million, respectively. Management fees for our private equity funds range from 0.65% to 1.50% and are charged on either (a) a fixed percentage of committed capital over a stated investment period or (b) a fixed percentage of invested capital of unrealized portfolio investments. Changes in values of investments could indirectly affect future management fees from private equity funds by. among other things. reducing the (uncle access to capital or liquidity and their ability to currently pay the management fees or if such change resulted in a write-down of investments below their associated invested capital. . Management fees earned from AAA and its affiliates range between 1.0% and 1.25% of AAA adjusted assets, defined as invested capital plus proceeds of any borrowings of AAA Investments. plus its cumulative distributable earnings at the end of each quarterly period (taking into account actual distributions but excluding the management fees relating to the period or any non-cash equity compensation expense). net of any amount AAA pays for the repurchase of limited partner interests. as well as capital invested in Apollo funds and temporary investments and any distributable earnings attributable thereto. Management fees earned from AAA Investments during the years ended December 31.2011 and 2010 would increase or decrease by approximately 41.7 million and $1.4 million, respectively, if the fair values of the investments held by AAA Investments were I0% higher or lower during the same respective periods. . Carried interest income from most of our capital markets funds, which are quantified in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Segment 158 EFTA00623550

Table of Contents Analysis". are impacted directly by changes in the fair value of their investments. Carried interest income from most of our capital markets funds generally is earned based on achieving specified performance criteria. We anticipate that a 10% decline in the fair values of investments held by all of the capital markets funds at December 31. 2011 and 2010 would decrease consolidated carried interest income for the years ended December 31.2011 and 2010 by approximately $121.4 million and $131.9 million. h.spLaively. Additionally. the changes to carried interest income from most of our capital markets funds assume there is no loss in the fund for the relevant period. If the fund had a loss for the period, no carried interest income would be earned by us. By contrast. a 10% increase in fair value would increase consolidated carried interest income for the years ended December 31.2011 and 2010 by approximately $115.2 million and $163.4 million, respectively. ▪ Carried interest income from private equity funds generally is earned based on achieving specified performance criteria and is impacted by changes in the fair value of their fund investments. We anticipate that a 10% decline in the fair values of investments held by all of the pnvate equity funds at December 31. 2011 and 2010 would decrease consolidated carried interest income for the years ended December 31. 2011 and 2010 by $230.6 million and $934.7 million, respectively. The effects on private equity fees and income assume that a decrease in value does not cause a permanent write-down of investments below their associated invested capital. By contrast. a 10% increase in fair value would increase consolidated carried interest income for the year ended December 31. 2011 and 2010 by $231.5 million and $484.4 million, respectively. . For select Apollo funds. our share of investment income as a limited partner in such funds is derived from unrealized gains or losses on investments in funds included in the consolidated financial statements. For funds in which we have an interest, but are not included in our consolidated financial statements. our share of investment income is limited to our accrued compensation units and direct investments in the funds, which ranges from 0.001% to 6.450%. A 10% decline in the fair value of investments at December 31. 2011 and 2010 would result in an approximately $31.1 million and $28.3 million decrease in investment income at the consolidated level. respectively. 159 EFTA00623551

Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Finn Consolidated Statements of Financial Condition as of December 31.2011 and 2010 Consolidated Statements of Operations for the Years Ended December 31. 2011. 2010 and 2009 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31.2011. 2010 and 2009 Consolidated Statements of Changes in Shareholders' Faulty for the Years Ended December 31. 2011. 2010 and 2009 Consolidated Statements of Cash Flows for the Years Ended December 31. 2011. 2010 and 2009 Notes to Consolidated Financial Statements 160 161 162 163 164 165 167 170 EFTA00623552

Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Apollo Global Management. LW New York, New York We have audited the accompanying consolidated statements of financial condition of Apollo Global Management. LW and subsidiaries (the "Company) as of December 31. 2011 and 2010. and the related consolidated statements of operations. comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31. 2011. These financial statements arc the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly. we express no such opinion. An audit also includes examining. on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management. as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion. such consolidated financial statements present fairly, in all material respects. the financial position of Apollo Global Management. LLC and subsidiaries as of December 31.2011 and 2010. and the results of their operations and their cash flows for each of the three years in the period ended December 31. 2011. in conformity with accounting principles generally accepted in the United States of America. /s/Deloitte & Touche LLP New Yorlc, New York March 8, 2012 161 EFTA00623553

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION DECEMBER 31, 2011 AND DECEMBER 31, 2010 (dollars in thousands, except share data) December 31. December 31. 2011 2010 Assets: Cash and cash equivalents $ 738.679 $ 382.269 Cash and cash equivalents held at Consolidated Funds 6.052 Restricted cash 8.289 6.563 Investments 1.857,465 1.920.553 Assets of consolidated variable interest entities: Cash and cash equivalents 173,542 87,556 Investments. at fair value 3.301.966 1.342.611 Other assets 57,855 36,754 Carried interest receivable 868.582 1.867.073 Due from affiliates 176.740 144,363 Fixed assets, net 52.683 44.696 Deferred tax assets 576.304 571,325 Other assets 26.976 35.141 Goodwill 48.894 48.894 Intangible assets, net Total Assets Liabilities and Shareholders' Equity 81.846 64.574 $ 7.975873 $ 6,552.372 Accounts payable and accrued expenses $ 33.545 $ 31.706 Accrued compensation and benefits 45,933 54,057 Deferred revenue 232.747 251.475 Due to affiliates 578,764 517,645 Profit sharing payable 352.896 678,125 Debt 738,516 751,525 Liabilities of consolidated variable interest entities: Debt, at fair value 3,189,837 1,127,180 Other liabilities Other liabilities Total Liabilities 122.264 33.050 33.545 25,695 5.327.552 3.470.953 Commitments and Contingencies (see note 16) Shareholders' Equity: Apollo Global Management. LLC shareholders' equity: Class A shares. no par value, unlimited shares authorized. 123.923.042 shams and 97.921,232 shares issued and outstanding at December 31. 2011.. and 2010. respectively Class B shares, no par value, unlimited shares authorized. 1 share issued and outstanding at December 31. 2011. and 2010 Additional paid in capital 2.939.492 2.078.890 Accumulated deficit (2,426,197) (1,937,818) Appropriated partners capital Accumulated other comprehensive loss Total Apollo Global Management. LLC shareholders equity 213.594 (488) 11.359 (1,529) 726.401 150.902 Non-Controlling Interests in consolidated entities 1,444.767 1,888,224 Non-Controlling Interests in Apollo Operating Group 477.153 1 041 193 Total Shareholders' Equity 2.6413321 3.081.419 Total Liabilities and Shareholders Equity $ 7.975.873 $ 6552372 See accompanying notes to consolidated financial statements. 162 EFTA00623554

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) 2011 2010 2009 Revenues: Advisory and transaction fees from affiliates 81.953 $ 79.782 $ 56.075 Management fees from affiliates 487,559 431,096 406,257 Carried interest (loss) income from affiliates (397,880) 1,599,020 504.396 Total Revenues 171.632 2.109.898 966.728 Expenses: Compensation and benefits: Equity-based compensation 1.149.753 1.118.412 1.100.106 Salary. bonus and benefits 251,095 249,571 227,356 Profit sharing expense (63.453) 555.225 161.935 Incentive fee compensation 3.383 20.142 5.613 Total Compensation and Benefits 1.340.778 1.943.350 1.495.010 Interest expense 40.850 35,436 50.252 Professional fees 59.277 61.919 33.889 General, administrative and other 75,558 65,107 61,066 Placement fees 3.911 4.258 12.364 Occupancy 35,816 23,067 29.625 Depreciation and amortization 26.260 24.249 24.299 Total Expenses 1,582,450 2.157,386 1.706,505 Other Income: Net (losses) gains from investment activities (129,827) 367,871 510,935 Net gains from investment activities of consolidated variable interest entities 24.201 48.206 Gains from repurchase of debt 36.193 Income from equity method investments 13.923 69.812 83.113 Interest income 4.731 1.528 1.450 Other income, net 205.520 195.032 41.410 Total Other Income 118.548 682.449 673.101 (Loss) income before income tax provision (1.292.270) 634.961 (66.676) Income tax provision (11,929) (91.737) (28.714) Net (Loss) Income Net loss (income) attributable to Non-Controlling Interests Net (Loss) Income Attributable to Apollo Global Management, LLC (1.304.199) 835,373 543.224 (448,607) (95.390) (59.786) S (468.826) S 94.617 (155.176) Distributions Declared per Class A Share S 0.83 S 0.21 S 0.05 Net (Loss) Income Per Class A Share: Net (Loss) Income Available to Class A Shareholders $ (468.826) $ 94.617 $ (155.176) Net (Loss) Income Per Class A Share—Basic and Diluted Weighted Average Number of Class A Shares—Basic and Diluted S (4.151 S 0.83 5 116.364.110 96.964.769 95.815.500 See accompanying notes to consolidated financial statements. 163 EFTA00623555

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) 2011 2010 2009 Net (Loss) Income $(1,304,199) $ etn,274 $ (9S,390) Other Comprehensive Income. net of tax: Net unrealized gain on interest rate swaps (net of taxes of $855. $1.499 and $1.992 for Apollo Global Management. LLC and $0 for Non-Controlling Interests in Apollo Operating Group for all three years ended December 31. 2011. 2010 and 2009. respectively) 6328 11,435 14,591 Net (lass) income on available-for-sale securities (from equity method investment) (225) 343 Total Other Comprehensive Income. net of tax 6303 11.778 14.591 Comprehensive (Loss) Income (1,297,696) 555,002 (80,799) Comprehensive Loss (Income) attributable to Non-Controlling Interests 1.032.502 (446.467) (71.629) Comprehensive (Loss) Income Attributable to Apollo Global Management, LLC 1. 24Za i4) $ 108,535 $4152,428) See accompanying notes to consolidated financial statements. 164 EFTA00623556

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) Apollo Global Management. I.1.0 Shareholders Total Apollo Global Management. Nor-Contrlling Accumulated lit Total Nor6Controlling Interests in Additional Appropriated Other Shareholders' Interests hr Apollo Total Class A Class B Paid in Accumulated Partners Comprehensive (Deficit) Consolidated Operating Shareholders' Shares Shares Capital Deficit Capital (LOW Sisson Equity Entities Group Equity Balance at January 1.2009 97324341 1 $ 1.384.143 $ (1,8743631 $ 16.8361 $ (497.658) $ 822.843 $ — $ 325.785 Capital contributions 207 207 Non-cash contributions (105) (105) 4.301 4.196 Capital macaw related to equity-based compensation — — 355.659 — — 355.659 — 738431 1.094.090 Distribution, — — (4.866) — — — (4.866) — (12,000) (16.866) Cash distribution. — — — — — — (12.387) 07.9501 (30.3371 Non -cash distributions — — (4372) — — — (1.572) 0.273 — (2991 Net transfers of AAA ownership interest to Mom) Non-Controlling Interests in consolidated entities — — 13.799) — — — 13.799) 3.799 — — Satisfaction of liability related to AAA RDUs — — 6418 — — — 6.618 — — 6.618 Repurchase of (11.13% A shares (1.700.000) — 13.485) — — — 13.485) — — (3.4831 Net (loss) income (153.176) — — (155376) 460.226 (400.440) (95.390) Net unrealized gain on interest rate swaps (net of taxes of $1,992 and SO for Apollo Global ManagemenL LLC and NonControlling Interests in Apollo Operating Group. respectively) 2.748 2.748 11.843 14.591 Balance at December 31, 2009 95.624.541 I S 1.729.593 3 12.0293411 $ $ 14.0881 $ 1304.036) S 1.283.262 $ 319.884 S 1.299.110 'transition adjusunent relating 10 consolidation of variable interest entity 411.885 411.885 Capital increase related to equity-based compensation — — 376380 — — 376380 - 735.698 1.112.078 RecLosilication of equity. based cxmipensation — — 13.505) — — 13.505) — — (3.505) Repurchase of Class A shares 17.135) — (03) — — — (03) — — (43) Punta ,e of Class A shares — — — — — — — 148.7681 — (48.768) Capital contributions — — — — — — — 187 — 187 Cash distributrom — — — — — — — (160.316) — 1160.3161 Dronbutions — — (24,115) — — — (24,115) (6,602) (50,400) (81317) Ihstributions related to deliveries of Class A shares for RSVs 2.303.826 — — (2.8761 — — 12.876) — — (2.8761 Non-cash dutributions — — (BO (18) (590) (608) 1)econsolidation of fund (7,214) (7 204) Net transfers of AAA ownership interest to (from) NoroControlling Interests in consolidated entities (7,014) (7.014) 7.011 Satisfaction of liability related to AAA RDUs 7.594 7.594 7.594 See accompanying notes to consolidated financial statements. 165 EFTA00623557

