Apollo Global Management Inc.

05/02/2024 | Press release | Distributed by Public on 05/02/2024 04:32

Q1 2024 Financial Supplement

Cover

Apollo Global Management, Inc.
First Quarter 2024 Earnings
Supplemental Financial Data
May 2, 2024

Summary

Total Segment Earnings Highlights (Unaudited)
(in millions, except per share data) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 LTM 1Q'23 LTM 1Q'24
Fee Related Earnings $ 310 $ 341 $ 365 $ 394 $ 397 $ 442 $ 472 $ 457 $ 462 $ 1,497 $ 1,833
Spread Related Earnings $ 674 $ 455 $ 642 $ 698 $ 688 $ 799 $ 873 $ 748 $ 817 $ 2,483 $ 3,237
Notable items1 - (16) (42) 35 (25) - (90) - - (41) (90)
Spread Related Earnings, Excluding Notable Items $ 674 $ 439 $ 600 $ 733 $ 663 $ 799 $ 783 $ 748 $ 817 $ 2,442 $ 3,147
Fee and Spread Related Earnings $ 984 $ 796 $ 1,007 $ 1,092 $ 1,085 $ 1,241 $ 1,345 $ 1,205 $ 1,279 $ 3,980 $ 5,070
Fee and Spread Related Earnings, Excluding Notable Items $ 984 $ 780 $ 965 $ 1,127 $ 1,060 $ 1,241 $ 1,255 $ 1,205 $ 1,279 $ 3,939 $ 4,980
Principal Investing Income $ 187 $ 20 $ 50 $ 27 $ 8 $ 20 $ 4 $ 51 $ 21 $ 105 $ 96
Segment Income $ 1,171 $ 816 $ 1,057 $ 1,119 $ 1,093 $ 1,261 $ 1,349 $ 1,256 $ 1,300 $ 4,085 $ 5,166
Segment Income, Excluding Notable Items $ 1,171 $ 800 $ 1,015 $ 1,154 $ 1,068 $ 1,261 $ 1,259 $ 1,256 $ 1,300 $ 4,044 $ 5,076
HoldCo interest and other financing costs2 (39) (35) (29) (19) (21) (20) (36) (11) (15) (104) (82)
Taxes and related payables (215) (205) (178) (197) (227) (231) (268) (63) (221) (807) (783)
Adjusted Net Income $ 917 $ 576 $ 850 $ 903 $ 845 $ 1,010 $ 1,045 $ 1,182 $ 1,064 $ 3,174 $ 4,301
Tax impact of notable items - 3 9 (7) 5 - 19 - - 8 19
Adjusted Net Income, Excluding Notable Items $ 917 $ 563 $ 817 $ 931 $ 825 $ 1,010 $ 974 $ 1,182 $ 1,064 $ 3,141 $ 4,230
Alternative net investment income delta to long-term expectation3 $ (151) $ 135 $ 82 $ 14 $ 148 $ 75 $ 96 $ 132 $ 56 $ 379 $ 359
Adjusted Net Income Shares Outstanding 600 601 600 599 596 595 612 618 617
FRE per Share $ 0.52 $ 0.57 $ 0.61 $ 0.66 $ 0.67 $ 0.74 $ 0.77 $ 0.74 $ 0.75 $ 2.51 $ 3.00
SRE per Share $ 1.12 $ 0.76 $ 1.07 $ 1.17 $ 1.15 $ 1.34 $ 1.43 $ 1.21 $ 1.32 $ 4.15 $ 5.30
Fee and Spread Related Earnings per Share $ 1.64 $ 1.33 $ 1.68 $ 1.82 $ 1.82 $ 2.08 $ 2.20 $ 1.95 $ 2.07 $ 6.65 $ 8.30
PII per Share $ 0.31 $ 0.03 $ 0.08 $ 0.05 $ 0.01 $ 0.03 $ 0.01 $ 0.08 $ 0.03 $ 0.17 $ 0.15
ANI per Share $ 1.53 $ 0.96 $ 1.42 $ 1.51 $ 1.42 $ 1.70 $ 1.71 $ 1.91 $ 1.72 $ 5.31 $ 7.04
SRE per Share, Excluding Notable Items $ 1.12 $ 0.73 $ 1.00 $ 1.22 $ 1.11 $ 1.34 $ 1.28 $ 1.21 $ 1.32 $ 4.07 $ 5.15
ANI per Share, Excluding Notable Items $ 1.53 $ 0.94 $ 1.36 $ 1.55 $ 1.38 $ 1.70 $ 1.59 $ 1.91 $ 1.72 $ 5.24 $ 6.92
Note: Per share calculations are based on end of period Adjusted Net Income Shares Outstanding. As a supplemental item, the Company provides the difference between management's long-term expectation of generating an 11% average annual return and reported alternative net investment income.
1. Notable items include unusual variability such as actuarial experience, assumption updates and other insurance adjustments.
2. Represents interest and other financing costs related to Apollo Global Management, Inc. not attributable to any specific segment. HoldCo interest and other financing costs for 3Q'23 includes $21 million related to the redemption of Apollo Asset Management's Series A and Series B Preferred Stock, representing the difference between the book value and the redemption value.
3. Refers to the amount that as-reported alternative net investment income is below (above) management's long-term expectation of an 11% average annual return. Our long-term expectation is based on historical experience and provides investors with supplemental information for period-to-period comparability as well as a basis for developing expectations of future performance. There is no assurance that management's expected long-term average annual return will be achieved. Actual results may differ materially.

