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, 2018

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 5, 2019
$0.001 par value		69,187,804

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APOLLO INVESTMENT CORPORATION

Table of Contents

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Statements of Assets and Liabilities December 31, 2018 and March 31, 2018	1
	Statements of Operations Three and nine months ended December 31, 2018 and December 31, 2017	2
	Statements of Changes in Net Assets Nine months ended December 31, 2018 and year ended March 31, 2018	3
	Statements of Cash Flows Nine months ended December 31, 2018 and December 31, 2017	4
	Schedule of Investments December 31, 2018	5
	Schedule of Investments March 31, 2018	23
	Notes to Financial Statements	40
	Report of Independent Registered Public Accounting Firm	69
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	70
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	85
Item 4.	Controls and Procedures	86
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	87
Item 1A.	Risk Factors	87
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
Item 3.	Defaults Upon Senior Securities	89
Item 4.	Mine Safety Disclosures	89
Item 5.	Other Information	89
Item 6.	Exhibits	89
	Signatures	91

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PART I. FINANCIAL INFORMATION

In this report, the terms the “Company,” “Apollo Investment,” “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, 2018				March 31, 2018
	(Unaudited)
Assets
Investments at fair value:
Non-controlled/non-affiliated investments (cost — $1,522,779 and $1,471,492, respectively)	$	1,492,712			$	1,450,033
Non-controlled/affiliated investments (cost — $67,308 and $73,943, respectively)	51,236				68,954
Controlled investments (cost — $767,028 and $723,161, respectively)	764,018				729,060
Cash and cash equivalents	22,654				14,035
Foreign currencies (cost — $7,259 and $1,292, respectively)	7,283				1,298
Cash collateral on options contracts	—				5,016
Receivable for investments sold	43				2,190
Interest receivable	20,695				22,272
Dividends receivable	3,454				2,550
Deferred financing costs	20,603				14,137
Variation margin receivable on options contracts	—				1,846
Prepaid expenses and other assets	969				419
Total Assets	$	2,383,667			$	2,311,810
Liabilities
Debt	$	994,487			$	789,846
Payable for investments purchased	7,811				41,827
Distributions payable	31,302				32,447
Management and performance-based incentive fees payable	14,276				16,585
Interest payable	9,508				5,310
Accrued administrative services expense	3,012				2,507
Other liabilities and accrued expenses	6,666				5,202
Total Liabilities	$	1,067,062			$	893,724
Commitments and contingencies (Note 10)
Net Assets	$	1,316,605			$	1,418,086
Net Assets
Common stock, $0.001 par value (400,000,000 shares authorized; 69,187,804 and 72,104,032 shares issued and outstanding, respectively)	$	69			$	72
Paid-in capital in excess of par	2,590,605				2,636,651
Accumulated over-distributed net investment income	(10,565		)		(10,229		)
Accumulated net realized loss	(1,216,679		)		(1,166,471		)
Net unrealized loss	(46,825		)		(41,937		)
Net Assets	$	1,316,605			$	1,418,086
Net Asset Value Per Share	$	19.03			$	19.67

See notes to financial statements.

1

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APOLLO INVESTMENT CORPORATION STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)
	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
Investment Income
Non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind (“PIK”) interest income)	$	39,494			$	38,350			$	123,523			$	116,519
Dividend income	2				—				2				—
PIK interest income	643				1,752				2,709				5,926
Other income	3,748				1,487				6,961				5,264
Non-controlled/affiliated investments:
Interest income (excluding PIK interest income)	—				—				—				114
Dividend income	298				392				904				2,461
PIK interest income	—				2,644				—				7,582
Other income	—				—				—				(306		)
Controlled investments:
Interest income (excluding PIK interest income)	15,061				13,499				44,627				42,789
Dividend income	3,300				5,250				10,550				13,403
PIK interest income	1,495				1,379				4,390				4,046
Total Investment Income	$	64,041			$	64,753			$	193,666			$	197,798
Expenses
Management fees	$	8,720			$	12,048			$	26,851			$	36,463
Performance-based incentive fees	7,409				7,484				21,190				23,433
Interest and other debt expenses	14,217				12,433				42,697				40,479
Administrative services expense	1,657				1,693				5,152				5,061
Other general and administrative expenses	2,564				2,262				8,621				6,438
Total expenses	34,567				35,920				104,511				111,874
Management and performance-based incentive fees waived	(1,852		)		(4,986		)		(5,542		)		(15,077		)
Expense reimbursements	(161		)		(148		)		(500		)		(444		)
Net Expenses	$	32,554			$	30,786			$	98,469			$	96,353
Net Investment Income	$	31,487			$	33,967			$	95,197			$	101,445
Net Realized and Change in Unrealized Gains (Losses)
Net realized gains (losses):
Non-controlled/non-affiliated investments	$	(12,421	)		$	443			$	(22,140	)		$	(96,704	)
Non-controlled/affiliated investments	—				5,369				2,007				(141,472		)
Option contracts	(6,475		)		(614		)		(29,995		)		(619		)
Foreign currency transactions	(55		)		16				(80		)		6,635
Extinguishment of debt	—				(5,790		)		—				(5,790		)
Net realized losses	(18,951		)		(576		)		(50,208		)		(237,950		)
Net change in unrealized gains (losses):
Non-controlled/non-affiliated investments	2,235				(12,502		)		(8,603		)		88,785
Non-controlled/affiliated investments	(7,124		)		(6,391		)		(11,084		)		150,828
Controlled investments	(18,883		)		4,988				(8,911		)		(796		)
Option contracts	8,787				(12,100		)		19,146				(13,973		)
Foreign currency translations	1,271				(1,553		)		4,564				(21,937		)
Net change in unrealized gains (losses)	(13,714		)		(27,558		)		(4,888		)		202,907
Net Realized and Change in Unrealized Losses	$	(32,665	)		$	(28,134	)		$	(55,096	)		$	(35,043	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(1,178	)		$	5,833			$	40,101			$	66,402
Earnings (Loss) Per Share — Basic	$	(0.02	)		$	0.08			$	0.56			$	0.91

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION STATEMENTS OF CHANGES IN NET ASSETS (In thousands, except share data)
	Nine Months Ended December 31, 2018				Year Ended March 31, 2018
	(Unaudited)
Operations
Net investment income	$	95,197			$	133,387
Net realized losses	(50,208		)		(258,128		)
Net change in unrealized losses	(4,888		)		211,770
Net Increase in Net Assets Resulting from Operations	$	40,101			$	87,029
Distributions to Stockholders
Distribution of net investment income	$	(95,533	)		$	(86,906	)
Distribution of return of capital	—				(44,088		)
Net Decrease in Net Assets Resulting from Distributions to Stockholders	$	(95,533	)		$	(130,994	)
Capital Share Transactions
Repurchase of common stock	$	(46,049	)		$	(19,746	)
Net Decrease in Net Assets Resulting from Capital Share Transactions	$	(46,049	)		$	(19,746	)
Net Assets
Net decrease in net assets during the period	$	(101,481	)		$	(63,711	)
Net assets at beginning of period	1,418,086				1,481,797
Net Assets at End of Period	$	1,316,605			$	1,418,086
Capital Share Activity
Shares repurchased during the period	(2,916,228		)		(1,127,519		)
Shares issued and outstanding at beginning of period	72,104,032				73,231,551
Shares Issued and Outstanding at End of Period	69,187,804				72,104,032

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
	Nine Months Ended December 31,
	2018				2017
Operating Activities
Net increase (decrease) in net assets resulting from operations	$	40,101			$	66,402
Net realized losses	50,208				237,950
Net change in unrealized losses	4,888				(202,907		)
Net amortization of premiums and accretion of discounts on investments	(4,597		)		(5,240		)
Accretion of discount on notes	447				447
Amortization of deferred financing costs	3,723				3,575
Gains/losses from foreign currency transactions	(80		)		6,635
PIK interest and dividends capitalized	(5,584		)		(12,630		)
Changes in operating assets and liabilities:
Purchases of investments	(1,061,858		)		(789,231		)
Proceeds from sales and repayments of investments	931,520				827,315
Purchases of option contracts	—				(8,976		)
Proceeds from option contracts	—				8,330
Net settlement of option contracts	(9,002		)		(13,031		)
Decrease (increase) in interest receivable	1,579				(5,946		)
Decrease (increase) in dividends receivable	(904		)		3,939
Decrease (increase) in prepaid expenses and other assets	(550		)		(498		)
Increase (decrease) in management and performance-based incentive fees payable	(2,309		)		2,270
Increase (decrease) in interest payable	4,198				2,355
Increase (decrease) in accrued administrative services expense	505				143
Increase (decrease) in other liabilities and accrued expenses	1,464				(2,788		)
Net Cash Used in/Provided by Operating Activities	$	(46,251	)		$	118,114
Financing Activities
Issuances of debt	$	759,963			$	895,483
Payments of debt	(551,657		)		(897,719		)
Financing costs paid and deferred	(9,758		)		(177		)
Repurchase of common stock	(46,049		)		(8,601		)
Distributions paid	(96,678		)		(98,764		)
Net Cash Used in/Provided by Financing Activities	$	55,821			$	(109,778	)
Cash, Cash Equivalents, Foreign Currencies and Collateral on Option Contracts
Net increase (decrease) in cash, cash equivalents, foreign currencies and collateral on option contracts during the period	$	9,570			$	8,336
Effect of foreign exchange rate changes on cash and cash equivalents	18				29
Cash, cash equivalents, foreign currencies and collateral on option contracts at beginning of period	20,349				11,280
Cash, Cash Equivalents, Foreign Currencies and Collateral on Option Contracts at the End of Period	$	29,937			$	19,645
Supplemental Disclosure of Cash Flow Information
Cash interest paid	$	34,323			$	34,081
Non-Cash Activity
PIK income	$	7,099			$	17,554

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
Advertising, Printing & Publishing
A-L Parent LLC		Second Lien Secured Debt		9.78% (1M L+725, 1.00% Floor)		12/02/24		$	5,536			$	5,495			$	5,536
American Media, Inc.		First Lien Secured Debt		10.53% (3M L+800, 1.00% Floor)		08/24/20		11,633				11,471				12,214
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		08/24/20		1,778				(22		)		—				(21)(23)
												11,449				12,214
Simplifi Holdings, Inc.		First Lien Secured Debt		8.02% (1M L+550, 1.00% Floor)		09/28/22		25,427				24,983				25,173				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/28/22		2,400				(54		)		(24		)		(8)(9)(21)(23)
												24,929				25,149
Total Advertising, Printing & Publishing												$	41,873			$	42,899
Aerospace & Defense
Erickson Inc		First Lien Secured Debt - Revolver		10.30% (3M L+750, 1.00% Floor)		04/28/22		$	21,257			$	21,257			$	20,779			(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		04/28/22		17,899				(374		)		(403		)		(8)(9)(21)(23)
		First Lien Secured Debt - Letters of Credit		7.50%		4/21/19 - 4/30/20		5,843				—				(131		)		(8)(9)(23)
												20,883				20,245
ILC Dover LP		Second Lien Secured Debt		11.38% (6M L+850, 1.00% Floor)		06/28/24		20,000				19,618				19,550
PAE Holding Corporation		Second Lien Secured Debt		12.12% (2M L+950, 1.00% Floor)		10/20/23		28,097				27,510				27,675				(10)
Total Aerospace & Defense												$	68,011			$	67,470
Automotive
Accelerate Parent Corp.		Common Equity/Interests - Common Stock		N/A		N/A		1,664,046 Shares				$	1,714			$	—			(13)
Crowne Automotive
Vari-Form Group, LLC		First Lien Secured Debt		13.80% (3M L+11.00% (7.00% Cash plus 4.00% PIK), 1.00% Floor)		02/02/23		$	6,627			6,266				3,777				(9)(13)(14)
Vari-Form Inc.		First Lien Secured Debt		13.80% (3M L+11.00% (7.00% Cash plus 4.00% PIK), 1.00% Floor)		02/02/23		10,443				9,836				5,953				(9)(13)(14)
												16,102				9,730
K&N Parent, Inc.		Second Lien Secured Debt		11.27% (1M L+875, 1.00% Floor)		10/21/24		23,765				23,414				22,873				(10)
Total Automotive												$	41,230			$	32,603
Aviation and Consumer Transport
Merx Aviation
Merx Aviation Finance Assets Ireland Limited (5)		First Lien Secured Debt - Letters of Credit		2.25%		2/18/19 - 2/22/19		$	3,600			$	—			$	—			(23)
Merx Aviation Finance, LLC (5)		First Lien Secured Debt - Revolver		12.00%		10/31/23		402,200				402,200				402,200				(23)
		First Lien Secured Debt - Letter of Credit		2.25%		07/13/19		177				—				—				(23)
		Common Equity/Interests - Membership Interests		N/A		N/A		N/A				15,000				53,351
Total Aviation and Consumer Transport												$	417,200			$	455,551
Beverage, Food & Tobacco
Eagle Foods Family Group, LLC		First Lien Secured Debt		9.30% (3M L+650, 1.00% Floor)		06/14/24		$	24,875			$	24,621			$	24,626			(9)
		First Lien Secured Debt - Unfunded Revolver		0.00% Unfunded		06/14/23		3,750				(38		)		(38		)		(8)(9)(21)(23)
												24,583				24,588

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
Florida Food Products
Florida Food Products, Inc.		First Lien Secured Debt		9.27% (1M L+675, 1.00% Floor)		09/08/25		23,229				22,675				22,997				(9)
Florida Food Products, LLC		First Lien Secured Debt - Revolver		9.27% (1M L+675, 1.00% Floor)		09/06/23		1,062				1,062				1,051				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/06/23		651				(40		)		(7		)		(8)(9)(21)(23)
												23,697				24,041
TNT Crust LLC		First Lien Secured Debt		8.77% (1M L+625, 1.00% Floor)		11/06/23		9,106				8,929				8,924				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/06/23		1,626				(32		)		(33		)		(8)(9)(21)(23)
		Common Equity/Interests - Series A Units		N/A		N/A		244 Shares				244				244				(9)(13)
												9,141				9,135
Total Beverage, Food & Tobacco												$	57,421			$	57,764
Business Services
Access CIG, LLC		Second Lien Secured Debt		10.46% (3M L+775)		02/27/26		$	15,900			$	15,768			$	15,761			(10)
Aero Operating LLC		First Lien Secured Debt		9.77% (1M L+725, 1.00% Floor)		12/29/22		37,249				36,483				36,876				(9)
		First Lien Secured Debt - Revolver		11.75% (P+625)		12/29/22		2,406				2,406				2,382				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		1.00% Unfunded		12/29/22		2,303				(96		)		(23		)		(8)(9)(21)(23)
		First Lien Secured Debt - Letter of Credit		7.25%		06/21/19		103				—				(1		)		(8)(9)(23)
												38,793				39,234
Ambrosia Buyer Corp.		Second Lien Secured Debt		10.50% (2M L+800, 1.00% Floor)		08/28/25		21,428				20,982				20,966
Aptean, Inc.		Second Lien Secured Debt		12.31% (3M L+950, 1.00% Floor)		12/20/23		11,148				11,059				11,162				(10)
CT Technologies Intermediate Holdings, Inc		Second Lien Secured Debt		11.52% (1M L+900, 1.00% Floor)		12/01/22		31,253				30,594				29,378				(9)
Education Personnel		First Lien Secured Debt		7.28% (6M L+475, 0.50% Floor)		08/31/24		£	4,118			5,213				5,193				(9)(17)
		First Lien Secured Debt - Revolver		7.28% (6M L+475, 0.50% Floor)		08/31/24		£	1,471			1,861				1,855				(9)(17)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		1.66% Unfunded		08/31/24		£	4,412			—				—				(9)(17)(21)(23)
												7,074				7,048
Electro Rent Corporation		Second Lien Secured Debt		11.53% (3M L+900, 1.00% Floor)		01/31/25		36,598				35,706				35,866				(9)
McLarens Global Ltd.
Margaux Acquisition Inc.		First Lien Secured Debt		8.18% (3M L+600, 1.00% Floor)		12/19/24		17,614				17,264				17,262				(9)
		First Lien Secured Debt - Revolver		10.50% (P+500)		12/19/24		343				343				336				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/19/24		1,258				(32		)		(25		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		1.00% Unfunded		12/19/24		5,833				(116		)		(117		)		(8)(9)(21)(23)
Margaux UK Finance Limited		First Lien Secured Debt		8.80% (3M L+600, 1.00% Floor)		12/19/24		£	5,955			7,375				7,433				(9)(17)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/19/24		£	541			(14		)		(14		)		(8)(9)(17)(21)(23)

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
		First Lien Secured Debt - Unfunded Delayed Draw		1.00% Unfunded		12/19/24		£	1,353			(34		)		(34		)		(8)(9)(17)(21)(23)
												24,786				24,841
Ministry Brands, LLC		Second Lien Secured Debt		11.77% (1M L+925, 1.00% Floor)		06/02/23		10,000				9,897				10,050
Newscycle Solutions, Inc.		First Lien Secured Debt		9.52% (1M L+700, 1.00% Floor)		12/29/22		15,663				15,357				15,507				(9)
		First Lien Secured Debt		9.51% (1M L+700, 1.00% Floor)		12/29/22		1,201				1,171				1,189				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/29/22		500				(10		)		(5		)		(8)(9)(21)(23)
												16,518				16,691
PSI Services, LLC		First Lien Secured Debt		7.52% (1M L+500, 1.00% Floor)		01/20/23		4,586				4,508				4,566				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		01/20/22		397				(6		)		(2		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		01/20/22		£	47			—				—				(9)(21)(23)
		Second Lien Secured Debt		11.52% (1M L+900, 1.00% Floor)		01/20/24		37,893				37,081				37,720				(9)
												41,583				42,284
RA Outdoors, LLC		First Lien Secured Debt		7.27% (1M L+475, 1.00% Floor)		09/11/24		7,156				7,040				7,013				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/09/22		1,200				(18		)		(24		)		(8)(9)(21)(23)
		Second Lien Secured Debt		11.27% (1M L+875, 1.00% Floor)		09/11/25		34,200				33,483				33,345				(9)
												40,505				40,334
STG-Fairway Acquisitions, Inc.		Second Lien Secured Debt		11.96% (3M L+925, 1.00% Floor)		06/30/23		15,000				14,788				14,400
TGG TS Acquisition Company		First Lien Secured Debt - Revolver		9.29% (3M L+650)		12/14/23		1,115				1,115				1,087				(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/14/23		635				—				—				(21)(23)
												1,115				1,087
Transplace Holdings, Inc.		Second Lien Secured Debt		11.21% (1M L+875, 1.00% Floor)		10/06/25		8,599				8,416				7,825				(10)
U.S. Legal Support
USLS Acquisition, Inc.		First Lien Secured Debt		8.46% (3M L+575, 1.00% Floor)		12/02/24		20,099				19,703				19,698				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/02/24		1,608				(32		)		(32		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		12/02/24		4,690				(46		)		(94		)		(8)(9)(21)(23)
U.S. Legal Support Investment Holdings, LLC		Common Equity/Interests - Series A-1 Units		N/A		N/A		602,978 Shares				603				619				(9)(13)
												20,228				20,191
Vertafore, Inc.		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		06/30/23		14,591				(1,552		)		(1,678		)		(8)(21)(23)
		First Lien Secured Debt - Letter of Credit		3.25%		06/30/23		409				—				(47		)		(8)(23)
												(1,552		)		(1,725		)
Total Business Services												$	336,260			$	335,393
Chemicals, Plastics & Rubber
Carbonfree Chemicals
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)		First Lien Secured Debt		5.215% PIK		09/30/20		$	50,305			$	50,305			$	47,129

See notes to financial statements.