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF CHANGES (CONT'D) IN SHAREHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) Apollo Global Nlanagement. LLC Shareholders Total Apollo Global Management. Non-Controlling Accumulated LLC Total Non•Con Intertsb in Additional Appropriated Other Shareholders' Interests h, Apollo Total Class A Class B Paid in Accumulated Partners' Comprehensive (Deficit) Consolidated Operating Shareholders' Shares Mures Capital Deficit Capital Ilanot Income Equity Entities Croup Equity Net ,sans Net income on available- for-sale secunties ansm equity method 94.617 11.359 105.976 409.356 27.892 543.224 investment) 343 343 3-13 Net unrealized gain on interest rate swaps (net of taxes of 51.499 and SO for Apollo Global Management, LLC and Non.Controlling Interests in Apollo Operating (hoop. respectively) 2.216 2,216 9.219 11.14s Balance al December 31. 2010 97.921.232 I S 2.078.890 5 'L937.8181 S 11.359 5 11.5291 5 150.902 S 1.888.224 S 1.042.293 5 3.081.419 Balance al January 1. 2011 97.921.232 1 52.078.890 3 (1.93781815 11.359 $ 1152915 150.902 S 1.888.224 $ 1.042.293 $ 3.081.419 Issuance ol Class A shares 21.500,000 352.455 352.455 382.458 Dilution impact of issuance of Class A shares 132.709 (356) 132.333 (127.096) 5.257 Capital macaw related to equity-based compensation 451.543 — 451.343 696.361 1.147.901 Capital contributions — — — — — — — Cash distributiorn — — — — 1322.2251 — 1322.225) DiBributions — (115.139) — — (115.139) (27.284) (199.199) (341,622) Ihstnhutionis related to deliveries of CAD A shares for RSUs 4631 906 11.6X0 117.081) 15.401) (5.401) Repurchase for net settlement of Class A shares (130.096) — (2.472) (2.472) (2.472) Non-cash distributions (3.176) (3.176) Net transfers of AAA ownership Merest to (from) Non-Controlling Interests in consolidated monies (6.524) (6.524) 6.324 SADAaction ol liability related to AAA RUC% — — 3.845 — — — 3.845 — — 3.845 Net (loss) IDOOMe — — (468.826) 202.235 — (266.591) (97.296) (940.312) (1.364.199) Net loss on as ai lable-lor. sale seconties (from equity method invesmwnt) — (225) (225) — — (225) Net unrealized gain on interest rate swaps (net of taxes of 3855 and SO for Apollo Global Management. LLC and Non.Conirolling Interests in Apollo Operating (hoop. ADVAADDIY) 1.0,22 1622 5.106 6.725 Balance al December 31. 2011 123.923.042 I S 2.939.492 $ 12.426.1971 S 213.594 5 141411 S 726.401 S 1.444.767 5 477.153 3 2.648.321 See accompanying notes to consolidated financial statements. 166 EFTA00623558

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2011,2010 AND 2009 (dollars in thousands, except share data) 2011 20W 2009 Cash Flows from Operating Activities: Net (loss) income $ (1.304.199) $ 543.224 $ (95,390) Adjustments to reconcile net loss to net cash provided by operating activities: Equity-based compensation 1.149.753 1,118.412 1.100.106 Depreciation and amortization 11,132 11,472 11,622 Amortization of intangible assets 15.128 12.777 12.677 Amortization of debt issuance costs 511 44 28 Losses from investment in HFA 5.881 Non-cash interest income (2,486) Income from equity awards received for directors fees (19) Income from equity method investment (13,923) (69.812) (83,113) Waived management fees (23.549) (24.826) (19.738) Non-cash compensation expense related to waived management fees 23,549 24.826 19,738 Deferred taxes, net 10.580 71.241 19.059 Gain on business acquisitions and dispositions (196,193) (29,741) Impairment of fixed assets 3.101 Loss related to general partner commitment (38.444) Loss on assets held for sale 2368 Loss on disposal of fixed assets 570 831 847 Gain from repurchase of debt (36.193) Other (584) Changes in assets and liabilities: Carried interest receivable 998,491 (1,383,219) (406.769) Due from affiliates (30.241) (11.066) 11.681 Other assets (7,019) (7.880) 28.928 Accounts payable and accrued expenses 3.079 (5.052) (8.189) Accrued compensation and benefits (6128) 24,931 (4,027) Deferred revenue (21.934) (69.949) (45.279) Due to affiliates 43,767 (33,529) (4,284) Profit sharing payable (325.229) 503.589 144.460 Other liabilities 5,778 (7.573) 7,267 Apollo Funds related: Net realized losses (gains) from investment activities 11,313 (4S31) Net unrealized losses (gains) from investment activities 113.114 (416.584) (471.907) Net realized gains on debt (41,819) (21,231) Net unrealized losses on debt 19.880 55.040 Distributions from investment activities 30.248 58,368 Cash transferred in from consolidated funds 6.052 38.033 Change in cash held at consolidated variable interest entities (17,400) (87,556) Purchases of investments (1.294.477) (1.240.842) (40.000) Proceeds from sale of investments and liquidating distributions 1,530,194 627,278 5,497 Change in other assets (7.109) (8.086) Change in other liabilities 56.526 107,891 Net Cash Provided by (Used in) Operating Activities 743.821 (218.051) 107.993 See accompanying notes to consolidated financial statements. 167 EFTA00623559

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D) YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) 2011 2010 2009 Cash Flows from Investing Activities: Purchases of fixed assets (21.285) (5.601) (15.849) Proceeds from disposals of fixed assets 631 Cash received from business acquisition and disposition 11.624 Cash paid for acquisition (1,354) Purchase of investments in HFA (see note 4) (52.142) Investment in Senior Loan Fund (see note 4) (26,000) Acquisition of Gulf Stream (see note 3) (29.632) Cash contributions to equity method investments (64226) (63,459) (42.522) Cash distributions from equity method investments 64.844 38.868 42.475 Change in restricted cash (1.726) 255 (974) Net Cash Used in Investing Activities $ (129.536) $ (9,667) $ (16,870) Cash Flows from Financing Activities: Issuance of Class A shares $ 383.990 $ - $ Repurchase of Class A shares (2,472) (43) (3,485) Principal repayments on debt and repurchase of debt (1.939) (182309) (55.783) Debt issuance casts (3,085) Issuance costs (1.502) Distributions related to deliveries of Class A shares far RSUs (17,081) (2,876) Distributions to Non-Controlling Interests in consolidated entities (13.440) (13.628) (12.387) Contributions from Non-Controlling Interests in consolidated entities 187 207 Distributions paid Distributions paid to Non-Controlling Interests in Apollo Operating Group Distributions to Non-Controlling Interests in Apollo Operating Group (102.598) (199,199) (21.284) (50,400) (4.866) (12,000) (17.950) Apollo Funds related: Issuance of debt 454.356 1.050.377 Principal repayment on term loans (415.869) (331.120) Purchase of AAA shares (48.768) Distributions paid to Non-Controlling Interests in consolidated variable interest entities (308,785) (146,688) Distributions paid to Non-Controlling Interests in consolidated entities (27.284) f,11O)2 Net Cash (Used in) Provided by Financing Activities (251,823) 243,761 (106,264) Net Increase (Decrease) in Cash and Cash Equivalents 362.462 16.043 (15.141) Cash and Cash Equivalents. Beginning of Period 382.269 166,126 381,367 Cash and Cash Equivalents, End of Period $ 744.731 $ 382.269 $ 366.226 Supplemental Disclosure of Cash Flow Information: Interest paid $ 49.296 $ 38.317 $ 51.850 Interest paid by consolidated variable interest entities 20,892 12,522 Income taxes paid Supplemental Disclosure of Non-Cash Investing Activities: Non-cash contributions on equity method investments 10.732 9,847 13.468 6.652 1,802 Non-cash distributions from equity method investments (703) Non-cash sale of assets held-for-sale for repayment of CIT loan (11.069) Non-cash distributions from investing activities 3,176 Profit interests received in Fund VII 1.510 Change in accrual for purchase of fixed assets 967 (814) 3,649 See accompanying notes to consolidated financial statements. 168 EFTA00623560

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTD) YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009 (dollars in thousands, except share data) 2011 2010 2009 Supplemental Disclosure of Non-Cash Financing Activities: Non-cash distributions $ — $ $ (4572) Declared and unpaid distributions (12,541) (2,831) Non-cash distributions to Non-Controlling Interests in consolidated entities Non-cash contributions from Non-Controlling Interests in Apollo Operating Group related to equity-based compensation Non-cash contributions from Non-Controlling Interests in consolidated entities Unrealized gain on interest rate swaps to Non-Controlling Interests in Apollo Operating Group. net of taxes Satisfaction of liability related to AAA RDUs (3.176) 696361 5,106 3.845 (590) 735.698 - 9,219 (7.594) (4.273) 738.431 4.301 11,843 (6.618) Net transfers of AAA ownership interest to Non-Controlling Interests in consolidated entities 6,524 7,014 3,799 Net frowsier of AAA ownership interest from AGM (6.524) (7.014) (3.799) Unrealized gain on interest rate swaps 2,477 3.715 4.741 Unrealized (loss) gain on available for sale securities (from equity method investment) Capital increases related to equity-based compensation Dilution impact of issuance of Class A shares (225) 451,543 132.353 343 376,380 355.659 Dilution impact of issuance of Class A shares on Non-Controlling Interests in Apollo Operating Group (127,096) Non-cash contributions 105 Deferred tax asset related to interest rate swaps (855) (1.499) (1.993) Reclassification of equity-based compensation (3.505) Reclass of fixed assets to assets held for sale 11,331 Tax benefits related to deliveries of Class A shares for RSUs (11.680) Satisfaction of liability related to repayment on CIT loan 11.069 Net Assets Transferred from Consolidated Funds: Cash 6.052 38.033 Investments 24.213 Other assets 609 443 Other liabilities (4.874) Net Assets Transferred from Consolidated Variable Interest Entities: Cash 68.586 Investments 2.195.986 1.102,114 Other assets 14.039 28.789 Debt (2,046,157) (706,027) Other liabilities (31.959) (12.991) Net Assets of Deconsolidated Variable Interest Entities: Investments — 419.198 Other assets 5,180 Debt — (329.836) Other liabilities (87,338) See accompanying notes to consolidated financial statements. 169 EFTA00623561

