AINV-2014.12.31-10Q
Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended December 31, 2014
¨    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number: 814-00646
APOLLO INVESTMENT CORPORATION
(Exact name of registrant as specified in its charter)
 
Maryland
52-2439556
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
9 West 57th Street
37th Floor
New York, N.Y.
10019
(Address of principal executive office)
(Zip Code)
(212) 515-3450
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ¨  No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
x
Accelerated filer
¨
Non-accelerated filer  
¨
Smaller Reporting Company  
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨  No x
The number of shares of the registrant’s Common Stock, $.001 par value, outstanding as of February 5, 2015 was 236,741,351.
 
 
 
 



Table of Contents

APOLLO INVESTMENT CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 2014
TABLE OF CONTENTS
 

 
 
PAGE  
 
PART I. FINANCIAL INFORMATION
 
 
 
 
Item 1.
FINANCIAL STATEMENTS
 
 
 
 
Statements of Assets and Liabilities as of December 31, 2014 and March 31, 2014
 

 
 
Statements of Operations for the three and nine months ended December 31, 2014 and December 31, 2013
 

 
 
Statements of Changes in Net Assets for the nine months ended December 31, 2014 and the year ended March 31, 2014
 

 
 
Statements of Cash Flows for the nine months ended December 31, 2014 and December 31, 2013
 

 
 
Schedule of Investments as of December 31, 2014
 
 
 
 
Schedule of Investments as of March 31, 2014
 
 
 
 
Notes to Financial Statements
 
 
 
 
Report of Independent Registered Public Accounting Firm
 
 
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
 
 
 
Item 4.
Controls and Procedures
 
 
 
 
PART II. OTHER INFORMATION
 
 
 
 
Item 1.
Legal Proceedings
 
 
 
Item 1A.
Risk Factors
 
 
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
 
 
Item 3.
Defaults Upon Senior Securities
 
 
 
Item 4.
Mine Safety Disclosures
 
 
 
Item 5.
Other Information
 
 
 
Item 6.
Exhibits
 
 
 
 
Signatures


Table of Contents

PART I. FINANCIAL INFORMATION
In this Quarterly Report, “Apollo Investment”, the “Company”, “AIC”, “we”, “us” and “our” refer to Apollo Investment Corporation unless the context otherwise states.

Item 1. Financial Statements

APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
(in thousands, except per share amounts)
 
 
December 31, 2014

March 31, 2014
Assets
 
 
 
Non-controlled/non-affiliated investments, at fair value (cost — $2,683,906 and $2,714,971, respectively)
$
2,568,832


$
2,751,896

Non-controlled/affiliated investments, at fair value (cost — $189,673 and $153,721, respectively)
198,739


144,628

Controlled investments, at fair value (cost — $715,993 and $590,060, respectively)
746,444


582,147

Total investments (cost — $3,589,572 and $3,458,752, respectively)
3,514,015


3,478,671

Cash
11,661


13,413

Foreign currency (cost — $16,151 and $1,305, respectively)
16,009


1,323

Receivable for investments sold
94,965


72,918

Interest receivable
30,013


40,106

Dividends receivable
3,667


3,627

Deferred financing costs
27,066


31,601

Prepaid expenses and other assets
3,778


292

Total assets
$
3,701,174


$
3,641,951

Liabilities
 
 
 
Debt (see note 6 & 9)
$
1,588,653


$
1,372,261

Payable for investments purchased
8,212


119,577

Dividends payable
47,348


47,348

Management and performance-based incentive fees payable (see note 3)
37,525


31,108

Interest payable
15,937


14,318

Accrued administrative expenses
2,232


1,915

Other liabilities and accrued expenses
4,576


3,813

Total liabilities
$
1,704,483


$
1,590,340

Net Assets
 
 
 
Common stock, par value $.001 per share, 400,000,000 and 400,000,000 common shares authorized, respectively, 236,741,351 and 236,741,351 issued and outstanding, respectively
$
237


$
237

Paid-in capital in excess of par (see note 2)
3,221,803


3,221,829

Over-distributed net investment income (see note 2)
(20,137
)

(53,995
)
Accumulated net realized loss (see note 2)
(1,136,574
)

(1,133,405
)
Net unrealized gain (loss)
(68,638
)

16,945

Net assets
$
1,996,691


$
2,051,611

Total liabilities and net assets
$
3,701,174


$
3,641,951

Net asset value per share
$
8.43


$
8.67


See notes to financial statements.
3

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share amounts)
 
Three Months Ended
 
Nine Months Ended
 
December 31, 2014
 
December 31, 2013
 
December 31, 2014
 
December 31, 2013
INVESTMENT INCOME:
 
 
 
 
 
 
 
From non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest
$
87,606

 
$
76,347

 
$
266,300

 
$
231,136

Dividends
991

 
1,172

 
3,106

 
5,866

Other income
4,533

 
2,983

 
10,827

 
9,675

From non-controlled/affiliated investments:
 
 
 
 

 
 
Interest
283

 
1,001

 
3,210

 
2,730

Dividends
4,236

 
5,964

 
12,310

 
15,528

From controlled investments:
 
 
 
 

 
 
Interest
10,199

 
5,767

 
29,423

 
16,345

Dividends
2,115

 
914

 
5,815

 
3,174

Other income
63

 
413

 
525

 
487

Total investment income
$
110,026

 
$
94,561

 
$
331,516

 
$
284,941

EXPENSES:
 
 
 
 

 
 