7

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
		Common Equity/Interests - Residual Interests		N/A		N/A		9,000				9,000				—				(13)
Carbonfree Caustic SPE LLC		First Lien Secured Debt		5.00%		12/31/21		3,800				3,800				3,800
		First Lien Secured Debt - Unfunded Delayed Draw - Promissory Note		N/A		12/31/21		9,311				—				—				(21)(23)
												63,105				50,929
Hare Bidco, Inc.		Second Lien Secured Debt		9.75% (1M E+875, 1.00% Floor)		08/01/24		€	13,574			14,455				15,207
Westfall Technik, Inc.		First Lien Secured Debt		7.78% (3M L+500, 1.00% Floor)		09/13/24		4,700				4,610				4,606				(9)
		First Lien Secured Debt		7.79% (3M L+500, 1.00% Floor)		09/13/24		1,238				1,226				1,214				(9)
		First Lien Secured Debt - Revolver		7.61% (3M L+500, 1.00% Floor)		09/13/24		135				135				132				(9)(23)
		First Lien Secured Debt - Revolver		9.50% (P+400)		09/13/24		539				539				528				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/13/24		1,346				(38		)		(27		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		1.00% Unfunded		09/13/24		9,531				(102		)		(215		)		(8)(9)(21)(23)
												6,370				6,238
Total Chemical, Plastics & Rubber												$	83,930			$	72,374
Consumer Goods – Durable
Hayward Industries, Inc.		Second Lien Secured Debt		10.77% (1M L+825)		08/04/25		$	21,919			$	21,640			$	21,590
KDC US Holdings		First Lien Secured Debt - Unfunded Revolver		0.00% Unfunded		12/21/23		6,020				—				—				(21)(23)
KLO Holdings
9357-5991 Quebec Inc.		First Lien Secured Debt		10.27% (1M L+775, 1.50% Floor)		04/07/22		8,822				8,750				8,469
KLO Acquisition LLC		First Lien Secured Debt		10.27% (1M L+775, 1.50% Floor)		04/07/22		5,108				5,066				4,903
												13,816				13,372
Sorenson Holdings, LLC		Common Equity/Interests - Membership Interests		N/A		N/A		587 Shares				—				440				(13)
Total Consumer Goods - Durable												$	35,456			$	35,402
Consumer Goods – Non-Durable
ABG Intermediate Holdings 2, LLC		Second Lien Secured Debt		10.27% (1M L+775, 1.00% Floor)		09/29/25		$	7,371			$	7,344			$	7,261			(10)
BIG Buyer, LLC		First Lien Secured Debt		9.14% (3M L+650, 1.00% Floor)		11/20/23		25,278				24,536				24,519				(9)
		First Lien Secured Debt		9.28% (3M L+650, 1.00% Floor)		11/20/23		2,326				2,292				2,256				(9)
		First Lien Secured Debt - Revolver		9.14% (3M L+650, 1.00% Floor)		11/20/23		271				271				263				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/20/23		1,535				(53		)		(46		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		11/20/23		3,091				(79		)		(163		)		(8)(9)(21)(23)
												26,967				26,829
Sequential Brands Group, Inc.		Second Lien Secured Debt		11.25% (1M L+875)		02/07/24		13,141				13,029				13,002				(17)
Reddy Ice Corporation		First Lien Secured Debt		10.02% (1M L+750, 1.00% Floor)		06/30/23		30,488				30,075				30,195				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		06/30/23		2,920				(39		)		(28		)		(8)(9)(21)(23)
		First Lien Secured Debt - Letter of Credit		4.50%		04/05/19		9,680				—				(93		)		(8)(9)(23)

See notes to financial statements.

8

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		06/30/23		266				—				—				(9)(21)(23)
												30,036				30,074
Total Consumer Goods - Non-Durable												$	77,376			$	77,166
Consumer Services
1A Smart Start LLC		Second Lien Secured Debt		10.77% (1M L+825, 1.00% Floor)		08/22/22		$	25,100			$	24,708			$	24,687
Nemo (BC) Bidco Pty Ltd		First Lien Secured Debt		7.84% (3M BBSW+575, 1.00% Floor)		04/06/24		A$	6,768			4,906				4,669				(17)
		First Lien Secured Debt - Unfunded Delayed Draw		2.59% Unfunded		04/06/24		A$	232			(9		)		(10		)		(8)(17)(21)(23)
												4,897				4,659
Pinstripe Holdings, LLC		First Lien Secured Debt		8.52% (1M L+600)		01/15/25		7,000				6,860				6,860
Tidewater Consumer Receivables, LLC		First Lien Secured Debt		8.26% (1M L+575)		12/28/23		11,333				11,220				11,220				(9)(17)
		First Lien Secured Debt - Revolver		8.26% (1M L+575)		12/28/23		18				18				18				(9)(17)(23)
		First Lien Secured Debt - Unfunded Revolver		0.00% Unfunded		12/28/23		1,148				(12		)		(11		)		(8)(9)(17)(21)(23)
												11,226				11,227
Total Consumer Services												$	47,691			$	47,433
Containers, Packaging & Glass
Sprint Industrial Holdings, LLC		Second Lien Secured Debt		13.50% PIK		11/14/19		$	21,086			$	18,107			$	14,560			(13)(14)
		Common Equity/Interests - Warrants		N/A		N/A		7,341 Warrants				—				—				(13)(26)
												18,107				14,560
TricorBraun Holdings, Inc.		First Lien Secured Debt - Revolver		7.75% (P+225)		11/30/21		4,208				4,208				4,215				(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/30/21		1,418				(295		)		—				(21)(23)
												3,913				4,215
Total Containers, Packaging & Glass												$	22,020			$	18,775
Diversified Investment Vehicles, Banking, Finance, Real Estate
Alera Group Holdings		First Lien Secured Debt - Unfunded Delayed Draw		1.00% Unfunded		08/01/25		$	20,000			$	(177	)		$	(180	)		(8)(21)(23)
Craft 2015-2		Structured Products and Other - Credit-Linked Note		12.70% (3M L+925)		01/16/24		13,379				13,307				13,379				(11)(17)
Flock SPV I, LLC		First Lien Secured Debt		9.02% (1M L+650)		08/30/22		8,000				7,927				7,894				(9)(17)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		08/30/22		1,333				(12		)		(18		)		(8)(9)(17)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		08/30/22		10,667				(98		)		(141		)		(8)(9)(17)(21)(23)
												7,817				7,735
Golden Bear 2016-R, LLC (3)(4)		Structured Products and Other - Membership Interests		N/A		09/20/42		—				16,633				13,432				(17)
Mayfield Agency Borrower Inc.		Second Lien Secured Debt		11.02% (1M L+850)		03/02/26		5,000				4,933				4,966				(10)
Purchasing Power, LLC		First Lien Secured Debt		8.02% (1M L+550)		05/09/19		21,300				21,285				21,248				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		05/09/19		3,000				(7		)		(7		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		05/09/19		5,700				(49		)		(51		)		(8)(9)(21)(23)
												21,229				21,190

See notes to financial statements.

9

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
Taupo River II, LLC		First Lien Secured Debt		8.05% (3M L+525, 1.00% Floor)		06/08/20		14,000				13,947				13,947				(9)(17)
Ten-X, LLC		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/29/22		4,680				(315		)		(328		)		(8)(21)(23)
Total Diversified Investment Vehicles, Banking, Finance, Real Estate												$	77,374			$	74,141
Energy – Electricity
AMP Solar Group, Inc. (4)		Common Equity/Interests - Class A Common Unit		N/A		N/A		243,646 Shares				10,000				6,050				(13)(17)
Renew Financial
AIC SPV Holdings II, LLC (4)		Preferred Equity - Preferred Stock		N/A		N/A		143 Shares				534				676				(15)(17)
Renew Financial LLC (f/k/a Renewable Funding, LLC) (4)		Preferred Equity - Series B Preferred Stock		N/A		N/A		1,505,868 Shares				8,343				14,469				(13)
		Preferred Equity - Series D Preferred Stock		N/A		N/A		436,689 Shares				5,568				5,841				(13)
Renew JV LLC (4)		Common Equity/Interests - Membership Interests		N/A		N/A		N/A				1,683				2,058				(13)(17)
												16,128				23,044
Solarplicity Group
Solarplicity Group Limited (3)(4)		First Lien Secured Debt		N/A		11/30/22		£	4,331			5,811				2,785				(13)(17)
Solarplicity UK Holdings Limited		First Lien Secured Debt		4.00%		03/08/23		£	5,562			7,637				6,968				(17)
		Preferred Equity - Preferred Stock		N/A		N/A		4,286 Shares				5,861				4,952				(2)(13)(17)
		Common Equity/Interests - Ordinary Shares		N/A		N/A		2,825 Shares				4				276				(2)(13)(17)
												19,313				14,981
Total Energy – Electricity												$	45,441			$	44,075
Energy – Oil & Gas
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (5)		First Lien Secured Debt		8.00% Cash (10.00% PIK Toggle)		03/29/19		$	10,000			$	10,000			$	10,000
		Second Lien Secured Debt		10.00% PIK (8.00% Cash Toggle)		03/29/21		32,876				32,876				32,876
		Common Equity/Interests - Common Stock		N/A		N/A		5,000,000 Shares				30,078				4,782				(13)
												72,954				47,658
Pelican Energy, LLC (4)		Common Equity/Interests - Membership Interests		N/A		N/A		1,444 Shares				18,736				5,925				(13)(17)(16)
SHD Oil & Gas, LLC (5)		First Lien Secured Debt - Tranche C Note		12.00%		03/31/20		20,400				20,400				21,012
		First Lien Secured Debt - Tranche A Note		14.00% (8.00% Cash plus 6.00% PIK)		03/31/20		45,457				45,457				46,821
		First Lien Secured Debt - Tranche B Note		14.00% PIK		03/31/20		81,346				44,380				39,309				(13)(14)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		03/31/20		1,600				—				—				(21)(23)
		Common Equity/Interests - Series A Units		N/A		N/A		7,600,000 Shares				1,411				—				(13)(16)
												111,648				107,142
Total Energy – Oil & Gas												$	203,338			$	160,725
Food & Grocery
Bumble Bee Foods
Bumble Bee Holdings, Inc.		First Lien Secured Debt		10.65% (3M L+800, 1.00% Floor)		08/15/23		$	15,390			$	15,138			$	15,082

See notes to financial statements.

10

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
Connors Bros Clover Leaf Seafoods Company		First Lien Secured Debt		10.65% (3M L+800, 1.00% Floor)		08/15/23		4,360				4,289				4,273
												19,427				19,355
Grocery Outlet, Inc.		Second Lien Secured Debt		9.59% (1M L+725)		10/22/26		10,500				10,397				10,434				(10)
Total Food & Grocery												$	29,824			$	29,789
Healthcare & Pharmaceuticals
Altasciences
9360-1367 Quebec Inc.		First Lien Secured Debt		8.96% (3M L+625, 1.00% Floor)		06/09/23		$	2,877			$	2,829			$	2,769			(9)(17)
		First Lien Secured Debt		8.43% (3M L+625, 1.00% Floor)		06/09/23		C$	2,400			1,758				1,691				(9)(17)
Altasciences US Acquisition, Inc.		First Lien Secured Debt		8.96% (3M L+625, 1.00% Floor)		06/09/23		5,195				5,109				5,001				(9)
		First Lien Secured Debt		8.69% (1M L+625, 1.00% Floor)		06/09/23		924				924				890				(9)(27)
		First Lien Secured Debt - Revolver		9.07% (3M L+625, 1.00% Floor)		06/09/23		285				285				274				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.25% Unfunded		06/09/23		1,140				(24		)		(43		)		(8)(9)(21)(23)(27)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		06/09/23		1,927				(26		)		(107		)		(8)(9)(21)(23)(27)
												10,855				10,475
Amerivet Partners Management, Inc.		First Lien Secured Debt		8.27% (1M L+575, 1.00% Floor)		06/05/24		13,017				12,797				12,647				(9)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		06/05/24		13,146				(224		)		(375		)		(8)(9)(21)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		06/05/24		806				(18		)		(23		)		(8)(9)(21)(23)
												12,555				12,249
Analogic Corporation		First Lien Secured Debt		8.52% (1M L+600, 1.00% Floor)		06/22/24		27,323				26,699				27,049				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		06/22/23		2,609				(58		)		(26		)		(8)(9)(21)(23)
												26,641				27,023
Aptevo Therapeutics Inc.		First Lien Secured Debt		10.12% (1M L+760, 0.50% Floor)		02/01/23		8,571				8,709				8,458				(9)
Argon Medical Devices Holdings, Inc.		Second Lien Secured Debt		10.52% (1M L+800, 1.00% Floor)		01/23/26		19,600				19,513				19,404				(10)
BioClinica Holding I, LP		Second Lien Secured Debt		10.75% (3M L+825, 1.00% Floor)		10/21/24		24,612				24,238				22,643				(10)
Genesis Healthcare, Inc.		First Lien Secured Debt		8.80% (3M L+600, 0.50% Floor)		03/06/23		25,000				24,686				24,693				(9)
		First Lien Secured Debt		13.80% (3M L+1100, 1.00% Floor)		03/06/23		9,130				8,978				9,018				(9)
		First Lien Secured Debt - Revolver		8.80% (3M L+600, 0.50% Floor)		03/06/23		20,430				20,430				20,184				(9)(23)
		First Lien Secured Debt - Revolver		6.05% (3M L+325, 0.50% Floor)		03/06/23		5,698				5,698				5,629				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		03/06/23		34,741				(763		)		(420		)		(8)(9)(21)(23)
												59,029				59,104
Lanai Holdings III, Inc.		Second Lien Secured Debt		11.03% (3M L+850, 1.00% Floor)		08/28/23		17,391				17,046				15,913				(10)
LSCS Holdings, Inc		Second Lien Secured Debt		10.96% (3M L+825)		03/16/26		19,818				19,401				19,719
Maxor National Pharmacy Services, LLC		First Lien Secured Debt		8.82% (3M L+600, 1.00% Floor)		11/22/23		24,796				24,295				24,207				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/22/22		1,558				(30		)		(36		)		(8)(9)(21)(23)
												24,265				24,171

See notes to financial statements.

11

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
Partner Therapeutics, Inc		First Lien Secured Debt		9.17% (1M L+665, 1.00% Floor)		01/01/23		10,000				9,849				9,845				(9)
		Preferred Equity - Preferred Stock		N/A		N/A		55,556 Shares				333				333				(9)
		Common Equity/Interests - Warrants		N/A		N/A		33,333 Warrants				135				96				(9)(13)
												10,317				10,274
ProPharma Group Intermediate, LLC		First Lien Secured Debt		8.51% (1M L+600, 0.50% Floor)		07/12/23		€	6,438			7,267				7,286
		First Lien Secured Debt		8.51% (1M L+600, 0.50% Floor)		07/12/23		8,130				8,049				8,049
		First Lien Secured Debt		8.51% (1M L+600, 0.50% Floor)		01/13/20		255				296				252
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		07/12/23		1,032				(10		)		(10		)		(8)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		01/13/20		€	2,753			(31		)		(31		)		(8)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		01/13/20		158				(2		)		(2		)		(8)(21)(23)
												15,569				15,544
PTC Therapeutics, Inc		First Lien Secured Debt		8.67% (1M L+615, 1.00% Floor)		05/01/21		12,667				12,630				12,793				(9)(17)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		05/01/21		6,333				(18		)		—				(9)(17)(21)(23)
												12,612				12,793
RiteDose Holdings I, Inc.		First Lien Secured Debt		10.05% (3M L+725, 1.00% Floor)		09/13/23		14,850				14,471				14,212				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/13/22		2,000				(48		)		(75		)		(8)(9)(21)(23)
												14,423				14,137
Teladoc, Inc.		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		07/14/20		1,306				(35		)		(1		)		(8)(17)(21)(23)
		First Lien Secured Debt - Letters of Credit		7.25%		1/12/19 - 5/15/20		360				—				—				(8)(17)(23)
												(35		)		(1		)
TherapeuticsMD, Inc.		First Lien Secured Debt		10.27% (1M L+775, 1.50% Floor)		05/01/23		22,500				22,402				22,275				(9)(17)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		05/01/23		37,500				(332		)		(375		)		(8)(9)(17)(21)(23)
												22,070				21,900
Wright Medical Group, Inc.		First Lien Secured Debt		10.37% (1M L+785, 1.00% Floor)		12/23/21		6,667				6,557				6,533				(9)(17)
		First Lien Secured Debt - Revolver		6.77% (1M L+425, 0.75% Floor)		12/23/21		7,807				7,807				7,807				(9)(17)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/23/21		42,193				(298		)		—				(9)(17)(21)(23)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		12/23/21		6,667				(109		)		(133		)		(8)(9)(17)(21)(23)
												13,957				14,207
Total Healthcare & Pharmaceuticals												$	311,165			$	308,013
High Tech Industries
ChargePoint, Inc.		First Lien Secured Debt		9.07% (1M L+655, 1.25% Floor)		06/01/23		$	10,500			$	10,405			$	10,381			(9)
		First Lien Secured Debt - Unfunded Delayed Draw		1.00% Unfunded		06/01/23		3,000				(27		)		—				(9)(21)(23)
												10,378				10,381
ChyronHego Corporation		First Lien Secured Debt		7.43% (3M L+643, 1.00% Floor)		03/09/20		34,812				34,624				32,723				(18)
DigiCert Holdings, Inc.		Second Lien Secured Debt		10.52% (1M L+800, 1.00% Floor)		10/31/25		12,157				12,105				11,823				(10)