Total Segment Earnings

Total Segment Earnings (Unaudited)
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 LTM 1Q'23 LTM 1Q'24
Management Fees
Yield $ 333 $ 342 $ 367 $ 374 $ 379 $ 392 $ 408 $ 422 $ 440 $ 1,462 $ 1,662
Hybrid 48 53 53 57 57 62 62 63 61 220 248
Equity 124 127 126 130 141 166 178 150 151 524 645
Total management fees 505 522 546 561 577 620 648 635 652 2,206 2,555
Capital solutions fees and other, net 64 103 105 142 138 138 146 116 141 488 541
Fee related performance fees 14 12 20 26 27 35 40 44 46 85 165
Fee Related Revenues 583 637 671 729 742 793 834 795 839 2,779 3,261
Fee related compensation (175) (187) (194) (198) (211) (212) (212) (200) (220) (790) (844)
Non-compensation expenses (98) (109) (112) (137) (134) (139) (150) (138) (157) (492) (584)
Fee Related Earnings $ 310 $ 341 $ 365 $ 394 $ 397 $ 442 $ 472 $ 457 $ 462 $ 1,497 $ 1,833
Fixed income and other net investment income 1,207 1,302 1,470 1,727 1,957 2,207 2,235 2,340 2,454 6,456 9,236
Alternative net investment income 448 186 250 322 185 259 230 190 266 943 945
Strategic capital management fees 12 13 14 14 14 16 19 23 25 55 83
Cost of funds (822) (873) (902) (1,158) (1,235) (1,437) (1,384) (1,594) (1,723) (4,168) (6,138)
Net investment spread 845 628 832 905 921 1,045 1,100 959 1,022 3,286 4,126
Other operating expenses (109) (109) (117) (127) (124) (117) (121) (119) (114) (477) (471)
Interest and other financing costs (62) (64) (73) (80) (109) (129) (106) (92) (91) (326) (418)
Spread Related Earnings $ 674 $ 455 $ 642 $ 698 $ 688 $ 799 $ 873 $ 748 $ 817 $ 2,483 $ 3,237
Realized performance fees 127 151 93 224 164 177 132 269 94 632 672
Realized investment income 226 37 62 5 28 2 5 (37) 14 132 (16)
Realized principal investing compensation (156) (155) (90) (184) (170) (145) (119) (167) (73) (599) (504)
Other operating expenses (10) (13) (15) (18) (14) (14) (14) (14) (14) (60) (56)
Principal Investing Income $ 187 $ 20 $ 50 $ 27 $ 8 $ 20 $ 4 $ 51 $ 21 $ 105 $ 96