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) I. ORGANIZATION AND BASLS OF PRESENTATION Apollo Global Management. LLC and 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 and invest private equity. capital markets and real estate funds as well as managed accounts. on behalf of pension and endowment funds, as well as other institutional and high net worth individual investors. For these investment management services. Apollo receives management fees generally related to the amount of assets managed. transaction and advisory fees for the investments made and carried interest income related to the performance of the respective funds that it manages. Apollo has three primary business segments: Private equity—invests in control equity and related debt instruments, convertible securities and distressed debt investments: Capital markets—primarily invests in non-control debt and non-control equity investments, including distressed debt securities: and Real estate—invests in legacy commercial mortgage-backed securities, commercial first mortgage loans, mezzanine investments and other commercial real estate-related debt investments. Additionally. the Company sponsors real estate funds that focus on opportunistic investments in distressed debt and equity recapitalization transactions. Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The 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 and for which the Company is considered the primary beneficiary. and certain entities which are not considered variable interest entities but in which the Company has a controlling financial interest. Intercompany accounts and transactions have been eliminated upon consolidation. Reorganization of the Company The Company was formed as a Delaware limited liability company on July 3.2007 and completed a reorganization of its predecessor businesses on July 13. 2007 (the "Reorganization"). The Company is managed and operated by its manager. AGM Management. LLC. which in turn is wholly-owned and controlled by Leon Black. Joshua Harris and Marc Rowan (the "Managing Partners"). As of December 31. 2011. the Company owned. through three 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.. LW ("APO Asset"), a Delaware limited liability company that is a disregarded entity for U.S. Federal income tax purposes. and APO (-c). LLC ("APO (PC)"). an Anguilla limited liability company that is treated as a corporation for U.S Federal income tax purposes (collectively, the "Intermediate Holding Companies"). 34.1% of the economic interests of. and operated and controlled all of the businesses and affairs of. the Apollo Operating Group through its wholly-owned general partners. AP Professional Holdings. L.P.. a Cayman Islands exempted limited partnership ("Holdings"). is the entity through which the Managing Partners and the Company's other partners (the "Contributing Partners") indirectly own (through Holdings) Apollo Operating Group units ("AOG Units") that represent 65.9% of the economic interests in the Apollo Operating Group as of December 31. 2011. The Company consolidates the financial 170 EFTA00623562

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) 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 consolidated financial statements. Apollo also entered into an exchange agreement with Holdings that allows the partners in Holdings. subject to the vesting and minimum retained ownership requirements and transfer restrictions set forth in the partnership agreements of the Apollo Operating Group. to exchange their AOG Units for the Company's Class A shares on a one-for-one basis up to four times each year. subject to customary conversion rate adjustments for splits. unit distributions and reclassifications. A limited partner must exchange one partnership unit in each of the ten Apollo Operating Group partnerships to effect an exchange for one Class A share. The Company has historically consolidated Apollo Commodities Trading Fund. L.P. In April 2010. the Company became the sole investor in the master and feeder fund structure of Apollo Metals Trading Fund. L.P. (the "Metals Trading Fund") and Apollo Commodities Trading Fund. L.P.. respectively. and began to consolidate the Metals Trading Fund. The Metals Trading Fund and Apollo Commodities Trading Fund were liquidated prior to December 31. 2010. Initial Public Offering—On April 4. 2011. the Company completed the initial public offering ("IPO") of its Class A shares. representing limited liability company interests of the Company. AGM received net proceeds from the initial public offering of approximately $382.5 million. which was used to acquire additional AOG Units. As a result. Holdings ownership interest in the Apollo Operating Group decreased from 70.7% to 66.5% and the Company's ownership interest increased from 29.3% to 33.5%. As such. the difference between the fair value of the consideration paid for the Apollo Operating Group level ownership interest and the book value on the date of the IPO is reflected in additional paid in capital. 2, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation—Apollo consolidates those entities it controls through a majority voting interest or through other means, including those funds in which the general partner is presumed to have control (e.g.. AP Alternative Assets. L.P., a Guernsey limited partnership that, through AAA Investments L.P., its investment partnership. generally invests alongside certain of the Company's private equity funds and directly in certain of its capital markets funds and in other transactions that the Company sponsors and manages ("AAA") and Apollo Credit Senior Loan Fund. LP. ("Apollo Senior Loan Fund")). Apollo also consolidates entities that are VIEs for which Apollo is the primary beneficiary. Under the amended consolidation rules, an enterprise is determined to be the primary beneficiary if it holds a controlling financial interest. A controlling financial interest is defined as (a) the power to direct the activities of a VIE that most significantly impact the entity's business and (b) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Certain of the Company's subsidiaries hold equity interests in and/or receive fees qualifying as variable interests from the funds that the Company manages. The amended consolidation rules require an analysis to determine whether (a) an entity in which Apollo holds a variable interest is a VIE and (b) Apollo's involvement, through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g.. carried interest and management fees), would give it a controlling financial interest. When the VIE has qualified for the deferral of the amended consolidation rules in accordance with U.S. GAAP, the analysis is based on previous consolidation rules, which require an analysis to determine whether (a) an entity in which Apollo holds 171 EFTA00623563

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) a variable interest is a VIE and (b) Apollo's involvement. through holding interests directly or indirectly in the entity or contractually through other variable interests (e.g.. carried interest and management fees), would be expected to absorb a majority of the variability of the entity. Under both the previous and amended consolidation rules, the determination of whether an entity in which Apollo holds a variable interest is a VIE requires judgments which include determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, evaluating whether the equity holders, as a group. can make decisions that have a significant effect on the success of the entity. determining whether two or more parties' equity interests should be aggregated. and determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity. Under both the previous and amended consolidation rules. Apollo determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion continuously. The consolidation analysis can generally be performed qualitatively. However, if it is not readily apparent whether Apollo is the primary beneficiary. a quantitative expected losses and expected residual returns calculation will be performed. Investments and redemptions (either by Apollo. affiliates of Apollo or third parties) or amendments to the governing documents of the respective Apollo fund may affect an entity's status as a VIE or the determination of the primary beneficiary. Apollo assesses whether it is the primary beneficiary and will consolidate or deconsolidate the entity accordingly. Performance of that assessment requires the exercise of judgment. Where the variable interests have qualified for the deferral. judgments are made in estimating cash flows in evaluating which member within the equity group absorbs a majority of the expected profits or losses of the VIE. Where the variable interests have not qualified for the deferral. judgments are made in determining whether a member in the equity group has a controlling financial interest including power to direct activities that most significantly impact the VIEs economic performance and rights to receive benefits or obligations to absorb losses that are potentially significant to the VIE. Under both guidelines. judgment is made in evaluating the nature of the relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE. The use of these judgments has a material impact to certain components of Apollo's consolidated financial statements. The only VIE formed prior to 2010. the adoption date of amended consolidation guidance. was consolidated as of the date of transition resulting in recognition of the assets and liabilities of the consolidated VIE at fair value and recognition of a cumulative effect transition adjustment presented as a component of Non-Controlling Interests in Consolidated Entities in the consolidated statement of changes in shareholders' equity for the year ended December 31. 2010. The transition adjustment is classified as a component of Non-Controlling Interest rather than an adjustment to appropriated partners' capital because the VIE is funded with equity and 100% of the equity ownership of the VIE is held by unconsolidated Apollo funds and one unaffiliated third party. Changes in the fair value of assets and liabilities and the related interest dividend and other income for this VIE are recorded within Non-Controlling Interests in consolidated entities in the consolidated statement of financial condition and within net gains from investment activities of consolidated VIEs and net (income) loss attributable to Non-Controlling Interests in the consolidated statement of operations. Certain of the consolidated VIEs were formed to issue collateralized notes in the legal form of debt backed by financial assets. Changes in the fair value of the assets and liabilities of these VIEs and the related interest and other income are presented within appropriated partners' capital in the consolidated statement of financial condition as these VIES arc funded solely with debt and within net gains from investment activities of consolidated variable interest entities and net (income) loss attributable to Non-Controlling Interests in the 172 EFTA00623564

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) consolidated statement of operations. Such amounts are recorded within appropriated partners' capital as. in each case. the VIE:: note holders. not Apollo. will ultimately receive the benefits or absorb the losses associated with the VIE's assets and liabilities. Assets and liability amounts of the consolidated VIEs are shown in separate sections within the consolidated statement of financial condition as of December 31.2011 and 2010. Refer to additional disclosures regarding VIEs in note 5. Intercompany transactions and balances, if any. have been eliminated in the consolidation. Equity Method Investments—For investments in entities over which the Company exercises significant influence but which do not meet the requirements for consolidation, the Company uses the equity method of accounting. whereby the Company records its share of the underlying income or loss of such entities. Income (loss) from equity method investments is recognized as part of other income (loss) in the consolidated statements of operations. The carrying amounts of equity method investments are reflected in investments in the consolidated statements of financial condition. As the underlying entities that the Company manages and invests in are. for U.S. GAAP purposes. primarily investment companies which reflect their investments at estimated fair value, the carrying value of the Company's equity method investments in such entities arc at fair value. Non-Controlling Interest—For entities that arc 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 Interest in the consolidated financial statements. The Non-Controlling Interest relating to Apollo Global Management. LW primarily includes the 65.9% ownership interest in the Apollo Operating Group held by the Managing Partners and Contributing Partners through their limited partner interests in Holdings and other ownership interests in consolidated entities. which primarily consist of the approximate 98% ownership interest held by limited partners in AAA as of December 31. 2011. Non-Controlling Interests also include limited partner interests of Apollo managed funds in certain consolidated VIES. Non-Controlling Interests are presented as a separate component of shareholders' equity on the Company's consolidated statements of financial condition: net income (loss) includes the net income (loss) attributed to the Non-Controlling Interest holders on the Company's consolidated statements of operations; the primary components of Non-Controlling Interest are separately presented in the Company's consolidated statements of changes in shareholders' equity to clearly distinguish the interests in the Apollo Operating Group and other ownership interests in the consolidated entities: and profits and losses are allocated to Non-Controlling Interests in proportion to their ownership interests regardless of their basis. Cash and Cash Equivalents—Apollo considers all highly liquid short-term investments with original maturities of 90 days or less when purchased to be cash equivalents. Substantially all amounts on deposit in interest-bearing accounts with major financial institutions exceed insured limits. Restricted Cash—Restricted cash represents cash deposited at a bank, which is pledged as collateral in connection with leased premises. Revenues—Revenues are reported in three separate categories that include (i) advisory and transaction fees from affiliates, which relate to the investments of the funds and may include individual monitoring agreements with the portfolio companies and debt investment vehicles of the private equity funds and capital markets funds; 173 EFTA00623565