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
FiscalNote, Inc.		First Lien Secured Debt		10.52% (1M L+800, 1.00% Floor)		08/21/23		28,125				27,407				27,352				(9)
		First Lien Secured Debt - Revolver		10.52% (1M L+800, 1.00% Floor)		08/21/23		1,313				1,313				1,276				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		08/21/23		1,313				(67		)		(36		)		(8)(9)(21)(23)
		Preferred Equity - Series F Preferred Stock		N/A		N/A		259,654 Shares				1,500				1,500				(9)
												30,153				30,092
International Cruise & Excursion Gallery, Inc.		First Lien Secured Debt		7.77% (1M L+525, 1.00% Floor)		06/06/25		14,925				14,649				14,776
LabVantage Solutions
LabVantage Solutions Inc.		First Lien Secured Debt		9.80% (1M L+750, 1.00% Floor)		12/29/20		12,234				12,073				12,111
LabVantage Solutions Limited		First Lien Secured Debt		8.50% (1M E+750, 1.00% Floor)		12/29/20		€	12,024			12,770				13,607				(17)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/29/20		€	3,435			(43		)		(39		)		(8)(17)(21)(23)
												24,800				25,679
Magnate Holding Corp.		First Lien Secured Debt		8.78% (3M L+600, 1.00% Floor)		12/16/24		16,670				16,422				16,420				(9)(17)
		First Lien Secured Debt - Revolver		7.78% (3M L+500, 1.00% Floor)		12/14/23		1,358				1,358				1,338				(9)(17)(23)
		First Lien Secured Debt - Unfunded Revolver		1.75% Unfunded		12/14/23		1,972				(49		)		(30		)		(8)(9)(17)(21)(23)
												17,731				17,728
Omnitracs, LLC		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		03/23/23		3,750				(285		)		(338		)		(8)(21)(23)
Telestream Holdings Corporation		First Lien Secured Debt		7.61% (3M L+645, 1.00% Floor)		03/24/22		36,073				35,828				35,171				(18)
Tibco Software Inc.		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/05/19		6,000				(11		)		(840		)		(8)(21)(23)
ZPower, LLC		First Lien Secured Debt		10.27% (1M L+775, 1.00% Floor)		07/01/22		6,667				6,685				6,636				(9)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		07/01/22		1,667				(7		)		(8		)		(8)(9)(21)(23)
		Common Equity/Interests - Warrants		N/A		N/A		29,630 Warrants				48				57				(9)(13)
												6,726				6,685
Total High Tech Industries												$	186,698			$	183,880
Hotel, Gaming, Leisure, Restaurants
GFRC Holdings LLC		First Lien Secured Debt		10.80% (3M L+800 Cash (L+800 PIK Toggle), 1.50% Floor)		02/01/22		$	2,500			$	2,500			$	2,500
Total Hotel, Gaming, Leisure, Restaurants												$	2,500			$	2,500
Manufacturing, Capital Equipment
AVAD
AVAD Canada Ltd.		First Lien Secured Debt - Revolver		6.52% (1M L+400, 1.00% Floor)		10/02/23		$	641			$	641			$	628			(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		10/02/23		359				(19		)		(7		)		(8)(9)(21)(23)
AVAD, LLC		First Lien Secured Debt		10.27% (1M L+775, 1.00% Floor)		10/02/23		8,194				8,039				8,031				(9)
		First Lien Secured Debt - Revolver		6.52% (1M L+400, 1.00% Floor)		10/02/23		12,376				12,376				12,129				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		10/02/23		3,290				(298		)		(66		)		(8)(9)(21)(23)
												20,739				20,715

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (28)				Fair Value (1) (29)
MedPlast Holdings Inc.		Second Lien Secured Debt		10.55% (3M L+775)		07/02/26		8,000				7,925				7,800				(10)
Total Manufacturing, Capital Equipment												$	28,664			$	28,515
Media – Diversified & Production
SESAC Holdco II LLC		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		02/23/22		$	587			$	(33	)		$	(44	)		(8)(10)(21)(23)
		Second Lien Secured Debt		9.76% (1M L+725, 1.00% Floor)		02/24/25		3,241				3,216				3,120				(10)
												3,183				3,076
Sonar Entertainment, Inc.		First Lien Secured Debt		10.12% (1M L+760, 1.25% Floor)		11/15/21		9,669				9,508				9,499				(9)
		First Lien Secured Debt - Revolver		10.12% (1M L+760, 1.25% Floor)		11/15/21		6,581				6,581				6,466				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/15/21		16,250				(382		)		(284		)		(8)(9)(21)(23)
												15,707				15,681
Total Media – Diversified & Production												$	18,890			$	18,757
Metals & Mining
Magnetation, LLC		First Lien Secured Debt		10.80% (3M L+800 Cash (PIK Toggle))		12/31/19		$	1,352			$	1,182			$	157			(13)(14)
Total Metals & Mining												$	1,182			$	157
Telecommunications
IPC Corporation		First Lien Secured Debt		7.51% (3M L+500, 1.00% Floor)		08/06/21		$	10,000			$	9,921			$	9,383			(9)
Securus Technologies Holdings, Inc.		Second Lien Secured Debt		10.77% (1M L+825, 1.00% Floor)		11/01/25		12,878				12,768				12,459				(10)
Total Telecommunications												$	22,689			$	21,842
Transportation – Cargo, Distribution
Dynamic Product Tankers, LLC (5)		First Lien Secured Debt		9.80% (3M L+700)		06/30/23		$	42,000			$	41,820			$	42,000			(17)
		First Lien Secured Debt - Letters of Credit		2.25%		9/20/19 - 3/31/21		2,750				—				—				(17)(23)
		Common Equity/Interests - Class A Units		N/A		N/A		N/A				48,956				37,367				(17)(24)
												90,776				79,367
MSEA Tankers LLC (5)		Common Equity/Interests - Class A Units		N/A		N/A		N/A				74,450				74,300				(17)(25)
PT Intermediate Holdings III, LLC		Second Lien Secured Debt		10.80% (3M L+800, 1.00% Floor)		12/08/25		9,375				9,293				9,281
Total Transportation – Cargo, Distribution												$	174,519			$	162,948
Utilities – Electric
Asset Repackaging Trust Six B.V.		Structured Products and Other		12.04%		05/18/27		$	58,411			$	26,363			$	29,794			(11)(17)(19)
Total Utilities – Electric												$	26,363			$	29,794
Total Investments before Cash Equivalents												$	2,357,115			$	2,307,966
J.P. Morgan U.S. Government Money Market Fund		N/A		N/A		N/A		$	22,653			$	22,653			$	22,653			(22)
Total Investments after Cash Equivalents												$	2,379,768			$	2,330,619			(6)(7)

____________________

(1)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (See Note 2 to the financial statements).

(2)	Preferred and ordinary shares in Solarplicity UK Holdings Limited are GBP denominated equity investments.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(3)

Denotes investments in which the Company owns greater than 25% of the equity, where the governing documents of each entity preclude the Company from exercising a controlling influence over the management or policies of such entity. The Company does not have the right to elect or appoint more than 25% of the directors or another party has the right to elect or appoint more directors than the Company and has the right to appoint certain members of senior management. Therefore, the Company has determined that these entities are not controlled affiliates. As of December 31, 2018, we had a 100% and 28% equity ownership interest in Golden Bear 2016-R, LLC and Solarplicity Group Limited, respectively.

(4)

Denotes investments in which we are an “Affiliated Person,” as defined in the 1940 Act, due to holding the power to vote or owning 5% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of March 31, 2018 and December 31, 2018 along with transactions during the nine months ended December 31, 2018 in these affiliated investments are as follows:

Name of Issuer	Fair Value at March 31, 2018			Gross Additions ●			Gross Reductions ■			Net Change in Unrealized Gains (Losses)			Fair Value at December 31, 2018			Net Realized Gains (Losses)			Interest/Dividend/Other Income
AIC SPV Holdings II, LLC, Preferred Stock	$	925		$	534		$	(534	)	$	(249	)	$	676		$	—		$	66
AMP Solar Group, Inc., Class A Common Unit	5,051			—			—			998			6,049			—			—
Golden Bear 2016-R, LLC, Membership Interests	14,147			128			—			(843		)	13,432			—			838
Pelican Energy, LLC, Membership Interests	12,946			—			(5,705		)	(1,316		)	5,925			—			—
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series B Preferred Stock	19,035			—			—			(4,566		)	14,469			—			—
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series D Preferred Stock	6,676			—			—			(835		)	5,841			—			—
Renew JV LLC, Membership Interests	4,111			687			(1,744		)	(996		)	2,058			2,007			—
Solarplicity Group Limited, First Lien Term Loan	6,063			—			—			(3,277		)	2,786			—			—
	$	68,954		$	1,349		$	(7,983	)	$	(11,084	)	$	51,236		$	2,007		$	904

____________________

● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(5)

Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Fair value as of March 31, 2018 and December 31, 2018 along with transactions during the nine months ended December 31, 2018 in these controlled investments are as follows:

Name of Issuer	Fair Value at March 31, 2018			Gross Additions ●			Gross Reductions ■			Net Change in Unrealized Losses			Fair Value at December 31, 2018			Net Realized Losses			Interest/Dividend/Other Income
Dynamic Product Tankers, LLC, First Lien Term Loan	$	42,000		$	30		$	—		$	(30	)	$	42,000		$	—		$	3,016
Dynamic Product Tankers, LLC, Letters of Credit	—			—			—			—			—			—			—
Dynamic Product Tankers, LLC, Class A Units	41,479			850			—			(4,962		)	37,367			—			—
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), First Lien Term Loan	15,000			—			(5,000		)	—			10,000			—			903
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Second Lien Term Loan	30,510			2,367			—			(1		)	32,876			—			2,358
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Common Stock	20,303			—			—			(15,521		)	4,782			—			—
Merx Aviation Finance Assets Ireland Limited, Letters of Credit	—			—			—			—			—			—			—
Merx Aviation Finance, LLC, Letter of Credit	—			—			—			—			—			—			—
Merx Aviation Finance, LLC, Revolver	359,800			92,000			(49,600		)	—			402,200			—			36,251
Merx Aviation Finance, LLC, Membership Interests	42,381			—			—			10,970			53,351			—			6,900
MSEA Tankers LLC, Class A Units	72,256			—			—			2,045			74,301			—			3,650
SHD Oil & Gas, LLC, Tranche C Note	19,776			1,200			—			36			21,012			—			1,774
SHD Oil & Gas, LLC, Tranche A Note	44,739			2,022			—			60			46,821			—			4,715
SHD Oil & Gas, LLC, Tranche B Note	40,816			—			—			(1,508		)	39,308			—			—
SHD Oil & Gas, LLC, Unfunded Tranche C Note	—			—			—			—			—			—			—
SHD Oil & Gas, LLC, Series A Units	—			—			—			—			—			—			—
	$	729,060		$	98,469		$	(54,600	)	$	(8,911	)	$	764,018		$	—		$	59,567

____________________

● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

	As of December 31, 2018, the Company had a 85%, 47%, 100%, 98% and 38% equity ownership interest in Dynamic Product Tankers, LLC; Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.); Merx Aviation Finance, LLC; MSEA Tankers, LLC; and SHD Oil & Gas, LLC (f/k/a Spotted Hawk Development LLC), respectively.

(6)	Aggregate gross unrealized gain and loss for federal income tax purposes is $138,350 and $164,943, respectively. Net unrealized loss is $26,593 based on a tax cost of $2,357,212.

(7)	Substantially all securities are pledged as collateral to our multi-currency revolving credit facility (the “Senior Secured Facility” as defined in Note 8 to the financial statements). As such, these securities are not available as collateral to our general creditors.

(8)	The negative fair value is the result of the commitment being valued below par.

(9)	These are co-investments made with the Company’s affiliates in accordance with the terms of the exemptive order the Company received from the Securities and Exchange Commission (the “SEC”) permitting us to do so. (See Note 3 to the financial statements for discussion of the exemptive order from the SEC.)

(10)	Other than the investments noted by this footnote, the fair value of the Company’s investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 2 to the financial statements for more information regarding ASC 820, Fair Value Measurements (“ASC 820”).

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(11)	These securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions that are exempt from registration, normally to qualified institutional buyers.

(12)	Par amount is denominated in USD unless otherwise noted, Euro (“€”), British Pound (“£”), Canadian Dollar (“C$”) and Australian Dollar (“A$”).

(13)	Non-income producing security.

(14)	Non-accrual status (See Note 2 to the financial statements).

(15)	The underlying investments of AIC SPV Holdings II, LLC is a securitization in which the Company owns preferred shares representing 14.25% economic interest.

(16)

AIC Spotted Hawk Holdings, LLC, AIC SHD Holdings, LLC and AIC Pelican Holdings, LLC are consolidated wholly-owned special purpose vehicles which only hold equity investments of the underlying portfolio companies and have no other significant assets or liabilities. AIC Spotted Hawk Holdings, LLC and AIC SHD Holdings, LLC hold equity investments in SHD Oil & Gas, LLC. AIC Pelican Holdings, LLC holds an equity investment in Pelican Energy, LLC.

(17)

Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of December 31, 2018, non-qualifying assets represented approximately 16.50% of the total assets of the Company.

(18)	In addition to the interest earned based on the stated rate of this loan, the Company may be entitled to receive additional interest as a result of its arrangement with other lenders in a syndication.

(19)	This investment represents a leveraged subordinated interest in a trust that holds one foreign currency denominated bond and a derivative instrument.

(20)

Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate or the prime rate. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates (1M L, 2M L, 3M L or 6M L, respectively), EURIBOR loans are typically indexed to 90-day EURIBOR rates (3M E) and Bank Bill Swap rates (3M BBSW) are typically index to 90-day Bank Bill Swap rates, at the borrower’s option. LIBOR and EURIBOR loans may be subject to interest floors. As of December 31, 2018, rates for 1M L, 2M L, 3M L, 6M L, 1M E, 3M E, 3M BBSW, and Prime are 2.52%, 2.62%, 2.80%, 2.87%, (0.41%), (0.36%), 2.09% and 5.50%, respectively.

(21)	The rates associated with these undrawn committed revolvers and delayed draw term loans represent rates for commitment and unused fees.

(22)	This security is included in the Cash and Cash Equivalents on the Statements of Assets and Liabilities.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(23)

As of December 31, 2018, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 10 to the financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.

Portfolio Company	Total Commitment			Drawn Commitment			Letters of Credit			Undrawn Commitment
Aero Operating LLC	$	4,813		$	2,406		$	104		$	2,303
Alera Group Holdings	20,000			—			—			20,000
Altasciences US Acquisition, Inc.	3,352			285			—			3,067
American Media, Inc.	1,778			—			—			1,778
Amerivet Partners Management, Inc.	13,952			—			—			13,952
Analogic Corporation	2,609			—			—			2,609
AVAD Canada Ltd.*	1,000			641			—			359
AVAD, LLC	15,666			12,376			—			3,290
BIG Buyer, LLC	4,896			271			—			4,625
Carbonfree Caustic SPE LLC	9,311			—			—			9,311
ChargePoint, Inc.	3,000			—			—			3,000
Dynamic Product Tankers, LLC	2,750			—			2,750			—
Eagle Foods Family Group, LLC	3,750			—			—			3,750
Education Personnel*	5,619			—			—			5,619
Erickson Inc	45,000			21,257			5,844			17,899
FiscalNote, Inc.	2,626			1,313			—			1,313
Flock SPV I, LLC	12,000			—			—			12,000
Florida Food Products, LLC	1,713			1,062			—			651
Genesis Healthcare, Inc.	60,870			26,129			—			34,741
KDC US Holdings	6,020			—			—			6,020
LabVantage Solutions Limited*	3,927			—			—			3,927
Magnate Holding Corp.*	3,330			1,358			—			1,972
Margaux Acquisition Inc.*	9,848			343			—			9,505
Maxor National Pharmacy Services, LLC	1,558			—			—			1,558
Merx Aviation Finance Assets Ireland Limited	3,600			—			3,600			—
Merx Aviation Finance, LLC	177			—			177			—
Nemo (BC) Bidco Pty Ltd*	163			—			—			163
Newscycle Solutions, Inc.	500			—			—			500
Omnitracs, LLC	3,750			—			—			3,750
ProPharma Group Intermediate, LLC*	4,338			—			—			4,338
PSI Services, LLC*	457			—			—			457
PTC Therapeutics, Inc	6,333			—			—			6,333
Purchasing Power, LLC	8,700			—			—			8,700
RA Outdoors, LLC	1,200			—			—			1,200
RiteDose Holdings I, Inc.	2,000			—			—			2,000
Reddy Ice Corporation	12,865			—			9,680			3,185
SESAC Holdco II LLC	587			—			—			587
SHD Oil & Gas, LLC	1,600			—			—			1,600
Simplifi Holdings, Inc.	2,400			—			—			2,400
Sonar Entertainment, Inc.	22,831			6,581			—			16,250
Teladoc, Inc.	1,666			—			360			1,306
Ten-X, LLC	4,680			—			—			4,680
TGG TS Acquisition Company	1,750			1,115			—			635
TherapeuticsMD, Inc.	37,500			—			—			37,500
Tibco Software Inc.	6,000			—			—			6,000
Tidewater Consumer Receivables, LLC	1,166			18			—			1,148
TNT Crust LLC	1,626			—			—			1,626
TricorBraun Holdings, Inc.	5,626			4,208			—			1,418
USLS Acquisition, Inc.	6,298			—			—			6,298
Vertafore, Inc.	15,000			—			409			14,591
Westfall Technik, Inc.	11,551			674			—			10,877
Wright Medical Group, Inc.	56,667			7,807			—			48,860
ZPower, LLC	1,667			—			—			1,667
Total Commitments	$	462,086		$	87,844		$	22,924		$	351,318

____________________

* These investments are in a foreign currency and the total commitment has been converted to USD using the December 31, 2018 exchange rate.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(24)	As of December 31, 2018, Dynamic Product Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-3 units which are identical except that Class A-1 unit is voting and Class A-3 unit is non-voting. The units entitle the Company to appoint three out of five managers to the board of managers.

(25)	As of December 31, 2018, MSEA Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-2 units which are identical except that Class A-1 unit is voting and Class A-2 unit is non-voting. The units entitle the Company to appoint two out of three managers to the board of managers.

(26)	The Company holds three classes of warrants in Sprint Industrial Holdings, LLC. The Company holds 5,595 warrants of Class G, 507 warrants of Class H, and 1,239 warrants of Class I.