GAAP Income Statement

GAAP Condensed Consolidated Statements of Operations (Unaudited)
($ in millions, except share data) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Revenues:
Asset Management
Management fees $336 $375 $389 $403 $414 $452 $462 $444 $438
Advisory and transaction fees, net 66 110 110 157 155 170 157 141 169
Investment income (loss) 701 (195) (31) 321 452 138 292 150 402
Incentive fees 6 2 9 10 15 26 18 21 26
Retirement Services
Premiums 2,110 5,614 3,045 869 96 9,041 26 3,586 101
Product charges 166 175 184 193 198 207 217 226 238
Net investment income 1,731 1,903 2,033 2,481 2,612 2,948 3,166 3,354 3,576
Investment related gains (losses) (4,230) (5,745) (2,847) 105 1,065 366 (2,624) 2,621 1,677
Revenues of consolidated variable interest entities (21) 55 114 292 281 347 318 495 411
Other revenues (3) (8) (27) 10 13 7 563 8 2
Total Revenues 862 2,286 2,979 4,841 5,301 13,702 2,595 11,046 7,040
Expenses:
Asset Management
Compensation and benefits: 734 309 386 514 670 516 557 979 667
Interest expense 32 31 31 30 31 31 36 47 51
General, administrative and other 148 157 167 210 197 226 220 229 240
Retirement Services
Interest sensitive contract benefits (99) (653) 171 1,119 1,289 2,012 333 2,595 2,884
Future policy and other policy benefits 2,184 5,776 3,270 1,235 466 9,512 368 4,088 543
Market risk benefits remeasurement (gains) losses (622) (609) (458) 32 346 (71) (441) 570 (154)
Amortization of deferred acquisition costs, deferred sales inducements and value of business acquired 98 108 112 126 138 153 211 186 207
Policy and other operating expenses 309 334 342 387 437 452 467 481 453
Total Expenses 2,784 5,453 4,021 3,653 3,574 12,831 1,751 9,175 4,891
Other Income (Loss) - Asset Management
Net gains (losses) from investment activities 34 146 (16) 1 (2) 20 (32) 21 39
Net gains (losses) from investment activities of consolidated variable interest entities 367 13 85 29 34 12 49 35 25
Other income (loss), net (23) 21 28 12 32 48 22 34 (26)
Total Other Income (Loss) 378 180 97 42 64 80 39 90 38
Income (loss) before income tax (provision) benefit (1,544) (2,987) (945) 1,230 1,791 951 883 1,961 2,187
Income tax (provision) benefit1 485 381 96 (223) (253) (201) (243) 1,620 (422)
Net income (loss) (1,059) (2,606) (849) 1,007 1,538 750 640 3,581 1,765
Net (income) loss attributable to non-controlling interests 658 969 286 (367) (528) (151) 42 (825) (338)
Net income (loss) attributable to Apollo Global Management, Inc. (401) (1,637) (563) 640 1,010 599 682 2,756 1,427
Preferred stock dividends - - - - - - (22) (24) (24)
Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $(401) $(1,637) $(563) $640 $1,010 $599 $660 $2,732 $1,403
Earnings (Loss) per share
Net income (loss) attributable to Common Stockholders - Basic $(0.70) $(2.82) $(0.98) $1.06 $1.67 $1.00 $1.10 $4.53 $2.31
Net income (loss) attributable to Common Stockholders - Diluted $(0.70) $(2.82) $(0.98) $1.06 $1.66 $1.00 $1.10 $4.44 $2.28
Weighted average shares outstanding - Basic 586 585 584 583 584 579 579 584 588
Weighted average shares outstanding - Diluted 586 585 584 583 584 579 579 601 605
1. 4Q'23 includes a one-time tax benefit of $1.8 billion resulting from the establishment of deferred tax assets related to the Government of Bermuda's enactment of the Corporate Income Tax Act of 2023.