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) (ii) management fees from affiliates. which are based on committed capital. invested capital. net asset value. gross assets or as otherwise defined in the respective agreements: and (iii) carried interest income (loss) from affiliates, which is normally based on the performance of the funds subject to preferred return. Advisory and Transaction Fees from Affiliates—Advisory and transaction fees. including directors fees are recognized when the underlying services rendered are substantially completed in accordance with the terms of their transaction and advisory agreements. Additionally. during the normal course of business, the Company incurs certain costs related to private equity fund transactions that are not consummated ("Broken Deal Costs"). Refer to the 'Pending Deal Costs" policy below for information regarding how and when the Company accounts for Broken Deal Costs. As a result of providing advisory services to certain private equity and capital markets portfolio companies. Apollo is generally entitled to receive fees for transactions related to the acquisition and disposition of portfolio companies as well as ongoing monitoring of portfolio company operations. The amounts due from portfolio companies arc included in "Due from Affiliates." which is discussed further in note 15. 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"). Such amounts are presented as a reduction to Advisory and Transaction Fees from Affiliates in the consolidated statements of operations. Management Fees from Affiliates—Management fees for private equity funds, real estate funds and certain capital markets funds are recognized in the period during which the related services are performed in accordance with the contractual terms of the related agreement. and are based upon (I) 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. Carried Interest Income from Affiliates—Apollo is entitled to an incentive retum that can normally amount to as much as 20% of the total returns on funds' capital. depending upon performance. Performance-based fees are assessed as a percentage of the investment performance of the funds. The carried interest income from affiliates for any period is based upon an assumed liquidation of the fund's net assets on the repotting date, and distribution of the net proceeds in accordance with the fund's income allocation provisions. Carried interest receivable is presented separately in the consolidated statements of financial condition. The carried interest income may be subject to reversal to the extent that the carried interest income recorded exceeds the amount due to the general partner based on a fund's cumulative investment returns. When applicable, the accrual for potential repayment of previously received carried interest income, which is a component of due to affiliates. represents all amounts previously distributed to the general partner that would need to be repaid to the Apollo funds if these funds were to be liquidated based on the current fair value of the underlying funds' investments as of the reporting date. The actual general partner obligation, however, would not become payable or realized until the end of a fund's life. Management Fee Waiver and Notional Investment Program—Under the terms of certain investment fund partnership agreements. Apollo may from time to time elect to forgo a portion of the management fee revenue that is due from the funds and instead receive a right to a proportionate interest in future distributions of profits of those funds. Waived fees recognized during the period are included in management fees from affiliates in the consolidated statements of operations. This election allows certain employees of Apollo to waive a portion of their respective sham of future income from Apollo and receive, in lieu of a cash distribution, title and ownership of the profits interests in the respective fund. Apollo immediately assigns the profits interests received to its employees. Such assignments of profits interests are treated as compensation and benefits when assigned. 174 EFTA00623566

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Deferred Revenue—Apollo earns management fees subject to the Management Fee Offset. 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 management company receives cash for advisory and transaction fees, a certain percentage is allocated as a credit to reduce future management fees, otherwise payable by such fund. Such credit is classified as deferred revenue in the consolidated statements of financial condition. As the management fees earned by the management company are presented on a gross basis, any Management Fee Offsets calculated are presented as a reduction to advisory and transaction fees in the consolidated statements of operations. Additionally. Apollo earns advisory fees pursuant to the terms of the advisory agreements with pertain of the portfolio companies that are owned by the funds. When Apollo receives a payment from a portfolio company that exceeds the advisory• fees earned at that point in time, the excess payment is classified as deferred revenue in the 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. Under the terms of the funds partnership agreements. Apollo is normally required to bear organizational expenses over a set dollar amount and placement costs in connection with the offering and sale of interests in the funds 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 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. Interest and Other Income—Apollo recognizes security transactions on the trade date. Interest income is recognized as earned on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized over the life of the respective securities using the effective interest method. Realized gains and losses are recorded based on the specific identification method. Due from/to Affiliates—Apollo considers its existing partners. employees, certain former employees portfolio companies of the funds and non- consolidated private equity. capital markets and real estate funds to be affiliates or related parties. 175 EFTA00623567

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Investments, at Fair Value—The Company follows U.S. GAAP attributable to fair value measurements, which among other things. requires enhanced disclosures about investments that arc measured and reported at fair value. Investments, at fair value. represent investments of the consolidated funds. investments of the consolidated VIES and certain financial instruments for which the fair value option was elected and the unrealized gains and losses resulting from changes in the fair value am reflected as net gains (losses) from investment activities and net gains (losses) from investment activities of the consolidated variable interest entities. respectively, in the consolidated statements of operations. In accordance with U.S. GAAP. investments measured and reported at fair value are classified and disclosed in one of the following categories: Level /—Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I include listed equities and listed derivatives. As required by U.S. GAAP. the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and the sale of such position would likely deviate from the quoted price. Level Il—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. Investments that am 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 investments exhibit higher levels of liquid market observability as compared to Level III investments. The Company subjects broker quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II investment. These criteria include. but am not limited to, the number and quality of broker quotes. the standard deviation of obtained broker quotes. and the percentage deviation from independent pricing services. Level Ill—Pricing inputs am unobservable for the investment and includes situations where them is little observable market activity for the investment. The inputs into the determination of fair value may require significant management judgment or estimation. Investments that arc included in this category generally include general and limited partnership interests in corporate private equity and real estate funds, mezzanine funds funds of hedge funds. distressed debt and non-investment grade residual interests in securitizations and collateralized debt obligations 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 investment would qualify for treatment as a Level II or Level III investment. Some of the factors we consider include the number of broker quotes we obtain, the quality of the broker quotes. the standard deviations of the observed broker quotes and the corroboration of the broker quotes to independent 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, an investment'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 investment when the fair value is based on unobservable inputs. In cases where an investment or financial instrument that is measured and reported at fair value is transferred into or out of Level III of the fair value hierarchy. the Company accounts for the transfer as of the end of the reporting period. 176 EFTA00623568

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Private Equity Investments 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 last sales price on the date of determination. Valuation approaches used to estimate the fair value of investments that are less liquid include the income approach and the market approach. 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 used in the income approach is a discounted cash flow method. Inherent in the discounted cash flow method are assumptions of expected results and a calculated discount rate. The market approach provides an indication of fair value based on a comparison of the subject company to comparable publicly traded companies and transactions in the industry. The market approach is driven more by current market conditions of actual trading levels of similar companies and actual transaction data of similar companies. Consideration may also be given to such factors as the Company's historical and projected financial data. valuations given to comparable companies. the size and scope of the Company's operations. the Company's strengths. weaknesses, expectations relating to the market's receptivity to an offering of the Company's securities, applicable restrictions on transfer. industry information and assumptions. general economic and market conditions and other factors deemed relevant. As part of management's process. the Company utilizes a valuation committee to review and approve the valuations. 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. Capital Markets Investments The majority of the investments in Apollo's capital markets funds are valued using quoted market prices. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value utilizing recognized pricing services. market participants or other sources. The capital markets funds also enter into foreign currency exchange 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 this period, the changes in value are recorded in income as unrealized. Realized gains or losses are recognized when contracts are settled. 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 arc recognized at the termination of the contract based on the difference between the close-out price of the credit default contract and the original contract price. Forward contracts are valued based on market rates obtained from counterparties or prices obtained from recognized financial data service providers. When determining fair value pricing when no market value exists, the value attributed to an investment is based on the enterprise value at 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. Valuation approaches used to estimate the fair value of illiquid investments included in Apollo's capital markets funds also may use the income approach or market approach. The valuation approaches used consider. as applicable, market risks. credit risks. counterparty risks and foreign currency risks. Real Estate Investments—For the OARS portfolio of Apollo's funds, the estimated fair value is determined by reference to market prices provided by certain dealers who make a market in these financial instruments. 177 EFTA00623569

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) 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. Loans that the funds plan to sell or liquidate in the near term will be treated as loans held-for-sale and will be held at the lower of cost or fair value. For the illiquid investments, valuations of non-marketable underlying investments arc 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. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing panics. other than in a forced or liquidation sale. Except for the Company's debt obligation related to the AMH Credit Agreement (as defined in note 12). Apollo's financial instruments are recorded at fair value or at amounts whose carrying value approximates fair value. See "Investments, at Fair Value" above. While Apollo's valuations of portfolio investments arc based on assumptions that Apollo believes are reasonable under the circumstances. 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. Other financial instruments carrying values generally approximate fair value because of the short-term nature of those instruments or variable interest rates related to the borrowings. As disclosed in note 12, the Company's long term debt obligation related to the AMH Credit Agreement is believed to have an estimated fair value of approximately $752.2 million based on a yield analysis using available market data of comparable securities with similar terms and remaining maturities. However, the carrying value that is recorded on the consolidated statement of financial condition is the amount for which we expect to settle the long term debt obligation. Fair Value Option—Apollo has elected the fair value option for the convertible notes issued by HFA and for the assets and liabilities of the consolidated VIEs. Such election is irrevocable and is applied to financial instruments on an individual basis at initial recognition. Apollo has elected to separately present interest income in the consolidated statement of operations from other changes in the fair value of the convertible notes issued by HFA. Apollo has applied the fair value option for certain corporate loans• other investments and debt obligations held by these entities that otherwise would not have been carried at fair value. Refer to note 5 for further disclosure on financial instruments of the consolidated VIEs for which the fair value option has been elected. Interest Rate Swap Agreements—Apollo recognizes derivatives as either an asset or liability measured at fair value. In order to reduce interest rate risk. Apollo entered into interest rate swap agreements which were formally designated as cash flow hedges. To qualify for cash flow hedge accounting. interest rate swaps must meet certain criteria. including (a) the items to be hedged expose Apollo to interest rate risk and (b) the interest rate swaps are highly effective in reducing Apollo's exposure to interest rate risk. Apollo formally documents at inception its hedge relationships. including identification of the hedging instruments and the hedged items. its risk management objectives. its strategy for undertaking the hedge transaction and Apollo's evaluation of effectiveness. Effectiveness is periodically assessed based upon a comparison of the relative changes in the cash flows of the interest rate swaps and the items being hedged. For derivatives that have been formally designated as cash flow hedges. the effective portion of changes in the fair value of the derivatives are recorded in accumulated other comprehensive (loss) income ("OCI"). 178 EFTA00623570

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Amounts in OCI arc reclassified into earnings when interest expense on the underlying borrowings is recognized. If. at any time. the swaps are determined to be ineffective. in whole or in part. due to changes in the interest rate swap or underlying debt agreements. the fair value of the portion of the interest rate swap determined to be ineffective will be recognized as a gain or loss in the consolidated statements of operations. Financial Instruments held by Consolidated VIEs The consolidated VIEs hold investments that are traded over-the-counter. Investments in securities that arc 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 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 arc based on the avenge 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. The consolidated VIEs also have debt obligations that are recorded at fair value. The valuation approach used to estimate the fair values of debt obligations is the discounted cash flow method. which includes consideration of the cash flows of the debt obligation based on projected quarterly interest payments and quarterly amortization. Debt obligations are discounted based on the appropriate yield curve given the loan's respective maturity and credit rating. Management uses its discretion and judgment in considering and appraising relevant factors for determining the valuations of its debt obligations. Pending Deal Costs Pending deal costs consist of certain costs incurred (e.g. research costs, due diligence costs, professional fees, legal fees and other related items) related to private equity and capital markets fund transactions that we are pursuing but which have not yet been consummated. These costs arc deferred until such transactions arc broken or successfully completed. A transaction is determined to be broken upon management's decision to no longer pursue the transaction. In accordance with the related fund agreements. in the event the deal is broken, all of the costs are reimbursed by the funds and considered in the calculation of the Management Fee Offset. These offsets are included in Advisory and Transaction Fees from Affiliates in the Company's consolidated statements of operations. If a deal is successfully completed. Apollo is reimbursed by the fund or a fund's portfolio company for all costs incurred. Fixed Assets Fixed Assets consist primarily of ownership interests in aircraft. leasehold improvements. furniture, fixtures and equipment. computer hardware and software and arc recorded at cost net of accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method over the assets' estimated useful lives and in the case of leasehold improvements the lesser of the useful life or the term of the lease. Aircraft engine overhauls arc capitalized and depreciated until the next expected overhaul. Expenditures for repairs and maintenance are charged to expense when incurred. The Company evaluates long-lived assets for impairment periodically and whenever events or changes in circumstances indicate the carrying amounts of the assets may be impaired. 179 EFTA00623571