(27)	The unused line fees of 0.50% and 0.25% are collected for the Unfunded Delayed Draw and Unfunded Revolver, respectively from both Altasciences US Acquisition, Inc. and Altasciences/9360-1367 Quebec Inc. as each borrower has access to the respective lending facilities.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(28)	The following shows the composition of the Company’s portfolio at cost by control designation, investment type and industry as of December 31, 2018:

Industry	First Lien - Secured Debt			Second Lien - Secured Debt			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Non-Controlled/Non-Affiliated Investments
Advertising, Printing & Publishing	$	36,378		$	5,495		$	—		$	—		$	—		$	—		$	—		$	41,873
Aerospace & Defense	20,883			47,128			—			—			—			—			—			68,011
Automotive	16,102			23,414			—			—			—			1,714			—			41,230
Beverage, Food & Tobacco	57,177			—			—			—			—			244			—			57,421
Business Services	117,883			217,774			—			—			—			603			—			336,260
Chemicals, Plastics & Rubber	60,475			14,455			—			—			—			9,000			—			83,930
Consumer Goods – Durable	13,816			21,640			—			—			—			—			—			35,456
Consumer Goods – Non-Durable	57,003			20,373			—			—			—			—			—			77,376
Consumer Services	22,983			24,708			—			—			—			—			—			47,691
Containers, Packaging & Glass	3,913			18,107			—			—			—			—			—			22,020
Diversified Investment Vehicles, Banking, Finance, Real Estate	42,501			4,933			—			13,307			—			—			—			60,741
Energy – Electricity	7,637			—			—			—			5,861			4			—			13,502
Food & Grocery	19,427			10,397			—			—			—			—			—			29,824
Healthcare & Pharmaceuticals	230,499			80,198			—			—			333			—			135			311,165
High Tech Industries	173,045			12,105			—			—			1,500			—			48			186,698
Hotel, Gaming, Leisure, Restaurants	2,500			—			—			—			—			—			—			2,500
Manufacturing, Capital Equipment	20,739			7,925			—			—			—			—			—			28,664
Media – Diversified & Production	15,674			3,216			—			—			—			—			—			18,890
Metals & Mining	1,182			—			—			—			—			—			—			1,182
Telecommunications	9,921			12,768			—			—			—			—			—			22,689
Transportation – Cargo, Distribution	—			9,293			—			—			—			—			—			9,293
Utilities – Electric	—			—			—			26,363			—			—			—			26,363
Total Non-Controlled/ Non-Affiliated Investments	$	929,738		$	533,929		$	—		$	39,670		$	7,694		$	11,565		$	183		$	1,522,779
Non-Controlled/Affiliated Investments
Diversified Investment Vehicles, Banking, Finance, Real Estate	$	—		$	—		$	—		$	16,633		$	—		$	—		$	—		$	16,633
Energy – Electricity	5,811			—			—			—			14,445			11,683			—			31,939
Energy – Oil & Gas	—			—			—			—			—			18,736			—			18,736
Total Non-Controlled/Affiliated Investments	$	5,811		$	—		$	—		$	16,633		$	14,445		$	30,419		$	—		$	67,308
Controlled Investments
Aviation and Consumer Transport	$	402,200		$	—		$	—		$	—		$	—		$	15,000		$	—		$	417,200
Energy – Oil & Gas	120,237			32,876			—			—			—			31,489			—			184,602
Transportation – Cargo, Distribution	41,820			—			—			—			—			123,406			—			165,226
Total Controlled Investments	$	564,257		$	32,876		$	—		$	—		$	—		$	169,895		$	—		$	767,028
Total	$	1,499,806		$	566,805		$	—		$	56,303		$	22,139		$	211,879		$	183		$	2,357,115

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

(29)	The following shows the composition of the Company’s portfolio at fair value by control designation, investment type and industry as of December 31, 2018:

Industry	First Lien - Secured Debt			Second Lien - Secured Debt			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total			% of Net Assets
Non-Controlled / Non-Affiliated Investments
Advertising, Printing & Publishing	$	37,363		$	5,536		$	—		$	—		$	—		$	—		$	—		$	42,899		3.2	%
Aerospace & Defense	20,245			47,225			—			—			—			—			—			67,470			5.1	%
Automotive	9,730			22,873			—			—			—			—			—			32,603			2.5	%
Beverage, Food & Tobacco	57,520			—			—			—			—			244			—			57,764			4.4	%
Business Services	118,301			216,473			—			—			—			619			—			335,393			25.5	%
Chemicals, Plastics & Rubber	57,167			15,207			—			—			—			—			—			72,374			5.5	%
Consumer Goods – Durable	13,372			21,590			—			—			—			440			—			35,402			2.7	%
Consumer Goods – Non-Durable	56,903			20,263			—			—			—			—			—			77,166			5.9	%
Consumer Services	22,746			24,687			—			—			—			—			—			47,433			3.6	%
Containers, Packaging & Glass	4,215			14,560			—			—			—			—			—			18,775			1.4	%
Diversified Investment Vehicles, Banking, Finance, Real Estate	42,364			4,966			—			13,379			—			—			—			60,709			4.6	%
Energy – Electricity	6,968			—			—			—			4,952			276			—			12,196			0.9	%
Food & Grocery	19,355			10,434			—			—			—			—			—			29,789			2.2	%
Healthcare & Pharmaceuticals	229,905			77,679			—			—			333			—			96			308,013			23.4	%
High Tech Industries	170,500			11,823			—			—			1,500			—			57			183,880			14.0	%
Hotel, Gaming, Leisure, Restaurants	2,500			—			—			—			—			—			—			2,500			0.2	%
Manufacturing, Capital Equipment	20,715			7,800			—			—			—			—			—			28,515			2.2	%
Media – Diversified & Production	15,637			3,120			—			—			—			—			—			18,757			1.4	%
Metals & Mining	157			—			—			—			—			—			—			157			0%
Telecommunications	9,383			12,459			—			—			—			—			—			21,842			1.7	%
Transportation – Cargo, Distribution	—			9,281			—			—			—			—			—			9,281			0.7	%
Utilities – Electric	—			—			—			29,794			—			—			—			29,794			2.3	%
Total Non-Controlled / Non-Affiliated Investments	$	915,046		$	525,976		$	—		$	43,173		$	6,785		$	1,579		$	153		$	1,492,712		113.4	%
% of Net Assets	69.5		%	40.0		%	—		%	3.3		%	0.5		%	0.1		%	0%			113.4		%
Non-Controlled / Affiliated Investments
Diversified Investment Vehicles, Banking, Finance, Real Estate	$	—		$	—		$	—		$	13,432		$	—		$	—		$	—		$	13,432		1.0	%
Energy – Electricity	2,785			—			—			—			20,987			8,107			—			31,879			2.4	%
Energy – Oil & Gas	—			—			—			—			—			5,925			—			5,925			0.5	%
Total Non-Controlled / Affiliated Investments	$	2,785		$	—		$	—		$	13,432		$	20,987		$	14,032		$	—		$	51,236		3.9	%
% of Net Assets	0.2		%	—		%	—		%	1.0		%	1.6		%	1.1		%	—		%	3.9		%
Controlled Investments
Aviation and Consumer Transport	$	402,200		$	—		$	—		$	—		$	—		$	53,351		$	—		$	455,551		34.6	%
Energy – Oil & Gas	117,142			32,876			—			—			—			4,782			—			154,800			11.7	%
Transportation – Cargo, Distribution	42,000			—			—			—			—			111,667			—			153,667			11.7	%
Total Controlled Investments	$	561,342		$	32,876		$	—		$	—		$	—		$	169,800		$	—		$	764,018		58.0	%
% of Net Assets	42.6		%	2.5		%	—		%	—		%	—		%	12.9		%	—		%	58.0		%
Total	$	1,479,173		$	558,852		$	—		$	56,605		$	27,772		$	185,411		$	153		$	2,307,966		175.3	%
% of Net Assets	112.3		%	42.5		%	—		%	4.3		%	2.1		%	14.1		%	0%			175.3		%

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS (Unaudited)

December 31, 2018

(In thousands, except share data)

Industry Classification	Percentage of Total Investments (at Fair Value) as of December 31, 2018
Aviation and Consumer Transport	19.7%
Business Services	14.5%
Healthcare & Pharmaceuticals	13.3%
High Tech Industries	8.0%
Transportation – Cargo, Distribution	7.1%
Energy - Oil & Gas	7.0%
Consumer Good - Non-durable	3.4%
Diversified Investment Vehicles, Banking, Finance, Real Estate	3.2%
Chemicals, Plastics & Rubber	3.1%
Aerospace & Defense	2.9%
Beverage, Food & Tobacco	2.5%
Consumer Services	2.1%
Energy - Electricity	1.9%
Advertising, Printing & Publishing	1.9%
Consumer Goods – Durable	1.5%
Automotive	1.4%
Utilities – Electric	1.3%
Foods & Grocery	1.3%
Manufacturing, Capital Equipment	1.2%
Telecommunications	0.9%
Containers, Packaging & Glass	0.8%
Media – Diversified & Production	0.8%
Hotel, Gaming, Leisure, Restaurants	0.1%
Metals & Mining	0.1%
Total Investments	100.0%

See notes to financial statements.

22

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
Advertising, Printing & Publishing
A-L Parent LLC		Second Lien Secured Debt		9.13% (1M L+725, 1.00% Floor)		12/02/24		$	7,536			$	7,473			$	7,611
American Media, Inc.		First Lien Secured Debt		10.75% (3M L+900, 1.00% Floor)		08/24/20		13,867				13,596				14,213
		First Lien Secured Debt - Revolver		11.25% (3M L+900, 1.00% Floor)		08/24/20		948				948				963				(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		08/24/20		746				(32		)		—				(21)(23)
		First Lien Secured Debt - Letter of Credit		9.00%		08/24/20		84				—				—				(23)
												14,512				15,176
Simplifi Holdings, Inc.		First Lien Secured Debt		8.39% (1M L+650, 1.00% Floor)		09/28/22		12,139				11,812				11,775				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/28/22		2,400				(65		)		(72		)		(8)(9)(21)(23)
												11,747				11,703
Total Advertising, Printing & Publishing												$	33,732			$	34,490
Aerospace & Defense
Erickson Inc		First Lien Secured Debt - Revolver		9.81% (3M L+750, 1.00% Floor)		04/28/22		$	21,140			$	21,140			$	20,823			(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		04/28/22		16,201				(458		)		(243		)		(8)(9)(21)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		04/01/18		277				—				(4		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		06/20/18		43				—				—				(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		06/25/18		4				—				—				(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		09/30/18		104				—				(2		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		10/18/18		708				—				(11		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		11/28/18		670				—				(10		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		12/10/18		37				—				(1		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		03/31/20		1,287				—				(19		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		08/24/18		288				—				(4		)		(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		10/27/18		5				—				—				(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		08/26/18		9				—				—				(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		08/16/18		9				—				—				(8)(9)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		04/30/20		4,218				—				(63		)		(8)(9)(23)
												20,682				20,466
ILC Dover LP		Second Lien Secured Debt		10.95% (6M L+850, 1.00% Floor)		06/28/24		20,000				19,566				19,550
PAE Holding Corporation		Second Lien Secured Debt		11.49% (2M L+950, 1.00% Floor)		10/20/23		28,097				27,422				28,343				(10)
Total Aerospace & Defense												$	67,670			$	68,359
Automotive
Crowne Automotive
Vari-Form Group, LLC		First Lien Secured Debt		12.92% (3M L+11.00% (7.00% Cash plus 4.00% PIK), 1.00% Floor)		02/02/23		$	5,000			$	4,855			$	4,850			(9)

See notes to financial statements.

23

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
Vari-Form Inc.		First Lien Secured Debt		12.92% (3M L+11.00% (7.00% Cash plus 4.00% PIK), 1.00% Floor)		02/02/23		10,000				9,710				9,700				(9)
												14,565				14,550
K&N Parent, Inc.		Second Lien Secured Debt		10.63% (1M L+875, 1.00% Floor)		10/21/24		27,000				26,550				26,325				(10)
Total Automotive												$	41,115			$	40,875
Aviation and Consumer Transport
Merx Aviation
Merx Aviation Finance Assets Ireland Limited (5)		First Lien Secured Debt - Letter of Credit		2.25%		09/30/18		$	3,600			$	—			$	—			(23)
Merx Aviation Finance, LLC (5)		First Lien Secured Debt - Revolver		12.00%		10/31/23		359,800				359,800				359,800				(23)
		First Lien Secured Debt - Letter of Credit		2.25%		07/13/18		177				—				—				(23)
		Common Equity/Interests - Membership Interests		N/A		N/A		N/A				15,000				42,381
Total Aviation and Consumer Transport												$	374,800			$	402,181
Business Services
Access CIG, LLC		Second Lien Secured Debt		9.63% (1M L+775)		02/27/26		$	20,235			$	20,035			$	20,463			(10)
		Second Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		02/27/26		3,765				—				—				(10)(21)(23)
												20,035				20,463
Aero Operating LLC		First Lien Secured Debt		9.13% (1M L+725, 1.00% Floor)		12/29/22		33,477				32,683				32,640				(9)
		First Lien Secured Debt - Revolver		9.13% (1M L+725, 1.00% Floor)		12/29/22		2,486				2,486				2,424				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		1.00% Unfunded		12/29/22		2,326				(71		)		(58		)		(8)(9)(21)(23)
												35,098				35,006
Almonde, Inc		Second Lien Secured Debt		9.23% (3M L+725, 1.00% Floor)		06/13/25		2,316				2,294				2,300				(10)(17)
Ambrosia Buyer Corp.		Second Lien Secured Debt		9.88% (1M L+ 800, 1.00% Floor)		08/28/25		21,429				20,933				20,934
Aptean, Inc.		Second Lien Secured Debt		11.80% (3M L+950, 1.00% Floor)		12/20/23		11,148				11,045				11,245				(10)
CT Technologies Intermediate Holdings, Inc		Second Lien Secured Debt		10.88% (1M L+900, 1.00% Floor)		12/01/22		31,253				30,470				30,315				(9)
Electro Rent Corporation		Second Lien Secured Debt		10.98% (3M L+900, 1.00% Floor)		01/31/25		18,333				17,863				17,967				(9)
		Second Lien Secured Debt		11.25% (3M L+900, 1.00% Floor)		01/31/25		18,265				17,753				17,899				(9)
												35,616				35,866
Ministry Brands, LLC		Second Lien Secured Debt		11.13% (1M L+925, 1.00% Floor)		06/02/23		10,000				9,880				9,875
Newscycle Solutions, Inc.		First Lien Secured Debt		8.89% (1M L+700, 1.00% Floor)		12/28/22		13,743				13,416				13,399				(9)
		First Lien Secured Debt		8.88% (1M L+700, 1.00% Floor)		12/28/22		1,257				1,227				1,226				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/28/22		500				(7		)		(13		)		(8)(9)(21)(23)
												14,636				14,612
PSI Services, LLC		First Lien Secured Debt		6.87% (1M L+500, 1.00% Floor)		01/20/23		4,121				4,038				4,055				(9)

See notes to financial statements.

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
		First Lien Secured Debt - Revolver		6.89% (1M L+500, 1.00% Floor)		01/20/22		79				79				78				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		01/20/22		159				(8		)		(2		)		(8)(9)(21)(23)
		First Lien Secured Debt - Revolver		6.85% (1M L+500, 1.00% Floor)		01/20/22		159				159				156				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		01/20/22		£	47			—				—				(9)(21)(23)
		Second Lien Secured Debt		10.87% (1M L+900, 1.00% Floor)		01/20/24		25,714				25,073				25,170				(9)
												29,341				29,457
RA Outdoors, LLC		First Lien Secured Debt		6.54% (1M L+475, 1.00% Floor)		09/11/24		7,229				7,095				7,156				(9)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/09/22		1,200				(21		)		(12		)		(8)(9)(21)(23)
		Second Lien Secured Debt		10.54% (1M L+875, 1.00% Floor)		09/11/25		34,200				33,404				33,516				(9)
												40,478				40,660
Skyline Data/Dodge Data
Dodge Data & Analytics LLC		First Lien Secured Debt		11.06% (3M L+875, 1.00% Floor)		10/31/19		48,965				48,653				47,790
Skyline Data, News and Analytics LLC		Common Equity/Interests - Class A Common Unit		N/A		N/A		4,500,000 Shares				4,500				4,500				(13)
												53,153				52,290
STG-Fairway Acquisitions, Inc.		Second Lien Secured Debt		11.23% (3M L+925, 1.00% Floor)		06/30/23		15,000				14,753				14,400				(10)
Transplace Holdings, Inc.		Second Lien Secured Debt		10.46% (1M L+875, 1.00% Floor)		10/06/25		14,963				14,609				15,187				(10)
U.S. Security Associates Holdings, Inc.		Unsecured Debt		11.00%		01/28/20		80,000				80,000				80,000
Total Business Services												$	412,341			$	412,610
Chemicals, Plastics & Rubber
Carbon Free Chemicals
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)		First Lien Secured Debt		5.215% PIK		06/30/20		$	59,305			$	59,305			$	47,170
Carbonfree Caustic SPE LLC		Unfunded Delayed Draw - Promissory Note		0.00% Unfunded		06/30/20		6,111				—				—				(21)(23)
												59,305				47,170
Hare Bidco, Inc.		Second Lien Secured Debt		9.75% (3M E+875, 1.00% Floor)		08/01/24		€	13,574			14,423				16,360
Total Chemical, Plastics & Rubber												$	73,728			$	63,530
Consumer Goods – Durable
Hayward Industries, Inc.		Second Lien Secured Debt		10.13% (1M L+825)		08/04/25		$	25,110			$	24,649			$	24,647
KLO Holdings
9357-5991 Quebec Inc.		First Lien Secured Debt		9.69% (1M L+775, 0.75% Floor)		04/07/22		9,322				9,229				9,224
KLO Acquisition LLC		First Lien Secured Debt		9.69% (1M L+775, 0.75% Floor)		04/07/22		5,397				5,343				5,340
												14,572				14,564
Sorenson Holdings, LLC		Common Equity/Interests - Membership Interests		N/A		N/A		587 Shares				—				466				(13)
Total Consumer Goods - Durable												$	39,221			$	39,677
Consumer Goods – Non-Durable
ABG Intermediate Holdings 2, LLC		Second Lien Secured Debt		10.05% (3M L+775, 1.00% Floor)		09/29/25		$	8,094			$	8,036			$	8,226			(10)

See notes to financial statements.

25

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
Sequential Brands Group, Inc.		Second Lien Secured Debt		10.79% (1M L+900)		07/01/22		17,160				17,007				17,250				(17)
Total Consumer Goods - Non-Durable												$	25,043			$	25,476
Consumer Services
1A Smart Start LLC		Second Lien Secured Debt		10.13% (1M L+825, 1.00% Floor)		08/22/22		$	25,100			$	24,628			$	24,623
Total Consumer Services												$	24,628			$	24,623
Containers, Packaging & Glass
Sprint Industrial Holdings, LLC		Second Lien Secured Debt		13.5% PIK		11/14/19		$	19,072			$	18,107			$	10,159			(13)(14)
		Common Equity/Interests - Warrants		N/A		N/A		7,341 Warrants				—				—				(13)(26)
												18,107				10,159
TricorBraun Holdings, Inc.		First Lien Secured Debt - Revolver		7.00% (P+225)		11/30/21		1,560				1,560				1,561				(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/30/21		4,065				(371		)		—				(21)(23)
												1,189				1,561
Total Containers, Packaging & Glass												$	19,296			$	11,720
Diversified Investment Vehicles, Banking, Finance, Real Estate
Armor Holding II LLC		Second Lien Secured Debt		11.31% (3M L+900, 1.25% Floor)		12/26/20		$	8,000			$	7,941			$	8,110			(10)
Craft 2014-1A		Structured Products and Other - Credit-Linked Note		N/A		05/15/21		42,500				—				—				(11)(17)
Craft 2015-2		Structured Products and Other - Credit-Linked Note		10.22% (3M L+925)		01/16/24		24,998				25,691				24,960				(11)(17)
Golden Bear 2016-R, LLC (3)(4)		Structured Products and Other - Membership Interests		N/A		09/20/42		—				16,506				14,147				(17)
Mayfield Agency Borrower Inc.		Second Lien Secured Debt		10.38% (1M L+850, 1.00% Floor)		03/02/26		5,000				4,926				4,997				(10)
Purchasing Power, LLC		First Lien Secured Debt - Revolver		9.88% (1M L + 800, 1.00% Floor)		07/10/19		3,068				3,068				3,048				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.75% Unfunded		07/10/19		1,432				(53		)		(35		)		(8)(9)(21)(23)
												3,015				3,013
Ten-X, LLC		First Lien Secured Debt - Revolver		5.60% (1M L+375, 1.00% Floor)		09/29/22		520				520				477				(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/29/22		4,160				(379		)		(341		)		(8)(21)(23)
												141				136
Total Diversified Investment Vehicles, Banking, Finance, Real Estate												$	58,220			$	55,363
Energy – Electricity
AMP Solar Group, Inc. (4)		Common Equity/Interests - Class A Common Unit		N/A		N/A		243,646 Shares				$	10,000			$	5,051			(13)(17)
Renew Financial
AIC SPV Holdings II, LLC (4)		Preferred Equity - Preferred Stock		N/A		N/A		143 Shares				534				925				(13)(15)(17)
Renew Financial LLC (f/k/a Renewable Funding, LLC) (4)		Preferred Equity - Series B Preferred Stock		N/A		N/A		1,505,868 Shares				8,343				19,035				(13)
		Preferred Equity - Series D Preferred Stock		N/A		N/A		436,689 Shares				5,568				6,676				(13)
Renew JV LLC (4)		Common Equity/Interests - Membership Interests		N/A		N/A		N/A				2,740				4,111				(13)(17)
												17,185				30,747
Solarplicity Group
Solarplicity Group Limited (3)(4)		First Lien Secured Debt		N/A		11/30/22		£	4,331			5,811				6,063				(13)(17)

See notes to financial statements.

