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Apollo Investment Corporation Reports Financial Results for the Quarter and Year Ended March 31, 2014

NEW YORK, NY -- (Marketwired) -- 05/20/14 -- Apollo Investment Corporation (NASDAQ: AINV)

Fiscal Fourth Quarter and Recent Highlights:

  • Net investment income per share for the quarter was $0.22, compared to $0.22 for the quarter ended December 31, 2013

  • Net asset value per share at the end of the quarter was $8.67, compared to $8.57 at December 31, 2013, a 1.2% increase

  • Declared a dividend of $0.20 per share for the quarter

  • Invested $986 million during the quarter, substantially driven by primary originations, representing the highest quarterly level of gross investment activity in the Company's history

  • Net investment activity was $259 million for the quarter

  • Fitch Rating affirmed the Company's Issuer Default Rating (IDR) and secured debt rating at BBB and upgraded the senior unsecured rating to BBB in April

Fiscal Year Highlights:

  • Net investment income per share for the year was $0.91, compared to $0.83 for the year ended March 31, 2013

  • Net asset value per share at the end of the year was $8.67, compared to $8.27 at March 31, 2013, a 4.8% increase

  • Dividends paid to stockholders was $0.80 per share during the year

  • Invested $2.8 billion during the year, substantially driven by primary originations, representing the highest annual level of gross investment activity in the Company's history

  • Net investment activity was $494 million for the year

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its fourth fiscal quarter ended March 31, 2014. The Company's net investment income was $0.22 per share for the quarter ended March 31, 2014, compared to $0.22 for the quarter ended December 31, 2013. The Company's net asset value ("NAV") was $8.67 per share as of March 31, 2014, up from $8.57 at December 31, 2013.

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the fourth fiscal quarter of 2014, payable on July 7, 2014 to stockholders of record as of June 20, 2014. 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, "Amidst a challenging investing environment, we are pleased to report strong results for the March quarter, including solid net investment income, an increase in net asset value, and a record level of asset deployment. Investment activity for the quarter focused on primary market secured debt opportunities and on our specialty verticals. We also utilized the strength in the markets to monetize select higher risk positions."


Select Balance Sheet Data
                                            December 31,
                            March 31, 2014      2013      March 31, 2013
                            -------------- -------------- --------------
Total assets                 $3.64 billion  $3.38 billion  $2.94 billion
Investment portfolio         $3.48 billion  $3.18 billion  $2.85 billion
Debt                         $1.37 billion  $1.26 billion  $1.16 billion
Net assets                   $2.05 billion  $1.93 billion  $1.68 billion
Net asset value per share            $8.67          $8.57          $8.27
Debt-to-equity                      0.67 x         0.66 x         0.69 x
Net leverage ratio                  0.68 x         0.65 x         0.70 x

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

Portfolio Activity and Portfolio Companies
                                             Three months     Twelve months
                                                ended            ended
                                            March 31, 2014   March 31, 2014
                                           ---------------- ----------------

Investments made during the period         $    986 million $  2,816 million
Investments sold                           $  (323) million $(1,006) million
                                           ---------------- ----------------
Net activity before repaid investments     $    663 million $  1,810 million
Investments repaid                         $  (404) million $(1,316) million
                                           ---------------- ----------------
Net investment activity                    $    259 million $    494 million

Portfolio companies, at beginning of
 period                                                 101               81
New portfolio companies                                  26               81
Exited portfolio companies                               16               51
Portfolio companies, at end of period                   111              111

Operating Results
                                                Three months   Twelve months
                                                   ended          ended
                                               March 31, 2014 March 31, 2014
                                               -------------- --------------
(in thousands)
Net investment income                          $       49,612 $      201,248
Net realized and unrealized gain               $       20,293 $       69,624
                                               -------------- --------------
Net increase in net assets from operations     $       69,905 $      270,872

(per share)
Net investment income per share                $         0.22 $         0.91
Net realized and unrealized gain per share     $         0.09 $         0.30
                                               -------------- --------------
Earnings per share - basic                     $         0.31 $         1.21
Earnings per share - diluted                   $         0.30 $         1.18


The Company will host a conference call on Tuesday, May 20, 2014 at 10:00 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 # 28609386 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 May 27, 2014 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 28609386. 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.


