Apollo Investment Corporation Reports Financial Results for the Quarter Ended December 31, 2014

NEW YORK--(BUSINESS WIRE)--

Apollo Investment Corporation AINV or the "Company," or "Apollo Investment," today announced financial results for its third fiscal quarter ended December 31, 2014. The Company's net investment income was $0.24 per share for the quarter ended December 31, 2014, compared to $0.28 for the quarter ended September 30, 2014. The Company's net asset value ("NAV") was $8.43 per share as of December 31, 2014, down from $8.72 as of September 30, 2014.

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the third fiscal quarter of 2015, payable on April 6, 2015 to stockholders of record as of March 20, 2015. The specific tax characteristics of this dividend will be reported to stockholders on Form 1099 after the end of the calendar year.

Mr. James Zelter, Apollo Investment Corporation's Chief Executive Officer, commented, "Although the liquid credit markets were challenging during the quarter, the volatile environment enabled us to deploy capital at attractive risk-adjusted returns." Mr. Zelter continued, "Long-term, we remain optimistic about the outlook for providers of flexible capital solutions amidst the growing impact of regulation on the lending landscape."

FINANCIAL HIGHLIGHTS

($ in billions, except per share)		December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
Total assets		$	3.70		$	3.83		$	3.81		$	3.64
Investment portfolio (fair value)		$	3.51		$	3.67		$	3.64		$	3.48
Debt outstanding		$	1.59		$	1.58		$	1.57		$	1.37
Total net assets		$	2.00		$	2.06		$	2.07		$	2.05
Net asset value per share		$	8.43		$	8.72		$	8.74		$	8.67
Debt-to-equity ratio		0.80 x			0.76 x			0.76 x			0.67 x
Net leverage ratio (1)		0.74 x			0.76 x			0.75 x			0.68 x

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⁽¹⁾ The Company's net leverage ratio is defined as debt outstanding plus payable for investments purchased, plus due to custodian, less receivable for investments sold, less cash, less foreign currency, divided by total net assets.

INVESTMENT ACTIVITY AND PORTFOLIO COMPANIES

($ in millions)		Three months ended December 31, 2014				Nine months ended December 31, 2014
Investments made (2)		$	609			$	1,839
Investments sold		$	(444	)		$	(1,070	)
Net activity before repaid investments		$	165			$	769
Investments repaid		$	(255	)		$	(705	)
Net investment activity		$	(90	)		$	64
Portfolio companies, at beginning of period			113				111
New portfolio companies			13				53
Exited portfolio companies			(17	)			(55	)
Portfolio companies, at end of period			109				109
Number of investments in existing companies			13				55

___________

⁽²⁾ Investments were primarily made through a combination of primary and secondary debt investments.

OPERATING RESULTS

($ in thousands, except per share data)		Three months ended December 31, 2014				Nine months ended December 31, 2014
Net investment income		$	56,662			$	175,902
Net realized and unrealized loss		$	(76,114	)		$	(88,750	)
Net increase (decrease) in net assets from operations		$	(19,452	)		$	87,152
(per share)
Net investment income per share		$	0.24			$	0.75
Net realized and unrealized loss per share		$	(0.33	)		$	(0.39	)
Earnings (loss) per share – basic		$	(0.09	)		$	0.36
Earnings (loss) per share – diluted (3)		$	(0.09	)		$	0.36

⁽³⁾ In applying the if-converted method, conversion shall not be assumed for purposes of computing diluted EPS if the effect would be anti-dilutive. For the three and nine months ended December 31, 2014, anti-dilution would total $0.01 and $0.01, respectively.

CONFERENCE CALL / WEBCAST AT 8:30 AM EST ON FEBRUARY 5, 2015

The Company will host a conference call on Thursday, February 5, 2015 at 8:30 a.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (888) 802-8579 approximately 5-10 minutes prior to the call; international callers should dial (973) 633-6740. Participants should reference Apollo Investment Corporation or Conference ID # 63065773 when prompted. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Event Calendar in the Investor Relations section of our website at www.apolloic.com. Following the call you may access a replay of the event either telephonically or via audio webcast. The telephonic replay will be available approximately two hours after the live call and through February 12, 2015 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 63065773. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Event Calendar in the Investor Relations section of our website at www.apolloic.com.

SUPPLEMENTAL INFORMATION

The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the investor relations section of the Company's website at www.apolloic.com.