RS Flows and IA

Retirement Services Flows & Invested Assets
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Retail $ 2,865 $ 3,748 $ 6,132 $ 7,662 $ 8,578 $ 6,782 $ 6,523 $ 13,410 $ 9,663
Flow reinsurance 1,001 1,038 2,291 1,856 1,793 2,782 3,174 2,798 2,390
Funding agreements1 5,696 1,755 1,588 1,000 1,500 148 3,245 2,300 8,041
Pension group annuities 1,994 5,508 2,944 772 56 9,002 - 1,316 -
Gross organic inflows $ 11,556 $ 12,049 $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 $ 19,824 $ 20,094
Gross inorganic inflows2 - - - - - - - 2,214 -
Total gross inflows $ 11,556 $ 12,049 $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 $ 22,038 $ 20,094
Gross outflows3 (4,883) (4,925) (7,000) (11,064) (6,879) (9,135) (10,738) (7,116) (8,035)
Net flows $ 6,673 $ 7,124 $ 5,955 $ 226 $ 5,048 $ 9,579 $ 2,204 $ 14,922 $ 12,059
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Inflows attributable to Athene4 $ 9,333 $ 8,889 $ 11,000 $ 10,022 $ 11,896 $ 14,977 $ 3,101 $ 13,026 $ 14,591
Inflows attributable to ADIP4,5 2,223 3,160 1,955 1,268 31 3,737 9,841 9,012 4,437
Inflows ceded to third-party reinsurers6 - - - - - - - - 1,066
Total gross inflows $ 11,556 $ 12,049 $ 12,955 $ 11,290 $ 11,927 $ 18,714 $ 12,942 $ 22,038 $ 20,094
Outflows attributable to Athene $ (4,072) $ (4,062) $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) $ (5,791) $ (6,748)
Outflows attributable to ADIP5 (811) (863) (1,197) (1,277) (1,348) (1,244) (1,188) (1,325) (1,287)
Total gross outflows3 $ (4,883) $ (4,925) $ (7,000) $ (11,064) $ (6,879) $ (9,135) $ (10,738) $ (7,116) $ (8,035)
Outflows attributable to Athene by type
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Maturity-driven, contractual-based outflows7 $ (1,384) $ (1,305) $ (2,834) $ (1,472) $ (1,717) $ (3,981) $ (3,243) $ (1,952) $ (2,818)
Policyholder-driven outflows8 (2,688) (2,757) (2,969) (3,453) (3,814) (3,910) (3,584) (3,839) (3,930)
Income oriented withdrawals (planned)9 (1,529) (1,413) (1,516) (1,813) (1,766) (1,750) (1,617) (1,831) (1,691)
From policies out-of-surrender-charge (planned)10 (865) (1,075) (1,131) (1,188) (1,480) (1,377) (1,326) (1,365) (1,512)
From policies in-surrender-charge (unplanned)11 (294) (269) (322) (452) (568) (783) (641) (643) (727)
Core outflows $ (4,072) $ (4,062) $ (5,803) $ (4,925) $ (5,531) $ (7,891) $ (6,827) $ (5,791) $ (6,748)
Strategic reinsurance transactions12 - - - (4,862) - - (2,723) - -
Outflows attributable to Athene $ (4,072) $ (4,062) $ (5,803) $ (9,787) $ (5,531) $ (7,891) $ (9,550) $ (5,791) $ (6,748)
Annualized rate13
Maturity-driven, contractual-based outflows7 (3.1)% (2.8)% (5.9)% (3.0)% (3.4)% (7.6)% (6.3)% (3.7)% (5.1)%
Policyholder-driven outflows8 (5.9)% (5.9)% (6.2)% (7.1)% (7.6)% (7.4)% (6.9)% (7.2)% (7.0)%
Income oriented withdrawals (planned)9 (3.4)% (3.0)% (3.2)% (3.7)% (3.5)% (3.3)% (3.1)% (3.4)% (3.0)%
From policies out-of-surrender-charge (planned)10 (1.9)% (2.3)% (2.3)% (2.5)% (3.0)% (2.6)% (2.6)% (2.6)% (2.7)%
From policies in-surrender-charge (unplanned)11 (0.6)% (0.6)% (0.7)% (0.9)% (1.1)% (1.5)% (1.2)% (1.2)% (1.3)%
Core outflows (9.0)% (8.7)% (12.1)% (10.1)% (11.0)% (15.0)% (13.2)% (10.9)% (12.1)%
Strategic reinsurance transactions12 - % - % - % (9.9)% - % - % (5.2)% - % - %
Outflows attributable to Athene (9.0)% (8.7)% (12.1)% (20.0)% (11.0)% (15.0)% (18.4)% (10.9)% (12.1)%
Invested Assets
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Gross Invested Assets $ 221,720 $ 229,545 $ 236,720 $ 238,310 $ 247,673 $ 257,235 $ 261,209 $ 278,617 $ 292,837
Invested assets attributable to ADIP4,5 (37,449) (40,240) (41,563) (41,859) (40,924) (43,565) (53,114) (61,190) (65,482)
Net Invested Assets4,14 $ 184,271 $ 189,305 $ 195,157 $ 196,451 $ 206,749 $ 213,670 $ 208,095 $ 217,427 $ 227,355
Fixed income and other investments 172,765 177,464 182,822 184,372 194,646 201,480 196,302 205,768 215,608