Management fees (see note 3)
$
18,755

 
$
15,932

 
$
55,744

 
$
46,044

Performance-based incentive fees (see note 3)
13,215

 
11,469

 
41,075

 
35,464

Interest and other debt expenses
20,315

 
17,366

 
58,163

 
50,682

Administrative services expense
1,863

 
1,410

 
4,821

 
3,616

Other general and administrative expenses
3,014

 
2,097

 
7,919

 
6,203

Total expenses
$
57,162

 
$
48,274

 
$
167,722

 
$
142,009

Management and performance-based incentive fees waived (see note 3)
$
(3,740
)
 
$
(3,375
)
 
$
(11,934
)
 
$
(8,675
)
Expense reimbursements (see note 3)
(58
)
 
(21
)
 
(174
)
 
(29
)
Net expenses
$
53,364

 
$
44,878

 
$
155,614

 
$
133,305

Net investment income
$
56,662

 
$
49,683

 
$
175,902

 
$
151,636

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS, FOREIGN CURRENCIES AND DERIVATIVES:
 
 
 
 
 
 
 
Net realized gain (loss):
 
 
 
 
 
 
 
Investments and cash equivalents
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
$
(2,355
)
 
$
2,516

 
$
(14,244
)
 
$
(119,902
)
Non-controlled/affiliated investments
(169
)
 
321

 
11,357

 
321

Controlled investments
(57
)
 
1,368

 
(57
)
 
(970
)
Net realized gain (loss) from investments and cash equivalents
$
(2,581
)
 
$
4,205

 
$
(2,944
)
 
$
(120,551
)
Foreign currencies
 
 
 
 

 
 
Non-controlled/non-affiliated investments
$
(13
)
 
$
13

 
$
374

 
$
(87
)
Non-controlled/affiliated investments

 

 

 

Controlled investments
134

 
6

 
134

 
42

Foreign debt
1,030

 
(557
)
 
(733
)
 
2,514

Net realized gain (loss) from foreign currencies
$
1,151

 
$
(538
)
 
$
(225
)
 
$
2,469

Derivatives

 

 

 
8,541

Net realized gain (loss)
$
(1,430
)
 
$
3,667

 
$
(3,169
)
 
$
(109,541
)
 
 
 
 
 
 
 
 

See notes to financial statements.
4

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (unaudited) (continued)
(in thousands, except per share amounts)
 
Three Months Ended
 
Nine Months Ended
 
December 31, 2014
 
December 31, 2013
 
December 31, 2014
 
December 31, 2013
Net change in unrealized gain (loss):
 
 
 
 
 
 
 
Investments and cash equivalents
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
$
(100,749
)
 
$
50,084

 
$
(149,322
)
 
$
150,228

Non-controlled/affiliated investments
4,939

 
3,424

 
15,592

 
(1,897
)
Controlled investments
18,068

 
887

 
38,364

 
23,669

Net change in unrealized gain (loss) from investments and cash equivalents
$
(77,742
)
 
$
54,395

 
$
(95,366
)
 
$
172,000

Foreign currencies
 
 
 
 


 
 
Non-controlled/non-affiliated investments
$
(234
)
 
$
58

 
$
(747
)
 
$
593

Non-controlled/affiliated investments

 

 

 

Controlled investments

 
(12
)
 

 
9

Foreign debt
3,292

 
(2,053
)
 
10,532

 
(13,730
)
Net change in unrealized gain (loss) from foreign currencies
$
3,058

 
$
(2,007
)
 
$
9,785

 
$
(13,128
)
Net change in unrealized gain (loss)
$
(74,684
)
 
$
52,388

 
$
(85,581
)
 
$
158,872

Net realized and unrealized gain (loss) from investments, cash equivalents, foreign currencies and derivatives
(76,114
)
 
56,055

 
(88,750
)
 
49,331

NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$
(19,452
)
 
$
105,738

 
$
87,152

 
$
200,967

EARNINGS (Loss) PER SHARE — BASIC (see note 4)
$
(0.09
)
 
$
0.47

 
$
0.36

 
$
0.90

EARNINGS (Loss) PER SHARE — DILUTED (see note 4)
$
(0.09
)
 
$
0.45

 
$
0.36

 
$
0.88


See notes to financial statements.
5

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS (unaudited)
(in thousands, except shares)
 
 
Nine Months Ended 
 December 31, 2014
 
Year ended March 31, 2014
Increase (decrease) in net assets from operations:
 
 
 
Net investment income
$
175,902

 
$
201,248

Net realized loss
(3,169
)
 
(106,507
)
Net change in unrealized gain (loss)
(85,581
)
 
176,131

Net increase in net assets resulting from operations
87,152

 
270,872

 
 
 
 
Dividends and distributions to stockholders (see note 2):
 
 
 
Distribution of income
(142,045
)
 
(182,193
)
Return of capital

 

Total dividends and distributions to stockholders
(142,045
)
 
(182,193
)
 
 
 
 
Capital share transactions:
 
 
 
Net proceeds from shares sold

 
286,553

Less offering costs
(27
)
 
(1,010
)
Reinvestment of dividends

 

Net increase (decrease) in net assets from capital share transactions
(27
)
 
285,543

 
 
 
 
Total increase (decrease) in net assets:
(54,920
)
 
374,222

Net assets at beginning of period
2,051,611

 
1,677,389

Net assets at end of period
$
1,996,691

 
$
2,051,611

 
 
 
 
Capital share activity
 
 
 
Shares sold

 
33,850,000

Shares issued from reinvestment of dividends

 

Net capital share activity

 
33,850,000


See notes to financial statements.
6

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS (unaudited)
(in thousands) 
 
Nine months ended December 31,
 
2014
 
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net increase in net assets resulting from operations
$
87,152