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Business Combinations—The Company accounts for acquisitions using the purchase method of accounting in accordance with U.S. GAAP. The purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Goodwill and Intangible Assets—Goodwill and indefinite-life intangible assets must be reviewed annually for impairment or more frequently if circumstances indicate impairment may have occurred. Identifiable finite-life intangible assets. by contrast. are amortized over their estimated useful lives. which are periodically re-evaluated for impairment or when circumstances indicate an impairment may have occurred. Apollo amortizes its identifiable finite- life intangible assets using a method of amortization reflecting the pattern in which the economic benefits of the finite-life intangible asset are consumed or otherwise used up. If that pattern cannot be reliably determined. Apollo uses the straight-line method amortization. At June 30. 2011. the Company performed its annual impairment testing and determined there was no impairment of goodwill or indefinite life intangible assets at such time. Profit Sharing Payable—Profit sharing payable represents the amounts payable to employees and former employees who arc entitled to a proportionate share of carried interest income in one or more funds. The liability is calculated based upon the changes to realized and unrealized carried interest and is therefore not payable until the carried interest itself is realized. Debt Issuance Costs—Debt issuance costs consist of costs incurred in obtaining financing and arc amortized over the term of the financing using the effective interest method. These costs are included in Other Assets on the consolidated statements of financial condition. Foreign Currency—The Company may. from time to time. hold foreign currency denominated assets and liabilities. Such assets and liabilities are translated using the exchange rates prevailing at the end of each reporting period. The functional currency of the Company's international subsidiaries is the U.S. Dollar. as their operations are considered an extension of U.S. parent operations. Non-monetary assets and liabilities of the Company's international subsidiaries are remeasured into the functional currency using historical exchange rates specific to each asset and liability. The results of the Company's foreign operations arc normally remeasured using an average exchange etc for the respective reporting period. All currency remeasurement adjustments arc included within other income (loss), net in the consolidated statements of operations. Gains and losses on the settlement of foreign currency transactions are also included within other income (loss), net in the consolidated statements of operations. Compensation and Benefits The components of compensation and benefits have been expanded in the consolidated statements of operations in 2009 and 2010 to conform with the 2011 presentation. Equity-Based Compensation—Equity-based compensation is 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. The Company estimates forfeitures for equity-based awards that are not expected to vest. Equity-based awards granted to non- employees for services provided to the affiliates are remeasured to fair value at the end of each reporting period and expensed over the relevant service period. Salaries, Bonus and Benefits—Salaries, bonus and benefits includes base salaries, discretionary and non-discretionary bonuses. severance and employee benefits. Bonuses are accrued over the service period. 180 EFTA00623572

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) From time to time, the Company may assign profits interests received in lieu of management fees to certain investment professionals. Such assignments of profits interests are treated as compensation and benefits when assigned. The Company sponsors a 401(k) Savings Plan whereby U.S.-based employees are entitled to participate in the plan based upon satisfying certain eligibility requirements. The Company may provide discretionary contributions from time to time. No contributions relating to this plan were made by the Company for the years ended December 31. 2011. 2010 and 2009. respectively. Profit Sharing Expense—Profit sharing expense consists of a portion of carried interest earned in one or more funds allocated to employees and former employees. Profit sharing expense is recognized as the related carried interest income is recognized. Profit sharing expense can be reversed during periods when there is a decline in carried interest income that was previously recognized. Additionally. profit sharing expenses paid may be subject to clawback from employees, former employees and Contributing Partners. In June 2011. the Company adopted 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 carried interest realizations earned by the Company in a given year. which amounts are reflected in profit sharing expense in the accompanying consolidated financial statements. Incentive Fee Compensation—Certain employees are entitled to receive a discretionary portion of incentive fee income from certain of our capital markets funds. based on performance for the year. Incentive fee compensation expense is recognized on accrual basis as the related carried interest income is earned. Incentive fee compensation expense may be subject to reversal until the carried interest income crystallizes. Other Income (Loss) Net Gains (lasses) from Investment Activities—Net gains (losses) from investment activities include both realized gains and losses and the change in unrealized gains and losses in the Company's investment portfolio between the opening balance sheet date and the closing balance sheet date. The consolidated financial statements include the net realized and unrealized gains (losses) of AAA and the investment in HFA discussed in note 4. Net Gains from Investment Activities of Consolidated Variable Interest Entities—Changes in the fair value of the consolidated VIEss assets and liabilities and related interest, dividend and other income and expenses subsequent to consolidation are presented within net gains (losses) front investment activities of consolidated variable interest entities and are attributable to Non-Controlling Interests in the consolidated statements of operations. Comprehensive (Loss)Income—U.S. GAAP guidance establishes standards for reporting comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. U.S. GAAP requires that the Company classify items of OCI by their nature in the financial statements and display the accumulated balance of OCI separately in the shareholders' equity section of the Company's consolidated statements of financial condition. Comprehensive income (loss) consists of net income (loss) and OCI. Apollo's OCI is primarily comprised of the effective portion of changes in the fair value of the interest rate swap agreements discussed previously. It at any time, any of the Company's subsidiaries functional currency becomes non-U.S. dollar denominated, the Company will record foreign currency cumulative translation adjustments in OCI. 181 EFTA00623573

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Income Taxes—The Apollo Operating Group and its subsidiaries continue to generally operate in the U.S. as partnerships for U.S. Federal income tax purposes and generally as corporate entities in non-U.S. jurisdictions. Accordingly. these entities in some cases are subject to New York City unincorporated business tax. or in the case of non-U.S. entities. to non-U.S. corporate income taxes. In addition. APO Corp.. a wholly-owned subsidiary of the Company. is subject to U.S. Federal. state and local corporate income tax. and the Company's provision for income taxes is accounted for in accordance with U.S. GAAP. As significant judgment is required in determining tax expense and in evaluating tax positions. including evaluating uncertainties. we recognize the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. The tax benefit is measured as the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. If a tax position is no considered more likely than not to be sustained. then no benefits of the position arc recognized. The Company's tax positions are reviewed and evaluated quarterly and determine whether or not we have uncertain tax positions that require financial statement recognition. Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated statements of financial condition. These temporary differences result in taxable or deductible amounts in future years. Nei Income (Loss) Per Class A Share—U.S. GAAP requires use of the two-class method of computing earnings per share for all periods presented for each class of common stock and participating security as if all earnings for the period had been distributed. Under the two-class method. during periods of net income, the net income is first reduced for distributions declared on all classes of securities to arrive at undistributed earnings. During periods of net losses. the net loss is reduced for distributions declared on participating securities only if the security has the right to participate in the earnings of the entity and an objectively determinable contractual obligation to sham in net losses of the entity. The remaining earnings are allocated to common Class A Shares and participating securities to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. Each total is then divided by the applicable number of shares to arrive at basic earnings per share. For the diluted earnings, the denominator includes all outstanding common shares and all potential common shares assumed issued if they am dilutive. The numerator is adjusted for any changes in income or loss that would result from a hypothetical conversion of these potential common shams. Use of Estimates—The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, the disclosure of contingent assets and liabilities at the date of the 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. carried interest income from affiliates. non-cash compensation and fair value of investments and debt in the consolidated and unconsolidated funds and VIES. Actual results could differ materially from those estimates. Recent Accounting Pronouncements In April 2011. the FASB amended existing guidance for agreements to transfer financial assets that both entitle and obligate the transferor to repurchase or redeem the financial assets before their maturity. The amendments remove from the assessment of effective control the criterion requiring the transferor to have the 182 EFTA00623574

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and the collateral maintenance implementation guidance related to that criterion. The guidance is effective for the first interim or annual period beginning on or after December 15. 2011 and is to be applied prospectively. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In May 2011, the PASS issued an update which includes amendments that result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs. Consequently. the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Certain of the amendments could change how the fair value measurement guidance is applied including provisions related to highest and best use and valuation premise for nonfinancial assets, application to financial assets and financial liabilities with offsetting positions in market risks or countcrparty credit risk, premiums or discounts in fair value measurement. fair value of an instrument classified in a reporting entity's shareholders' equity. and additional disclosure requirements about fair value measurements. The update is effective for interim and annual periods beginning after December 15. 2011 for public entities and is to be applied prospectively. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In June 2011. the FASB issued an update which includes amendments that eliminate the option to present components of other comprehensive income (OCI) as pan of the statement of changes in stockholders' equity and requires entities to report components of other comprehensive income in either (1) a single continuous statement of comprehensive income or (2) two separate but consecutive statements. In a single continuous statement. entities must include the components of net income, a total for net income, the components of OCI. a total for OCI. and a total for comprehensive income. Under the two separate but continuous statements approach. the first statement would include components of net income. consistent with the income statement format used today. and the second statement would include components of OCI. For public entities, the amendments are effective for fiscal years. and interim periods within those years. beginning after December 15. 2011. In December 2011. the FASB issued an amendment to this update deferring changes related to the presentation of reclassification adjustments out of accumulated other comprehensive income. The adoption of this guidance will not have an impact on the Company's consolidated financial statements as the Company presents a separate statement of comprehensive income. In September 2011. the FASB issued an update which amends the guidance related to testing goodwill for impairment. Under the revised guidance. entities testing goodwill for impairment have the option to perform a qualitative assessment before calculating the fair value of the reporting unit (i.e.. step 1 of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not to be less than the carrying amount, the two-step impairment test would be required. Otherwise, further testing would not be needed. The update does not amend the requirement to test goodwill for impairment between annual tests if events or circumstances warrant. The amendments are effective for all entities for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15. 2011. The adoption of this guidance is not expected to have an impact on the Company's consolidated financial statements. In December 2011. the FASB issued amended guidance which will enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset or (2) subject to an enforceable master netting arrangement or similar agreement. irrespective of whether they are offset. This information will enable users of an entity's financial statements to evaluate the 183 EFTA00623575

