10-Q
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 quarterly period ended December 31, 2015
OR
¨ 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, New York
10019
(Address of principal executive offices)
(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 (or for such shorter period that the Registrant was required to file such reports), 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 (§232.405 of this chapter) 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, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
 
Accelerated filer
¨
Non-accelerated filer
¨

 
Smaller reporting company
¨

(Do not check if a 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
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class of Common Stock
 
Outstanding at February 9, 2016
$0.001 par value
 
226,156,496
 

Table of Contents

APOLLO INVESTMENT CORPORATION
Table of Contents
 
 
Page
 
PART I. FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
PART II. OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 
Signatures

Table of Contents

PART I. FINANCIAL INFORMATION
In this report, the terms “Apollo Investment,” the “Company,” “AIC,” “we,” “us” and “our” refer to Apollo Investment Corporation unless the context specifically states otherwise.
Item 1. Financial Statements
APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except share and per share data)

 
December 31, 2015

March 31, 2015
 
(Unaudited)
 
 
Assets
 
 
 
Investments at fair value:
 
 
 
Non-controlled/non-affiliated investments (cost — $2,353,855 and $2,514,328, respectively)
$
2,079,618

 
$
2,357,042

Non-controlled/affiliated investments (cost — $188,725 and $297,948, respectively)
249,607

 
327,218

Controlled investments (cost — $715,920 and $674,299, respectively)
739,768

 
665,567

Total investments at fair value (cost — $3,258,500 and $3,486,575, respectively)
3,068,993

 
3,349,827

Cash
10,414

 
3,766

Foreign currencies (cost — $2,125 and $4,856, respectively)
2,113

 
4,651

Receivable for investments sold
63,024

 
114,884

Interest receivable
32,603

 
43,312

Dividends receivable
8,874

 
5,425

Deferred financing costs
30,111

 
29,743

Prepaid expenses and other assets
3,162

 
9,283

Total Assets
$
3,219,294

 
$
3,560,891

 
 
 
 
Liabilities
 
 
 
Debt
$
1,384,719

 
$
1,498,759

Payable for investments purchased
5,282

 
10,736

Dividends payable
45,634

 
47,348

Management and performance-based incentive fees payable
30,086

 
37,361

Interest payable
17,292

 
15,851

Accrued administrative services expense
1,808

 
2,000

Other liabilities and accrued expenses
10,264

 
11,228

Total Liabilities
$
1,495,085

 
$
1,623,283

Net Assets
$
1,724,209

 
$
1,937,608

 
 
 
 
Net Assets
 
 
 
Common stock, $0.001 par value (400,000,000 shares authorized; 228,168,622 and 236,741,351 shares issued and outstanding, respectively)
$
228

 
$
237

Paid-in capital in excess of par
3,145,287

 
3,197,715

Over-distributed net investment income
(26,783
)
 
(35,589
)
Accumulated net realized loss
(1,222,886
)
 
(1,102,517
)
Net unrealized loss
(171,637
)
 
(122,238
)
Net Assets
$
1,724,209

 
$
1,937,608

 
 
 
 
Net Asset Value Per Share
$
7.56

 
$
8.18


See notes to financial statements.
1
Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

 
Three Months Ended 
 December 31,
 
Nine Months Ended 
 December 31,
 
2015
 
2014
 
2015
 
2014
Investment Income
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
61,756

 
$
87,606

 
$
205,585

 
$
266,300

Dividend income
1,037

 
991

 
2,824

 
3,106

Other income
677

 
4,533

 
6,822

 
10,827

Non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
182

 
283

 
633

 
3,479

Dividend income
9,594

 
4,393

 
28,263

 
12,467

Other income
70

 
—

 
297

 
87

Controlled investments:
 
 
 
 
 
 
 
Interest income
13,388

 
10,199

 
34,571

 
29,154

Dividend income
7,621

 
1,958

 
15,352

 
5,658

Other income
—

 
63

 
63

 
438

Total Investment Income
$
94,325

 
$
110,026

 
$
294,410

 
$
331,516

Expenses
 
 
 
 
 
 
 
Management fees
$
16,478

 
$
18,755

 
$
50,557

 
$
55,744

Performance-based incentive fees
11,142

 
13,215

 
33,783

 
41,075

Interest and other debt expenses
19,335

 
20,315

 
63,535

 
58,163

Administrative services expense
1,531

 
1,863

 
4,614

 
4,821

Other general and administrative expenses
2,806

 
3,014

 
7,695

 
7,919

Total expenses
51,292

 
57,162

 
160,184

 
167,722

Management and performance-based incentive fees waived
(4,999
)
 
(3,740
)
 
(14,237
)
 
(11,934
)
Expense reimbursements
(59
)
 
(58
)
 