Alternative investments 11,506 11,841 12,335 12,079 12,103 12,190 11,793 11,659 11,747
1. Funding agreements are comprised of funding agreements issued under Athene's funding agreement backed notes ("FABN") program, secured and other funding agreements, funding agreements issued to the Federal Home Loan Bank ("FHLB") and long-term repurchase agreements.
2. Gross inorganic inflows represent acquisitions and block reinsurance transactions. On November 6, 2023, Athene entered into an agreement with a Japanese counterparty, effective October 1, 2023, pursuant to which it agreed to reinsure a block of whole life insurance policies on a coinsurance basis. In conjunction with the transaction, Athene entered into an agreement with a leading mortality reinsurer to retrocede the mortality risk related to this block of business.
3. Gross outflows include full and partial policyholder withdrawals on deferred annuities, death benefits, pension group annuity benefit payments, payments on payout annuities, funding agreement repurchases and maturities and block reinsurance outflows.
4. Effective July 1, 2023, Athene Life Re Ltd. ("ALRe") sold 50% of Athene Co-Invest Reinsurance Affiliate Holding 2 Ltd.'s (together with its subsidiaries, "ACRA 2") economic interests to Apollo/Athene Dedicated Investment Program II ("ADIP II"), resulting in approximately $6.8 billion of inflows attributable to Athene for the first six months of 2023 being retroactively attributed to ADIP II. Effective December 31, 2023, ADIP II's ownership of economic interests in ACRA 2 increased to 60%, with ALRe owning the remaining 40% of economic interests. This resulted in approximately $3.0 billion of inflows attributable to Athene for the year ended December 31, 2023 being retroactively attributed to ADIP II. These were reflected as an inflow for ADIP and a reduction of Athene inflows in 3Q'23 and 4Q'23, respectively.
5. ADIP refers to Apollo/Athene Dedicated Investment Program ("ADIP I") and ADIP II and represents the non-controlling interests in business ceded to ACRA.
6. During the first quarter of 2024, Athene entered into a modco reinsurance agreement with Catalina Re Archdale Life Insurance Company Ltd., a subsidiary of Catalina Holdings (Bermuda) Ltd. (together with its subsidiaries, "Catalina"), to cede a quota share of its retail deferred annuity business issued on or after January 1, 2024.
7. Represents outflows from funding agreements, pension group annuities and multi-year guarantee fixed annuities ("MYGA"), all of which occur based on defined maturities or substantially lapse upon reaching their contractual term. Amounts may vary on a quarterly basis, based on the timing of original issuance.
8. Represents outflows from fixed indexed annuities and other applicable products, which have varying degrees of predictability due to policyholder actions.
9. Represents partial annuity withdrawals to meet retirement income needs within contractual annual limits.
10. Represents outflows from policies that no longer have an active surrender charge in force.
11. Represents outflows from policies with an active surrender charge in force.
12. Strategic reinsurance transaction outflows include the cession of certain inforce funding agreements to Catalina in 4Q'22 and the portion of the reinsurance business recaptured by Venerable Insurance and Annuity Company in 3Q'23.
13. The outflow rate is calculated as outflows attributable to Athene divided by Athene average net invested assets for the respective period, on an annualized basis.
14. Net Invested Assets represent the investments that directly back Athene's net reserve liabilities as well as surplus assets. Net invested assets are a component of Apollo's total AUM reported under the Asset Management segment and should not be viewed as additive to total AUM.