26

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
Solarplicity UK Holdings Limited		First Lien Secured Debt		4.00%		03/08/23		£	5,562			7,637				7,778				(17)
		Preferred Equity - Preferred Stock		N/A		N/A		4,286 Shares				5,832				5,008				(2)(17)
		Common Equity/Interests - Ordinary Shares		N/A		N/A		2,825 Shares				4				929				(2)(13)(17)
												19,284				19,778
Westinghouse Electric Co LLC		First Lien Secured Debt		6.44% (1M L+450, 1.00% Floor)		01/11/19		$	30,000			30,000				30,000				(9)
Total Energy – Electricity												$	76,469			$	85,576
Energy – Oil & Gas
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (5)		First Lien Secured Debt		8.00% Cash (10.00% PIK Toggle)		03/29/19		$	15,000			$	15,000			$	15,000
		Second Lien Secured Debt		10.00% PIK (8.00% Cash Toggle)		03/29/21		30,510				30,510				30,510
		Common Equity/Interests - Common Stock		N/A		N/A		5,000,000 Shares				30,078				20,303				(13)
												75,588				65,813
Pelican Energy, LLC (4)		Common Equity/Interests - Membership Interests		N/A		N/A		1,444 Shares				24,441				12,946				(13)(17)(29)
SHD Oil & Gas, LLC (5)		First Lien Secured Debt - Tranche A Note		14.00% (8.00% Cash plus 6.00% PIK)		12/31/19		43,436				43,436				44,739
		First Lien Secured Debt - Tranche B Note		14.00% PIK		12/31/19		73,231				44,380				40,816				(13)(14)
		First Lien Secured Debt - Tranche C Note		12.00%		12/31/19		19,200				19,200				19,776
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		12/31/19		2,800				—				—				(21)(23)
		Common Equity/Interests - Series A Units		N/A		N/A		7,600,000 Shares				1,411				—				(13)(29)
												108,427				105,331
Total Energy – Oil & Gas												$	208,456			$	184,090
Food & Grocery
Bumble Bee Foods
Bumble Bee Holdings, Inc.		First Lien Secured Debt		9.87% (3M L+800, 1.00% Floor)		08/15/23		$	15,507			$	15,221			$	15,197
Connors Bros Clover Leaf Seafoods Company		First Lien Secured Debt		9.87% (3M L+800, 1.00% Floor)		08/15/23		4,393				4,312				4,305
												19,533				19,502
Grocery Outlet, Inc.		Second Lien Secured Debt		10.55% (3M L+825, 1.00% Floor)		10/21/22		25,000				24,784				25,250				(10)
Total Food & Grocery												$	44,317			$	44,752
Healthcare & Pharmaceuticals
Altasciences
9360-1367 Quebec Inc.		First Lien Secured Debt		7.93% (3M L+625, 1.00% Floor)		06/09/23		C$	2,418			$	1,766			$	1,833			(9)(17)
		First Lien Secured Debt		8.56% (3M L+625, 1.00% Floor)		06/09/23		$	2,899			2,842				2,834				(9)(17)
Altasciences US Acquisition, Inc.		First Lien Secured Debt		8.56% (3M L+625, 1.00% Floor)		06/09/23		5,235				5,133				5,117				(9)
		First Lien Secured Debt - Unfunded Delayed Draw		0.50% Unfunded		06/09/23		2,851				(31		)		(64		)		(8)(9)(21)(23)(28)
		First Lien Secured Debt - Revolver		8.56% (3M L+625, 1.00% Floor)		06/09/23		71				71				70				(9)(23)(28)

See notes to financial statements.

27

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
		First Lien Secured Debt - Revolver		8.56% (3M L+625, 1.00% Floor)		06/09/23		214				214				209				(9)(23)(28)
		First Lien Secured Debt - Unfunded Revolver		0.25% Unfunded		06/09/23		1,140				(28		)		(27		)		(8)(9)(21)(23)(28)
												9,967				9,972
Aptevo Therapeutics Inc.		First Lien Secured Debt		9.48% (1M L+760, 0.50% Floor)		02/01/21		8,571				8,708				8,531				(9)
Argon Medical Devices Holdings, Inc.		Second Lien Secured Debt		10.30% (3M L+800, 1.00% Floor)		01/23/26		21,600				21,494				21,870				(10)
Avalign Technologies, Inc.		Second Lien Secured Debt		10.38% (6M L+825, 1.00% Floor)		09/02/24		5,500				5,449				5,483				(10)
BioClinica Holding I, LP		Second Lien Secured Debt		9.99% (3M L+825, 1.00% Floor)		10/21/24		24,612				24,201				23,874				(10)
Genesis Healthcare, Inc.		First Lien Secured Debt		8.31% (3M L+600, 0.50% Floor)		03/06/23		25,000				24,630				24,630				(9)
		First Lien Secured Debt - Unfunded Delayed Draw		2.00% Unfunded		03/06/23		9,130				(180		)		(135		)		(8)(9)(21)(23)
		First Lien Secured Debt - Revolver		8.03% (3M L+600, 0.50% Floor)		03/06/23		23,835				23,835				23,483				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		03/06/23		37,035				(877		)		(547		)		(8)(9)(21)(23)
												47,408				47,431
Elements Behavioral Health, Inc.		Second Lien Secured Debt		15.06% (3M L+1275, 1.00% Floor)		02/11/20		12,353				11,911				—				(13)(14)
Invuity, Inc.		First Lien Secured Debt		8.38% (1M L+650, 1.50% Floor)		03/01/22		10,000				9,855				9,750				(9)
		First Lien Secured Debt - Revolver		5.13% (1M L+325, 1.50% Floor)		03/01/22		657				657				649				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		03/01/22		1,343				(8		)		(17		)		(8)(9)(21)(23)
		Common Equity/Interests - Warrants		N/A		N/A		32,803 Warrants				180				69				(9)(13)
												10,684				10,451
Lanai Holdings III, Inc.		Second Lien Secured Debt		10.29% (2M L+850, 1.00% Floor)		08/28/23		17,391				16,991				16,696				(10)
LSCS Holdings, Inc		Second Lien Secured Debt		10.31% (3M L+825)		03/16/26		20,455				19,995				20,352
		Second Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		03/16/26		4,545				(102		)		(23		)		(8)(21)(23)
												19,893				20,329
Maxor National Pharmacy Services, LLC		First Lien Secured Debt		8.25% (3M L+600, 1.00% Floor)		11/22/23		21,577				21,070				21,373				(9)
		First Lien Secured Debt - Revolver		9.75% (P+500)		11/22/22		195				195				193				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		11/22/22		1,363				(19		)		(12		)		(8)(9)(21)(23)
												21,246				21,554
Oxford Immunotec, Inc.		First Lien Secured Debt		9.48% (1M L+760, 0.50% Floor)		10/01/21		9,750				9,886				9,916				(9)(17)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		10/01/21		1,000				(4		)		—				(9)(17)(21)(23)
												9,882				9,916
Partner Therapeutics, Inc		First Lien Secured Debt		8.53% (1M L+665, 1.00% Floor)		01/01/23		10,000				9,821				9,846				(9)
		Preferred Equity - Preferred Stock		N/A		N/A		55,556 Shares				333				333				(9)
		Common Equity/Interests - Warrants		N/A		N/A		33,333 Warrants				135				104				(9)(13)
												10,289				10,283

See notes to financial statements.

28

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Table of Contents

APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
PTC Therapeutics, Inc		First Lien Secured Debt		8.03% (1M L+615, 1.00% Floor)		05/01/21		12,667				12,618				12,743				(9)(17)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		05/01/21		6,333				(24		)		—				(9)(17)(21)(23)
												12,594				12,743
RiteDose Holdings I, Inc.		First Lien Secured Debt		8.81% (3M L+650, 1.00% Floor)		09/13/23		14,963				14,520				14,681				(9)
		First Lien Secured Debt - Revolver		8.81% (3M L+650, 1.00% Floor)		09/13/22		1,067				1,067				1,048				(9)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		09/13/22		933				(58		)		(17		)		(8)(9)(21)(23)
												15,529				15,712
Teladoc, Inc.		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		07/14/20		1,289				(52		)		(1		)		(8)(17)(21)(23)
		First Lien Secured Debt - Letter of Credit		7.25%		01/12/19		378				—				—				(8)(17)(23)
												(52		)		(1		)
Wright Medical Group, Inc.		First Lien Secured Debt - Revolver		6.13% (1M L+425, 0.75% Floor)		12/23/21		18,333				18,333				18,333				(9)(17)(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/23/21		31,667				(373		)		—				(9)(17)(21)(23)
												17,960				18,333
Total Healthcare & Pharmaceuticals												$	264,154			$	253,177
High Tech Industries
ChyronHego Corporation		First Lien Secured Debt		7.43% (3M L+643, 1.00% Floor)		03/09/20		$	35,277			$	34,967			$	33,866			(18)
DigiCert Holdings, Inc.		Second Lien Secured Debt		9.77% (3M L+800, 1.00% Floor)		10/31/25		20,196				20,100				20,405				(10)
LabVantage Solutions
LabVantage Solutions Inc.		First Lien Secured Debt		9.38% (1M L+750, 1.00% Floor)		12/29/20		13,688				13,441				13,551
LabVantage Solutions Limited		First Lien Secured Debt		8.50% (1M E+750, 1.00% Floor)		12/29/20		€	12,539			13,246				15,267				(17)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/29/20		€	3,435			(63		)		(42		)		(8)(17)(21)(23)
												26,624				28,776
Omnitracs, LLC		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		03/23/23		3,750				(336		)		(338		)		(8)(21)(23)
Smokey Merger Sub, Inc.		Second Lien Secured Debt		10.44% (3M L+850, 1.00% Floor)		05/24/24		30,000				29,208				29,250				(9)
Telestream Holdings Corporation		First Lien Secured Debt		7.61% (6M L+645, 1.00% Floor)		03/24/22		36,748				36,446				36,014				(18)
Tibco Software Inc.		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		12/05/19		6,000				(20		)		(840		)		(8)(21)(23)
ZPower, LLC		First Lien Secured Debt		9.63% (1M L+775, 1.00% Floor)		07/01/22		6,667				6,607				6,593				(9)
		First Lien Secured Debt - Unfunded Delayed Draw		0.00% Unfunded		07/01/22		1,667				71				(18		)		(8)(9)(21)(23)
		Common Equity/Interests - Warrants		N/A		N/A		29,630 Warrants				48				78				(9)(13)
												6,726				6,653
Total High Tech Industries												$	153,715			$	153,786
Hotel, Gaming, Leisure, Restaurants
GFRC Holdings LLC		First Lien Secured Debt		9.77% (3M L+800 Cash (L+800 PIK Toggle), 1.50% Floor))		02/01/22		$	2,500			$	2,500			$	2,500
Total Hotel, Gaming, Leisure, Restaurants												$	2,500			$	2,500

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
Insurance
Alliant Holdings Intermediate, LLC		First Lien Secured Debt - Revolver		7.25% (P+250)		08/14/20		$	3,375			$	3,375			$	3,278			(23)
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		08/14/20		11,438				(810		)		(327		)		(8)(21)(23)
		First Lien Secured Debt - Letter of Credit		3.375%		04/23/18		37				—				(1		)		(8)(23)
		First Lien Secured Debt - Letter of Credit		3.375%		05/04/18		8				—				—				(8)(23)
		First Lien Secured Debt - Letter of Credit		3.375%		07/30/18		97				—				(2		)		(8)(23)
		First Lien Secured Debt - Letter of Credit		3.375%		11/30/18		37				—				(1		)		(8)(23)
		First Lien Secured Debt - Letter of Credit		3.375%		05/31/19		8				—				—				(8)(23)
												2,565				2,947
Confie Seguros Holding II Co.		Second Lien Secured Debt		11.48% (3M L+950, 1.25% Floor)		05/08/19		21,844				21,807				21,216				(10)
Total Insurance												$	24,372			$	24,163
Manufacturing, Capital Equipment
MedPlast Holdings Inc.		Second Lien Secured Debt		10.43% (2M L+875, 1.00% Floor)		06/06/23		$	8,000			$	7,832			$	7,740
Power Products, LLC		Second Lien Secured Debt		10.74% (3M L+900, 1.00% Floor)		12/20/23		32,500				31,568				32,226				(9)
Total Manufacturing, Capital Equipment												$	39,400			$	39,966
Media – Diversified & Production
SESAC Holdco II LLC		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		02/23/22		$	587			$	(41	)		$	(44	)		(8)(21)(23)
		Second Lien Secured Debt		9.13% (1M L+725, 1.00% Floor)		02/24/25		3,241				3,213				3,233				(10)
Total Media – Diversified & Production												$	3,172			$	3,189
Metals & Mining
Magnetation, LLC		First Lien Secured Debt		10.31% (3M L+800 Cash (PIK Toggle))		12/31/19		$	1,352			$	1,273			$	451			(13)(14)
Total Metals & Mining												$	1,273			$	451
Telecommunications
Securus Technologies Holdings, Inc.		Second Lien Secured Debt		10.13% (1M L+825, 1.00% Floor)		11/01/25		$	12,878			$	12,755			$	13,051			(10)
UniTek Global Services Inc.		First Lien Secured Debt		10.81% (3M L+850, 1.00% Floor)		01/13/19		32,367				32,367				33,014
		First Lien Secured Debt		10.81% (3M L+750 Cash plus 1.00% PIK, 1.00% Floor)		01/13/19		1,951				1,951				1,951
		First Lien Secured Debt - Unfunded Revolver		0.50% Unfunded		01/13/19		5,000				—				—				(21)(23)
		First Lien Secured Debt - Letter of Credit		7.50%		01/13/19		5,857				—				—				(23)
		Unsecured Debt		15.00% PIK		07/13/19		9,918				9,918				10,117
												44,236				45,082
Wave Holdco Merger Sub, Inc.		Second Lien Secured Debt		11.13% (1M L+925, 1.00% Floor)		05/27/23		10,000				9,810				9,890
Total Telecommunications												$	66,801			$	68,023
Transportation – Cargo, Distribution
American Tire
Accelerate Parent Corp.		Common Equity/Interests - Common Stock		N/A		N/A		1,664,046 Shares				$	1,715			$	2,310			(13)

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry / Company		Investment Type		Interest Rate (20)		Maturity Date		Par / Shares (12)				Cost (30)				Fair Value (1) (31)
American Tire Distributors, Inc.		Unsecured Debt		10.25%		03/01/22		$	12,741			12,798				13,049				(10)(11)
												14,513				15,359
Dynamic Product Tankers, LLC (5)		First Lien Secured Debt		9.30% (3M L+700)		06/30/23		42,000				41,790				42,000				(17)
		First Lien Secured Debt - Letter of Credit		2.25%		09/20/18		2,250				—				—				(17)(23)
		First Lien Secured Debt - Letter of Credit		2.25%		01/31/21		500				—				—				(17)(23)
		Common Equity/Interests - Class A Units		N/A		N/A		N/A				48,106				41,479				(17)(24)
												89,896				83,479
MSEA Tankers LLC (5)		Common Equity/Interests - Class A Units		N/A		N/A		N/A				74,450				72,256				(17)(25)
PT Intermediate Holdings III, LLC		Second Lien Secured Debt		10.30% (3M L+800, 1.00% Floor)		12/08/25		9,375				9,284				9,516
Total Transportation – Cargo, Distribution												$	188,143			$	180,610
Utilities – Electric
Asset Repackaging Trust Six B.V.		Structured Products and Other		12.81%		05/18/27		$	58,411			$	26,030			$	28,860			(11)(17)(19)
Total Utilities – Electric												$	26,030			$	28,860
Total Investments before Cash Equivalents and Option Contracts												$	2,268,596			$	2,248,047
J.P. Morgan U.S. Government Money Market Fund		N/A		N/A		N/A		$	14,035			$	14,035			$	14,035			(22)
Total Investments after Cash Equivalents and before Option Contracts												$	2,282,631			$	2,262,082

Counterparty		Instrument		Exercise Price				Maturity Date		Number of Contracts			Notional Amount (27)				Cost (Proceeds)				Fair Value (1)
Purchased Put Options
CME Group		WTI Crude Oil Put Options		$	45.00			4/30/18 - 4/30/19		2,750			$	123,750			$	5,758			$	1,226			(10)
Total Purchased Put Options																	$	5,758			$	1,226			(16)
Written Call Options
CME Group		WTI Crude Oil Call Options		$	54.30			4/30/18 - 3/29/19		660			$	(35,838	)		$	(1,713	)		$	(6,388	)		(10)
CME Group		WTI Crude Oil Call Options		55.00				4/30/18 - 3/29/19		660			(36,300		)		(1,647		)		(6,021		)		(10)
CME Group		WTI Crude Oil Call Options		57.50				4/30/18 - 4/30/19		715			(41,113		)		(1,499		)		(5,150		)		(10)
CME Group		WTI Crude Oil Call Options		62.75				4/30/18 - 4/30/19		715			(44,866		)		(877		)		(2,791		)		(10)
Total Written Call Options																	$	(5,736	)		$	(20,350	)		(16)
Total Investments after Cash Equivalents and Option Contracts																	$	2,282,653			$	2,242,958			(6)(7)

____________________

(1)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (See Note 2 to the financial statements).

(2)	Preferred and ordinary shares in Solarplicity UK Holdings Limited are GBP denominated equity investments.

(3)

Denotes investments in which the Company owns greater than 25% of the equity, where the governing documents of each entity preclude the Company from exercising a controlling influence over the management or policies of such entity. The Company does not have the right to elect or appoint more than 25% of the directors or another party has the right to elect or appoint more directors than the Company and has the right to appoint certain members of senior management. Therefore, the Company has determined that these entities are not controlled affiliates. As of March 31, 2018, we had a 100% and 28% equity ownership interest in Golden Bear 2016-R, LLC and Solarplicity Group Limited, respectively. Equity ownership in Solarplicity Group Limited was written off as it was deemed worthless.

See notes to financial statements.