(176
)
 
(174
)
Net Expenses
$
46,234

 
$
53,364

 
$
145,771

 
$
155,614

Net Investment Income
$
48,091

 
$
56,662

 
$
148,639

 
$
175,902

Net Realized and Change in Unrealized Gains (Losses)
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
$
(6,112
)
 
$
(2,355
)
 
$
(82,896
)
 
$
(14,244
)
Non-controlled/affiliated investments
(1,575
)
 
(169
)
 
(1,642
)
 
11,357

Controlled investments
—

 
(57
)
 
(39,714
)
 
(57
)
Foreign currency transactions
(1,599
)
 
1,151

 
3,883

 
(225
)
Net realized losses
(9,286
)
 
(1,430
)
 
(120,369
)
 
(3,169
)
Net change in unrealized gains (losses):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
(73,088
)
 
(100,749
)
 
(116,950
)
 
(149,322
)
Non-controlled/affiliated investments
2,879

 
13,320

 
31,612

 
22,189

Controlled investments
(2,173
)
 
9,687

 
32,579

 
31,767

Foreign currency translations
7,805

 
3,058

 
3,360

 
9,785

Net change in unrealized losses
(64,577
)
 
(74,684
)
 
(49,399
)
 
(85,581
)
Net Realized and Change in Unrealized Losses
$
(73,863
)
 
$
(76,114
)
 
$
(169,768
)
 
$
(88,750
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
(25,772
)
 
$
(19,452
)
 
$
(21,129
)
 
$
87,152

Earnings (Loss) Per Share — Basic
$
(0.11
)
 
$
(0.09
)
 
$
(0.09
)
 
$
0.36

Earnings (Loss) Per Share — Diluted
$
(0.11
)
 
$
(0.09
)
 
$
(0.09
)
 
$
0.36


See notes to financial statements.
2
Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS
(In thousands, except share data)

 
Nine Months Ended 
 December 31, 2015
 
Year Ended
March 31, 2015
 
(Unaudited)
 
 
Operations
 
 
 
Net investment income
$
148,639

 
$
227,973

Net realized losses
(120,369
)
 
(13,368
)
Net change in unrealized losses
(49,399
)
 
(139,183
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
(21,129
)
 
$
75,422

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution of net investment income
$
(139,833
)
 
$
(165,626
)
Distribution of return of capital
—

 
(23,767
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
$
(139,833
)
 
$
(189,393
)
 
 
 
 
Capital Share Transactions
 
 
 
Offering costs for the issuance of common stock
$
—

 
$
(32
)
Repurchase of common stock
(52,437
)
 
—

Net Decrease in Net Assets Resulting from Capital Share Transactions
$
(52,437
)
 
$
(32
)
 
 
 
 
Net Assets
 
 
 
Net decrease in net assets during the period
$
(213,399
)
 
$
(114,003
)
Net assets at beginning of period
1,937,608

 
2,051,611

Net Assets at End of Period
$
1,724,209

 
$
1,937,608

 
 
 
 
Capital Share Activity
 
 
 
Shares repurchased during the period
(8,572,729
)
 
—

Shares issued and outstanding at beginning of period
236,741,351

 
236,741,351

Shares Issued and Outstanding at End of Period
228,168,622

 
236,741,351


See notes to financial statements.
3
Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

 
Nine Months Ended December 31,
 
2015
 
2014
Operating Activities
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(21,129
)
 
$
87,152

Net realized losses
120,369

 
3,169

Net change in unrealized losses
49,399

 
85,581

Net amortization of premiums and accretion of discounts on investments
(5,039
)
 
(7,860
)
Accretion of discount on notes
447

 
1

Amortization of deferred financing costs
5,278

 
4,966

Increase (decrease) from foreign currency transactions
4,477

 
(1,035
)
Changes in operating assets and liabilities:
 
 
 
Payment-in-kind interest and dividends capitalized
(34,090
)
 
(24,155
)
Purchases of investments
(923,719
)
 
(1,950,745
)
Proceeds from sales and repayments of investments
1,113,077

 
1,715,756

Decrease in interest receivable
10,709

 
10,093

Increase in dividends receivable
(3,449
)
 
(40
)
Decrease (increase) in prepaid expenses and other assets
6,121

 
(3,486
)
Increase (decrease) in management and performance-based incentive fees payable
(7,275
)
 
6,417

Increase in interest payable
1,441

 
1,619

Increase (decrease) in accrued administrative services expense
(192
)
 
317

Increase (decrease) in other liabilities and accrued expenses
(964
)
 
763

Net Cash Provided by (Used in) Operating Activities
$
315,461

 
$
(71,487
)
Financing Activities
 
 
 
Issuances of debt
$
1,624,754

 
$
2,423,577

Payments of debt
(1,736,668
)
 
