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Apollo Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2014

NEW YORK, NY -- (Marketwired) -- 08/07/14 -- Apollo Investment Corporation (NASDAQ: AINV)

Fiscal First Quarter and Recent Highlights:

  • Net investment income per share for the quarter was $0.23, compared to $0.22 for the quarter ended March 31, 2014

  • Net asset value per share at the end of the quarter was $8.74, compared to $8.67 at March 31, 2014, an increase of approximately 1%

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

  • Invested $650 million during the quarter, substantially driven by secured debt opportunities in the primary market

  • Net investment activity was $133 million for the quarter

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its first fiscal quarter ended June 30, 2014. The Company's net investment income was $0.23 per share for the quarter ended June 30, 2014, compared to $0.22 for the quarter ended March 31, 2014. The Company's net asset value ("NAV") was $8.74 per share as of June 30, 2014, up from $8.67 at March 31, 2014.

Additionally, the Company also announced that its Board of Directors has declared a dividend of $0.20 per share for the first fiscal quarter of 2015, payable on October 6, 2014 to stockholders of record as of September 19, 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, "We are pleased to report another solid quarter including strong investment income, a steady increase in net asset value, a stable portfolio yield, and an improvement in the portfolio's overall credit quality. We believe the strength and breadth of our platform enabled us to be prudent and selective investors during the quarter, as we focused on primary secured debt opportunities. During the quarter, we also sold some lower yielding positions and reduced select larger exposures."



FINANCIAL HIGHLIGHTS

($ in billions, except per share data)           June 30,
                                                   2014       March 31, 2014
--------------------------------------------- ------------- ----------------
Total assets                                  $        3.81 $           3.64
Investment portfolio (fair value)             $        3.64 $           3.48
Debt outstanding                              $        1.57 $           1.37
Total net assets                              $        2.07 $           2.05
Net asset value per share                     $        8.74 $           8.67

Debt-to-equity ratio                                 0.76 x           0.67 x
Net leverage ratio (1)                               0.75 x           0.68 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.



INVESTMENT ACTIVITY AND PORTFOLIO COMPANIES

                                                          Three months ended
($ in millions)                                             June 30, 2014
------------------------------------------------------- --------------------
Investments made (2)                                    $                650
Investments sold                                        $              (397)
                                                        --------------------
Net activity before repaid investments                  $                253
Investments repaid                                      $              (120)
                                                        --------------------
Net investment activity                                 $                133

Portfolio companies, at beginning of period                              111
New portfolio companies                                                   25
Exited portfolio companies                                              (19)
                                                        --------------------
Portfolio companies, at end of period                                    117

Number of investments in existing companies                               24

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



OPERATING RESULTS

                                                         Three months ended
($ in thousands, except per share data)                     June 30, 2014
------------------------------------------------------- --------------------
Net investment income                                   $             53,551
Net realized and unrealized gain                        $             11,085
                                                        --------------------
Net increase in net assets from operations              $             64,636

(per share)
Net investment income per share                         $               0.23
Net realized and unrealized gain per share              $               0.04
                                                        --------------------
Earnings per share - basic                              $               0.27
Earnings per share - diluted                            $               0.27

CONFERENCE CALL / WEBCAST AT 10:00 AM EDT ON AUGUST 7, 2014

The Company will host a conference call on Thursday, August 7, 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 # 71479492 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 August 14, 2014 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 71479492. 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 June 30, 2014 and at March 31, 2014 are as follows:


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

Since the initial public offering of Apollo Investment in April 2004 and through June 30, 2014, invested capital totaled $13.8 billion in 316 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.


                       APOLLO INVESTMENT CORPORATION
                    STATEMENTS OF ASSETS AND LIABILITIES
                  (in thousands, except per share amounts)


                                           June 30, 2014
                                            (unaudited)     March 31, 2014
                                         ----------------  ----------------
Assets
Non-controlled/non-affiliated
 investments, at fair value (cost--
 $2,790,135 and $2,714,971,
 respectively)                           $      2,829,627  $      2,751,896
Non-controlled /affiliated investments,
 at fair value (cost--$162,796 and
 $153,721, respectively)                          161,412           144,628
Controlled investments, at fair value
 (cost--$647,103 and $590,060,
 respectively)                                    653,669           582,147
                                         ----------------  ----------------
  Total investments (cost--$3,600,034
   and $3,458,752 respectively)                 3,644,708         3,478,671

Cash                                               10,177            13,413
Foreign currency (cost--$1,384 and
 $1,305, respectively)                              1,386             1,323
Receivable for investments sold                    86,874            72,918
Interest receivable                                32,829            40,106
Dividends receivable                                5,050             3,627
Deferred financing costs                           30,010            31,601
Prepaid expenses and other assets                   1,315               292
                                         ----------------  ----------------
  Total assets                           $      3,812,349  $      3,641,951
                                         ----------------  ----------------