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SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(4)	Denotes investments in which we are an “Affiliated Person,” as defined in the 1940 Act, due to holding the power to vote or owning 5% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of March 31, 2017 and March 31, 2018 along with transactions during the year ended March 31, 2018 in these affiliated investments are as follows:

Name of Issuer	Fair Value at March 31, 2017			Gross Additions ●			Gross Reductions ■			Net Change in Unrealized Gains (Losses)			Fair Value at March 31, 2018			Net Realized Gains (Losses)			Interest/Dividend/Other Income
AIC SPV Holdings I, LLC, Membership Interests	$	24,285		$	35		$	(69,074	)	$	44,754		$	—		$	(43,284	)	$	114
AIC SPV Holdings II, LLC, Preferred Stock	—			534			—			391			925			—			—
AMP Solar Group, Inc., Class A Common Unit	4,687			—			—			364			5,051			—			—
Golden Bear 2016-R, LLC, Membership Interests	17,066			47			—			(2,966		)	14,147			—			—
Ivy Hill Middle Market Credit Fund IX, Ltd., Subordinated Notes	9,537			—			(9,159		)	(378		)	—			1,954			1,008
Ivy Hill Middle Market Credit Fund X, Ltd., Subordinated Notes	10,841			—			(11,078		)	237			—			(238		)	905
LVI Group Investments, LLC, Common Units	—			—			(17,505		)	17,505			—			(17,505		)	(306		)
MCF CLO I, LLC, Membership Interests	—			—			—			—			—			(19		)	120
MCF CLO III, LLC, Membership Interests	—			—			—			—			—			(19		)	427
Pelican Energy, LLC, First Lien Term Loan	15,417			—			(26,665		)	11,248			—			—			—
Pelican Energy, LLC, Membership Interests	—			26,664			(3,322		)	(10,396		)	12,946			—			—
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series B Preferred Stock	19,383			—			—			(348		)	19,035			—			—
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series D Preferred Stock	6,254			—			—			422			6,676			—			—
Renew JV LLC, Membership Interests	4,701			10,062			(9,282		)	(1,370		)	4,111			7,831			67
Solarplicity Group Limited, First Lien Term Loan	119,426			5,064			(145,851		)	27,424			6,063			(24,885		)	7,554
Solarplicity Group Limited, Class B Common Shares	—			—			(2,472		)	2,472			—			(2,472		)	—
Solarplicity UK Holdings Limited, First Lien Term Loan	—			7,637			(7,778		)	141			—			—			21
Solarplicity UK Holdings Limited, Unsecured Debt	2,501			223			(2,721		)	(3		)	—			246			204
Solarplicity UK Holdings Limited, Ordinary Shares	4,952			—			(928		)	(4,024		)	—			—			—
Solarplicity UK Holdings Limited, Preferred Stock	—			5,832			(5,008		)	(824		)	—			—			—
Venoco, Inc., Unsecured Debt	—			—			(338		)	338			—			(338		)	—
Venoco, Inc., LLC Units	—			—			(40,517		)	40,517			—			(40,517		)	—
Venoco, Inc., Series A Warrants	—			—			(48,170		)	48,170			—			(48,170		)	—
	$	239,050		$	56,098		$	(399,868	)	$	173,674		$	68,954		$	(167,416	)	$	10,114

____________________

● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(5)

Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Fair value as of March 31, 2017 and March 31, 2018 along with transactions during the year ended March 31, 2018 in these controlled investments are as follows:

Name of Issuer	Fair Value at March 31, 2017			Gross Additions ●			Gross Reductions ■			Net Change in Unrealized Losses			Fair Value at March 31, 2018			Net Realized Losses			Interest/Dividend/Other Income
Dynamic Product Tankers, LLC, First Lien Term Loan	$	—		$	41,790		$	—		$	210		$	42,000		$	—		$	1
Dynamic Product Tankers, LLC, Letters of Credit	—			—			—			—			—			—			—
Dynamic Product Tankers, LLC, Class A Units	42,644			—			—			(1,165		)	41,479			—			—
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), First Lien Term Loan	10,000			5,000			—			—			15,000			—			1,133
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Second Lien Term Loan	27,617			2,893			—			—			30,510			—			2,885
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Common Stock	18,862			—			—			1,441			20,303			—			—
Merx Aviation Finance Assets Ireland Limited, Letters of Credit	—			—			—			—			—			—			—
Merx Aviation Finance, LLC, Letter of Credit	—			—			—			—			—			—			—
Merx Aviation Finance, LLC, Revolver	374,084			139,700			(153,984		)	—			359,800			—			49,244
Merx Aviation Finance, LLC, Membership Interests	48,811			—			(4,205		)	(2,225		)	42,381			—			12,350
MSEA Tankers LLC, Class A Units	72,797			—			—			(541		)	72,256			—			4,803
SHD Oil & Gas, LLC, Tranche A Note	40,891			2,545			—			1,303			44,739			—			5,924
SHD Oil & Gas, LLC, Tranche B Note	32,793			—			—			8,023			40,816			—			—
SHD Oil & Gas, LLC, Tranche C Note	6,750			12,450			—			576			19,776			—			2,033
SHD Oil & Gas, LLC, Unfunded Tranche C Note	—			—			—			—			—			—			—
SHD Oil & Gas, LLC, Series A Units	—			—			—			—			—			—			—
	$	675,249		$	204,378		$	(158,189	)	$	7,622		$	729,060		$	—		$	78,373

____________________

● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

	As of March 31, 2018, the Company had a 85%, 47%, 100%, 98% and 38% equity ownership interest in Dynamic Product Tankers, LLC; Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.); Merx Aviation Finance, LLC; MSEA Tankers, LLC; and SHD Oil & Gas, LLC (f/k/a Spotted Hawk Development LLC), respectively.

(6)	Aggregate gross unrealized gain and loss for federal income tax purposes is $143,712 and $138,978, respectively. Net unrealized gain is $4,734 based on a tax cost of $2,238,224.

(7)	Substantially all securities are pledged as collateral to our multi-currency revolving credit facility (the “Senior Secured Facility” as defined in Note 8 to the financial statements). As such, these securities are not available as collateral to our general creditors.

(8)	The negative fair value is the result of the commitment being valued below par.

(9)	These are co-investments made with the Company’s affiliates in accordance with the terms of the exemptive order the Company received from the Securities and Exchange Commission (the “SEC”) permitting us to do so. (See Note 3 to the financial statements for discussion of the exemptive order from the SEC.)

(10)	Other than the investments noted by this footnote, the fair value of the Company’s investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 2 to the financial statements for more information regarding ASC 820, Fair Value Measurements (“ASC 820”).

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(11)	These securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions that are exempt from registration, normally to qualified institutional buyers.

(12)	Par amount is denominated in USD unless otherwise noted, Euro (“€”), British Pound (“£”), and Canadian Dollar (“C$”).

(13)	Non-income producing security.

(14)	Non-accrual status (See Note 2 to the financial statements).

(15)	The underlying investments of AIC SPV Holdings II, LLC is a securitization in which the Company has a 14.25% ownership interest in the residual tranche.

(16)	Refer to Note 7 to the financial statements for details of the Offsetting Assets and Liabilities. On the Statement of Assets and Liabilities, the fair value of purchased put options and written call options that are settled-to-market are offset against the cash collateral posted with the clearing house as variation margin amounting to $20,970.

(17)

Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of March 31, 2018, non-qualifying assets represented approximately 15.13% of the total assets of the Company.

(18)	In addition to the interest earned based on the stated rate of this loan, the Company may be entitled to receive additional interest as a result of its arrangement with other lenders in a syndication.

(19)	This investment represents a leveraged subordinated interest in a trust that holds one foreign currency denominated bond and a derivative instrument.

(20)

Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate or the prime rate. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates (1M L, 2M L, 3M L or 6M L, respectively), and EURIBOR loans are typically indexed to 90-day EURIBOR rates (3M E), at the borrower’s option. LIBOR and EURIBOR loans may be subject to interest floors. As of March 31, 2018, rates for 1M L, 2M L, 3M L, 6M L, 1M E, 3M E, and Prime are 1.88%, 2.00%, 2.31%, 2.45%, (0.41%), (0.37%) and 4.75%, respectively.

(21)	The rates associated with these undrawn committed revolvers and delayed draw term loans represent rates for commitment and unused fees.

(22)	This security is included in the Cash and Cash Equivalents on the Statements of Assets and Liabilities.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(23)

As of March 31, 2018, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 10 to the financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.

Portfolio Company	Total Commitment			Drawn Commitment			Letters of Credit			Undrawn Commitment
Access CIG, LLC	$	3,765		$	—		$	—		$	3,765
Aero Operating LLC	4,812			2,486			—			2,326
Alliant Holdings Intermediate, LLC	15,000			3,375			187			11,438
Altasciences US Acquisition, Inc.	4,276			285			—			3,991
American Media, Inc.	1,778			948			84			746
Carbonfree Caustic SPE LLC	6,111			—			—			6,111
Dynamic Product Tankers, LLC	2,750			—			2,750			—
Erickson Inc	45,000			21,140			7,659			16,201
Genesis Healthcare, Inc.	70,000			23,835			—			46,165
Invuity, Inc.	2,000			657			—			1,343
LabVantage Solutions Limited*	4,225			—			—			4,225
LSCS Holdings, Inc	4,545			—			—			4,545
Maxor National Pharmacy Services, LLC	1,558			195			—			1,363
Merx Aviation Finance Assets Ireland Limited	3,600			—			3,600			—
Merx Aviation Finance, LLC	177			—			177			—
Newscycle Solutions, Inc.	500			—			—			500
Omnitracs, LLC	3,750			—			—			3,750
Oxford Immunotec, Inc.	1,000			—			—			1,000
PSI Services, LLC*	462			238			—			224
PTC Therapeutics, Inc	6,333			—			—			6,333
Purchasing Power, LLC	4,500			3,068			—			1,432
RA Outdoors, LLC	1,200			—			—			1,200
RiteDose Holdings I, Inc.	2,000			1,067			—			933
SESAC Holdco II LLC	587			—			—			587
SHD Oil & Gas, LLC	2,800			—			—			2,800
Simplifi Holdings, Inc.	2,400			—			—			2,400
Teladoc, Inc.	1,667			—			378			1,289
Ten-X, LLC	4,680			520			—			4,160
Tibco Software Inc.	6,000			—			—			6,000
TricorBraun Holdings, Inc.	5,625			1,560			—			4,065
UniTek Global Services Inc.	10,857			—			5,857			5,000
Wright Medical Group, Inc.	50,000			18,333			—			31,667
ZPower, LLC	1,667			—			—			1,667
Total Commitments	$	275,625		$	77,707		$	20,692		$	177,226

____________________

* These investments are in a foreign currency and the total commitment has been converted to USD using the March 31, 2018 exchange rate.

(24)	As of March 31, 2018, Dynamic Product Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-3 units which are identical except that Class A-1 unit is voting and Class A-3 unit is non-voting. The units entitle the Company to appoint three out of five managers to the board of managers.

(25)	As of March 31, 2018, MSEA Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-2 units which are identical except that Class A-1 unit is voting and Class A-2 unit is non-voting. The units entitle the Company to appoint two out of three managers to the board of managers.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(26)	The Company holds three classes of warrants in Sprint Industrial Holdings, LLC. The Company holds 5,595 warrants of Class G, 507 warrants of Class H, and 1,239 warrants of Class I.

(27)	The notional value represents the number of contracts open multiplied by the exercise price as of March 31, 2018.

(28)	The unused line fees of 0.50% and 0.25% are collected for the Unfunded Delayed Draw and Unfunded Revolver, respectively from both Altasciences US Acquisition, Inc. and Altasciences / 9360-1367 Quebec Inc. as each borrower has access to the respective lending facilities.

(29)

AIC Spotted Hawk Holdings, LLC, AIC SHD Holdings, LLC and AIC Pelican Holdings, LLC are consolidated wholly-owned special purpose vehicles which only hold equity investments of the underlying portfolio companies and have no other significant assets or liabilities. AIC Spotted Hawk Holdings, LLC and AIC SHD Holdings, LLC hold equity investments in SHD Oil & Gas, LLC. AIC Pelican Holdings, LLC holds an equity investment in Pelican Energy, LLC.

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(30)	The following shows the composition of the Company’s portfolio at cost by control designation, investment type and industry as of March 31, 2018:

Industry	First Lien - Secured Debt			Second Lien - Secured Debt			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Non-Controlled / Non-Affiliated Investments
Advertising, Printing & Publishing	$	26,259		$	7,473		$	—		$	—		$	—		$	—		$	—		$	33,732
Aerospace & Defense	20,682			46,988			—			—			—			—			—			67,670
Automotive	14,565			26,550			—			—			—			—			—			41,115
Business Services	109,729			218,112			80,000			—			—			4,500			—			412,341
Chemicals, Plastics & Rubber	59,305			14,423			—			—			—			—			—			73,728
Consumer Goods – Durable	14,572			24,649			—			—			—			—			—			39,221
Consumer Goods – Non-Durable	—			25,043			—			—			—			—			—			25,043
Consumer Services	—			24,628			—			—			—			—			—			24,628
Containers, Packaging & Glass	1,189			18,107			—			—			—			—			—			19,296
Diversified Investment Vehicles, Banking, Finance, Real Estate	3,156			12,867			—			25,691			—			—			—			41,714
Energy – Electricity	37,637			—			—			—			5,832			4			—			43,473
Food & Grocery	19,533			24,784			—			—			—			—			—			44,317
Healthcare & Pharmaceuticals	163,567			99,939			—			—			333			—			315			264,154
High Tech Industries	104,359			49,308			—			—			—			—			48			153,715
Hotel, Gaming, Leisure, Restaurants	2,500			—			—			—			—			—			—			2,500
Insurance	2,565			21,807			—			—			—			—			—			24,372
Manufacturing, Capital Equipment	—			39,400			—			—			—			—			—			39,400
Media – Diversified & Production	(41		)	3,213			—			—			—			—			—			3,172
Metals & Mining	1,273			—			—			—			—			—			—			1,273
Telecommunications	34,318			22,565			9,918			—			—			—			—			66,801
Transportation – Cargo, Distribution	—			9,284			12,798			—			—			1,715			—			23,797
Utilities – Electric	—			—			—			26,030			—			—			—			26,030
Total Non-Controlled / Non-Affiliated Investments	$	615,168		$	689,140		$	102,716		$	51,721		$	6,165		$	6,219		$	363		$	1,471,492
Non-Controlled / Affiliated Investments
Diversified Investment Vehicles, Banking, Finance, Real Estate	$	—		$	—		$	—		$	16,506		$	—		$	—		$	—		$	16,506
Energy – Electricity	5,811			—			—			—			13,911			13,274			—			32,996
Energy – Oil & Gas	—			—			—			—			—			24,441			—			24,441
Total Non-Controlled / Affiliated Investments	$	5,811		$	—		$	—		$	16,506		$	13,911		$	37,715		$	—		$	73,943
Controlled Investments
Aviation and Consumer Transport	$	359,800		$	—		$	—		$	—		$	—		$	15,000		$	—		$	374,800
Energy – Oil & Gas	122,016			30,510			—			—			—			31,489			—			184,015
Transportation – Cargo, Distribution	41,790			—			—			—			—			122,556			—			164,346
Total Controlled Investments	$	523,606		$	30,510		$	—		$	—		$	—		$	169,045		$	—		$	723,161
Total	$	1,144,585		$	719,650		$	102,716		$	68,227		$	20,076		$	212,979		$	363		$	2,268,596

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

(31)	The following shows the composition of the Company’s portfolio at fair value by control designation, investment type and industry as of March 31, 2018:

Industry	First Lien - Secured Debt			Second Lien - Secured Debt			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total			% of Net Assets
Non-Controlled / Non-Affiliated Investments
Advertising, Printing & Publishing	$	26,879		$	7,611		$	—		$	—		$	—		$	—		$	—		$	34,490		2.4	%
Aerospace & Defense	20,466			47,893			—			—			—			—			—			68,359			4.8	%
Automotive	14,550			26,325			—			—			—			—			—			40,875			2.9	%
Business Services	108,839			219,271			80,000						—			4,500			—			412,610			29.1	%
Chemicals, Plastics & Rubber	47,170			16,360			—			—			—			—			—			63,530			4.5	%
Consumer Goods – Durable	14,564			24,647			—			—			—			466			—			39,677			2.8	%
Consumer Goods – Non-Durable	—			25,476			—			—			—			—			—			25,476			1.8	%
Consumer Services	—			24,623			—			—			—			—			—			24,623			1.8	%
Containers, Packaging & Glass	1,561			10,159			—			—			—			—			—			11,720			0.8	%
Diversified Investment Vehicles, Banking, Finance, Real Estate	3,149			13,107			—			24,960			—			—			—			41,216			2.9	%
Energy – Electricity	37,778			—			—			—			5,008			929			—			43,715			3.1	%
Food & Grocery	19,502			25,250			—			—			—			—			—			44,752			3.2	%
Healthcare & Pharmaceuticals	164,419			88,252			—			—			333			—			173			253,177			17.9	%
High Tech Industries	104,053			49,655			—			—			—			—			78			153,786			10.8	%
Hotel, Gaming, Leisure, Restaurants	2,500			—			—			—			—			—			—			2,500			0.2	%
Insurance	2,947			21,216			—			—			—			—			—			24,163			1.7	%
Manufacturing, Capital Equipment	—			39,966			—			—			—			—			—			39,966			2.8	%
Media – Diversified & Production	(44		)	3,233			—			—			—			—			—			3,189			0.2	%
Metals & Mining	451			—			—			—			—			—			—			451			0%
Telecommunications	34,965			22,941			10,117			—			—			—			—			68,023			4.8	%
Transportation – Cargo, Distribution	—			9,516			13,049			—			—			2,310			—			24,875			1.8	%
Utilities – Electric	—			—			—			28,860			—			—			—			28,860			2.0	%
Total Non-Controlled / Non-Affiliated Investments	$	603,749		$	675,501		$	103,166		$	53,820		$	5,341		$	8,205		$	251		$	1,450,033		102.3	%
% of Net Assets	42.6		%	47.6		%	7.3		%	3.8		%	0.4		%	0.6		%	0%			102.3		%
Non-Controlled / Affiliated Investments
Diversified Investment Vehicles, Banking, Finance, Real Estate	$	—		$	—		$	—		$	14,147		$	—		$	—		$	—		$	14,147		1.0	%
Energy – Electricity	6,063			—			—			—			25,711			10,087			—			41,861			3.0	%
Energy – Oil & Gas	—			—			—			—			—			12,946			—			12,946			0.9	%
Total Non-Controlled / Affiliated Investments	$	6,063		$	—		$	—		$	14,147		$	25,711		$	23,033		$	—		$	68,954		4.9	%
% of Net Assets	0.4		%	—		%	—		%	1.0		%	1.8		%	1.7		%	—		%	4.9		%
Controlled Investments
Aviation and Consumer Transport	$	359,800		$	—		$	—		$	—		$	—		$	42,381		$	—		$	402,181		28.3	%
Energy – Oil & Gas	120,331			30,510			—			—			—			20,303			—			171,144			12.1	%
Transportation – Cargo, Distribution	42,000			—			—			—			—			113,735			—			155,735			11.0	%
Total Controlled Investments	$	522,131		$	30,510		$	—		$	—		$	—		$	176,419		$	—		$	729,060		51.4	%
% of Net Assets	36.8		%	2.2		%	—		%	—		%	—		%	12.4		%	—		%	51.4		%
Total	$	1,131,943		$	706,011		$	103,166		$	67,967		$	31,052		$	207,657		$	251		$	2,248,047		158.6	%
% of Net Assets	79.8		%	49.8		%	7.3		%	4.8		%	2.2		%	14.7		%	0%			158.6		%

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

SCHEDULE OF INVESTMENTS

March 31, 2018

(In thousands, except share data)

Industry Classification	Percentage of Total Investments (at Fair Value) as of March 31, 2018
Business Services	18.4%
Aviation and Consumer Transport	17.9%
Healthcare & Pharmaceuticals	11.3%
Energy – Oil & Gas	8.2%
Transportation – Cargo, Distribution	8.0%
High Tech Industries	6.9%
Energy – Electricity	3.8%
Aerospace & Defense	3.0%
Telecommunications	3.0%
Chemicals, Plastics & Rubber	2.8%
Diversified Investment Vehicles, Banking, Finance, Real Estate	2.5%
Food & Grocery	2.0%
Automotive	1.8%
Manufacturing, Capital Equipment	1.8%
Consumer Goods – Durable	1.8%
Advertising, Printing & Publishing	1.5%
Utilities – Electric	1.3%
Consumer Goods – Non-durable	1.1%
Consumer Services	1.1%
Insurance	1.1%
Containers, Packaging & Glass	0.5%
Media – Diversified & Production	0.1%
Hotel, Gaming, Leisure, Restaurants	0.1%
Metals & Mining	0.0%
Total Investments	100.0%

See notes to financial statements.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share and per share data)

Note 1. Organization

Apollo Investment Corporation (the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” or “our”), a Maryland corporation incorporated on February 2, 2004, is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). In addition, for tax purposes we have elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We commenced operations on April 8, 2004 receiving net proceeds of $870,000 from our initial public offering by selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split). Since then, and through December 31, 2018, we have raised approximately $2,210,067 in net proceeds from additional offerings of common stock and repurchased common stock for $166,150.