(2,196,492
)
Financing costs paid and deferred
(5,646
)
 
(432
)
Offering costs for the issuance of common stock
—

 
(27
)
Repurchase of common stock
(52,437
)
 
—

Dividends paid
(141,547
)
 
(142,045
)
Net Cash Provided by (Used in) Financing Activities
$
(311,544
)
 
$
84,581

 
 
 
 
Cash and Foreign Currencies
 
 
 
Net increase in cash and foreign currencies during the period
$
3,917

 
$
13,094

Effect of foreign exchange rate changes
193

 
(160
)
Cash and foreign currencies at beginning of period
8,417

 
14,736

Cash and Foreign Currencies at End of Period
$
12,527

 
$
27,670

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash interest paid
$
46,962

 
$
50,064

 
 
 
 
Non-Cash Activities
 
 
 
Payment-in-kind income
$
31,607

 
$
24,889

Non-cash reorganizations and restructuring of investments
$
268,250

 
$
17,141


See notes to financial statements.
4
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Non-Controlled/Non-Affiliated Investments—120.6% (10)
 
 
 
 
 
 
 
 
 
 
Corporate Debt—105.5%
 
 
 
 
 
 
 
 
 
 
Secured Debt—88.9%
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt—36.1%
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt (excluding Revolvers and Letters of Credit)—36.0%
 
 
 
 
 
 
 
 
Aventine Renewable Energy Holdings, Inc.
 
Chemicals, Plastics & Rubber
 
10.500% Cash (15.000% PIK Toggle)
 
9/22/17
 
$
16,339

 
$
17,970

 
$
15,685

Aveta, Inc.
 
Healthcare & Pharmaceuticals
 
9.750% (3M L+825, 1.50% Floor)
 
12/12/17
 
51,315

 
50,619

 
30,575

Belk, Inc.
 
Retail
 
5.750% (6M L+475, 1.00% Floor)
 
12/12/22
 
10,780

 
9,587

 
9,513

ChyronHego Corporation (18)
 
High Tech Industries
 
6.625% (3M L+563, 1.00% Floor)
 
3/9/20
 
32,431

 
31,858

 
31,783

Deep Gulf Energy II, LLC
 
Energy – Oil & Gas
 
14.500% (6M L+1300, 1.50% Floor)
 
9/30/18
 
50,000

 
50,000

 
45,625

Delta Educational Systems, Inc.
 
Education
 
16.000% PIK
 
12/11/16
 
6,509

 
6,509

 
6,496

Dodge Data & Analytics LLC
 
Business Services
 
9.750% (3M L+875, 1.00% Floor)
 
10/31/19
 
53,503

 
52,641

 
52,031

ECN Holding Company (18)
 
High Tech Industries
 
8.000% (3M L+700, 1.00% Floor)
 
6/12/21
 
22,388

 
22,077

 
21,850

Hunt Companies, Inc. (11)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.625%
 
3/1/21
 
34,008

 
32,665

 
30,862

Magnetation, LLC (11)(13)(14)(16)
 
Metals & Mining
 
11.000%
 
5/15/18
 
32,632

 
33,957

 
1,812

Magnetation, LLC (13)(14)(16)
 
Metals & Mining
 
12.000% PIK
 
3/7/16
 
13,070

 
12,427

 
6,607

Maxus Capital Carbon SPE I, LLC
 
Chemicals, Plastics & Rubber
 
13.000%
 
9/18/19
 
63,438

 
63,438

 
62,800

My Alarm Center, LLC (16)
 
Business Services
 
9.000% (12M L+800, 1.00% Floor)
 
1/9/19
 
42,614

 
42,614

 
42,614

My Alarm Center, LLC (16)(23)
 
Business Services
 
9.000% (12M L+800 Funded, 0.350% Unfunded, 1.00% Floor)
 
1/9/19
 
11,441

 
11,441

 
11,441

My Alarm Center, LLC (16)(23)
 
Business Services
 
9.000% (3M L+800 Funded, 0.350% Unfunded, 1.00% Floor)
 
1/9/19
 
3,880

 
3,880

 
3,880

Osage Exploration & Development, Inc. (11)(13)(14)(17)
 
Energy – Oil & Gas
 
13.000% (12M L+1100, 2.00% Floor), 13.000% PIK Toggle
 
4/27/16
 
25,840

 
24,856

 
4,489

Pelican Energy, LLC (17)
 
Energy – Oil & Gas
 
10.000% (7.000% Cash, 3.000% PIK)
 
12/31/18
 
28,313

 
27,524

 
22,878

Saba Software, Inc. (18)
 
High Tech Industries
 
9.750% (12M L+875, 1.00% Floor)
 