 
$
200,967

Adjustments to reconcile net increase (decrease):
 
 
 
PIK interest and dividends capitalized (see note 5)
(24,155
)
 
(21,008
)
Net amortization on investments
(7,860
)
 
(5,833
)
Accretion of original issue discount on 2024 Note
1

 

Amortization of deferred financing costs
4,966

 
5,497

(Increase) decrease from foreign currency transactions
(1,035
)
 
2,975

Net change in unrealized (gain) loss on investments, cash equivalents, foreign currencies and derivatives
85,581

 
(158,872
)
Net realized loss on investments, cash equivalents, and foreign currencies
3,169

 
109,541

Changes in operating assets and liabilities:
 
 
 
Purchase of investments
(1,839,380
)
 
(1,830,368
)
Proceeds from derivatives

 
4,156

Proceeds from the disposition of derivatives

 
4,385

Proceeds from disposition of investments
1,737,803

 
1,575,542

Increase in receivables for investments sold
(22,047
)
 
(93,887
)
Decrease in interest receivable
10,093

 
11,364

Increase in dividends receivable
(40
)
 
(4,145
)
Increase in prepaid expenses and other assets
(3,486
)
 
(677
)
Increase (decrease) in payable for investments purchased
(111,365
)
 
73,113

Increase in management and performance-based incentive fees payable
6,417

 
2,835

Increase in interest payable
1,619

 
2,138

Increase (decrease) in accrued administrative expenses
317

 
(904
)
Increase in other liabilities and accrued expenses
763

 
661

Net cash (used in) provided by operating activities
$
(71,487
)
 
$
(122,520
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Net proceeds from the issuance of common stock
$

 
$
182,273

Offering costs for the issuance of common stock
(27
)
 
(445
)
Dividends paid in cash
(142,045
)
 
(130,475
)
Proceeds from debt
2,423,577

 
1,609,313

Repayments of debt
(2,196,492
)
 
(1,517,840
)
Deferred financing costs paid
(432
)
 
(11,678
)
Net cash provided by (used in) financing activities
$
84,581

 
$
131,148

NET INCREASE IN CASH AND CASH EQUIVALENTS
$
13,094

 
$
8,628

Effect of exchange rates on cash balances
(160
)
 
22

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
14,736

 
$
6,197

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
27,670

 
$
14,847

 
 
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 
 
 
Cash interest paid during the period
$
50,064

 
$
41,006

PIK income (see note 5)
$
24,889

 
$
21,447


See notes to financial statements.
7

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited)
December 31, 2014
(in thousands)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
CORPORATE DEBT—116.3%
SECURED DEBT—90.0%
1st Lien Secured Debt—40.4%
 Alion Science & Technology Corporation
 
 11.00% (L+1000, 1.00% Floor)
 
8/16/19
 
 Aerospace and Defense
 
$
32,083

 
$
31,074

 
$
31,442

 Archroma (17)
 
 9.50% (L+825, 1.25% Floor)
 
10/1/18
 
 Chemicals
 
45,230

 
44,796

 
44,891

 Aventine Renewable Energy Holdings, Inc.
 
 15.00% PIK or 10.50% Cash
 
9/22/17
 
 Chemicals
 
15,742

 
18,244

 
15,663

 Aveta, Inc.
 
 9.75% (L+825, 1.50% Floor)
 
12/12/17
 
 Healthcare
 
54,959

 
53,886

 
53,311

 Caza Petroleum, Inc.
 
 12.00% (L+1000, 2.00% Floor)
 
5/23/17
 
 Oil and Gas
 
45,000

 
43,892

 
43,762

 Compuware Holdings, LLC (16)
 
 6.25% (L+525, 1.00% Floor)
 
12/15/21
 
 Business Services
 
2,903

 
2,758

 
2,756

 Compuware Holdings, LLC (16)
 
 6.25% (L+525, 1.00% Floor)
 
12/15/19
 
 Business Services
 
1,398

 
1,370

 
1,369

 Deep Gulf Energy II, LLC
 
 11.50% (11.50% or L+1000, 1.50% Floor)
 
3/31/17
 
 Oil and Gas
 
25,000

 
25,000

 
24,437

 Delta Educational Systems, Inc.
 
 16.00% (8.00% Cash / 8.00% PIK)
 
12/11/16
 
 Education
 
5,774

 
5,774

 
5,774

 Dodge Data & Analytics LLC
 
 9.75% (L+875, 1.00% Floor)
 
10/31/19
 
 Printing and Publishing
 
60,500

 
59,322

 
58,836

 Extraction Oil & Gas Holdings, LLC
 
11.00% and 10.00%
 
5/29/19
 
 Oil and Gas
 
52,633

 
51,899

 
51,843

 GenCorp, Inc. (17)
 
 9.50% (L+850, 1.00% Floor)
 
4/18/22
 
 Aerospace and Defense
 
44,500

 
44,500

 
44,500

 Great Bear Petroleum Operating, LLC
 
12.000%
 
10/1/17
 
 Oil and Gas
 
5,064

 
5,064

 
5,064

 Hunt Companies, Inc. (11)
 
9.625%
 
3/1/21
 
 Buildings and Real Estate
 
41,008

 
40,542

 
41,828

 M&G Chemicals, S.A. (17)
 
 9.139% (L+900, 0.139% Floor)
 
3/28/16
 
 Chemicals
 
5,000

 
5,000

 
5,000

 Magnetation, LLC (11)
 
11.000%
 
5/15/18
 
 Mining
 
38,454

 
39,976

 
26,629

 Maxus Capital Carbon SPE I, LLC (Skyonic Corp.)
 