Apollo Investment Management, L.P. (the “Investment Adviser” or “AIM”) is our investment adviser and an affiliate of Apollo Global Management, LLC and its consolidated subsidiaries (“AGM”). The Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of and provides investment advisory services to the Company.

Apollo Investment Administration, LLC (the “Administrator” or “AIA”), an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Furthermore, AIA provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.

Our investment objective is to generate current income and capital appreciation. We invest primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. We may also invest in the securities of public companies and in structured products and other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”). Our portfolio is comprised primarily of investments in debt, including secured and unsecured debt of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $250 million. Our portfolio may include equity interests such as common stock, preferred stock, warrants and/or options.

Note 2. Significant Accounting Policies

The following is a summary of the significant accounting and reporting policies used in preparing the financial statements.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the requirements on Form 10-Q, ASC 946, Financial Services — Investment Companies (“ASC 946”), and Articles 6, 10 and 12 of Regulation S-X. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of the financial statements for the periods presented, have been included.

Under the 1940 Act, ASC 946, and the regulations pursuant to Article 6 of Regulation S-X, we are precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit us. Consequently, as of December 31, 2018, the Company consolidated some special purposes entities. These special purposes entities only hold investments of the Company and have no other significant asset and liabilities. All significant intercompany transactions and balances have been eliminated in consolidation.

These financial statements should be read in conjunction with the audited financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended March 31, 2018.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of income, expenses, gains and losses during the reported periods. Changes in the economic environment, financial markets, credit worthiness of our portfolio companies and any other parameters used in determining these estimates could cause actual results to differ materially.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Cash and Cash Equivalents

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements, and other high-quality, short-term debt securities would qualify as cash equivalents.

Cash and cash equivalents are carried at cost which approximates fair value. Cash equivalents held as of December 31, 2018 was $22,654. Cash equivalents held as of March 31, 2018 was $14,035.

Collateral on Option Contracts

Collateral on option contracts represents restricted cash held by our counterparty as collateral against our derivative instruments until such contracts mature or are settled upon per agreement of buyer and seller of the contract. In accordance with Accounting

Standards Update No. 2016-18, Statement of Cash Flows: Restricted Cash, the Statements of Cash Flows outline the changes in cash, including both restricted and unrestricted cash, cash equivalents and foreign currencies.

Investment Transactions

Investments are recognized when we assume an obligation to acquire a financial instrument and assume the risks for gains and losses related to that instrument. Investments are derecognized when we assume an obligation to sell a financial instrument and forego the risks for gains or losses related to that instrument. Specifically, we record all security transactions on a trade date basis. Amounts for investments recognized or derecognized but not yet settled are reported as a receivable for investments sold and a payable for investments purchased, respectively, in the Statements of Assets and Liabilities.

Fair Value Measurements

The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:

Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.

Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: Unobservable inputs for the asset or liability.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the values that would be received upon an actual disposition of such investments.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Investment Valuation Process

Under procedures established by our Board of Directors, we value investments, including certain secured debt, unsecured debt and other debt securities with maturities greater than 60 days, for which market quotations are readily available, at such market quotations (unless they are deemed not to represent fair value). We attempt to obtain market quotations from at least two brokers or dealers (if available, otherwise from a principal market maker, primary market dealer or other independent pricing service). We utilize mid-market pricing as a practical expedient for fair value unless a different point within the range is more representative. If and when market quotations are unavailable or are deemed not to represent fair value, we typically utilize independent third party valuation firms to assist us in determining fair value. Accordingly, such investments go through our multi-step valuation process as described below. In each case, our independent third party valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such investments. Investments purchased within 15 business days before the valuation date and debt investments with remaining maturities of 60 days or less may each be valued at cost with interest accrued or discount amortized to the date of maturity (although they are typically valued at available market quotations), unless such valuation, in the judgment of our Investment Adviser, does not represent fair value. In this case such investments shall be valued at fair value as determined in good faith by or under the direction of our Board of Directors including using market quotations where available. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of our Board of Directors. Such determination of fair values may involve subjective judgments and estimates.

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board of Directors has approved a multi-step valuation process each quarter, as described below:

1.	Our quarterly valuation process begins with each investment being initially valued by the investment professionals of our Investment Adviser who are responsible for the investment.

2.	Preliminary valuation conclusions are then documented and discussed with senior management of our Investment Adviser.

3.	Independent valuation firms are engaged by our Board of Directors to conduct independent appraisals by reviewing our Investment Adviser’s preliminary valuations and then making their own independent assessment.

4.	The Audit Committee of the Board of Directors reviews the preliminary valuation of our Investment Adviser and the valuation prepared by the independent valuation firms and responds, if warranted, to the valuation recommendation of the independent valuation firms.

5.	The Board of Directors discusses valuations and determines in good faith the fair value of each investment in our portfolio based on the input of our Investment Adviser, the applicable independent valuation firm, and the Audit Committee of the Board of Directors.

Investments determined by these valuation procedures which have a fair value of less than $1 million during the prior fiscal quarter may be valued based on inputs identified by the Investment Adviser without the necessity of obtaining valuation from an independent valuation firm, if once annually an independent valuation firm using the procedures described herein provides an independent assessment of value. Investments in all asset classes are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, seniority of investment in the investee company’s capital structure, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors. When readily available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. During the nine months ended December 31, 2018, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Derivative Instruments

The Company recognizes all derivative instruments as assets or liabilities at fair value in its financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result the Company presents changes in fair value and realized gains or losses through current period earnings.

Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process. The derivatives may require the Company to pay or receive an upfront fee or premium. These upfront fees or premiums are carried forward as cost or proceeds to the derivatives.

Exchange-traded derivatives which include put and call options are valued based on the last reported sales price on the date of valuation. Over-the-counter (“OTC”) derivatives, including credit default swaps, are valued by the Investment Adviser using quotations from counterparties. In instances where models are used, the value of the OTC derivative is derived from the contractual terms of, and specific risks inherent in, the instrument as well as the availability and reliability of observable inputs, such as credit spreads.

Offsetting Assets and Liabilities

The Company has elected not to offset cash collateral against the fair value of derivative contracts. The fair values of these derivatives are presented on a gross basis, even when derivatives are subject to master netting agreements. The Company’s disclosures regarding offsetting are discussed in Note 7 to the financial statements.

Valuation of Other Financial Assets and Financial Liabilities

ASC 825, Financial Instruments, permits an entity to choose, at specified election dates, to measure certain assets and liabilities at fair value (the “Fair Value Option”). We have not elected the Fair Value Option to report selected financial assets and financial liabilities. Debt issued by the Company is reported at amortized cost (see Note 8 to the financial statements). The carrying value of all other financial assets and liabilities approximates fair value due to their short maturities or their close proximity of the originations to the measurement date.

Realized Gains or Losses

Security transactions are accounted for on a trade date basis. Realized gains or losses on investments are calculated by using the specific identification method. Securities that have been called by the issuer are recorded at the call price on the call effective date.

Investment Income Recognition

The Company records interest and dividend income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Some of our loans and other investments, including certain preferred equity investments, may have contractual payment-in-kind (“PIK”) interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At the point the Company believes PIK is not fully expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company believes that PIK is expected to be realized.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining interest or dividend obligations. Interest or dividend cash payments received on non-accrual designated investments may be recognized as income or applied to principal depending upon management’s judgment.

Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. Other income generally includes amendment fees, bridge fees, and structuring fees which are recorded when earned.

The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. Such assumptions include the rate and timing of principal and interest receipts (which may be subject to prepayments and defaults) of the underlying pool of assets. These assumptions are updated on at least a quarterly basis to reflect changes related to a particular security, actual historical data, and market changes. A structured product investment typically has an underlying pool of assets. Payments on structured product investments are and will be payable solely from the cash flows from such assets. As such, any unforeseen event in these underlying pools of assets might impact the expected recovery of principal and future accrual of income.

Expenses

Expenses include management fees, performance-based incentive fees, insurance expenses, administrative service fees, legal fees, directors’ fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis.

Financing Costs

The Company records expenses related to shelf filings and applicable offering costs as deferred financing costs in the Statements of Assets and Liabilities. To the extent such expenses relate to equity offerings, these expenses are charged as a reduction of capital upon utilization, in accordance with ASC 946-20-25, or charged to expense if no offering is completed.

The Company records origination and other expenses related to its debt obligations as deferred financing costs. The deferred financing cost for all outstanding debt is presented as a direct deduction from the carrying amount of the related debt liability, except that incurred under the Senior Secured Facility (as defined in Note 8 to the financial statements), which the Company presents as an asset on the Statements of Assets and Liabilities. These expenses are deferred and amortized as part of interest expense using the straight-line method over the stated life of the obligation which approximates the effective yield method. In the event that we modify or extinguish our debt before maturity, the Company follows the guidance in ASC 470-50, Modification and Extinguishments (“ASC 470-50”). For modifications to or exchanges of our Senior Secured Facility (as defined in Note 8 to the financial statements), any unamortized deferred financing costs relating to lenders who are not part of the new lending group are expensed. For extinguishments of our senior secured notes and senior unsecured notes, any unamortized deferred financing costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.

Foreign Currency Translations

The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Dividends and Distributions

Dividends and distributions to common stockholders are recorded as of the ex-dividend date. The amount to be paid out as a distribution is determined by the Board of Directors each quarter. Net realized capital gains, if any, are generally distributed or deemed distributed at least annually.

Share Repurchases

In connection with the Company’s share repurchase program, the cost of shares repurchased is charged to net assets on the trade date.

Federal and State Income Taxes

We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must (among other requirements) meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders at least 90% of its investment company taxable income as defined by the Code, for each year. The Company (among other requirements) has made and intends to continue to make the requisite distributions to its stockholders, which will generally relieve the Company from corporate-level income taxes. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of distributions paid to stockholders through December 31, 2018 may include return of capital, however, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ending March 31, 2019. The character of income and gains that we will distribute is determined in accordance with income tax regulations that may differ from GAAP. Book and tax basis differences relating to stockholder dividend and distributions and other permanent book and tax difference are reclassified to paid-in capital.

If we do not distribute (or are not deemed to have distributed) at least 98% of our annual ordinary income and 98.2% of our capital gains in the calendar year earned, we will generally be required to pay excise tax equal to 4% of the amount by which 98% of our annual ordinary income and 98.2% of our capital gains exceed the distributions from such taxable income for the year. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, we accrue excise taxes, if any, on estimated undistributed taxable income.

If we fail to satisfy the annual distribution requirement or otherwise fail to qualify as a RIC in any taxable year, we would be subject to tax on all of our taxable income at regular corporate rates. Distribution would generally be taxable to our individual and other non-corporate taxable stockholders as ordinary dividend income eligible for the reduced maximum rate applicable to qualified dividend income to the extent of our current and accumulated earnings and profits provided certain holding period and other requirements are met. Subject to certain limitation under the Code, corporate distributions would be eligible for the dividend-received deduction. To qualify again to be taxed as a RIC in a subsequent year, we would be required to distribute to our stockholders our accumulated earnings and profits payable by us as an additional tax. In addition, if we failed to qualify as a RIC for a period greater than two taxable years, then, in order to qualify as a RIC in a subsequent year, we would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if we had been liquidated) or, alternatively, be subject to taxation on such built-in gain recognized for a period of five years.

We follow ASC 740, Income Taxes (“ASC 740”). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. As of December 31, 2018, there were no uncertain tax positions and no amounts accrued for interest or penalties. Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although we file both federal and state income tax returns, our major tax jurisdiction is federal. Our tax returns for each of our federal tax years since 2015 remain subject to examination by the Internal Revenue Service.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Retroactive Adjustments for Common Stock Reverse Split

The Company’s Board of Directors approved a one-for-three reverse stock split of the Company’s common stock on October 30, 2018 (the “Reverse Stock Split”). All common share and common per share amounts in the unaudited financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split as disclosed in Note 9.

Recent Accounting Pronouncements

In August 2018, the FASB issued guidance which changes the fair value disclosure requirements. The new guidance includes new, eliminated and modified fair value disclosures. Among other requirements, the guidance requires disclosure of the range and weighted average of the significant unobservable inputs for Level 3 fair value  measurements and the way it is calculated. The guidance also eliminated the following disclosures: (i) amount and reason for transfers between Level 1 and Level 2, (ii) policy for timing of transfers between levels of the fair value hierarchy and (iii) valuation processes for Level 3 fair value measurement. The guidance is effective for all entities for interim and annual periods beginning after December 15, 2019. Early adoption is permitted upon issuance of the guidance. The adoption of this guidance is not expected to have a material effect on the Company’s financial statements.

SEC Disclosure Update

In August 2018, the US Securities and Exchange Commission adopted the final rule under SEC Release N0. 33-10532, Disclosure Update and Simplification which amends certain disclosures that were redundant, overlapping, outdated or superseded. The SEC has commented that these amendments will not be effective untill the quarter that begins after the effective date of the final rule, which was November 5, 2018. Among the amendments of the final rule is the requirement to disclose the Statement of Changes in Net Assets in the interim financial statements in reference to rules 8-03(a)(5) and10-01(a)(7). The Company is currently evaluating the impact of adopting amended rules 8-03(a)(5) and 10-01(a)(7) on its financial statements and disclosures.

Note 3. Related Party Agreements and Transactions

Investment Advisory Agreement with AIM

The Company has an investment advisory management agreement with the Investment Adviser (the “Investment Advisory Agreement”) under which AIM receives a fee from the Company, consisting of two components — a base management fee and a performance-based incentive fee.

On January 16, 2019, the Company and AIM entered into a fee offset agreement in connection with revenue realized by AIM and its affiliates for the management of certain aircraft assets.  The Company will receive an offsetting credit against total incentive fees otherwise due to AIM under the Investment Advisory Agreement.  The amount offset will initially be 20% of the management fee revenue earned and incentive fee revenue realized by AIM and its affiliates in connection with managing aircraft assets on related insurance balance sheets, new aircraft managed account capital and new dedicated aircraft funds. Once the aggregate capital raised exceeds $3 billion, the fee offset will step down to 10% of the amount of incremental management fee revenue earned and incentive fee revenue realized by AIM and its affiliates. The offset will be in place for seven years, however the incentive fees realized by AIM and its affiliates after this seven-year period from applicable investments that were raised or made within the seven-year period will also be used to offset incentive fees payable to AIM by the Company. The offset will be limited to the amount of incentive fee payable by the Company to AIM and any unapplied fee offset which exceeds the incentive fees payable in a given quarter will carry forward to be credited against the incentive fees payable by the Company in subsequent quarters.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Base Management Fee

Effective April 1, 2018, the base management fee is calculated initially at an annual rate of 1.50% (0.375% per quarter) of the lesser of (i) the average of the value of the Company’s gross assets, net of average of any payable for investments (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters and (ii) the average monthly value (measured as of the last day of each month) of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) during the most recently completed calendar quarter; provided, however, in each case, the base management fee is calculated at an annual rate of 1.00% (0.250% per quarter) of the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) that exceeds the product of (A) 200% and (B) the value of the Company’s net asset value at the end of the prior calendar quarter. The base management fee will be payable quarterly in arrears. The value of the Company’s gross assets shall be calculated in accordance with the Company's valuation policies.

For the period from April 1, 2017 through March 31, 2018, the base management fee was calculated at an annual rate of 2% (0.50% per quarter) of the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters. For the same period, the Investment Adviser agreed to waive 25% of its base management fee so the base management fee was reduced from 2% to 1.50%.

Performance-based Incentive Fee

The incentive fee (the “Incentive Fee”) consists of two components that are determined independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on income and a portion is based on capital gains, each as described below:

A. Incentive Fee based on Income

(i)	Incentive Fee on Pre-Incentive Fee Net Investment Income - (April 1, 2017 - December 31, 2018)

The first part of the incentive fee is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter at an annual rate of 20%. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including, without limitation, any accrued income that the Company has not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee on Income and the Incentive Fee on Capital Gains). Pre-incentive fee net investment income does not include any realized or unrealized gains or losses. Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the rate of 1.75% per quarter (7% annualized) (the “performance threshold”). For the period from April 1, 2017 through December 31, 2018, if the resulting incentive fee rate was less than 20% due to the incentive fee waiver discussed below, the percentage at which the Investment Adviser’s 100% catch-up is complete would also be reduced ratably from 2.1875% (8.75% annualized) to as low as 2.06% (8.24% annualized) (“catch-up threshold”).

The Company pays the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the performance threshold; and (2) 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds 1.75% but does not exceed the catch-up threshold in any calendar quarter; and (3) for the period from April 1, 2017 through December 31, 2018, 15% to 20% of the amount of our pre-incentive fee net investment income, if any, that exceeds catch-up threshold in any calendar quarter. These calculations are appropriately prorated for any period of less than three months. The effect of the fee calculation described above is that if pre-incentive fee net investment income is equal to or exceeds catch-up threshold, the Investment Adviser will receive a fee of 15% to 20% of our pre-incentive fee net investment income for the quarter.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Incentive Fee Waiver

For the period from April 1, 2018 through December 31, 2018, the Investment Adviser has agreed to waive 25% of its performance based incentive fee so that the incentive fee on pre-incentive fee net investment income is accrued at 15%.