3/30/21
 
9,950

 
9,950

 
9,801

SCM Insurance Services, Inc. (17)
 
Business Services
 
9.250%
 
8/22/19
 
C$
39,480

 
32,960

 
25,863

Spotted Hawk Development, LLC
 
Energy – Oil & Gas
 
19.000% (13.000% Cash, 6.000% PIK)
 
9/12/16
 
84,380

 
84,380

 
68,001


See notes to financial statements.
5
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Telestream Holdings Corporation (18)
 
High Tech Industries
 
7.430% (3M L+643, 1.00% Floor)
 
1/15/20
 
$
31,891

 
$
31,891

 
$
31,444

UniTek Global Services Inc. (16)
 
Telecommunications
 
9.500% (3M L+750, 1.000% PIK, 1.00% Floor)
 
1/13/19
 
17,882

 
17,882

 
17,882

UniTek Global Services Inc. (16)
 
Telecommunications
 
8.500% (3M L+750, 1.00% Floor)
 
1/13/19
 
32,367

 
32,367

 
30,748

Venoco, Inc.
 
Energy – Oil & Gas
 
12.000%
 
2/28/19
 
40,517

 
40,517

 
36,465

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)
 
 
 
 
 
$
744,010

 
$
621,145

Funded and Unfunded Revolver Obligations—0.1%
 
 
 
 
 
 
 
 
 
 
Alliant Holdings, Unfunded Revolver (8)(21)(23)
 
Insurance
 
0.500% Unfunded
 
8/14/20
 
$
15,000

 
$
(1,575
)
 
$
(1,485
)
Avaya, Inc., Revolver
 
Telecommunications
 
2.963% (12M L+275)
 
10/26/16
 
3,303

 
3,152

 
3,105

CIT Group, Inc., Unfunded Revolver (8)(17)(21)(23)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
0.625% Unfunded
 
1/27/17
 
25,000

 
(3
)
 
(875
)
Confie Seguros Holding II Co., Revolver (16)(23)
 
Insurance
 
7.000% (3M P+350)
 
12/10/18
 
750

 
750

 
660

Confie Seguros Holding II Co., Revolver (16)(23)
 
Insurance
 
4.924% (3M L+450)
 
12/10/18
 
470

 
470

 
414

Confie Seguros Holding II Co., Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.500% Unfunded
 
12/10/18
 
3,194

 
(271
)
 
(384
)
My Alarm Center, LLC, Unfunded Revolver (16)(21)(23)
 
Business Services
 
0.350% Unfunded
 
1/9/19
 
6,250

 
—

 
—

Tibco Software Inc., Revolver (16)(23)
 
High Tech Industries
 
4.230% (12M L+400)
 
12/5/19
 
1,440

 
1,440

 
1,332

Tibco Software Inc., Unfunded Revolver (8)(21)(23)
 
High Tech Industries
 
0.500% Unfunded
 
12/5/19
 
4,560

 
(47
)
 
(342
)
Transfirst Holdings, Inc., Unfunded Revolver (8)(16)(21)(23)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
0.500% Unfunded
 
11/12/19
 
2,943

 
(12
)
 
(88
)
UniTek Global Services Inc., Unfunded Revolver (16)(21)(23)
 
Telecommunications
 
0.500% Unfunded
 
1/13/19
 
5,000

 
—

 
—

Total Funded and Unfunded Revolver Obligations
 
 
 
 
 
 
 
$
3,904

 
$
2,337

Letters of Credit—0.0%
 
 
 
 
 
 
 
 
 
 
Confie Seguros Holding II Co., Letter of Credit (8)(16)(23)
 
Insurance
 
4.500%
 
1/13/16
 
$
86

 
$
—

 
$
(10
)
Transfirst Holdings, Inc., Letter of Credit (8)(16)(23)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
3.750%
 
11/12/19
 
57

 
—

 
(2
)
UniTek Global Services Inc., Letter of Credit (16)(23)
 
Telecommunications
 
7.500%
 
1/13/19
 
8,813

 
—

 
—

UniTek Global Services Inc., Letter of Credit (16)(23)
 
Telecommunications
 
7.500%
 
1/13/19
 
1,850

 
—

 
—

Total Letters of Credit
 
 
 
 
 
 
 
$
—

 
$
(12
)
Total First Lien Secured Debt
 
 
 
 
 
 
 
$
747,914

 
$
623,470


See notes to financial statements.
6
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Second Lien Secured Debt—52.8%
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC
 
Consumer Services
 
9.500% (3M L+850, 1.00% Floor)
 
8/22/22
 
$
35,000

 
$
34,327

 
$
34,055

Access CIG, LLC
 
Business Services
 
9.750% (3M L+875, 1.00% Floor)
 
10/17/22
 
50,970

 
48,746

 
49,696

Active Network, Inc.
 