13.000%
 
9/18/19
 
 Chemicals
 
76,123

 
76,123

 
76,123

 Molycorp, Inc. (17)
 
10.000%
 
6/1/20
 
 Diversified Natural Resources, Precious Metals and Minerals
 
50,424

 
50,017

 
28,363

 My Alarm Center, LLC (16)
 
 8.50% (L+750, 1.00% Floor)
 
1/9/18
 
 Business Services
 
42,614

 
42,614

 
42,614

 My Alarm Center, LLC (16)
 
 8.50% (L+750, 1.00% Floor)
 
1/9/18
 
 Business Services
 
11,000

 
11,000

 
11,000

 Osage Exploration & Development, Inc. (11)(17)
 
 13.00% (L+1100, 2.00% Floor)
 
4/27/16
 
 Oil and Gas
 
25,000

 
24,688

 
24,063

 Panda Temple Power, LLC
 
 11.50% (L+1000, 1.50% Floor)
 
7/17/18
 
 Energy
 
25,500

 
25,155

 
25,755

 Pelican Energy, LLC (17)
 
 10.00% (7.00% Cash /3.00% PIK)
 
12/31/18
 
 Oil and Gas
 
26,541

 
25,607

 
26,541

 SCM Insurance Services, Inc. (17)
 
9.250%
 
8/22/19
 
 Business Services
 
CAD
30,000

 
27,125

 
25,642

 Spotted Hawk Development, LLC
 
13.00% (12.00% Cash / 1.00% PIK)
 
9/12/16
 
 Oil and Gas
 
80,698

 
79,558

 
78,681

 Sunrun Solar Owner IX, LLC
 
9.079%
 
12/31/24
 
 Energy
 
3,476

 
3,332

 
3,330

 UniTek Global Services Inc.
 
9.50% (L+850, 1.00% Floor) Funded, 0.50% Unfunded
 
1/21/15
 
Telecommunications
 
8,256

 
8,256

 
8,256

Total 1st Lien Secured Debt excluding Revolvers and Letters of Credit
 
$
846,572

 
$
807,473


See notes to financial statements.
8

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
 
Funded and Unfunded Revolver Obligations--3.9%
 Avaya, Inc., (Revolver) (16)
 
5.00% (L+175 Funded) /
2.910% (L+275 Funded)
 
10/26/16
 
Telecommunications
 
$
18,392

 
$
18,392

 
$
16,828

 Avaya, Inc., (Unfunded Revolver) (8)(16)
 
0.500% Unfunded
 
10/26/16
 
Telecommunications
 
18,392

 
(3,680
)
 
(1,563
)
 BMC Software, Inc., (Unfunded Revolver) (8)
 
L+400 Funded, 0.50% Unfunded
 
9/10/18
 
 Business Services
 
20,760

 
(1,994
)
 
(1,868
)
 CIT Group, Inc., (Unfunded Revolver) (8)(17)
 
0.625% Unfunded
 
1/27/17
 
 Financial Services
 
25,000

 
(336
)
 
(1,000
)
 Confie Seguros Holding II Co., (Revolver) (16)
 
6.75% (P+350, 3.25% Floor) Funded
 
12/10/18
 
 Insurance
 
1,050

 
1,050

 
955

 Confie Seguros Holding II Co., (Unfunded Revolver) (8)(16)
 
0.500% Unfunded
 
12/10/18
 
 Insurance
 
2,784

 
(363
)
 
(251
)
 Laureate Education Inc., (Revolver) (16)(17)
 
5.00% (L+375, 1.25% Floor) Funded
 
6/16/16
 
 Education
 
28,764

 
28,764

 
26,175

 Laureate Education, Inc., (Unfunded Revolver) (8)(16)(17)
 
0.625% Unfunded
 
6/16/16
 
 Education
 
23

 
(2,494
)
 
(2
)
 Salix Pharmaceuticals, Ltd., (Unfunded Revolver) (8)(16)(17)
 
L+300 Funded, 0.50% Unfunded
 
1/2/19
 
 Healthcare
 
24,867

 
(1,618
)
 
(497
)
 Tibco Software Inc., (Unfunded Revolver) (8)
 
 L+400 / L+300 Funded, 0.50% Unfunded
 
12/5/19
 
 Business Services
 
6,000

 
(59
)
 
(30
)
 Transfirst Holdings, Inc., (Unfunded Revolver) (8)(16)
 
 L+450 Funded, 0.50% Unfunded
 
11/12/19
 
 Financial Services
 
2,940

 
(15
)
 
(29
)
 UniTek Global Services, Inc., (Unfunded Revolver)
 
L+850 Funded, 0.50% Unfunded
 
1/21/15
 
Telecommunications
 
5,000

 

 

 UniTek Global Services, Inc., (Revolver)
 
10.25% (L+925, 1.00% Floor) Funded
 
4/15/16
 
Telecommunications
 
38,731

 
38,731

 
38,731

 Walter Energy, Inc., (Unfunded Revolver) (8)(16)(17)
 
L+550 Funded, 0.625% Unfunded
 
10/1/17
 
 Mining
 
275

 
(169
)
 
(48
)
Total Funded and Unfunded Revolver Obligations
 
$
76,209

 
$
77,401

 
Letters of Credit— (0.0)%
 Confie Seguros Holding II Co., Letter of Credit (8)(16)
 
4.500%
 
10/27/14
 
 Insurance
 
$
600

 
$

 
$
(54
)
 Confie Seguros Holding II Co., Letter of Credit (8)(16)
 
4.500%
 
1/13/15
 
 Insurance
 
66

 