Reconciliation_ANI

Reconciliation of GAAP to Non-GAAP Financial Measures
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 LTM 1Q'23 LTM 1Q'24
GAAP Net income (loss) attributable to Apollo Global Management, Inc. Common Stockholders $ (401) $ (1,637) $ (563) $ 640 $ 1,010 $ 599 $ 660 $ 2,732 $ 1,403 $ (550) $ 5,394
Preferred dividends - - - - - - 22 24 24 - 70
Net income (loss) attributable to non-controlling interests (658) (969) (286) 367 528 151 (42) 825 338 (360) 1,272
GAAP Net income (loss) $ (1,059) $ (2,606) $ (849) $ 1,007 $ 1,538 $ 750 $ 640 $ 3,581 $ 1,765 $ (910) $ 6,736
Income tax provision (benefit) (485) (381) (96) 223 253 201 243 (1,620) 422 (1) (754)
GAAP Income (loss) before Income tax provision (benefit) $ (1,544) $ (2,987) $ (945) $ 1,230 $ 1,791 $ 951 $ 883 $ 1,961 $ 2,187 $ (911) $ 5,982
Asset Management Adjustments:
Equity-based profit sharing expense and other1 97 67 55 57 67 57 62 53 94 246 266
Equity-based compensation 56 37 46 46 52 58 57 69 74 181 258
Special equity-based compensation and other charges2 - - - - - - - 438 - - 438
Transaction related charges3 (1) - (5) (36) (3) (4) 25 14 55 (44) 90
Merger-related transaction and integration costs4 18 18 14 20 7 5 5 10 8 59 28
(Gains) losses from changes in tax receivable agreement liability 14 - - 12 - - - 13 - 12 13
Net (income) loss attributable to non-controlling interests in consolidated entities 649 960 277 (387) (523) (192) 28 (869) (377) 327 (1,410)
Unrealized performance fees (445) 488 66 (111) (239) 86 (91) 117 (268) 204 (156)
Unrealized profit sharing expense 191 (188) (19) 36 135 1 55 (12) 159 (36) 203
HoldCo interest and other financing costs 39 35 29 19 21 20 36 11 15 104 82
Unrealized principal investment (income) loss 82 (72) 128 38 (10) (29) (27) (22) (11) 84 (89)
Unrealized net (gains) losses from investment activities and other (18) (139) 24 (11) 12 8 30 (24) (28) (114) (14)
Retirement Services Adjustments:
Investment (gains) losses, net of offsets 2,636 2,841 1,853 137 (397) 563 663 (999) 22 4,434 249
Non-operating change in insurance liabilities and related derivatives5 (649) (290) (518) 24 135 (304) (431) 418 (673) (649) (990)
Integration, restructuring and other non-operating expenses 34 33 37 29 29 28 41 32 30 128 131
Equity-based compensation expense 12 13 15 16 16 13 13 46 13 60 85
Segment Income $ 1,171 $ 816 $ 1,057 $ 1,119 $ 1,093 $ 1,261 $ 1,349 $ 1,256 $ 1,300 $ 4,085 $ 5,166
HoldCo interest and other financing costs (39) (35) (29) (19) (21) (20) (36) (11) (15) (104) (82)
Taxes and related payables (215) (205) (178) (197) (227) (231) (268) (63) (221) (807) (783)
Adjusted Net Income $ 917 $ 576 $ 850 $ 903 $ 845 $ 1,010 $ 1,045 $ 1,182 $ 1,064 $ 3,174 $ 4,301
Notable items - (16) (42) 35 (25) - (90) - - (41) (90)
Tax impact of notable items - 3 9 (7) 5 - 19 - - 8 19
Adjusted Net Income, Excluding Notable Items $ 917 $ 563 $ 817 $ 931 $ 825 $ 1,010 $ 974 $ 1,182 $ 1,064 $ 3,141 $ 4,230
1. Equity-based profit sharing expense and other includes certain profit sharing arrangements in which a portion of performance fees distributed to the general partner are required to be used by employees of Apollo to purchase restricted shares of common stock or is delivered in the form of RSUs, which are granted under the Equity Plan. Equity-based profit sharing expense and other also includes performance grants which are tied to the Company's receipt of performance fees, within prescribed periods, sufficient to cover the associated equity-based compensation expense.
2. Special equity-based compensation and other charges includes equity-based compensation expense and associated taxes related to the previously announced special fully vested equity grants to certain senior leaders.
3. Transaction-related charges include contingent consideration, equity-based compensation charges and the amortization of intangible assets and certain other charges associated with acquisitions, and restructuring charges.
4. Merger-related transaction and integration costs includes advisory services, technology integration, equity-based compensation charges and other costs associated with the Company's merger with Athene.
5. Includes change in fair values of derivatives and embedded derivatives, non-operating change in funding agreements, change in fair value of market risk benefits, and non-operating change in liability for future policy benefits.