Business Services
 
9.500% (3M L+850, 1.00% Floor)
 
11/15/21
 
19,672

 
19,593

 
18,197

Appriss Holdings, Inc.
 
Business Services
 
9.250% (3M L+825, 1.00% Floor)
 
5/21/21
 
32,750

 
32,315

 
32,750

Armor Holding II LLC
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.250% (3M L+900, 1.25% Floor)
 
12/26/20
 
8,000

 
7,881

 
7,800

Asurion Corporation
 
Insurance
 
8.500% (3M L+750, 1.00% Floor)
 
3/3/21
 
67,590

 
67,313

 
58,211

Confie Seguros Holding II Co.
 
Insurance
 
10.250% (3M L+900, 1.25% Floor)
 
5/8/19
 
22,344

 
22,242

 
22,149

Delta Educational Systems, Inc.
 
Education
 
35.000% PIK
 
6/10/18
 
1,182

 
1,182

 
2,301

Deltek, Inc.
 
Business Services
 
9.500% (3M L+850, 1.00% Floor)
 
6/26/23
 
28,086

 
27,696

 
27,735

Elements Behavioral Health, Inc.
 
Healthcare & Pharmaceuticals
 
11.750% (3M L+875 Cash, 2.000% PIK, 1.00% Floor)
 
2/11/20
 
9,534

 
9,464

 
9,482

Extraction Oil & Gas Holdings, LLC
 
Energy – Oil & Gas
 
11.000% & 10.000%
 
5/29/19
 
52,633

 
52,036

 
52,264

Garden Fresh Restaurant Corp. (16)
 
Hotel, Gaming, Leisure, Restaurants
 
7.750% (3M L+625 PIK, 1.50% Floor)
 
1/1/19
 
8,755

 
7,298

 
6,391

Garden Fresh Restaurant Corp. (16)
 
Hotel, Gaming, Leisure, Restaurants
 
15.000% (12M L+1350 PIK, 1.50% Floor)
 
1/1/19
 
44,687

 
43,116

 
35,750

GCA Services Group, Inc.
 
Business Services
 
9.250% (3M L+800, 1.25% Floor)
 
11/2/20
 
26,197

 
26,298

 
25,870

Grocery Outlet, Inc.
 
Food & Grocery
 
9.250% (3M L+825, 1.00% Floor)
 
10/21/22
 
28,000

 
27,624

 
27,580

GTCR Valor Companies, Inc.
 
Business Services
 
9.500% (3M L+850, 1.00% Floor)
 
11/30/21
 
35,000

 
34,695

 
33,644

Infiltrator Systems Integrated, LLC
 
Manufacturing, Capital Equipment
 
9.750% (3M L+875, 1.00% Floor)
 
5/26/23
 
13,889

 
13,625

 
13,819

Institutional Shareholder Services, Inc.
 
Business Services
 
8.500% (3M L+750, 1.00% Floor)
 
4/30/22
 
6,640

 
6,584

 
6,341

Kronos, Inc.
 
Business Services
 
9.750% (3M L+850, 1.25% Floor)
 
4/30/20
 
3,512

 
3,567

 
3,506

Miller Energy Resources, Inc. (13)(14)(17)
 
Energy – Oil & Gas
 
14.750% (3M L+1075 Cash, 2.000% PIK, 2.000% Floor)
 
2/3/18
 
89,021

 
88,568

 
63,757

MSC Software Corp. (17)
 
High Tech Industries
 
8.500% (3M L+750, 1.00% Floor)
 
5/31/21
 
13,448

 
13,337

 
11,834


See notes to financial statements.
7
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Novolex Holdings, Inc.
 
Containers, Packaging & Glass
 
9.750% (3M L+875, 1.00% Floor)
 
6/5/22
 
$
42,045

 
$
41,092

 
$
40,153

Pabst Brewing Company
 
Consumer Goods – Durable
 
9.250% (3M L+825, 1.00% Floor)
 
11/14/22
 
27,000

 
26,695

 
26,460

Poseidon Merger Sub, Inc.
 
Business Services
 
9.500% (3M L+850, 1.00% Floor)
 
8/15/23
 
18,000

 
17,485

 
18,000

Premier Trailer Leasing, Inc.
 