 
(6
)
 Laureate Education Inc., Letter of Credit (8)(17)
 
3.750%
 
6/16/16
 
 Education
 
93

 

 
(8
)
 Salix Pharmaceuticals, Ltd., Letter of Credit (16)(17)
 
3.000%
 
2/10/15
 
 Healthcare
 
8

 

 

 Salix Pharmaceuticals, Ltd., Letter of Credit (8)(16)(17)
 
3.000%
 
2/10/15
 
 Healthcare
 
125

 

 
(3
)
 Transfirst Holdings, Inc., Letter of Credit (8)(16)
 
L+450
 
11/12/19
 
 Financial Services
 
60

 

 
(1
)
 UniTek Global Services Inc., Letter of Credit
 
9.000%
 
1/21/15
 
Telecommunications
 
17,946

 

 

 UniTek Global Services Inc., Letter of Credit
 
9.000%
 
1/21/15
 
Telecommunications
 
1,850

 

 

 Walter Energy, Inc., Letter of Credit (8)(9)(16)(17)
 
5.500%
 
9/18/14- 7/4/15
 
 Mining
 
86

 

 
(15
)
 Walter Energy, Inc., Letter of Credit (8)(9)(16)(17)
 
5.500%
 
11/28/15- 8/31/15
 
 Mining
 
CAD
192

 

 
(29
)
Total Letters of Credit
 
$

 
$
(116
)
 
Total 1st Lien Secured Debt
 
$
922,781

 
$
884,758

 

See notes to financial statements.
9

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
2nd Lien Secured Debt—45.7%
Access Information
 
 9.75% (L+875, 1.00% Floor)
 
10/17/22
 
 Business Services
 
$
25,600

 
$
24,070

 
$
24,192

 Active Network, Inc.
 
 9.50% (L+850, 1.00% Floor)
 
11/15/21
 
 Business Services
 
19,672

 
19,584

 
19,181

 American Energy - Utica, LLC (10)
 
 11.00% (L+950, 1.50% Floor)
 
9/30/18
 
 Oil and Gas
 
6,828

 
6,770

 
6,247

 Appriss Holdings, Inc.
 
 9.25% (L+825, 1.00% Floor)
 
5/21/21
 
 Business Services
 
25,000

 
24,630

 
25,000

 Aptean, Inc.
 
 8.50% (L+750, 1.00% Floor)
 
2/26/21
 
 Business Services
 
10,322

 
10,181

 
9,883

 Armor Holdings, Inc. (American Stock Transfer and Trust Company)
 
 10.25% (L+900, 1.25% Floor)
 
12/26/20
 
 Financial Services
 
8,000

 
7,863

 
7,880

 Asurion Corporation
 
 8.50% (L+750, 1.00% Floor)
 
3/3/21
 
 Insurance
 
62,400

 
61,529

 
62,166

 Confie Seguros Holding II Co.
 
 10.25% (L+900, 1.25% Floor)
 
5/8/19
 
 Insurance
 
33,844

 
33,610

 
33,760

 Consolidated Precision Products Corp.
 
 8.75% (L+775, 1.00% Floor)
 
4/30/21
 
 Aerospace and Defense
 
1,940

 
1,931

 
1,853

 Deltek, Inc.
 
 10.00% (L+875, 1.25% Floor)
 
10/10/19
 
 Business Services
 
17,273

 
17,118

 
17,403

 Elements Behavioral Health, Inc.
 
 9.25% (L+825, 1.00% Floor)
 
2/11/20
 
 Healthcare
 
9,500

 
9,416

 
9,441

 Garden Fresh Restaurant Corp. (16)
 
 14.50% (L+1300 PIK, 1.50% Floor)
 
1/1/19
 
 Restaurants
 
38,448

 
36,504

 
34,219

 Garden Fresh Restaurant Corp. (16)
 
 7.25% (L+575 PIK, 1.50% Floor)
 
1/1/19
 
 Restaurants
 
8,090

 
6,279

 
5,501

 GCA Services Group, Inc.
 
 9.25% (L+800, 1.25% Floor)
 
11/1/20
 
 Diversified Service
 
22,838

 
22,930

 
22,609

 Grocery Outlet, Inc.
 
 9.25% (L+825, 1.00% Floor)
 
10/21/22
 
 Grocery
 
30,000

 
29,555

 
29,663

 GTCR Valor Companies, Inc.
 
 9.50% (L+850, 1.00% Floor)
 
11/30/21
 
 Business Services
 
35,000

 
34,657

 
33,950

 Institutional Shareholder Services, Inc.
 
 8.50% (L+750, 1.00% Floor)
 
4/30/22
 
 Financial Services
 
6,640

 
6,577

 
6,540

 Kronos, Inc.
 
 9.75% (L+850, 1.25% Floor)
 
4/30/20
 
 Business Services
 
51,123

 
50,727

 
52,082

 Miller Energy Resources, Inc. (17)
 
 12.75% (L+975, 3.00% Floor)
 
2/3/18
 
 Oil and Gas
 
87,500

 
86,076

 
85,750

 MSC Software Corp. (17)
 
 8.50% (L+750, 1.00% Floor)
 
5/28/21
 
 Business Services
 
18,448

 
18,275

 
18,079

 Novolex Holdings, Inc.
 
 9.75% (L+875, 1.00% Floor)
 
6/5/22
 
 Packing
 
40,000

 
39,005

 
39,200

 Pabst Brewing Company
 
 10.50 (P+725, 3.25% Floor) / 9.25 (L+825, 1.00% Floor)
 
11/14/22
 
 Consumer Products
 
32,000

 
31,601

 
31,600

 Premier Trailer Leasing, Inc.
 