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 and investment activity during the fiscal years ended March 31, 2014 and 2013 is as follows:

                                                  For the        For the
                                                fiscal year    fiscal year
                                                   ended          ended
                                                 March 31,      March 31,
  (amounts in millions)                             2014           2013
                                               -------------  -------------
Investments made in portfolio companies (1)    $       2,816  $       1,537
Investments sold                                      (1,006)          (717)
                                               -------------  -------------
Net activity before repaid investments                 1,810            820
Investments repaid                                    (1,316)          (621)
                                               -------------  -------------
Net investment activity                        $         494  $         199
                                               -------------  -------------

Portfolio companies, at beginning of period               81             62
Number of investments in new portfolio
 companies                                                81             49
Number of exited companies                                51             30
                                               -------------  -------------
Portfolio companies, at end of period                    111             81
                                               -------------  -------------

                                               -------------  -------------
Number of investments in existing portfolio
 companies                                                81             36
                                               -------------  -------------

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

Our portfolio composition and weighted average yields at March 31, 2014 and at March 31, 2013 are as follows:

                                            March 31, 2014   March 31, 2013
                                           ---------------  ---------------
Portfolio composition, measured at fair
  Secured debt                                          56%              44%
  Unsecured debt                                        27%              43%
  Structured products and other                          6%               7%
  Common equity, preferred equity and
   warrants                                             11%               6%
Weighted average yields, at current cost
 basis, exclusive of securities on non-
 accrual status:
  Secured debt portfolio                              10.8%            11.2%
  Unsecured debt portfolio                            11.5%            12.7%
  Total debt portfolio                                11.1%            11.9%
Income-bearing investment portfolio
 composition, measured at fair value:
  Fixed rate amount                        $   1.7 billion  $   1.6 billion
  Floating rate amount                     $   1.3 billion  $   0.9 billion
  Fixed rate %                                          58%              64%
  Floating rate %                                       42%              36%
Income-bearing investment portfolio
 composition, measured at cost:
  Fixed rate amount                        $   1.7 billion  $   1.6 billion
  Floating rate amount                     $   1.2 billion  $   0.9 billion
  Fixed rate %                                          58%              65%
  Floating rate %                                       42%              35%

Since the initial public offering of Apollo Investment in April 2004 and through March 31, 2014, invested capital totaled $13.1 billion in 291 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

                  (in thousands, except per share amounts)

                                                 March 31,      March 31,
                                                    2014           2013
                                               -------------  -------------
Non-controlled/non-affiliated investments, at
 fair value (cost--$2,714,971 and $2,525,550,
 respectively)                                 $   2,751,896  $   2,398,412
Non-controlled /affiliated investments, at
 fair value (cost--$153,721 and $148,547,
 respectively)                                       144,628        141,569
Controlled investments, at fair value (cost--
 $590,060 and $345,204, respectively)                582,147        310,418
                                               -------------  -------------
  Total investments (cost--$3,458,752 and
   $3,019,30,1 respectively)                       3,478,671      2,850,399

Cash                                                  13,413          3,902
Foreign currency (cost--$1,305 and $2,293,
 respectively)                                         1,323          2,295
Receivable for investments sold                       72,918          5,713
Interest receivable                                   40,106         51,990
Dividends receivable                                   3,627          2,703
Deferred financing costs                              31,601         26,990
Prepaid expenses and other assets                        292            320
                                               -------------  -------------

  Total assets                                 $   3,641,951  $   2,944,312
                                               -------------  -------------

Debt                                           $   1,372,261  $   1,156,067
Payable for investments purchased                    119,577         26,021
Dividends payable                                     47,348         40,578
Management and performance-based incentive
 fees payable                                         31,108         26,509
Interest payable                                      14,318         12,012
Accrued administrative expenses                        1,915          2,219
Other liabilities and accrued expenses                 3,813          3,517
                                               -------------  -------------

  Total liabilities                            $   1,590,340  $   1,266,923
                                               -------------  -------------

Net Assets
Common stock, par value $.001 per share,
 400,000,000 and 400,000,000 common shares
 authorized, respectively, and 236,741,351 and
 202,891,351 issued and outstanding,
 respectively                                  $         237  $         203
Paid-in capital in excess of par                   3,221,829      2,933,636
Over-distributed net investment income               (53,995)       (44,183)
Accumulated net realized loss                     (1,133,405)    (1,053,080)
Net unrealized gain (loss)                            16,945       (159,187)
                                               -------------  -------------