Transportation – Cargo, Distribution
 
10.000% (3M L+900, 1.00% Floor)
 
9/24/20
 
52,000

 
51,135

 
53,040

River Cree Enterprises LP (11)(17)
 
Hotel, Gaming, Leisure, Restaurants
 
11.000%
 
1/20/21
 
C$
23,000

 
21,684

 
16,516

SiTV, Inc. (11)
 
Broadcasting & Subscription
 
10.375%
 
7/1/19
 
2,219

 
2,219

 
1,786

SMG
 
Hotel, Gaming, Leisure, Restaurants
 
9.250% (3M L+825, 1.00% Floor)
 
2/27/21
 
19,900

 
19,900

 
20,000

Sprint Industrial Holdings, LLC
 
Containers, Packaging & Glass
 
11.250% (3M L+1000, 1.25% Floor)
 
11/14/19
 
16,163

 
15,469

 
12,365

SquareTwo Financial Corp. (17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
11.625%
 
4/1/17
 
65,152

 
64,619

 
37,462

STG-Fairway Acquisitions, Inc.
 
Business Services
 
10.250% (3M L+925, 1.00% Floor)
 
6/30/23
 
15,000

 
14,641

 
14,400

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

 
21,095

 
22,142

TMK Hawk Parent, Corp.
 
Transportation – Cargo, Distribution
 
8.500% (3M L+750, 1.00% Floor)
 
10/1/22
 
34,000

 
33,700

 
33,660

Transfirst Holdings, Inc.
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.000% (3M L+800, 1.00% Floor)
 
11/11/22
 
27,840

 
27,570

 
27,283

U.S. Renal Care, Inc.
 
Healthcare & Pharmaceuticals
 
9.000% (3M L+800, 1.00% Floor)
 
12/29/23
 
3,000

 
2,940

 
2,948

Velocity Technology Solutions, Inc.
 
Business Services
 
9.000% (3M L+775, 1.25% Floor)
 
9/28/20
 
16,500

 
16,241

 
15,881

Venoco, Inc.
 
Energy – Oil & Gas
 
8.875% (12.000% PIK Toggle)
 
2/28/19
 
35,843

 
46,020

 
25,090

Total Second Lien Secured Debt
 
 
 
 
 
 
 
$
1,010,012

 
$
910,318

Total Secured Debt
 
 
 
 
 
 
 
$
1,757,926

 
$
1,533,788


See notes to financial statements.
8
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Unsecured Debt—16.6%
 
 
 
 
 
 
 
 
 
 
Aerojet Rocketdyne Holdings, Inc. (formerly GenCorp, Inc.) (17)
 
Aerospace & Defense
 
9.500% (3M L+850, 1.00% Floor)
 
4/18/22
 
$
6,500

 
$
6,500

 
$
6,500

American Tire Distributors, Inc. (11)
 
Transportation – Cargo, Distribution
 
10.250%
 
3/1/22
 
29,741

 
29,821

 
27,399

Canacol Energy Ltd. (17)(23)
 
Energy – Oil & Gas
 
 9.500% (3M L+850, 1.000% Unfunded, 1.00% Floor)
 
12/31/19
 
75,000

 
73,339

 
71,400

Delta Educational Systems, Inc.
 
Education
 
16.000% PIK
 
5/12/17
 
27,181

 
27,016

 
18,862

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

 
15,721

 
12,367

Sorenson Holdings, LLC (11)
 
Consumer Goods – Durable
 
13.000% (13.000% PIK Toggle)
 
10/31/21
 
68

 
45

 
69

Tibco Software Inc. (11)
 
High Tech Industries
 
11.375%
 
12/1/21
 
6,984

 
6,803

 
5,849

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

 
135,000

 
136,350

UniTek Global Services Inc.
 
Telecommunications
 
15.000% PIK
 
7/13/19
 
7,093

 
7,093

 
7,093

Total Unsecured Debt
 
 
 
 
 
 
 
$
301,338

 
$
285,889

Total Corporate Debt
 
 
 
 
 
 
 
$
2,059,264

 
$
1,819,677

Structured Products and Other—10.6%
 
 
 
 
 
 
 
 
 
 
Asset Repackaging Trust Six B.V., Credit-Linked Note (11)(17)(19)
 
Utilities – Electric
 
13.832%
 
5/18/27
 
$
58,411

 
$
25,215

 
$
32,224

Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.565% (3M L+925)
 
4/17/22
 
25,000

 
25,066

 
23,754

Craft 2013-1, Credit-Linked Note (16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.565% (3M L+925)
 
4/17/22
 
7,625

 
7,731

 
7,248

Craft 2014-1A, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.012% (3M L+965)
 
5/15/21
 
42,500

 
42,436

 
40,692

Craft 2015-2, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.567% (3M L+925)
 
1/16/24
 
26,000

 
25,956

 
24,981

Dark Castle Holdings, LLC
 
Media – Diversified & Production
 
31.240%
 
N/A
 
24,395

 
1,189

 
2,150

JP Morgan Chase & Co., Credit-Linked Note (17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
12.595% (12M L+1225)
 