 10.00% (L+900, 1.00% Floor)
 
9/24/20
 
 Financial Services
 
52,000

 
50,996

 
50,960


See notes to financial statements.
10

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
2nd Lien Secured Debt—45.7% (continued)
 RegionalCare Hospital Partners, Inc.
 
 10.50% (L+950, 1.00% Floor)
 
10/23/19
 
 Healthcare
 
$
4,000

 
$
3,796

 
$
3,990

 River Cree Enterprises LP (11)(17)
 
11.000%
 
1/20/21
 
 Hotels, Motels, Inns and Gaming
 
CAD
33,000

 
31,111

 
30,307

 SiTV, Inc. (11)
 
10.375%
 
7/1/19
 
 Cable Television
 
$
2,219

 
2,219

 
2,065

 Sprint Industrial Holdings, LLC
 
 11.25% (L+1000, 1.25% Floor)
 
11/14/19
 
 Containers, Packaging, and Glass
 
14,163

 
13,951

 
13,880

 SquareTwo Financial Corp. (Collect America, Ltd.) (17)
 
11.625%
 
4/1/17
 
 Financial Services
 
65,152

 
64,219

 
64,012

 Stadium Management Corp.
 
 9.25% (L+825, 1.00% Floor)
 
2/27/21
 
 Business Services
 
19,900

 
19,900

 
19,999

 TASC, Inc.
 
12.000%
 
5/21/21
 
 Aerospace and Defense
 
21,815

 
21,011

 
22,306

 TMK Hawk Parent Corp.
 
 8.50% (L+750, 1.00% Floor)
 
10/1/22
 
 Distribution
 
34,000

 
33,667

 
33,830

 Transfirst Holdings, Inc.
 
 9.00% (L+800, 1.00% Floor)
 
11/11/22
 
 Financial Services
 
21,740

 
21,525

 
21,532

 U.S. Renal Care, Inc.
 
 10.25% (L+900, 1.25% Floor)
 
1/3/20
 
 Healthcare
 
11,927

 
11,975

 
11,957

 Velocity Technology Solutions, Inc.
 
 9.00% (L+775, 1.25% Floor)
 
9/28/20
 
 Business Services
 
16,500

 
16,199

 
16,170

 Vertafore, Inc.
 
 9.75% (L+825, 1.50% Floor)
 
10/27/17
 
 Business Services
 
36,436

 
36,263

 
36,618

 Walter Energy, Inc. (11)(17)
 
11.000%
 
4/1/20
 
 Mining
 
22,554

 
21,227

 
7,499

Total 2nd Lien Secured Debt
 
$
926,947

 
$
911,324

TOTAL SECURED DEBT
 
$
1,849,728

 
$
1,796,082

UNSECURED DEBT—26.3%
 American Energy - Woodford LLC/AEW Finance Corp. (11)
 
9.000%
 
9/15/22
 
 Oil and Gas
 
$
5,000

 
$
4,800

 
$
3,275

 American Tire Distributors, Inc. (11)(16)
 
11.500%
 
6/1/18
 
 Distribution
 
25,000

 
25,000

 
25,500

 American Tire Distributors, Inc. (11)(16)
 
11.500%
 
6/1/18
 
 Distribution
 
40,000

 
39,420

 
40,800

 Artsonig Pty Ltd. (11)(17)
 
 11.50% (12.00% PIK Toggle)
 
4/1/19
 
 Transportation
 
21,227

 
20,962

 
18,839

 BCA Osprey II Limited (British Car Auctions) (16)(17)
 
 12.500% PIK
 
8/17/17
 
 Transportation
 
£
23,566

 
37,671

 
37,848

 BCA Osprey II Limited (British Car Auctions) (16)(17)
 
 12.500% PIK
 
8/17/17
 
 Transportation
 
14,333

 
19,764

 
17,864

 Canacol Energy Ltd. (17)
 
9.50% (L+850, 1.00% Floor)
 
12/31/19
 
 Oil and Gas
 
$
50,000

 
48,539

 
48,500

 Ceridian Corp. (11)
 
11.000%
 
3/15/21
 
 Diversified Service
 
31,760

 
31,760

 
34,896

 Delta Educational Systems, Inc.
 
16.00% PIK or 10.00% Cash / 6.00% PIK
 
5/12/17
 
 Education
 
23,235

 
22,969

 
22,224

 Denver Parent Corp. (Venoco)
 
12.25% (13.00% PIK Toggle)
 
8/15/18
 
 Oil and Gas
 
8,988

 
8,821

 
3,707

 My Alarm Center, LLC
 
 16.25% (12.00% Cash / 4.25% PIK)
 
7/9/18
 
 Business Services
 
4,145

 
4,145

 
4,145

 Niacet Corporation
 
13.000%
 
8/28/18
 
 Chemicals
 
12,500

 
12,500

 
12,625

 PetroBakken Energy Ltd. (11)(17)
 
8.625%
 
2/1/20
 
 Oil and Gas
 
39,300

 
40,455

 
27,903

 Radio One, Inc. (11)(17)
 
9.250%
 
2/15/20
 
 Broadcasting & Entertainment
 
14,804

 
14,804

 
12,954

 Sorenson Holdings, LLC (11)
 
 13.00% PIK
 
10/31/21
 
 Consumer Products
 
68

 
46

 
68


See notes to financial statements.
11

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
UNSECURED DEBT—26.3% (continued)
 Tibco Software Inc. (11)
 
11.375%
 
12/1/21
 
 Business Services
 
$
26,924

 
$
26,149

 
$
26,217

 U.S. Security Associates Holdings, Inc.
 
