Apollo Global Management, Inc. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. Apollo is a global alternative asset manager and retirement-services provider, with Asset Management, Retirement Services (Athene) and Principal Investing segments. Apollo completed its merger with Athene on January 1, 2022; Athene is consolidated only from that date, so FY 2022 GAAP results are not directly comparable with FY 2021.
Financial performance and key metrics
| Metric | FY 2022 | Prior-period comparison / context |
|---|---|---|
| Total revenue | $10.97 billion | $5.95 billion in FY 2021; FY 2022 includes Athene, whose reported revenue was $8.20 billion. |
| Net income (loss) attributable to common stockholders | $(3.21) billion; diluted loss per share $(5.57) | $1.80 billion and $7.32 per diluted share in FY 2021. The 2022 loss reflects, among other items, $12.72 billion of Retirement Services investment-related losses. |
| Adjusted Segment Income (ASI) | $4.02 billion | $2.37 billion in FY 2021. Non-GAAP management measure; not a substitute for GAAP net income. |
| Asset Management FRE | $1.41 billion | Up 11.3% from $1.27 billion, supported by management-fee growth and record capital-solutions fees. |
| Retirement Services SRE | $2.33 billion | FY 2022 measure; Athene’s segment results were not included in Apollo’s FY 2021 consolidated results. |
| Principal Investing Income | $285 million | Down 74.3% from $1.11 billion, primarily as market volatility delayed realizations and reduced realized performance fees. |
| Assets under management | $547.6 billion | Up 10.1% from $497.6 billion. Fee-generating AUM was $412.1 billion, up 11.6%; dry powder was $51 billion. |
| Athene net investment spread | 1.63%; net investment earned rate 3.66%; cost of funds 2.06% | FY 2022 measures. Athene reported $196.5 billion of net invested assets. |
| Cash flows and liquidity | Operating cash flow $3.79 billion; investing cash flow $(23.44) billion; financing cash flow $28.71 billion | Year-end unrestricted cash and cash equivalents were $9.0 billion; Apollo also reported $0.7 billion of U.S. Treasury securities and $4.8 billion available under facilities. Consolidated cash flows include insurance and consolidated-fund activity. |
| Debt | $6.47 billion total carrying amount | $2.81 billion Asset Management and $3.66 billion Retirement Services. Athene’s credit facility was undrawn at year-end; Apollo reported compliance with applicable facility covenants. |
Material changes versus the prior period
- The Athene merger transformed the balance sheet and results: year-end total assets were $259.3 billion versus $30.5 billion at December 31, 2021, while total liabilities were $252.1 billion versus $18.5 billion. These comparisons largely reflect the merger and are not like-for-like growth measures.
- Asset Management GAAP revenue fell to $2.77 billion from $5.95 billion, chiefly because investment income declined to $796 million from $3.70 billion as performance allocations decreased; management fees also fell in the consolidated presentation following merger-related elimination of intercompany fees. FRE nevertheless increased.
- Market-rate increases and credit-spread widening contributed to Athene’s reported investment-related losses and a $14.42 billion consolidated other comprehensive loss. At year-end, accumulated other comprehensive loss was $12.33 billion.
- Apollo acquired Griffin Capital’s U.S. asset-management business in 2022; management cited the acquisition as a contributor to AUM and fee growth.
Outlook, commentary, risks and unusual items
- Management said current liquidity, together with cash generated from revenues, should be sufficient for anticipated expenses and working-capital needs for at least the next 12 months. It expects longer-term growth to depend on increasing AUM and fees and growing Athene’s investment portfolio. These statements are forward-looking, not earnings guidance.
- Apollo described the fundraising environment as generally supportive of alternative managers, while noting elevated inflation, higher interest rates, market volatility and recession concerns. Management’s stated strategy emphasizes credit origination, downside protection and disciplined underwriting. Fund return targets are gross, not guaranteed, and do not predict future performance.
- Athene reported U.S., Bermuda and consolidated RBC ratios of 387%, 407% and 416%, respectively, and estimated $5.2 billion of deployable capital, subject to conditions and market access. Its portfolio had $39.3 billion of floating-rate investments, partly offsetting rate exposure; results remain sensitive to rates, credit, equity markets, policyholder behavior and asset-liability liquidity.
- Performance-fee income is volatile and can be reversed or subject to clawback. Up to approximately $4.6 billion of cumulative recognized performance allocations could be reversed if existing investments became worthless; management characterized that scenario as remote. Fund VII had $85.5 million of gross performance fees in escrow at year-end.
- Commitments included $17.8 billion of Athene investment commitments and $0.6 billion of Apollo commitments to managed funds. Athene had $3.7 billion of FHLB funding agreements and $4.7 billion of repurchase-agreement payables at year-end. A subsequent event: Athene borrowed $1.0 billion under its liquidity facility on February 7, 2023.
- In February 2023, Apollo and Credit Suisse closed stages of the Atlas transaction. Atlas’s $3.3 billion deferred purchase obligation is supported through a guarantee structure involving Apollo entities, including assurances from Athene entities; the filing says the guarantee liability’s fair value was not material.
- Legal proceedings include the Harbinger and MPM matters, for which Apollo said no reasonable estimate of possible loss could be made. Certain adviser subsidiaries also received an SEC information request concerning record-retention compliance for electronic business communications. The filing reports no material impact from the Russia-Ukraine conflict to date and says direct portfolio exposure was insignificant.
- The board declared a fourth-quarter dividend of $0.40 per share, payable February 28, 2023; management stated an intention to pay an annual dividend of $1.72 per share, subject to board discretion, subsidiary distributions and regulatory limits.
Important facts for investors to verify
- Separate Athene’s post-merger contribution from Apollo’s legacy performance when assessing year-over-year revenue, earnings, assets and cash flows; review the filing’s segment measures alongside GAAP results.
- Assess the drivers and potential persistence of Athene’s investment losses, large AOCI decline, credit-loss provisions and fair-value marks, including the sensitivity of Level 3 assets and annuity liabilities to assumptions.
- Review liquidity available to the parent versus regulated insurance subsidiaries, restrictions on subsidiary dividends, collateral and trust requirements, facility maturities, and the February 2023 liquidity-facility borrowing.
- Evaluate the scale and timing of Athene’s investment commitments, the Atlas deferred-payment guarantee, performance-fee clawback exposure and the valuation basis for fee-eligible AUM.
- Monitor the SEC record-retention inquiry, material litigation developments, insurance capital-rule changes and the effect of persistently high rates or a downturn on Athene’s asset-liability position and Apollo’s realizations.