12/20/21
 
43,250

 
41,587

 
42,594

NXT Capital CLO 2014-1, LLC, Class E Notes (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
5.816% (3M L+550)
 
4/23/26
 
5,000

 
4,686

 
4,072

Renaissance Umiat, LLC, ACES Tax Receivable (15)(17)
 
Energy – Oil & Gas
 
15.250% to 17.460%
 
N/A
 
—

 
5,393

 
5,522

Total Structured Products and Other
 
 
 
 
 
 
 
$
179,259

 
$
183,237


See notes to financial statements.
9
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Equity—4.5%
 
 
 
 
 
 
 
 
 
 
Preferred Equity—2.9%
 
 
 
 
 
Shares
 
 
 
 
Crowley Holdings, Series A Preferred Stock (11)
 
Transportation – Cargo, Distribution
 
12.000% (10.000% Cash, 2.000% PIK)
 
N/A
 
33,428

 
$
33,839

 
$
34,233

Gryphon Colleges Corp, Preferred Stock (13)(14)
 
Education
 
12.500% PIK
 
N/A
 
332,500

 
6,863

 
—

Gryphon Colleges Corp, Preferred Stock (13)(14)
 
Education
 
13.500% PIK
 
5/12/18
 
12,360

 
27,685

 
—

Sungevity Inc, Series D Preferred Stock (13)
 
Energy – Electricity
 
N/A
 
N/A
 
114,678,899

 
11,250

 
11,250

Varietal Distribution Holdings, LLC, Class A Preferred Unit
 
Transportation – Cargo, Distribution
 
8.000% PIK
 
N/A
 
3,097

 
4,207

 
4,207

Total Preferred Equity
 
 
 
 
 
 
 
$
83,844

 
$
49,690

Common Equity/Interests—1.1%
 
 
 
 
 
Shares
 
 
 
 
Accelerate Parent Corp, Common Stock
 
Transportation – Cargo, Distribution
 
N/A
 
N/A
 
1,664,046

 
$
1,714

 
$
2,570

AMP Solar Group, Inc., Class A Common Unit (13)(17)
 
Energy – Electricity
 
N/A
 
N/A
 
166,974

 
7,000

 
7,000

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

 
6,000

 
701

Explorer Coinvest, LLC, Common Stock (17)
 
Business Services
 
N/A
 
N/A
 
133

 
1,021

 
3,826

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

 
5,000

 
—

Gryphon Colleges Corp, Common Stock (13)
 
Education
 
N/A
 
N/A
 
17,500

 
175

 
—

Pelican Energy, LLC, Net Profits Interest (13)(17)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
1,098,572

 
1,099

 
—

Skyline Data, News and Analytics LLC, Class A Common Unit (13)
 
Business Services
 
N/A
 
N/A
 
4,500

 
4,500

 
4,500

Sorenson Holdings, LLC, Membership Interests (13)
 
Consumer Goods – Durable
 
N/A
 
N/A
 
587

 
—

 
139

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

 
28

 
237

Total Common Equity/Interests
 
 
 
 
 
 
 
$
26,537

 
$
18,973

Warrants—0.5%
 
 
 
 
 
Warrants
 
 
 
 
Energy & Exploration Partners, Inc., Common Stock Warrants (13)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
60,778

 
$
2,374

 
$
—

Fidji Luxco (BC) S.C.A., Common Stock Warrants (2)(13)(17)
 
High Tech Industries
 
N/A
 
N/A
 
12,427

 
125

 
8,041

Gryphon Colleges Corp, Class A-1 Preferred Stock Warrants (13)
 
Education
 
N/A
 
N/A
 
45,947

 
459

 
—

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

 
1,043

 
—

Gryphon Colleges Corp, Common Stock Warrants (13)
 
Education
 
N/A
 
N/A
 
9,820

 
98

 
—

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

 
—

 
—

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

 
852

 
—

Total Warrants
 
 
 
 
 
 
 
$
4,951

 
$
8,041

Total Equity
 
 
 
 
 
 
 
$
115,332

 
$
76,704

Total Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
$
2,353,855

 
$
2,079,618


See notes to financial statements.
10
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Non-Controlled/Affiliated Investments—14.5% (4)(10)
 
 
 
 
 
 
 
 
 
 
Structured Products and Other—8.5%
 
 
 
 
 
 
 
 
 
 
Golden Bear Warehouse LLC, Membership Interests (3)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
N/A
 
$
26,438

 
$
26,438

 
$
35,409

Highbridge Loan Management 3-2014, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
17.510%
 
1/18/25
 
8,163

 
5,731

 
5,412

Ivy Hill Middle Market Credit Fund IX, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
17.200%
 
10/18/25
 
12,500

 
10,493

 
10,276

Ivy Hill Middle Market Credit Fund X, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
12.490%
 