11.000%
 
7/28/18
 
 Business Services
 
135,000

 
135,000

 
137,700

 Univar, Inc.
 
10.500%
 
6/30/18
 
 Distribution
 
20,000

 
20,000

 
19,780

 Venoco, Inc.
 
8.875%
 
2/15/19
 
 Oil and Gas
 
54,996

 
55,026

 
30,523

TOTAL UNSECURED DEBT
 
$
567,831

 
$
525,368

TOTAL CORPORATE DEBT
 
$
2,417,559

 
$
2,321,450

STRUCTURED PRODUCTS AND OTHER—8.6%
 Asset Repackaging Trust Six B.V., Credit-Linked Note (11)(17)
 
N/A
 
5/15/27
 
 Utilities
 
$
58,411

 
$
24,925

 
$
32,785

 Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
9.483% (L+925)
 
4/17/22
 
 Diversified Investment Vehicle
 
25,000

 
25,092

 
24,503

 Craft 2013-1, Credit-Linked Note (16)(17)
 
9.483% (L+925)
 
4/17/22
 
 Diversified Investment Vehicle
 
7,625

 
7,753

 
7,476

 Craft 2014-1A, Credit-Linked Note (11)(17)
 
9.884% (L+965)
 
5/15/21
 
 Diversified Investment Vehicle
 
42,500

 
42,497

 
41,995

 Dark Castle Holdings, LLC
 
N/A
 
N/A
 
 Media
 
24,395

 
1,190

 
2,748

 JP Morgan Chase & Co., Credit-Linked Note (17)
 
12.483% (L+1225)
 
12/20/21
 
 Diversified Investment Vehicle
 
43,250

 
42,318

 
43,560

 NXT Capital CLO 2014-1, LLC (11)(17)
 
5.731% (L+550)
 
4/23/26
 
 Diversified Investment Vehicle
 
5,000

 
4,665

 
4,250

 Renaissance Umiat, LLC, ACES Tax Receivable (15)(17)
 
N/A
 
N/A
 
 Oil and Gas
 

 
13,014

 
14,003

TOTAL STRUCTURED PRODUCTS AND OTHER
 
$
161,454

 
$
171,320

PREFERRED EQUITY—2.0%
 
Shares
 

 

 CA Holding, Inc. (Collect America, Ltd.), Series A Preferred Stock (13)(17)
 
N/A
 
N/A
 
 Financial Services
 
7,961

 
$
788

 
$
1,113

 Crowley Holdings, Series A Preferred Stock (11)
 
12.00% (10.00% Cash / 2.00% PIK)
 
N/A
 
 Cargo Transport
 
22,500

 
22,964

 
23,518

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Preferred Stock (Convertible) (13)(14)
 
12.50% PIK
 
N/A
 
 Education
 
332,500

 
6,863

 

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Preferred Stock (13)(14)
 
13.50% PIK
 
5/12/18
 
 Education
 
12,360

 
27,685

 
9,954

 Varietal Distribution Holdings, LLC, Class A Preferred Unit
 
8.00% PIK
 
N/A
 
 Distribution
 
3,097

 
5,613

 
5,613

TOTAL PREFERRED EQUITY
 
$
63,913

 
$
40,198


See notes to financial statements.
12

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par Amount(12)
 
Cost
 
Fair
Value (1)
EQUITY—1.8%
Common Equity/Interests—1.5%
 
 
 
 
 
 
 
Shares
 
 
 
 
 ATD Corporation (Accelerate Parent Corp.), Common Stock (11)(13)
 
N/A
 
N/A
 
 Distribution
 
3,225,514

 
3,276

 
5,130

 CA Holding, Inc. (Collect America, Ltd.), Series A Common Stock (13)(17)
 
N/A
 
N/A
 
 Financial Services
 
25,000

 
2,500

 

 CA Holding, Inc. (Collect America, Ltd.), Series AA Common Stock (13)(17)
 
N/A
 
N/A
 
 Financial Services
 
4,294

 
429

 

 Caza Petroleum, Inc., Net Profits Interest (13)
 
N/A
 
N/A
 
 Oil and Gas
 

 
1,202

 
1,036

 Caza Petroleum, Inc., Overriding Royalty Interest
 
N/A
 
N/A
 
 Oil and Gas
 

 
339

 
349

 Clothesline Holdings, Inc. (Angelica Corporation), Common Stock (13)
 
N/A
 
N/A
 
 Healthcare
 
6,000

 
6,000

 
669

 Explorer Coinvest, LLC (Booz Allen), Common Stock (13)(17)
 
N/A
 
N/A
 
 Business Services
 
246

 
1,881

 
6,063

 Garden Fresh Restaurant Holdings, LLC., Common Stock (13)
 
N/A
 
N/A
 
 Restaurants
 
50,000

 
5,000

 

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Common Stock (13)
 
N/A
 
N/A
 
 Education
 
17,500

 
175

 

 JV Note Holdco, LLC (DSI Renal, Inc.), Common Equity / Interest (13)
 
N/A
 
N/A
 
 Healthcare
 
9,303

 
85

 

 Pelican Energy, LLC, Net Profits Interest (13)(17)
 
N/A
 
N/A
 
 Oil and Gas
 
1,048,811

 
1,049

 
332

 Skyline Data, News and Analytics LLC, Class A Common Unit (13)
 
N/A
 
N/A
 
 Printing and Publishing
 
5,000

 
5,000

 
5,000

 Sorenson Holdings, LLC, Membership Interests (13)
 
N/A
 
N/A
 
 Consumer Products
 
587

 