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) effect or potential effect of netting arrangements on an entity's financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. An entity is required to apply the amendments for annual reporting periods beginning on or after January I. 2013. and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements. 3. ACQUISITIONS AND BUSINESS COMBINATIONS Business Combinations Gulf Stream On October 24.2011 (the "Acquisition Date"). the Company completed its previously announced acquisition (the "Acquisition") of 1005E of the membership interests of Gulf Stream Asset Management. LLC ("Gulf Stream"). a manager of collateralized loan obligations. The Acquisition was consummated by the Company for total consideration at fair value of approximately $38.3 million. The transaction broadens Apollo's existing senior credit business by expanding our credit coverage as well as investor relationships and increases the Assets Under Management of Apollo's capital markets. Consideration exchanged at closing consisted of payment of approximately $29.6 million. of which $6.7 million was used to repay subordinated notes and debt due to the existing shareholder on behalf of Gulf Stream. The Company funded the consideration exchanged at closing from its existing cash resources. Additional consideration of $4.0 million having an acquisition date fair value of $3.9 million will be paid to the former owners of Gulf Stream on the fourteen-month anniversary of the closing date. The Company will also make payments to the former owners of Gulf Stream under a contingent consideration obligation which requires the Company to transfer cash to the former owners of Gulf Stream based on a specified percentage of incentive fee revenue. The contingent consideration liability has an Acquisition Date fair value of approximately $4.7 million. which was determined based on the present value of the estimated range of undiscounted incentive fee payable cash flows between $0 and approximately $8.7 million using a discount rate of 13.7%. Tangible assets acquired in the Acquisition consisted of a management fee receivable. Intangible assets acquired consisted primarily of certain management contracts providing economic rights to senior fees. subordinate fees. and incentive fees from existing CLOs managed by Gulf Stream. Additionally. as pan of the Acquisition. the Company acquired the assets and liabilities of six consolidated CLOs. 184 EFTA00623576

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) The Company has performed an analysis and an evaluation of the net assets acquired and liabilities assumed. The estimated fair value of the assets acquired exceeded the estimated fair value of the liabilities assumed as of the Acquisition Date resulting in a bargain purchase gain of approximately $195.5 million. The bargain purchase gain is reflected in other income, net within the consolidated statements of operations with a corresponding amount reflected in appropriated partners' capital within the consolidated statements of changes in shareholder? equity. The estimated fair values for the net assets acquired and liabilities assumed am summarized in the following table: Tangible Assets: Receivable. management fees $ 1.720 Total assets of consolidated CLOs 2.278,612 Intangible Assets: Management Contracts 32.400 Fair Value of Assets Acquired Liabilities assumed: Deferred Tax Liability 2.312.732 871 Total liabilities of consolidated CLOs 2.078.117 Fair Value of Liabilities Assumed 2.078.988 Fair Value of Net Assets Acquired 233.744 Less: Pair Value of Consideration Transferred Gain on Acquisition 38.290 195.454 The Company's rights under all management contracts acquired will be amortized over six years. The management contract valuation and related amortization are as follows: Weighted Aterage Useful Life in Years December 31. 201 Management contracts Less: Accumulated amortization 12541 Net intangible assets 3.7 32.400 32.116 The results of operations of the acquired business since the Acquisition Date included in the Company's consolidated statements of operations for the period from October 24. 2011 to December 31.2011 were as follows: For the Period from October 24. 2011 Co December 31.2011 Total Revenues Net Income Attributable to Non-Controlling Interest Net Income Attributable to Apollo Global Management, LLC 2.107 194.852 473 185 EFTA00623577

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars In thousands, except share data) Unaudited Supplemental Pro Forma Information Unaudited supplemental pro forma results of operations of the combined entity for the years ended December 31. 2011 and 2010. assuming the Gulf Stream acquisition had occurred as of January 1.2010 are presented below. This pro forma information has been prepared for comparative purposes only and is not intended to be indicative of what the Company's results would have been had the Acquisition been completed on January I. 2010. nor does it purport to be indicative of any future results. For the Year Ended December 31. Total Revenues Net (Income) Loss Attributable to Non-Controlling Interest 2011 2010 On notion, except for share dat0 174.9 $ 2,115.7 (1.097.1) $ 652.1 Net (Loss) Income Attributable to Apollo Global Management. LLC (468.7) S 95.9 Net (Loss) Income per Class A Share: Net (Loss) Income per Class A Share—Basic and Diluted (4.18) S 0.84 Weighted Average Number of Class A Shares—Basic and Diluted 116.364.110 96.964.769 The 2011 and 2010 supplemental pro forma earnings include an adjustment to exclude $4.9 million and $9.7 million. respectively of compensation expense not expected to recur due to termination of certain contractual arrangements as part of the closing of the Acquisition. Other Acquisitions On February 1. 2010. the Company acquired substantially all of the assets of a limited company incorporated under the laws of Hong Kong and related entities thereto. The Company paid cash consideration of $1.4 million for identifiable assets with a combined fair value of $0.4 million. which resulted in $1.0 million of additional goodwill. CPI On November 12. 2010. Apollo completed the acquisition of substantially all of the assets of Citi Property Investors ("CM"). the real estate investment management group of Citigroup Inc. CPI had AUM of approximately $3.6 billion as of December 31. 2010. CPI is an integrated real estate investment platform with investment professionals located in Asia. Europe and North America. As part of the acquisition. Apollo received cash of $15.5 million and acquired general partner interests in. and advisory agreements with, various real estate investment funds and co-invest vehicles and added to its team of real estate professionals. The consideration transferred in the acquisition is a contingent consideration in the form of a liability incurred by Apollo to CM. The liability is an obligation of Apollo to transfer cash to CM based on a specified percentage of future earnings. The estimated fair value of the contingent liability is $1.2 million as of November 12. 2010. The acquisition was accounted for as a business combination and the Company recorded a $24.1 million gain on acquisition which is included in Other Income (Loss). Net in the accompanying consolidated statements of operations for the year ended December 31. 2010. 186 EFTA00623578

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) The finite-life intangible assets relate to management contracts associated with the CPI funds. The fair value of the management contracts was estimated to be $8.3 million. The Company also received $15.5 million of cash and recorded a receivable valued at $1.5 million as of December 31, 2010. The Company has performed an analysis and an evaluation of the net assets acquired and liabilities assumed. The Company has determined the following estimated fair values for the acquired assets and liabilities assumed: Tangible Assets: Cash $ 15.468 Receivables. at fair value 1,500 Intangible Assets: Management Contracts 8,300 Total Assets 25.268 Less- Contingent consideration. at fair value (1.200) Gain on Acquisition >4.(16S The estimated useful life of the management contracts is 2.5 years. The Company is amortizing the management contracts over their estimated useful life using the straight-line method. Useful 1.1te Detember31. December 31. in Yens 2011 2010 Management contracts Less: Accumulated amortization of intangibles Net identified intangible assets. at fair value 2.5 8.300 $ 8,300 (3,7611 (433) 4,539 S 7.867 Stone Tower On December 16. 2011. Apollo announced that it has agreed to merge Stone Tower Capital LLC and its related management companies. a leading alternative credit manager with approximately $18 billion of assets under management. into Apollo's capital markets business. The transaction is subject to the satisfaction of certain conditions and is expected to close in April 2012. subject to satisfaction of closing conditions. Intangible Assets Intangible assets. net consists of the following: As of December 31. 2011 2010 Finite-lived intangible assets/management contracts S 141,000 $ 108.600 Accumulated amortization (59,154) (44,026) Intangible assets, net S 81.846 $ 64.574 187 EFTA00623579

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) The changes in intangible assets. net consist of the following: For the Year Ended December 31. 2011 2010 2009 Balance, beginning of year Amortization expense (15.128) (12.777) (12.677) Acquisitions Balance, end of year $ 64,574 $ 69,051 $ 81,728 32.400 8.300 S 81,846 $ 64.574 $ 69.051 Amortization expense related to intangible assets. including the intangible assets related to acquisitions and the intangible assets as part of the acquisitions of Non-Controlling Interests in the Apollo Operating Group was $15.1 million. $12.8 million and $1 2.7 million for the years ended December 31. 2011. 2010. and 2009. respectively. Expected amortization of these intangible assets for each of the next 5 years and thereafter is as follows: Amortization of inungible sotto There- 2012 2013 2014 2015 2016 After Total $ 21.987 $ 14.842 S 9.598 S 9.864 $ 7.120 $ 18.033 $ 81.464 4. INVESTMENTS The following table represents Apollo's investments: December 31. December 31. 2011 2010 Investments. at fair value Other investments Total Investments $ 1,552,122 $ 1.637.091 305.343 283.462 1.857.465 $ 1.920,553 188 EFTA00623580

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Investments at Fair Value Investments at fair value consist of financial instruments held by AAA. the investment in HFA. Senior Loan Fund. other investments held at fair value and investments of consolidated VIEs as discussed further in note 5. As of December 31. 2011 and 2010. the net assets of the consolidated funds and VIEs were $1,724.2 million and $1,951.6 million. respectively. The following investments. except the investment in HFA and other investments, am presented as a percentage of net assets of the consolidated funds and VIEs: Investments. at Fair Value— Affiliates December 31.2011 December 31.2010 Fair Value Cost % of Net Assets of Consolidated Funds and VIEs Fair Value Cost % of Net Assets of Consolidated Funds and VIEs Private Equity Capital Markel. Total Private E nit : Capital Markets Total Intevin ntv. at fair value: AAA S 1.480.152 $ — S 1.480.152 $ 1.662.999 85.9% S 1.637.091 — S 1.637.091 S 1.695.992 X3.9q Investment held by Sena Loan Fund — 24213 24.213 24.569 IA 11FA — 46.678 46.678 54.628 NIA 1.079 1.079 2,881 NIA 1.481.231 5 70.891 S 1.552.122 5 1.745.077 87.3% 5 1.637.091 S 5 1.637.091 5 1.695.992 83.9% Securities At December 31. 2011 and 2010. the sole investment of AAA was its investment in AAA Investments. L.P. ("AAA Investments'). The following tables represent each investment of AAA Investments constituting mom than five percent of the net assets of the consolidated funds and VIEs as of the aforementioned dates: Dercemlite 31.2011 Instrument Type Coat Fair Value % of Net Assets of Consolidated Funds and VIFs Apollo Life Re Ltd. Equity $ 358.241 $ 430,800 25.0% Apollo Strategic Value Offshore Fund. Ltd. Investment Fund 105.889 164.811 9.6 Rexnord Corporation Equity 37,461 139,100 8.1 Apollo Asia Opportunity Offshore Fund. Ltd. Investment Fund 88.166 86.329 5.0 LeverageSource. L.P. Equity 139,913 102,834 6.0 189 EFTA00623581