7/18/27
 
14,000

 
12,457

 
10,807

Jamestown CLO I Ltd., Subordinated Notes (11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
0.000%
 
11/5/24
 
4,325

 
3,049

 
2,142

MCF CLO I, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
20.270%
 
4/20/23
 
38,918

 
33,666

 
35,138

MCF CLO III, LLC, Class E Notes (3)(11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
4.737% (3M L+445)
 
1/20/24
 
12,750

 
11,541

 
10,523

MCF CLO III, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
20.080%
 
1/20/24
 
41,900

 
35,059

 
35,384

Slater Mill Loan Fund LP, LP Certificates (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
0.000%
 
N/A
 
8,375

 
5,335

 
1,424

Total Structured Products and Other
 
 
 
 
 
 
 
$
143,769

 
$
146,515

Equity—6.0%
 
 
 
 
 
 
 
 
 
 
Preferred Equity—2.0%
 
 
 
 
 
Shares
 
 
 
 
Renewable Funding Group, Inc., Series B Preferred Stock (13)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
N/A
 
1,505,868

 
$
8,343

 
$
20,450

Renewable Funding Group, Inc., Series D Preferred Stock (13)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
N/A
 
436,689

 
5,568

 
13,013

Total Preferred Equity
 
 
 
 
 
 
 
$
13,911

 
$
33,463

Common Equity/Interests—4.0%
 
 
 
 
 
Shares
 
 
 
 
Generation Brands Holdings, Inc., Basic Common Stock (3)(13)
 
Consumer Goods – Durable
 
N/A
 
N/A
 
9,007

 
$
—

 
$
8,314

Generation Brands Holdings, Inc., Series 2L Common Stock (3)(13)
 
Consumer Goods – Durable
 
N/A
 
N/A
 
36,700

 
11,242

 
33,878

Generation Brands Holdings, Inc., Series H Common Stock (3)(13)
 
Consumer Goods – Durable
 
N/A
 
N/A
 
7,500

 
2,298

 
6,924

LVI Group Investments, LLC, Common Units (13)
 
Environmental Industries
 
N/A
 
N/A
 
212,460

 
17,505

 
20,513

Total Common Equity/Interests
 
 
 
 
 
 
 
$
31,045

 
$
69,629

Total Equity
 
 
 
 
 
 
 
$
44,956

 
$
103,092

Total Non-Controlled/Affiliated Investments
 
 
 
 
 
 
 
$
188,725

 
$
249,607


See notes to financial statements.
11
Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2015
(In thousands, except share data)

Investment
 
Industry (9)
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Controlled Investments—42.9% (5)(10)
 
 
 
 
 
 
 
 
 
 
Corporate Debt—29.6%
 
 
 
 
 
 
 
 
 
 
Secured Debt—29.6%
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt—29.6%
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt (excluding Revolvers and Letters of Credit)—8.4%
 
 
 
 
 
 
 
 
Solarplicity Group Limited (17)
 
Energy – Electricity
 
12.500% (12.500% PIK Toggle)
 
11/30/22
 
£
100,670

 
$
150,754

 
$
145,988

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)
 
 
 
 
 
$
150,754

 
$
145,988

Funded and Unfunded Revolver Obligations—21.2%
 
 
 
 
 
 
 
 
 
 
Merx Aviation Finance, LLC, Revolver (16)(23)
 
Aviation and Consumer Transport
 
12.000%
 
10/31/18
 
$
365,084

 
$
365,084

 
$
365,084

Merx Aviation Finance, LLC, Unfunded Revolver (16)(23)
 
Aviation and Consumer Transport
 
0.000% Unfunded
 
10/31/18
 
34,916

 
—

 
—

Total Funded and Unfunded Revolver Obligations
 
 
 
 
 
 
 
$
365,084

 
$
365,084

Letters of Credit—0.0%
 
 
 
 
 
 
 
 
 
 
Merx Aviation Finance, LLC, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.250%
 
7/13/16
 
$
177

 
$
—

 
$
—

Merx Aviation Finance Assets Ireland Limited, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.250%
 
9/30/16
 
1,800

 
—

 
—

Merx Aviation Finance Assets Ireland Limited, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.250%
 
9/30/16
 
1,800

 
—

 
—

Total Letters of Credit
 
 
 
 
 
 
 
$
—

 
$
—

Total First Lien Secured Debt
 
 
 
 
 
 
 
$
515,838

 
$
511,072

Total Secured Debt
 
 
 
 
 
 
 
$
515,838

 
$
511,072

Total Corporate Debt
 
 
 
 
 
 
 
$
515,838

 
$
511,072

Equity—13.3%
 
 
 
 
 
 
 
 
 
 
Common Equity/Interests—13.3%
 
 
 
 
 
Shares