Liabilities
Debt                                     $      1,571,018  $      1,372,261
Payable for investments purchased                  70,580           119,577
Dividends payable                                  47,348            47,348
Management and performance-based
 incentive fees payable                            33,362            31,108
Interest payable                                   14,718            14,318
Accrued administrative expenses                     2,747             1,915
Other liabilities and accrued expenses              3,703             3,813
                                         ----------------  ----------------
  Total liabilities                      $      1,743,476  $      1,590,340
                                         ----------------  ----------------

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 236,741,351 issued and
 outstanding, respectively               $            237  $            237
Paid-in capital in excess of par                3,221,802         3,221,829
Over-distributed net investment income            (47,791)          (53,995)
Accumulated net realized loss                  (1,146,738)       (1,133,405)
Net unrealized gain (loss)                         41,363            16,945
                                         ----------------  ----------------
  Total net assets                       $      2,068,873  $      2,051,611
                                         ----------------  ----------------
  Total liabilities and net assets       $      3,812,349  $      3,641,951
                                         ----------------  ----------------
Net asset value per share                $           8.74  $           8.67
                                         ----------------  ----------------



                       APOLLO INVESTMENT CORPORATION
                    STATEMENTS OF OPERATIONS (unaudited)
                  (in thousands, except per share amounts)

                                                         Three Months Ended
                                                        -------------------
                                                        June 30,   June 30,
                                                          2014       2013
                                                        --------  ---------
INVESTMENT INCOME:
From non-controlled/non-affiliated investments:
  Interest                                              $ 82,547  $  75,561
  Dividends                                                  841      4,264
  Other income                                             2,256      4,476
From non-controlled/affiliated investments:
  Interest                                                 1,956        703
  Dividends                                                3,946      4,825
From controlled investments:
  Interest                                                 9,120      4,910
  Dividends                                                1,808      1,896
  Other income                                               106         38
                                                        --------  ---------
    Total investment income                             $102,580  $  96,673
                                                        --------  ---------
EXPENSES:
  Management fees                                       $ 18,111  $  14,757
  Performance-based incentive fees                        12,467     12,449
  Interest and other debt expenses                        18,902     15,845
  Administrative services expense                          1,433      1,097
  Other general and administrative expenses                2,288      2,132
                                                        --------  ---------
    Total expenses                                        53,201     46,280
                                                        --------  ---------
  Management and performance-based incentive fees
   waived                                               $ (4,152) $  (1,974)
  Expense reimbursements                                     (20)        --
                                                        --------  ---------
    Net expenses                                        $ 49,029  $  44,306
                                                        --------  ---------
      Net investment income                             $ 53,551  $  52,367
                                                        --------  ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
 CASH EQUIVALENTS AND FOREIGN CURRENCIES:
  Net realized gain (loss):
    Investments and cash equivalents
      Non-controlled/non-affiliated investments         $(11,716) $(105,876)
      Non-controlled/affiliated investments                 (107)        --
      Controlled investments                                  --      7,966
                                                        --------  ---------
        Total investments and cash equivalents          $(11,823) $ (97,910)
                                                        --------  ---------
    Foreign currencies
      Non-controlled/non-affiliated investments         $    380  $    (177)
      Non-controlled/affiliated investments                   --         --
      Controlled investments                                  --        (11)
      Foreign debt                                        (1,890)     2,164
                                                        --------  ---------
        Total foreign currencies                        $ (1,510) $   1,976
                                                        --------  ---------
    Derivatives                                               --         --
                                                        --------  ---------
        Net realized loss                               $(13,333) $ (95,934)
  Net change in unrealized gain (loss):
    Investments and cash equivalents
      Non-controlled/non-affiliated investments         $  2,595  $  64,225
      Non-controlled/affiliated investments                7,709     (3,933)
      Controlled investments                              14,501     (3,098)
                                                        --------  ---------
        Total investments and cash equivalents          $ 24,805  $  57,194
                                                        --------  ---------
    Foreign currencies
      Non-controlled/non-affiliated investments         $   (177) $     226
      Non-controlled/affiliated investments                   --         --
      Controlled investments                                 (79)        (1)
      Foreign debt                                          (131)    (1,903)
                                                        --------  ---------
        Total foreign currencies                        $   (387) $  (1,678)
                                                        --------  ---------
    Derivatives                                               --      6,855
                                                        --------  ---------
      Net change in unrealized gain                     $ 24,418  $  62,371
                                                        --------  ---------
  Net realized and unrealized gain (loss) from
   investments, cash equivalents and foreign currencies   11,085    (33,563)
                                                        --------  ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $ 64,636  $  18,804
                                                        --------  ---------
EARNINGS PER SHARE -- BASIC                             $   0.27  $    0.09
                                                        --------  ---------
EARNINGS PER SHARE -- DILUTED                           $   0.27  $    0.09
                                                        --------  ---------

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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