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) December M. 2010 Instrument bite Cost Fair Value % of Net Amets of Consolidated Furls and VIEs Apollo Life Re Ltd. Equity $ 201.098 $ 249.900 12.8% Apollo Strategic Value Offshore Fund. Ltd. Investment Fund 113.772 160.262 8.2 Momentive Performance Materials Holdings Inc. Equity 76.007 137,992 7.1 Rexnord Corporation Equity 37.461 133.700 6.9 LeverageSource. L.P. Equity 140.743 115.677 5.9 Apollo Asia Opportunity Offshore Fund. Ltd. Investment Fund 102.530 110.029 5.6 Caesars Entertainment Corporation Equity 176.729 99,030 5.1 AAA Investments owns equity as a private equity co-investment in Caesars Entertainment Corporation (formerly known as Harrah's Entertainment. Inc.) and AAA Investments has an ownership interest in LeverageSource. L.P.. which owns debt of Caesars Entertainment Corporation. At December 31. 2010. AAA Investments' combined sham of these debt and equity investments was greater than 5% of the net assets of the consolidated funds and VIEs and was valued at $102.8 million. In addition to AAA Investments' private equity co-investment in Momentive Performance Materials Holdings Inc. ('Momentive) noted above. AAA Investments has an ownership interest in the debt of Momentive. AAA Investments' combined sham of these debt and equity investments is valued at $85.9 million and $138.8 million at December 31.2011 and December 31. 2010. respectively. At December 31. 2010. AAA Investments' combined sham of these debt and equity investments was greater than 5% of the net assets of the consolidated funds and VIEs. Furthermore. AAA Investments owns equity. as a private equity co-investment. and debt through its investment in Autumnleaf. L.P. and Apollo Fund VI BC. L.P.. in CEVA Logistics. AAA Investments' combined share of these debt and equity investments was valued at $75.2 million and $124.6 million as of December 31. 2011 and 2010. respectively. At December 31. 2010. AAA Investments' combined sham of these debt and equity investments was greater than 5% of the net assets of the consolidated funds and VIEs. Apollo Strategic Value Offshore Fund. Ltd. (the "Apollo Strategic Value Fund") has an ownership interest in a special purpose vehicle. Apollo VIF/SVF Bradco LLC. which owns interests in Bradco Supply Corporation. AAA Investments' sham of this investment is valued at $80.9 million at December 31. 2011. Apollo Strategic Value Fund primarily invests in the securities of leveraged companies in North America and Europe through three core strategics: distressed investments, value-driven investments and special opportunities. In connection with the redemptions requested by AAA Investments of its investment in Apollo Strategic Value Fund, the remainder of AAA Investments' investment in the Apollo Strategic Value Fund was converted into liquidating shares issued by the Apollo Strategic Value Fund. The liquidating shams were initially allocated a pro rata portion of each of the Apollo Strategic Value Fund's existing investments and liabilities, and as those investments are sold. AAA Investments is allocated the proceeds from such disposition less its proportionate sham of any current expenses incurred by the Apollo Strategic Value Fund. Apollo Asia Opportunity Offshore Fund. Ltd. ("Asia Opportunity Fund") is an investment vehicle that seeks to generate attractive risk-adjusted returns across market cycles by capitalizing on investment opportunities created by the increasing demand for capital in the rapidly expanding Asian markets. In connection with a 190 EFTA00623582

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) redemption requested by AAA Investments of its investment in Asia Opportunity Fund a portion of AAA Investments' investment was convened into liquidating shares issued by the Asia Opportunity Fund. The liquidating shares were initially allocated a pro mu portion of each of the Asia Opportunity Fund's existing investments and liabilities, and as those investments are sold. AAA Investments is allocated the proceeds from such disposition less its proportionate sham of any current expenses incurred or reserves set by the Asia Opportunity Fund. At December 31.2011 and 2010. the liquidating shams of Asia Opportunity Fund had a fair value of $26.1 million and $45.0 million, respectively. Apollo Life Re Ltd. is an Apollo-sponsored vehicle that owns the majority of the equity of Athene Holding Ltd., (rAthene"), the parent of Athene Life Re Ltd.. a Bermuda-based reinsurance company focused on the life reinsurance sector. Athene Annuity & Life Assurance Company. a recently acquired Delaware-domiciled (formerly South Carolina domiciled) stock life insurance company focused on retail sales and reinsurance in the retirement services market. Investors Insurance Corporation. a recently acquired Delaware-domiciled stock life insurance company focused on the retirement services market and Athene Life Insurance Company. a recently organized Indiana-domiciled stock life insurance company focused on the institutional guaranteed investment contract ("GIC") backed note and funding agreement markets. Senior Loan Fund On December 31. 2011. the Company invested $26.0 million in the Apollo Credit Senior Loan Fund. L.P. ("Senior Loan Fund"). As a result, the Company became the sole investor in the fund and therefore consolidated the assets and liabilities of the fund. The fund invests in U.S. denominated senior secured loans, senior secured bonds and other income generating fixed-income investments. At least 90% of the Senior Loan Fund's portfolio of investments must consist of senior secured, floating rate loans or cash or cash equivalents. Up to 10% of the Senior Loan Fund's portfolio may consist of non-first lien fixed income investments and other income generating fixed income investments. including but not limited to senior secured bonds. The Senior Loan Fund may not purchase assets rated (tranche rating) at B3 or lower by Moody's. or equivalent rating by another nationally recognized rating agency. The Company has classified the instruments associated with the Senior Loan Fund investment as Level II and Level III investments. HFA On March 7. 2011. the Company invested $52.1 million (including expenses related to the purchase) in a convertible note with an aggregate principal amount of $50.0 million and received 20.833.333 stock options issued by HFA. an Australian based specialist global funds management company. The terms of the convertible note allow the Company to convert the note. in whole or in part. into common shares of HFA at an exchange rate equal to the principal plus accrued payment-in-kind interest (or "P1K" interest) divided by US$0.98 at any time. and convey participation rights. on an as-converted basis. in any dividends declared in excess of $6.0 million per annum. as well as seniority rights over HFA common equity holders. Unless previously converted, repurchased or cancelled. the note will be converted on the eighth anniversary of its issuance on March 11. 2019. Additionally. the note has a percentage coupon interest of 6% per annum. paid via principal capitalization (PIK interest) for the first four years. and thereafter either in cash or via principal capitalization at HFA's discretion. The P1K interest provides for the Company to receive additional common shares of HFA if the note is converted. The Company has elected the fair value option for the 191 EFTA00623583

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) convertible note. The convertible note is valued using an as "if-convened basis." The Company separately presents interest income in the consolidated statement of operations from other changes in the fair value of the convertible note. For the year ended December 31.2011 the Company has recorded $2.5 million in PIK interest income included in interest income in the consolidated statements of operations. The terms of the stock options allow for the Company to acquire 20.833.333 fully paid ordinary shares of HFA at an exercise price in Australian Dollars ("AV) of A$8.00 (exchange rate of A$1.00 to $0.84 as of December 31. 2011) per stock option. The stock options became exercisable upon issuance and expire on the eighth anniversary of the issuance date. The stock options are accounted for as a derivative and arc valued at their fair value under U.S. GAAP at each balance sheet date. As a result, for the year ended December 31. 2011. the Company recorded an unrealized loss of approximately $5.9 million, related to the convertible note and stock options within net (losses) gains from investment activities in the consolidated statements of operations. The Company has classified the instruments associated with the HFA investment as Level III investments. Net (Losses) Gains from Investment Activities Net (losses) gains from investment activities in the consolidated statements of operations include net realized gains from sales of investments, and the change in net unrealized (losses) gains resulting from changes in fair value of the consolidated funds investments and realization of previously unrealized (losses) gains. Additionally net (losses) gains from investment activities include changes in the fair value of the investment in HFA and other investments held at fair value. The following tables present Apollo's net (losses) gains from investment activities for the years ended December 31. 2011. 2010 and 2009: For the Year Ended December 31.2011 Private Equity Capital Markets Total Change in net unrealized (losses) gains due to changes in fair values $ (123.946) $ (5.881) $ (129.827) Net (Losses) Gains from Investment Activities (123.9461 S 15.881) S 1129.827) For the Year Ended December 31. 2010 Private E Capital Market. Total Realized (lasses) gains on sales of investments - S (2.240) $ (2.240) Change in net unrealized gains (losses) due to changes in fair values 370.145 (34) 370.111 Net Gains (Losses) from Investment Activities 370.145 S (2.274) S 367.871 For the Year Ended December 31.2009 Private Equity Capital Markets Total Realized gains on sales of investments 584 $ $ 584 Change in net unrealized gains due to changes in fair values 471.873 38.478 510.351 Net Gains from Investment Activities 472.457 $ 38.478 $ 510.935 192 EFTA00623584

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Other Investments Other Investments primarily consist of equity method investments. Apollo's share of operating income (loss) generated by these investments is recorded within income from equity method investments in the consolidated statements of operations. The following table presents income from equity method investments for the years ended December 31. 2011. 2010 and 2009: For the lean Ended December 31. 2011 2010 2009 Investments: Private Equity Funds: AAA Investments Apollo Investment Fund IV. L.P. ("Fund IV") $ (55) 8 $ 215 24 $ 261 17 Apollo Investment Fund V. L.P. ("Fund V") (9) 39 44 Apollo Investment Fund VI. L.P. ("Fund VC) 2.090 599 1.335 Apollo Investment Fund VII, L.P. ("Fund VII") 10,156 37,499 31,527 Apollo Natural Resources Partners. LP. ("ANRP") (141) Capital Markets Funds: Apollo Special Opportunities Managed Account. L.P. ( SOMA ) (793) 1.106 1.961 Apollo Value Investment Fund, L.P. ("VIP") (2$) 29 57 Apollo Strategic Value Fund. LP. ("SVP) (21) 21 57 Apollo Credit Liquidity Fund. LP. ("ACLF") (295) 3,431 13,768 Apollo/Anus Investors 2007-I. L.P. ('Anus") 368 4.895 2.249 Apollo Credit Opportunity Fund I, LP. ("COF I") 2,410 12,618 16,473 Apollo Credit Opportunity Fund II. L.P. ("COP ll ) (737) 3.610 8.294 Apollo European Principal Finance Fund, L.P. ("EPP") 1,729 2,568 330 Apollo Investment Europe II. LP. CAIE (308) 1.496 2.937 Apollo Palmetto Strategic Partnership. L.P. (Palmetto') (IOW 903 258 Apollo Senior Floating Rate Fund ("AFT") (16) Apollo Residential Mortgage. Inc. ("AMTG") (8O)tO Apollo European Credit. LP. ( AEC ") (10) Apollo European Strategic Investment L.P. ("AESI") 21 Real Estate: Apollo Commercial Real Estate Finance. Inc. ("ARI") 63601 (390)(7) (743) ACRE US Real Estate Fund. L.P. (79) CPI Capital Partners NA Fund 98 CPI Capital Partners Asia Pacific Fund 71 Other Equity Method Investments: VC Holdings. L.P. Series A ("Vantium A") (1.860) (951) (3.770) VC Holdings. L.P. Series C ("Vantium C") 580 1,370 8,072 VC Holdings. L.P. Series D ("Vantium 0") Total Income from Equity Method Investments 285 730 (14) S 13.923 S 69.R12 S 83.113 ( I ) Amounts are as of September 30. 2011. (2) Amounts are as of September 30, 2010. 193 EFTA00623585

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) Other investments as of December 31.2011 and 2010 consisted of the following: Equio Held o. of December 31. 2011 % of Ownenhi December 31. 2010 % of Oonersal Investments: Private Equity Funds: AAA Investments 859 0.057% S 929 0.056% Fund IV 15 0.010 48 0.005 Fund V 202 0.014 231 0.013 Fund VI 7.752 0.082 5.860 0.051 Fund VII 139,765 1.318 122,384 1.345 Apollo Natural Resources Partners. LP. 1.982 2.544 Capital Markets Funds: Apollo Special Opportunities Managed Account. L.P. 5.051 0.525 5.863 0.537 Apollo Value Investment Fund, LP. 122 0.081 152 0.085 Apollo Strategic Value Fund. LP. 123 0.059 144 0.055 Apollo Credit Liquidity Fund. LP. 14,449 2.465 18,736 2.450 Apollo/Arlus Investors 2007-I. L.P. 6.009 6.156 7.143 6.156 Apollo Credit Opportunity Fund I. LP. 37,806 1.977 41,793 1.949 Apollo Credit Opportunity Fund II. L.P 22.979 1.472 27.415 1.441 Apollo European Principal Finance Fund. L.P. 14,423 1.363 15,352 1.363 Apollo Investment Europe II. LP. 7.845 2.076 8.154 2.045 Apollo Palmetto Strategic Partnership. L.P. 10,739 1.186 6,403 1.186 Apollo Senior Floating Rate Fund 84 0.034 Apollo/HI Loan Portfolio, L.P. 100 0.189 Apollo Residential Mortgage. Inc." 4.0Cd" Apollo European Credit. LP. 542 1.053 Apollo European Strategic Investments LP. 1.704 1.035 Real Estate: Apollo Commercial Real Estate Finance. Inc. 11.288 2.730 9.440 3.198 ACRE U.S. Real Estate Fund 5,884 2.065 CPI Capital Partners NA Fund 564 0.344 CPI Capital Partners Europe Fund 5 0.001 CPI Capital Partners Asia Pacific Fund 256 0.039 Other Equity Method Investments: Vantium A /B 359 6.450 2.219 12.240 Vantium C 6,944 2.300 10,135 2.166 Vantium D 1.345 6.300 1.061 6.345 Portfolio Company Holdings 2.147 we) Total Other Investments S 1O5.343 S 242 (I) Amounts are as of September 30. 2011. (2) Amounts are as of September 30. 2010. (3) Investment value includes the fair value of RSUs granted to the Company as of the grant date. These amounts are not considered in the percentage of ownership until the RSUs are vested. at which point the RSUs are convened to common stock and delivered to the Company. 194 EFTA00623586