 
81

 Univar, Inc., Common Stock (13)
 
N/A
 
N/A
 
 Distribution
 
900,000

 
9,000

 
10,710

 Varietal Distribution Holdings, LLC, Class A Common Unit (13)
 
N/A
 
N/A
 
 Distribution
 
28,028

 
28

 
125

Total Common Equity/Interests
 
$
35,964

 
$
29,495


See notes to financial statements.
13

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except warrants)
INVESTMENTS IN NON-CONTROLLED/NON-AFFILIATED INVESTMENTS—128.7% (18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Warrants
 
Cost
 
Fair
Value (1)
Warrants—0.3%
 CA Holding, Inc. (Collect America, Ltd.), Common Stock Warrants (13)(17)
 
N/A
 
N/A
 
 Financial Services
 
7,961

 
$
8

 
$

 Energy & Exploration Partners, Inc., Common Stock Warrants (13)
 
N/A
 
N/A
 
 Oil and Gas
 
60,778

 
2,374

 
58

 Fidji Luxco (BC) S.C.A., Common Stock Warrants (2)(13)(17)
 
N/A
 
N/A
 
 Electronics
 
18,113

 
182

 
4,450

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Class A-1 Preferred Stock Warrants (13)
 
N/A
 
N/A
 
 Education
 
45,947

 
459

 

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Class B-1 Preferred Stock Warrants (13)
 
N/A
 
N/A
 
 Education
 
104,314

 
1,043

 

 Gryphon Colleges Corp. (Delta Educational Systems, Inc.), Common Stock Warrants (13)
 
N/A
 
N/A
 
 Education
 
9,820

 
98

 

 Osage Exploration & Development, Inc., Common Stock Warrants (13)(17)
 
N/A
 
N/A
 
 Oil and Gas
 
1,496,843

 

 
365

 Spotted Hawk Development, LLC, Common Stock Warrants (13)
 
N/A
 
N/A
 
 Oil and Gas
 
54,545

 
852

 
1,496

Total Warrants
 
$
5,016

 
$
6,369

TOTAL EQUITY
 
$
40,980

 
$
35,864

Total Investments in Non-Controlled/ Non-Affiliated Investments
 
$
2,683,906

 
$
2,568,832


See notes to financial statements.
14

Table of Contents

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (unaudited) (continued)
December 31, 2014
(in thousands, except shares)
INVESTMENTS IN NON-CONTROLLED/AFFILIATED
INVESTMENTS—9.9%(4)(18)
 
Interest Rate
 
Maturity Date
 
Industry
 
Par
Amount (12)
 
Cost
 
Fair
Value (1)
CORPORATE DEBT—0.0%
SECURED DEBT—0.0%
1st Lien Secured Debt—0.0%
 Renewable Funding Group, Inc., (4)(13)
 
0.00%
 
9/30/15
 
Finance
 
$
1,000

 
$
1,000

 
$
1,000

Total 1st Lien Secured Debt
 
$
1,000

 
$
1,000

TOTAL SECURED DEBT
 
$
1,000

 
$
1,000

TOTAL CORPORATE DEBT
 
$
1,000

 
$
1,000

 
 
 
 
 
 
 
 
 
 
 
 
 
STRUCTURED PRODUCTS AND OTHER—9.2%
 Golden Bear Warehouse, LLC, Equity (3)(4)(17)
 
N/A
 
N/A
 
 Diversified Investment Vehicle
 
$
1,226

 
$
1,226

 
$
951

 Golden Hill CLO I, LLC, Equity (3)(4)(17)
 
N/A
 
N/A
 
 Diversified Investment Vehicle
 
61,285

 
61,818

 
62,689

 Highbridge Loan Management 3-2014, Ltd., Class E Notes (3)(4)(11)(16)(17)
 
6.234% (L+600)
 
1/18/25
 
 Diversified Investment Vehicle
 
2,485

 
2,274

 
2,145

 Highbridge Loan Management 3-2014, Ltd., Subordinated Notes (3)(4)(11)(16)(17)
 
N/A
 
1/18/25
 
 Diversified Investment Vehicle
 
8,163

 
6,809

 
6,759

 Ivy Hill Middle Market Credit Fund IX, Ltd, Subordinated Notes (3)(4)(11)(17)
 
N/A
 
10/18/25
 
 Diversified Investment Vehicle
 
12,500

 
11,375

 
11,375

 Jamestown CLO I LTD, Subordinated Notes (3)(4)(11)(17)
 
N/A
 
11/5/24
 
 Diversified Investment Vehicle
 
4,325

 
3,475

 
3,948

 MCF CLO I, LLC, Membership Interests (3)(4)(11)(17)
 
N/A
 
4/20/23
 
 Diversified Investment Vehicle
 
38,918

 
35,546

 
38,700

 MCF CLO III, LLC, Class E Notes (3)(4)(11)(17)
 
4.684% (L+445)
 
1/20/24
 
 Diversified Investment Vehicle
 
12,750

 
11,429

 
11,220

 MCF CLO III, LLC, Membership Interests (3)(4)(11)(17)
 
N/A
 
1/20/24
 
 Diversified Investment Vehicle
 
41,900

 
37,780

 
39,684

 Slater Mill Loan Fund LP, LP Certificates (3)(4)(17)
 
N/A
 
N/A
 
 Diversified Investment Vehicle
 
8,375

 
5,859

 
7,404

TOTAL STRUCTURED PRODUCTS AND OTHER
 
$
177,591

 
$
184,875

 
 
 
 
 
 
 
 
 
 
 
 
 
PREFERRED EQUITY—0.5%