Our portfolio composition and weighted average yields at December 31, 2014, September 30, 2014, June 30, 2014, and March 31, 2014 are as follows:

		December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014
Portfolio composition, measured at fair value:
Secured debt		61	%		63	%		59	%		56	%
Unsecured debt		15	%		17	%		22	%		27	%
Structured products and other		10	%		9	%		8	%		6	%
Common equity, preferred equity and warrants		14	%		11	%		11	%		11	%
Weighted average yields, at current cost basis, exclusive of securities on non-accrual status:
Secured debt portfolio		11.0	%		10.9	%		10.9	%		10.8	%
Unsecured debt portfolio		11.1	%		11.1	%		11.5	%		11.5	%
Total debt portfolio		11.1	%		11.0	%		11.1	%		11.1	%
Income-bearing investment portfolio composition, measured at fair value:
Fixed rate amount		$1.4 billion			$1.6 billion			$1.7 billion			$1.7 billion
Floating rate amount		$1.5 billion			$1.5 billion			$1.5 billion			$1.3 billion
Fixed rate %		48	%		51	%		53	%		58	%
Floating rate %		52	%		49	%		47	%		42	%
Income-bearing investment portfolio composition, measured at cost:
Fixed rate amount		$1.5 billion			$1.7 billion			$1.7 billion			$1.7 billion
Floating rate amount		$1.5 billion			$1.5 billion			$1.5 billion			$1.2 billion
Fixed rate %		50	%		52	%		53	%		58	%
Floating rate %		50	%		48	%		47	%		42	%

APOLLO INVESTMENT CORPORATION STATEMENTS OF ASSETS AND LIABILITIES (unaudited) (in thousands, except per share amounts)
	December 31, 2014				March 31, 2014
Assets
Non-controlled/non-affiliated investments, at fair value (cost — $2,683,906 and $2,714,971, respectively)	$	2,568,832			$	2,751,896
Non-controlled/affiliated investments, at fair value (cost — $189,673 and $153,721, respectively)	198,739				144,628
Controlled investments, at fair value (cost — $715,993 and $590,060, respectively)	746,444				582,147
Total investments (cost — $3,589,572 and $3,458,752, respectively)	3,514,015				3,478,671
Cash	11,661				13,413
Foreign currency (cost — $16,151 and $1,305, respectively)	16,009				1,323
Receivable for investments sold	94,965				72,918
Interest receivable	30,013				40,106
Dividends receivable	3,667				3,627
Deferred financing costs	27,066				31,601
Prepaid expenses and other assets	3,778				292
Total assets	$	3,701,174			$	3,641,951
Liabilities
Debt	$	1,588,653			$	1,372,261
Payable for investments purchased	8,212				119,577
Dividends payable	47,348				47,348
Management and performance-based incentive fees payable	37,525				31,108
Interest payable	15,937				14,318
Accrued administrative expenses	2,232				1,915
Other liabilities and accrued expenses	4,576				3,813
Total liabilities	$	1,704,483			$	1,590,340
Net Assets
Common stock, par value $.001 per share, 400,000,000 and 400,000,000 common shares authorized, respectively, 236,741,351 and 236,741,351 issued and outstanding, respectively	$	237			$	237
Paid-in capital in excess of par	3,221,803				3,221,829
Over-distributed net investment income	(20,137		)		(53,995		)
Accumulated net realized loss	(1,136,574		)		(1,133,405		)
Net unrealized gain (loss)	(68,638)				16,945
Total net assets	$	1,996,691			$	2,051,611
Total liabilities and net assets	$	3,701,174			$	3,641,951
Net asset value per share	$	8.43			$	8.67

