Press Release
February 06, 2013

Apollo Investment Corporation Reports Financial Results for Quarter Ended December 31, 2012

Apollo Investment Corporation Reports Financial Results for Quarter Ended December 31, 2012

NEW YORK, NY -- (MARKETWIRE) -- 02/06/13 -- Apollo Investment Corporation (NASDAQ: AINV)

Recent Highlights:

  • Net investment income per share for the quarter ended December 31, 2012 was $0.21, compared to $0.22 for the quarter ended September 30, 2012

  • Net asset value per share at December 31, 2012 was $8.14 compared to $8.46 at September 30, 2012

  • Declared a dividend of $0.20 per share for the fourth fiscal quarter of 2013

  • Invested $515 million during the quarter ended December 31, 2012, representing the third highest quarterly level of new investment activity since inception driven by strong primary originations

  • Net investment activity before repayments was $208 million for the quarter ended December 31, 2012

  • Invested $41.1 million into second Madison Capital Funding senior loan vehicle in October

  • Aircraft operating subsidiary made first investment subsequent to quarter-end

Apollo Investment Corporation (NASDAQ: AINV) or the "Company," or "Apollo Investment," today announced financial results for its third fiscal quarter ended December 31, 2012. The Company's net investment income was $0.21 per share for the quarter ended December 31, 2012 compared to $0.22 for the quarter ended September 30, 2012. The Company's net asset value ("NAV") was $8.14 per share as of December 31, 2012 down from $8.46 at September 30, 2012. The decline in NAV was driven primarily by losses on two investments partially offset by appreciation on the remainder of the portfolio.

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 2013, payable on April 4, 2013 to stockholders of record as of March 21, 2013. 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, said, "We had our third highest origination quarter and we continued to sell select investments given the strength in the credit markets in the December quarter. Since we announced a variety of strategic initiatives one year ago, we believe we have made great strides in accomplishing many of our objectives including the migration of our portfolio to a greater amount of secured debt, renewing our credit facility on favorable terms, diversifying our funding sources with the issuance of unsecured debt, and expanding our specialist sourcing capabilities. Looking ahead, we will continue to focus on diversifying into additional investment strategies with attractive risk adjusted returns."

FINANCIAL HIGHLIGHTS FOR THE QUARTER ENDED DECEMBER 31, 2012

Select Balance Sheet Data and Other Data
December 31, 2012 March 31, 2012
Total assets$2.78 billion $2.78 billion
Investment portfolio$2.63 billion $2.68 billion
Net assets$1.65 billion $1.69 billion
Net asset value per share$8.14 $8.55
Number of portfolio companies71 62
Portfolio Activity
Three months ended
December 31, 2012
Nine months ended
December 31, 2012
Investments made during the period $515 million $1,109 million
Number of new portfolio companies invested 16 38
Investments sold $(307) million $(619) million
Net activity before repaid investments $208 million $490 million
Investments repaid $(204) million $(490) million
Net investment activity $4 million $0
Number of portfolio company exits 14 29
Operating Results
Three months ended
December 31, 2012
Nine months ended
December 31, 2012*
Net investment income (in thousands) $42,080 $126,364
Net investment income per share $0.21 $0.63
Net realized and unrealized loss per share $(0.32) $(0.43)
Earnings (loss) per share - basic $(0.11) $0.20
Earnings (loss) per share - diluted $(0.11) $0.20

* Exclusive of non-recurring expenses related to refinancing of revolving credit facility. During the June 2012 quarter, the company recognized net $1.1 million in non-recurring expenses relating to the refinancing of its revolving credit facility.

CONFERENCE CALL / WEBCAST AT 10:00 AM EST ON FEBRUARY 6, 2013

The Company will host a conference call on Wednesday, February 6, 2013 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 # 85998517 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 20, 2013 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID # 85998517. 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.

PORTFOLIO AND INVESTMENT ACTIVITY

During the three months ended December 31, 2012, we invested $515 million across 16 new and 13 existing portfolio companies, through a combination of primary and secondary market purchases. This compares to investing $95 million in 3 new and 6 existing portfolio companies for the three months ended December 31, 2011. Investments sold or repaid during the three months ended December 31, 2012 totaled $511 million versus $175 million for the three months ended December 31, 2011.

At December 31, 2012, our portfolio consisted of 71 portfolio companies and was invested 40% in secured loans, 48% in subordinated debt, 0% in preferred equity, 12% in common equity and warrants1, measured at fair value, versus 62 portfolio companies invested 30% in secured loans, 60% in subordinated debt, 1% in preferred equity, and 9% in common equity and warrants1, measured at fair value at March 31, 2012.

The weighted average yields on our secured loan portfolio, subordinated debt portfolio and total debt portfolio as of December 31, 2012 at our current cost basis were 11.2%, 12.6% and 11.9%, respectively, exclusive of securities on non-accrual status. At December 31, 2011, the yields were 9.7%, 12.6% and 11.7%, respectively, exclusive of securities on non-accrual status.

Since the initial public offering of Apollo Investment in April 2004, and through December 31, 2012, invested capital totaled $9.9 billion in 204 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

At December 31, 2012, 61% or $1.4 billion of our income-bearing investment portfolio is fixed rate and 39% or $0.9 billion was floating rate, measured at fair value. On a cost basis, 61% or $1.5 billion of our income-bearing investment portfolio is fixed rate and 39% or $1.0 billion is floating rate. At March 31, 2012, 67% or $1.6 billion of our income-bearing investment portfolio was fixed rate and 33% or $0.8 billion is floating rate, measured at fair value. On a cost basis, 65% or $1.7 billion of our income-bearing investment portfolio was fixed rate and 35% or $0.9 billion was floating rate at March 31, 2012.

1 Includes value of collateralized loan obligations.

APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share amounts)
December 31, 2012
(unaudited)
March 31, 2012