Reconciliation_Sharecount

Reconciliation of GAAP to Non-GAAP Financial Measures - cont'd
Share Reconciliation 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Total GAAP Common Stock Outstanding 570,353,554 571,028,097 572,670,634 570,276,188 567,394,604 566,809,153 567,565,120 567,762,932 569,003,922
Non-GAAP Adjustments:
Mandatory Convertible Preferred Stock1 - - - - - - 15,999,683 15,564,983 14,524,381
Vested RSUs 15,624,235 15,393,631 13,492,457 15,656,775 12,781,851 12,771,092 12,502,457 22,072,379 18,438,577
Unvested RSUs Eligible for Dividend Equivalents 14,386,357 14,097,587 14,181,682 12,827,921 16,301,241 15,790,288 15,681,753 12,603,041 15,075,269
Adjusted Net Income Shares Outstanding 600,364,146 600,519,315 600,344,773 598,760,884 596,477,696 595,370,533 611,749,013 618,003,335 617,042,149
1. Reflects the number of shares of underlying common stock assumed to be issuable upon conversion of the Mandatory Convertible Preferred Stock during each period.

Reconciliation_NIA and Alts

Reconciliation of GAAP to Non-GAAP Financial Measures - cont'd
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Total investments, including related parties $ 196,234 $ 186,405 $ 185,222 $ 196,448 $ 203,230 $ 215,322 $ 214,953 $ 238,941 $ 254,239
Derivative assets (3,668) (2,932) (4,065) (3,309) (3,956) (5,114) (4,571) (5,298) (7,159)
Cash and cash equivalents (including restricted cash) 9,357 11,925 10,847 8,407 14,992 12,804 11,214 14,781 16,825
Accrued investment income 885 1,086 1,226 1,328 1,458 1,646 1,792 1,933 2,332
Net receivable (payable) for collateral on derivatives (2,941) (1,599) (1,940) (1,486) (1,909) (2,940) (2,485) (2,835) (4,293)
Reinsurance impacts 2,800 5,449 7,156 1,423 942 1,046 882 (572) (1,358)
VIE assets, liabilities and non-controlling interests 10,485 11,663 13,259 12,747 12,799 13,693 14,340 14,818 14,979
Unrealized (gains) losses 7,985 17,371 25,098 22,284 19,782 20,676 25,078 16,445 17,809
Ceded policy loans (158) (182) (180) (179) (175) (174) (174) (174) (171)
Net investment receivables (payables) 246 (279) (349) 186 39 (217) (375) 11 (950)
Allowance for credit losses 495 638 446 471 521 536 592 608 615
Other investments - - - (10) (50) (43) (37) (41) (31)
Total adjustments to arrive at gross invested assets 25,486 43,140 51,498 41,862 44,443 41,913 46,256 39,676 38,598
Gross invested assets $ 221,720 $ 229,545 $ 236,720 $ 238,310 $ 247,673 $ 257,235 $ 261,209 $ 278,617 $ 292,837
ACRA non-controlling interests (37,449) (40,240) (41,563) (41,859) (40,924) (43,565) (53,114) (61,190) (65,482)
Net invested assets $ 184,271 $ 189,305 $ 195,157 $ 196,451 $ 206,749 $ 213,670 $ 208,095 $ 217,427 $ 227,355
($ in millions) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24
Investment funds, including related parties and consolidated VIEs $ 17,899 $ 11,165 $ 13,186 $ 14,128 $ 14,447 $ 15,765 $ 16,717 $ 17,561 $ 18,443
Equity securities 732 544 542 509 469 472 472 430 436
Certain equity securities included in AFS or trading securities 1,075 288 293 225 229 193 197 201 205
Investment funds within funds withheld at interest 1,982 1,294 1,161 1,126 1,142 864 802 827 852
Royalties 48 46 16 15 15 15 14 14 10
Net assets of the VIE, excluding investment funds (8,632) 203 (1,371) (2,041) (2,293) (3,203) (3,905) (4,401) (5,069)
Unrealized (gains) losses 12 60 128 44 43 38 73 26 53
ACRA non-controlling interests (1,610) (1,759) (1,921) (1,836) (1,860) (1,768) (2,391) (2,829) (3,011)
Other assets - - 301 (91) (89) (186) (186) (170) (172)
Total adjustments to arrive at net alternative investments (6,393) 676 (851) (2,049) (2,334) (3,575) (4,924) (5,902) (6,696)
Net alternative investments $ 11,506 $ 11,841 $ 12,335 $ 12,079 $ 12,103 $ 12,190 $ 11,793 $ 11,659 $ 11,747