APOLLO INVESTMENT CORPORATION STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts)
		Three Months Ended								Nine Months Ended
		December 31, 2014				December 31, 2013				December 31, 2014				December 31, 2013
INVESTMENT INCOME:
From non-controlled/non-affiliated investments:
Interest		$	87,606			$	76,347			$	266,300			$	231,136
Dividends		991				1,172				3,106				5,866
Other income		4,533				2,983				10,827				9,675
From non-controlled/affiliated investments:
Interest		283				1,001				3,210				2,730
Dividends		4,236				5,964				12,310				15,528
From controlled investments:
Interest		10,199				5,767				29,423				16,345
Dividends		2,115				914				5,815				3,174
Other income		63				413				525				487
Total investment income		$	110,026			$	94,561			$	331,516			$	284,941
EXPENSES:
Management fees		$	18,755			$	15,932			$	55,744			$	46,044
Performance-based incentive fees		13,215				11,469				41,075				35,464
Interest and other debt expenses		20,315				17,366				58,163				50,682
Administrative services expense		1,863				1,410				4,821				3,616
Other general and administrative expenses		3,014				2,097				7,919				6,203
Total expenses		57,162				48,274				167,722				142,009
Management and performance-based incentive fees waived		$	(3,740	)		$	(3,375	)		$	(11,934	)		$	(8,675	)
Expense reimbursements		(58		)		(21		)		(174		)		(29		)
Net expenses		$	53,364			$	44,878			$	155,614			$	133,305
Net investment income		$	56,662			$	49,683			$	175,902			$	151,636
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS, FOREIGN CURRENCIES AND DERIVATIVES:
Net realized gain (loss):
Investments and cash equivalents
Non-controlled/non-affiliated investments		$	(2,355	)		$	2,516			$	(14,244	)		$	(119,902	)
Non-controlled/affiliated investments		(169		)		321				11,357				321
Controlled investments		(57		)		1,368				(57		)		(970		)
Net realized gain (loss) from investments and cash equivalents		$	(2,581	)		$	4,205			$	(2,944	)		$	(120,551	)
Foreign currencies
Non-controlled/non-affiliated investments		$	(13)			$	13			$	374			$	(87	)
Non-controlled/affiliated investments		—				—				—				—
Controlled investments		134				6				134				42
Foreign debt		1,030				(557		)		(733		)		2,514
Net realized gain (loss) from foreign currencies		$	1,151			$	(538	)		$	(225	)		$	2,469
Derivatives		—				—				—				8,541
Net realized gain (loss)		$	(1,430	)		$	3,667			$	(3,169	)		$	(109,541	)
Net change in unrealized gain (loss):
Investments and cash equivalents
Non-controlled/non-affiliated investments		$	(100,749	)		$	50,084			$	(149,322	)		$	150,228
Non-controlled/affiliated investments		4,939				3,424				15,592				(1,897		)
Controlled investments		18,068				887				38,364				23,669
Net change in unrealized gain (loss) from investments and cash equivalents		$	(77,742	)		$	54,395			$	(95,366	)		$	172,000
Foreign currencies
Non-controlled/non-affiliated investments		$	(234	)		$	58			$	(747	)		$	593
Non-controlled/affiliated investments		—				—				—				—
Controlled investments		—				(12		)		—				9
Foreign debt		3,292				(2,053		)		10,532				(13,730		)
Net change in unrealized gain (loss) from foreign currencies		$	3,058			$	(2,007	)		$	9,785			$	(13,128	)
Net change in unrealized gain (loss)		$	(74,684	)		$	52,388			$	(85,581	)		$	158,872
Net realized and unrealized gain (loss) from investments, cash equivalents, foreign currencies and derivatives		(76,114		)		56,055				(88,750		)		49,331
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	(19,452	)		$	105,738			$	87,152			$	200,967
EARNINGS (LOSS) PER SHARE — BASIC		$	(0.09	)		$	0.47			$	0.36			$	0.90
EARNINGS (LOSS) PER SHARE — DILUTED		$	(0.09	)		$	0.45			$	0.36			$	0.88

About Apollo Investment Corporation

Apollo Investment Corporation AINV is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. The Company invests primarily in various forms of debt investments, including secured and unsecured loan investments, and/or equity in private middle-market companies. The Company may also invest in the securities of public companies and structured products and other investments such as collateralized loan obligations. The Company seeks to provide private financing solutions for private companies that do not have access to the more traditional providers of credit. Apollo Investment Corporation is managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, LLC, a leading global alternative investment manager. For more information, please visit www.apolloic.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, including, but not limited to, statements as to our future operating results; our business prospects and the prospects of our portfolio companies; the impact of investments that we expect to make; the dependence of our future success on the general economy and its impact on the industries in which we invest; the ability of our portfolio companies to achieve their objectives; our expected financings and investments; the adequacy of our cash resources and working capital; and the timing of cash flows, if any, from the operations of our portfolio companies.

We may use words such as "anticipates," "believes," "expects," "intends," "will," "should," "may" and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. We do not undertake to update our forward-looking statements unless required by law.