  Total net assets                             $   2,051,611  $   1,677,389
                                               -------------  -------------

  Total liabilities and net assets             $   3,641,951  $   2,944,312
                                               -------------  -------------

Net asset value per share                      $        8.67  $        8.27
                                               -------------  -------------

                          STATEMENTS OF OPERATIONS
                  (in thousands, except per share amounts)

                                                Year Ended March 31,
                                            2014        2013        2012
                                         ----------  ----------  ----------
From non-controlled/non-affiliated
  Interest                               $  310,031  $  286,253  $  313,992
  Dividends                                   7,149       4,813       6,998
  Other income                               12,012      16,532      18,505
From non-controlled/affiliated
  Interest                                    3,252       1,020         899
  Dividends                                  19,765       6,825           -
From controlled investments:
  Interest                                   23,375       8,932       3,746
  Dividends                                   4,921       7,422      13,444
  Other income                                  841         197          --
                                         ----------  ----------  ----------
    Total investment income              $  381,346  $  331,994  $  357,584
                                         ----------  ----------  ----------
  Management fees                        $   62,819  $   55,717  $   60,321
  Performance-based incentive fees           46,924      41,144      39,651
  Interest and other debt expenses           68,639      58,200      66,360
  Administrative services expense             5,600       4,389       5,387
  Other general and administrative
   expenses                                   8,257       7,969      13,123
                                         ----------  ----------  ----------
    Total expenses                          192,239     167,419     184,842
                                         ----------  ----------  ----------
  Management and performance-based
   incentive fees waived                 $  (12,092) $   (2,785) $        -
  Expense reimbursements                        (49)         --           -
                                         ----------  ----------  ----------
    Net expenses                         $  180,098  $  164,634  $  184,842
                                         ----------  ----------  ----------
      Net investment income              $  201,248  $  167,360  $  172,742
                                         ----------  ----------  ----------
  Net realized loss:
    Investments and cash equivalents
       investments                       $ (118,745) $  (78,659) $  (88,150)
       investments                            2,078           -      18,825
      Controlled investments                   (969)      3,015    (271,590)
                                         ----------  ----------  ----------
        Total investments and cash
         equivalents                     $ (117,636) $  (75,644) $ (340,915)
                                         ----------  ----------  ----------
    Foreign currencies
       investments                       $     (112) $       18  $      255
       investments                                -           -           -
      Controlled investments                     42        (342)         (8)
      Foreign debt                            2,658       1,295        (775)
                                         ----------  ----------  ----------
        Total foreign currencies         $    2,588  $      971  $     (528)
                                         ----------  ----------  ----------
    Derivatives                               8,541          --          --
                                         ----------  ----------  ----------
      Net realized loss                  $ (106,507) $  (74,673) $ (341,443)
  Net change in unrealized gain (loss):
    Investments and cash equivalents
       investments                       $  163,972  $   24,884  $ (152,888)
       investments                           (2,115)     (6,977)    (14,888)
      Controlled investments                 26,840     (12,303)    242,009
                                         ----------  ----------  ----------
        Total investments and cash
         equivalents                     $  188,697  $    5,604  $   74,233
                                         ----------  ----------  ----------
    Foreign currencies
       investments                       $      619  $     (241) $      (78)
       investments                                -           -           -
      Controlled investments                     32          (9)          -
      Foreign debt                          (13,217)      6,430       8,282
                                         ----------  ----------  ----------
        Total foreign currencies         $  (12,566) $    6,180  $    8,204
                                         ----------  ----------  ----------
      Net change in unrealized gain
       (loss)                            $  176,131  $   11,784  $   82,437
                                         ----------  ----------  ----------
  Net realized and unrealized gain
   (loss) from investments, cash
   equivalents and foreign currencies        69,624     (62,889)   (259,006)
                                         ----------  ----------  ----------
 RESULTING FROM OPERATIONS               $  270,872  $  104,471  $  (86,264)
                                         ----------  ----------  ----------
EARNINGS GAIN (LOSS) PER SHARE - BASIC   $     1.21  $     0.51  $    (0.44)
                                         ----------  ----------  ----------
EARNINGS GAIN (LOSS) PER SHARE - DILUTED $     1.18  $     0.51  $    (0.44)
                                         ----------  ----------  ----------

About Apollo Investment Corporation
Apollo Investment Corporation (NASDAQ: 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.

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