Apollo Global Management, Inc. — Form 8-K Summary
Business context and reporting period
Filed May 2, 2022, under Items 7.01, 8.01, and 9.01. Apollo disclosed updates to its non-GAAP reporting ahead of its planned release of first-quarter 2022 results on May 5, 2022. The filing follows completion of Apollo’s merger with Athene Holding Ltd. on January 1, 2022.
Key financial metrics and reporting changes
- No current-period revenue, profit, cash flow, margin, debt, or liquidity amounts are provided in the filing text.
- Apollo will report three operating and reportable segments.
- Distributable Earnings has been renamed Adjusted Net Income (ANI). The underlying components are unchanged: Fee Related Earnings, Spread Related Earnings, Principal Investing Income, interest and financing costs, and taxes and related payables.
- Principal Investing Income will exclude interest and financing costs. Apollo stated that this change better reflects the Principal Investing segment’s profitability.
- Apollo introduced Normalized Spread Related Earnings, which adjusts reported SRE for normalized income from alternative investments managed for Athene and excludes certain notable items, including variability in long-term actuarial experience and assumption-unlocking events.
- Fee Related Earnings is clarified to include recurring fee-related performance fees from indefinite-term vehicles. Apollo stated this clarification does not affect previously published FRE results.
Material changes versus prior comparable presentation
- The modifications apply to Apollo’s non-GAAP measures and do not affect historical consolidated U.S. GAAP financial results.
- Relative to the updated measures published February 11, 2022, the only change affecting the Principal Investing segment is the exclusion of interest and financing costs from PII.
- The filing provides unaudited pro forma condensed combined financial data combining historical Apollo Asset Management and Athene financial information after giving effect to the mergers and Apollo’s corporate recapitalization. The source text does not include the pro forma amounts.
Guidance, outlook, risks, and unusual items
Apollo planned to report first-quarter 2022 results on May 5, 2022. The filing does not provide quantitative earnings, revenue, cash flow, margin, or liquidity guidance.
Management’s forward-looking statements include expectations regarding business performance, liquidity and capital resources, and benefits from the Athene merger. Identified risks include dependence on key personnel, fundraising ability, COVID-19, energy-market dislocation, market and interest-rate volatility, growth management, fund performance, revenue and cash-flow variability, leverage, Athene’s regulated insurance operations, regulatory and tax changes, litigation, and failure to realize anticipated merger benefits.
The filing states that the Regulation FD disclosure is furnished rather than filed for Exchange Act Section 18 liability purposes, except where expressly incorporated by reference.
Important facts for investors to verify
- Review Apollo’s first-quarter 2022 results for the actual ANI, FRE, SRE, Normalized SRE, PII, revenue, earnings, cash flow, debt, and liquidity figures.
- Reconcile the revised non-GAAP definitions with historical presentations and assess comparability after the Athene merger.
- Review Exhibit 99.1 for the unaudited pro forma combined financial statements and the assumptions underlying the merger and recapitalization adjustments.
- Assess the difference between reported SRE and Normalized SRE, including the treatment of Athene alternative investments and actuarial or assumption-related items.
- Review subsequent filings for the realized financial benefits, integration effects, and risks associated with the Athene transaction.