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) (4) Ownership percentages am not presented for these equity method investments in our portfolio companies as we only present for the funds in which we am the general partner. As of December 31. 2011 and 2010. no single equity method investment held by Apollo exceeded 10% of Apollo's total consolidated assets or income. respectively. The most recently issued summarized aggregated financial information of the funds and other equity method investments in which Apollo has equity method investments is as follows: Balance Sheet Information Private Equits'2I Capital Markets Real Estate As of December 31. AN 44 December 31. As of December 31. 2011i3"11 2010 2011 2010 :an"' moth Investments $ 22,759,853 $ 24,779.759 $ 10,004.744 $ 9,024,982 $ 1.980,613 $ 550,564 Assets 24 219 637 26 131 909 11 335 170 9 910 587 2.196460 785 497 Liabilities 686,558 594,954 2,773.163 1,414,244 587,576 483,393 Equity 23.533.079 25.538.955 8362.007 8.496.343 1.608.884 302.104 (I) (2) (3) (4) Certain real estate amounts am as of September 30. 2011 and 2010. Amounts include Vantium A. C and D. Certain equity investment amounts arc as of September 30. 2011. Financial information of certain equity method investments is not available as of December 31. 2011. Balance Sheet Infonnatkm Aggrepte Totals as of December 31. 2011 2010 Investments 34,745,210 $ 34,355,305 Assets 37.751.267 36.829.993 Liabilities 4,047,297 2,492,591 Equity Income Statement Information Private Equity l 33.703.970 Capital Markets 34337.402 Real Estate For the Year. Ended December 31. For the Year. Ended December 31. For the Years Ended December 31. 201145X4I 2010 2009 2011 2010 2009 2011(11 201011 2009 Revenues/Investment Income $ 1,522.831 $ 610,899 $ 734.480 $ 852.282 $ 304.332 $ 427.030 $ 46,654 $ 14.468 $ 660 Expenses 377.985 286.719 233.257 290.843 145.138 114.991 30.350 6.377 2.834 Net Investment Income (Loss) 1,144,846 324.180 501.223 561,439 159,194 312.039 16,304 8,091 (2.174) Net Realized and Unrealized Gain (Loss) 2.239.373 5.918.694 6.824.737 (537.017) 1.531,056 2.452.273 172.018 (1,058) Net Income (Loss) $ 3.384.219 56.242,874 $ 7.325,960 $ 24.422 $ 1.690.250 $ 2.764312 $ 188.322 $ 7.033 8(2.174) (1) Certain real estate amounts am as of September 30. 2011 and 2010. 195 EFTA00623587

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) (2) Amounts include Vantium A. C and D. (3) Certain equity investment amounts are as of September 30. 2011. (4) Financial information of certain equity method investments is not available as of December 31, 2011. Income Statement Information Aggregate Totals far the Years Ended December 31. 2011 2010 2009 Revenues/Investment Income 2,421,767 $ 929.699 $ 1,162.170 Expenses 699.178 438.234 351.082 Net Investment Income 1,722,589 491,465 811.088 Net Realized and Unrealized Gain 1.874.374 7.448.692 9.277.010 Net Income 3,596,963 $ 7.940.157 $ 10.088.098 Fair Value Measurements The following table summarizes the valuation of Apollo's investments in fair value hierarchy levels as of December 31. 2011 and 2010: Lest! I 1.evel II Level III 'Iota December 31. December 31. Nil 1 2010 December 31. December 31. 2011 2010 December 31. 2011 December 31. 2010 Ihrember 31. 1/ecember 31. 2011 2010 AMCLS. at fair value: Investment in AAA Investments. I. F. S S 1.480.132 S 1.637.091 S 1.480.152 S 1.637.091 Investments held by Senior Loan Fund 2‘.75,7 456 24.213 Investments in I1FA and Other 47.757 47.757 Total S S , k757 5 1.5_2x365 S 1.637.091 S 1.55_2.122_ S 1.637.091 Les el I Lund II Iota December 31. December 11. December 31. December 31. December 31. December 31. December 31. December 31. 2011 2010 2011 2010 2011 2010 2011 2010 Liabilities, at fair value: Interest rate swap agreements Total — $ 3.843 S 11.531 S — S — 3.843 S 11.531 3.843 S 11.531 3.843 S 11.531 — s - S There were no transfers between Level I. II or III during the year ended December 31. 2011 and 2010 relating to assets and liabilities, at fair value. noted in the tables above, respectively. 196 EFTA00623588

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) The following table summarizes the changes in AAA Investments, which is measured at fair value and characterized as a Level Ill investment: For the Year Ended December 31. 2011 2010 2009 Balance. Beginning of Period 1.637.091 $ 1.324,939 S 854.442 Purchases 432 375 4.121 Distributions (33,425) (58,368) (5,497) Change in unrealized (losses) gains, net Balance. End of Period (123.946) 370.145 471.873 1.480.152 $ 1.637.091 S 1.324.939 The following table summarizes the changes in the investment in HFA and Other Investments. which arc measured at fair value and characterized as Level 111 investments: For the Year Ended December 31. 2011 Balance. Beginning of Period $ Purchases Change in unrealized losses. net (5,881) Director fees Expenses incurred 57.509 Balance. End of Period (1.802) (2.069) 47.757 The change in unrealized losses. net has been recorded within the caption 'Net (losses) gains from investment activities' in the consolidated statements of operations. The following table summarizes the changes in the Senior Loan Fund, which is measured at fair value and characterized as a Level III investment: For the Year Ended net-ember 31. 2011 Balance. Beginning of Period S Acquisition Purchases Distributions Realized losses (gains) Change in unrealized (losses) gains 456 Balance. End of Period 456 197 EFTA00623589

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) The following table summarizes the changes in the Metals Trading Fund investment, which was measured at fair value and characterized as a Level III investment: Fur the Year Ended December 31. 2010 Balance. Beginning of Period S 40,034 Purchases Distributions (37,760)9) Realized losses (2.240) Change in unrealized losses (34) Balance. End of Period (I) Refer to note I for a discussion regarding consolidation of Metals Trading Fund. The change in unrealized gains (losses) and realized losses have been recorded within the caption "Net gains (losses) from investment activities". in the consolidated statements of operations. The following table summarizes a look-through of the Company's Level III investments by valuation methodology of the underlying securities held by AAA Investments: Private Equity December 31. 2011 December 31.2010 •"4 of Investment of AAA A of Investment of AAA Approximate values based on net asset value of the underlying funds, which are based on the funds underlying investments that are valued using the following: Comparable company and industry multiples $ 749,374 44.6% 782,775 42.6% Discounted cash flow models 643.031 38.4 490,024 26.6 Listed quotes 139.833 8.3 24.232 1.3 Broker quotes 179.621 10.7 504.917 27.5 Other net (liabilities) assets"' (33.330) (2.0) 37.351 2.0 Total Investments 1.678,529 100.0% 1,839,299 100.0% Other net liabilities12) Total Net Assets (198,377) (202.208) ;ISM $I 637 091 Balances include other assets and liabilities of certain funds in which AAA Investments has invested. Other assets and liabilities at the fund level primarily include cash and cash equivalents, broker receivables and payables and amounts due to and from affiliates. Carrying values approximate fair value for other assets and liabilities. and accordingly. extended valuation procedures are not required. Balances include other assets, liabilities and general partner interests of AAA Investments and are primarily comprised of $402.5 million and 5537.5 million in long-term debt offset by cash and cash equivalents at the 198 EFTA00623590

Table of Contents APOLLO GLOBAL MANAGEMENT, LLC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share data) December 31.2011 and 2010 balance sheet dates. respectively. Carrying values approximate fair value for other assets and liabilities (except for debt). and, accordingly. extended valuation procedures are not required. S. VARIABLE INTEREST ENTITIES The Company consolidates entities that are VIEs for which the Company has been designated as the primary beneficiary. The purpose of such VIEs is to provide strategy-specific investment opportunities for investors in exchange for management and performance based fees. The investment strategies of the entities that the Company manages may vary by entity. however. the fundamental risks of such entities have similar characteristics. including loss of invested capital and the return of carried interest income previously distributed to the Company by certain private equity and capital markets entities. The nature of the Company's involvement with VIEs includes direct and indirect investments and fee arrangements. The Company does not provide performance guarantees and has no other financial obligations to provide funding to VIEs other than its own capital commitments. Consolidated Variable Interest Entities In accordance with the methodology described in note 2. Apollo consolidated four VIEs under the amended consolidation guidance during 2010. an additional VIE during the second quarter of 2011, and six additional VIEs during the fourth quarter of 2011 in connection with its acquisition of Gulf Stream. One of the consolidated VIEs was formed to purchase loans and bonds in a leveraged structure for the benefit of its limited partners. which included certain Apollo funds that contributed equity to the consolidated VIE Through its role as general partner of this VIE. it was determined that Apollo had the characteristics of the power to direct the activities that most significantly impact the VIE's economic performance. Additionally. the Apollo funds have involvement with the VIE that have the characteristics of the right to receive benefits from the VIE that could potentially be significant to the VIE. As a group. the Company and its related parties have the characteristics of a controlling financial interest. Apollo determined that it is the luny within the related party group that is most closely associated with the VIE and therefore should consolidate it. The remaining consolidated VIEs including the VIE formed during the second quarter 2011 and the six VIES consolidated in connection with the acquisition of Gulf Steam were formed for the sole purpose of issuing collateralized notes to investors. The assets of these VIEs are primarily comprised of senior secured loans and the liabilities are primarily comprised of debt. Through its role as collateral manager of these VIEs, it was determined that Apollo had the power to direct the activities that most significantly impact the economic performance of these VIES. Additionally. Apollo determined that the potential fees that it could receive directly and indirectly from these VIEs represent rights to returns that could potentially be significant to such VIEs. As a result. Apollo determined that it is the primary beneficiary and therefore should consolidate the VIES. One of the consolidated VIEs. which qualified as an asset-backed financing entity. was formed during the fourth quarter of 2010 and the Company determined that it was the primary beneficiary of such VIE. Based on a restructuring of this VIE which occurred later in the fourth quarter of 2010. the Company no longer possessed the power to direct the activities of such VIE resulting in deconsolidation of such VIE in the fourth quarter of 2010. Apollo holds no equity interest in any of the consolidated VIES described above. The assets of these consolidated VIEs are not available to creditors of the Company. In addition, the investors in these consolidated 199 EFTA00623591