For the period from April 1, 2017 through March 31, 2018, the Investment Adviser has agreed to waive up to 25% of its performance based incentive fee so that the incentive fee on pre-incentive fee net investment income could be accrued at as low a rate as 15% to the extent the Company experiences cumulative net realized and change in unrealized losses during the waiver period (“cumulative net losses”). The inclusion of cumulative net gains and cumulative net losses will be measured on a cumulative basis from April 1, 2017 through the end of each quarter during the waiver period. Any cumulative net gains will result in a dollar for dollar increase in the incentive fee payable up to a maximum rate of 20% and any cumulative net losses will result in a dollar for dollar decrease in the incentive fee payable down to a minimum rate of 15%.

(ii)	Incentive Fee on Pre-Incentive Fee Net Income - effective from January 1, 2019

Beginning January 1, 2019, the incentive fee on pre-incentive fee net investment income will be determined and paid quarterly in arrears by calculating the amount by which (x) the aggregate amount of the pre-incentive fee net investment income in respect of the current calendar quarter and each of the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after April 1, 2018 (the “trailing twelve quarters”) exceeds (y) preferred return amount in respect of the trailing twelve quarters.

The preferred return amount will be determined on a quarterly basis, and will be calculated by summing the amounts obtained by multiplying 1.75% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters. The preferred return amount will be calculated after making appropriate adjustments to the Company’s net asset value at the beginning of each applicable calendar quarter for Company capital issuances and distributions during the applicable calendar quarter.

The amount of the Incentive Fee on Income that will be paid to the Investment Adviser for a particular quarter will equal the excess of the incentive fee on pre-incentive fee net investment income, so calculated less the aggregate incentive fee on pre-incentive fee net investment income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters comprising the relevant trailing twelve quarters.

The Company will pay the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:

(1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income for the trailing twelve quarters does not exceed the preferred return amount.

(2) 100% of our pre-incentive fee net investment income for the trailing twelve quarters, if any, that exceeds the preferred return amount but is less than or equal to an amount (the “catch-up amount”) determined by multiplying 2.1875% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters.

(3) for any quarter in which the Company’s pre-incentive fee net investment income for the trailing twelve quarters exceeds the catch-up amount, the incentive fee shall equal 20% of the amount of the Company’s pre-incentive fee net investment income for such trailing twelve quarters.

The Incentive Fee on Income as calculated is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant trailing twelve quarters less (b) the aggregate Incentive Fees on Income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters (or portion thereof) comprising the relevant trailing twelve quarters.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant trailing twelve quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the trailing twelve quarters less (y) any Net Capital Loss, since April 1, 2018, in respect of the trailing twelve quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company shall pay no Incentive Fee on Income to the Investment Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Incentive Fee on Income calculated in accordance with Section 3(c)(i) of the 1940 Act, the Company shall pay the Investment Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Incentive Fee on Income calculated in accordance with Section 3(c)(i) of the 1940 Act, the Company shall pay the Investment Adviser the Incentive Fee on Income for such quarter.

“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.

B. Annual Incentive Fee Based on Capital Gains.

The Incentive Fee on Capital Gains shall be determined and payable in arrears as of the end of each calendar year (or upon termination of this agreement). This fee shall equal 20.0% of the sum of the Company’s realized capital gains on a cumulative basis, calculated as of the end of each calendar year (or upon termination of this Agreement), computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any Incentive Fees on Capital Gains previously paid to the Investment Adviser. The aggregate unrealized capital depreciation of the Company shall be calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable calculation date and (b) the accreted or amortized cost basis of such investment.

For accounting purposes only, we are required under GAAP to accrue a theoretical capital gains incentive fee based upon net realized capital gains and unrealized capital gain and loss on investments held at the end of each period. The accrual of this theoretical capital gains incentive fee assumes all unrealized capital gain and loss is realized in order to reflect a theoretical capital gains incentive fee that would be payable to the Investment Adviser at each measurement date. There was no accrual for theoretical capital gains incentive fee for the three and nine months ended December 31, 2018 and 2017. It should be noted that a fee so calculated and accrued would not be payable under the Investment Advisers Act of 1940 (the “Advisers Act”) or the Investment Advisory Agreement, and would not be paid based upon such computation of capital gains incentive fees in subsequent periods. Amounts actually paid to the Investment Adviser will be consistent with the Advisers Act and formula reflected in the Investment Advisory Agreement which specifically excludes consideration of unrealized capital gain.

Deferred Payment of Certain Incentive Fees

For the period between April 1, 2013 and March 31, 2018, AIM has agreed to be paid the portion of the incentive fee that is attributable to interest or dividend income on PIK securities when the Company receives such interest or dividend income in cash. The accrual of incentive fee shall be reversed if such interest or dividend income is written off or determined to be no longer realizable. Upon payment of the deferred incentive fee, AIM will also receive interest on the deferred incentive fee at an annual rate of 3.25% for the period between the date in which the incentive fee is earned and the date of payment.

Effective April 1, 2018, with changes in the incentive fees calculation there will be no more deferral of incentive fees on PIK income. The interest will only continue to accrue on the deferred incentive fees payable to AIM as of March 31, 2018.

For the three and nine months ended December 31, 2018, the Company recognized $8,720 and $26,851 respectively, of management fees, and $7,409 and $21,190, respectively, of incentive fees before impact of waived fees. For the three and nine months ended December 31, 2017, the Company recognized $12,048 and $36,463 respectively, of management fees, and $7,484 and $23,433, respectively, of incentive fees before impact of waived fees. For the three and nine months ended December 31, 2018, no management fees were waived (as not applicable) and incentive fees waived were $1,852 and $5,542, respectively. For the three and nine months ended December 31, 2017, management fees waived were $3,012 and $9,116, respectively, and incentive fees waived were $1,974 and $5,961, respectively.

As of December 31, 2018 and March 31, 2018, management and performance-based incentive fees payable were $14,276 and $16,585, respectively.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

For the three and nine months ended December 31, 2018, there were no amounts of incentive fees on PIK income for which payments have been deferred. For the three and nine months ended December 31, 2017, the amount of incentive fees on PIK income for which payments have been deferred were $750 and $2,517, respectively. For the three and nine months ended December 31, 2018, the Company reversed $0 and $979 of the deferred incentive fee payable related to PIK income which were deemed to be no longer realizable. For the three and nine months ended December 31, 2017, the Company reversed $411 and $411 of the deferred incentive fee payable related to PIK income which were deemed to be no longer realizable. As of December 31, 2018 and March 31, 2018, the cumulative deferred incentive fee on PIK income included in management and performance-based incentive fee payable line of the Statements of Assets and Liabilities were $0 and $3,066, respectively.

For the three and nine months ended December 31, 2018, the amount of interest on deferred incentive fees accrued were $15 and $62. For the three and nine months ended December 31, 2017, the amount of interest on deferred incentive fees accrued were $32 and $76. For the three and nine months ended December 31, 2018, the Company reversed $0 and $41, respectively, of the accrued interest payable on deferred incentive fees related to PIK income which were deemed to be no longer realizable. For the three and nine months ended December 31, 2017, the Company reversed $14 and $14, respectively, of the accrued interest payable on deferred incentive fees related to PIK income which were deemed to be no longer realizable. As of December 31, 2018 and March 31, 2018, the accrued interest payable on deferred incentive fees were $0 and $85, respectively.

Administration Agreement with AIA

The Company has also entered into an administration agreement with the Administrator (the “Administration Agreement”) under which AIA provides administrative services for the Company. For providing these services, facilities and personnel, the Company reimburses the Administrator for the allocable portion of overhead and other expenses incurred by the Administrator and requested to be reimbursed by the Administrator in performing its obligations under the Administration Agreement. The expenses include rent and the Company’s allocable portion of compensation and other related expenses for its Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs. For the three and nine months ended December 31, 2018, the Company recognized administrative services expense under the Administration Agreement of $1,657 and $5,152, respectively. For the three and nine months ended December 31, 2017, the Company recognized administrative services expense under the Administration Agreement of $1,693 and $5,061, respectively. There was no payable to AIA and its affiliates for expenses paid on our behalf as of December 31, 2018 and March 31, 2018.

Administrative Service Expense Reimbursement

Merx Aviation Finance, LLC (“Merx”), a wholly-owned portfolio company of the Company, has entered into an administration agreement with the Administrator (the “Merx Administration Agreement”) under which AIA provides administrative services to Merx. For the three and nine months ended December 31, 2018, the Company recognized administrative service expense reimbursements of $62 and $188, respectively, under the Merx Administration Agreement. For the three and nine months ended December 31, 2017, the Company recognized administrative service expense reimbursements of $62 and $188, respectively.

Debt Expense Reimbursements

The Company has also entered into debt expense reimbursement agreements with Merx Aviation Finance Assets Ireland Limited (an affiliate of Merx) and a few other portfolio companies, which will reimburse the Company for reasonable out-of-pocket expenses incurred, including any interest, fees or other amounts incurred by the Company in connection with letters of credit issued on their behalf. For the three and nine months ended December 31, 2018, the Company recognized debt expense reimbursements of $99 and $312, respectively, under the debt expense reimbursement agreements. For the three and nine months ended December 31, 2017, the Company recognized debt expense reimbursements of $63 and $191, respectively, under the debt expense reimbursement agreements.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Co-Investment Activity

We may co-invest on a concurrent basis with affiliates of ours, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the SEC permitting us to do so. On March 29, 2016, we received an exemptive order from the SEC (the “Order”) permitting us greater flexibility to negotiate the terms of co-investment transactions with certain of our affiliates, including investment funds managed by AIM or its affiliates, subject to the conditions included therein. Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors’ approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.

As of December 31, 2018, the Company’s co-investment holdings were 35% of the portfolio or $811,270, measured at fair value and 35% of the portfolio or $819,328 measured at cost basis. As of March 31, 2018, the Company’s co-investment holdings were 22% of the portfolio or $498,704, measured at fair value and 22% of the portfolio or $497,418 measure at cost basis.

Note 4. Earnings Per Share

The following table sets forth the computation of earnings (loss) per share (“EPS”), pursuant to ASC 260-10, for the three and nine months ended December 31, 2018 and 2017:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
Basic Earnings (Loss) Per Share
Net increase (decrease) in net assets resulting from operations	$	(1,178	)		$	5,833			$	40,101			$	66,402
Weighted average shares outstanding	70,105,587				72,850,060				71,144,888				73,084,427
Basic earnings (loss) per share	$	(0.02	)		$	0.08			$	0.56			$	0.91

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Note 5. Investments

Fair Value Measurement and Disclosures

The following table shows the composition of our investment portfolio as of December 31, 2018, with the fair value disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820:

									Fair Value Hierarchy
	Cost				Fair Value				Level 1				Level 2				Level 3
First Lien Secured Debt	$	1,499,806			$	1,479,173			$	—			$	(44	)		$	1,479,217
Second Lien Secured Debt	566,805				558,852				—				201,119				357,733
Structured Products and Other	56,303				56,605				—				—				56,605
Preferred Equity	22,139				27,772				—				—				27,772
Common Equity/Interests	211,879				185,411				—				—				185,411
Warrants	183				153				—				—				153
Total Investments before Cash Equivalents	$	2,357,115			$	2,307,966			$	—			$	201,075			$	2,106,891
Money Market Fund	$	22,653			$	22,653			$	22,653			$	—			$	—
Total Cash Equivalents	$	22,653			$	22,653			$	22,653			$	—			$	—
Total Investments after Cash Equivalents	$	2,379,768			$	2,330,619			$	22,653			$	201,075			$	2,106,891

The following table shows the composition of our investment and derivative portfolio as of March 31, 2018, with the fair value disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820:

									Fair Value Hierarchy
	Cost				Fair Value				Level 1				Level 2				Level 3
First Lien Secured Debt	$	1,144,585			$	1,131,943			$	—			$	—			$	1,131,943
Second Lien Secured Debt	719,650				706,011				—				290,673				415,338
Unsecured Debt	102,716				103,166				—				13,049				90,117
Structured Products and Other	68,227				67,967				—				—				67,967
Preferred Equity	20,076				31,052				—				—				31,052
Common Equity/Interests	212,979				207,657				—				—				207,657
Warrants	363				251				—				—				251
Total Investments before Option Contracts and Cash Equivalents	$	2,268,596			$	2,248,047			$	—			$	303,722			$	1,944,325
Purchased Put Options	$	5,758			$	1,226			$	1,226			$	—			$	—
Written Call Options	(5,736		)		(20,350		)		(20,350		)		—				—
Total Option Contracts	$	22			$	(19,124	)		$	(19,124	)		$	—			$	—
Money Market Fund	$	14,035			$	14,035			$	14,035			$	—			$	—
Total Cash Equivalents	$	14,035			$	14,035			$	14,035			$	—			$	—
Total Investments after Option Contracts and Cash Equivalents	$	2,282,653			$	2,242,958			$	(5,089	)		$	303,722			$	1,944,325

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The following table shows changes in the fair value of our Level 3 investments during the three months ended December 31, 2018:

	First Lien Secured Debt (2)			Second Lien Secured Debt (2)			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Fair value as of September 30, 2018	$	1,313,116		$	372,511		$	80,000		$	67,131		$	32,524		$	200,256		$	164		$	2,065,702
Net realized gains (losses)	(39		)	(11,911		)	—			(293		)	—			—			(180		)	(12,423		)
Net change in unrealized gains (losses)	(16,983		)	9,892			—			1,508			(4,752		)	(9,052		)	169			(19,218		)
Net amortization on investments	746			246			—			115			—			—			—			1,107
Purchases, including capitalized PIK (3)	295,907			808			—			38			—			968			—			297,721
Sales (3)	(113,574		)	(33,750		)	(80,000		)	(11,894		)	—			(6,761		)	—			(245,979		)
Transfers out of Level 3 (1)	44			—			—			—			—			—			—			44
Transfers into Level 3 (1)	—			19,937			—			—			—			—			—			19,937
Fair value as of December 31, 2018	$	1,479,217		$	357,733		$	—		$	56,605		$	27,772		$	185,411		$	153		$	2,106,891
Net change in unrealized gains (losses) on Level 3 investments still held as of December 31, 2018	$	(16,565	)	$	(1,108	)	$	—		$	1,508		$	(4,752	)	$	(9,051	)	$	(12	)	$	(29,980	)

The following table shows changes in the fair value of our Level 3 investments during the nine months ended December 31, 2018:

	First Lien Secured Debt (2)			Second Lien Secured Debt (2)			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Fair value as of March 31, 2018	$	1,131,943		$	415,338		$	90,117		$	67,967		$	31,052		$	207,657		$	251		$	1,944,325
Net realized gains (losses)	(19		)	(11,881		)	—			(268		)	(1		)	2,007			(180		)	(10,342		)
Net change in unrealized gains (losses)	(7,990		)	12,875			(198		)	561			(5,345		)	(21,147		)	82			(21,162		)
Net amortization on investments	2,919			877			—			333			—			1			—			4,130
Purchases, including capitalized PIK (3)	963,510			34,428			762			128			2,034			12,883			—			1,013,745
Sales (3)	(611,190		)	(108,304		)	(90,681		)	(12,116		)	32			(15,990		)	—			(838,249		)
Transfers out of Level 3 (1)	44			—			—			—			—			—			—			44
Transfers into Level 3 (1)	—			14,400			—			—			—			—			—			14,400
Fair value as of December 31, 2018	$	1,479,217		$	357,733		$	—		$	56,605		$	27,772		$	185,411		$	153		$	2,106,891
Net change in unrealized gains (losses) on Level 3 investments still held as of December 31, 2018	$	(8,493	)	$	1,855		$	—		$	561		$	(6,169	)	$	(20,318	)	$	(29	)	$	(32,593	)

____________________

(1)

Transfers out (if any) of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained and transfers into (if any) Level 3 are due to a decrease in the quantity and reliability of broker quotes obtained as assessed by the Investment Adviser. Transfers are assumed to have occurred at the end of the period. There were no transfers between Level 1 and Level 2 fair value measurements during the periods shown.

(2)	Includes unfunded commitments measured at fair value of $(7,399).

(3)	Includes reorganizations and restructuring of investments.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The following table shows changes in the fair value of our Level 3 investments during the three months ended December 31, 2017:

	First Lien Secured Debt (2)			Second Lien Secured Debt (2)			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Fair value as of September 30, 2017	$	1,128,390		$	571,481		$	92,071		$	124,268		$	25,779		$	209,721		$	105		$	2,151,815
Net realized gains (losses)	(127		)	—			—			1,716			—			3,815			—			5,404
Net change in unrealized gains (losses)	(4,228		)	(9,332		)	29			(909		)	(89		)	1,040			(76		)	(13,565		)
Net amortization on investments	996			495			—			101			—			—			—			1,592
Purchases, including capitalized PIK (3)	108,659			45,479			348			—			—			804			100			155,390
Sales (3)	(64,373		)	(82,735		)	—			(27,292		)	—			(6,814		)	—			(181,214		)
Transfers out of Level 3 (1)	—			(53,709		)	—			—			—			(470		)	—			(54,179		)
Transfers into Level 3 (1)	—			—			—			—			—			—			—			—
Fair value as of December 31, 2017	$	1,169,317		$	471,679		$	92,448		$	97,884		$	25,690		$	208,096		$	129		$	2,065,243
Net change in unrealized gains (losses) on Level 3 investments still held as of December 31, 2017	$	(3,474	)	$	(8,319	)	$	29		$	(1,403	)	$	(90	)	$	1,653		$	(76	)	$	(11,680	)

The following table shows changes in the fair value of our Level 3 investments during the nine months ended December 31, 2017 :

	First Lien Secured Debt (2)			Second Lien Secured Debt (2)			Unsecured Debt			Structured Products and Other			Preferred Equity			Common Equity/Interests			Warrants			Total
Fair value as of March 31, 2017	$	1,049,232		$	446,772		$	146,218		$	166,893		$	25,637		$	228,200		$	94		$	2,063,046
Net realized gains (losses)	(13,526		)	48			(338		)	1,716			(98,133		)	(78,019		)	(49,771		)	(238,023		)
Net change in unrealized gains (losses)	34,897			(12,707		)	562			(1,596		)	98,186			70,812			49,706			239,860
Net amortization on investments	2,751			1,591			—			290			—			35			—			4,667
Purchases, including capitalized PIK (3)	459,132			225,996			1,006			—			—			30,187			100			716,421
Sales (3)	(363,169		)	(169,243		)	(55,000		)	(69,419		)	—			(42,649		)	—			(699,480		)
Transfers out of Level 3 (1)	—			(34,123		)	—			—			—			(470		)	—			(34,593		)
Transfers into Level 3 (1)	—			13,345			—			—			—			—			—			13,345
Fair value as of December 31, 2017	$	1,169,317		$	471,679		$	92,448		$	97,884		$	25,690		$	208,096		$	129		$	2,065,243
Net change in unrealized gains (losses) on Level 3 investments still held as of December 31, 2017	$	5,694		$	(10,888	)	$	225		$	(1,537	)	$	53		$	(12,965	)	$	(64	)	$	(19,482	)

____________________

(1)

Transfers out of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained and transfers into Level 3 are due to a decrease in the quantity and reliability of broker quotes obtained as assessed by the Investment Adviser. Transfers are assumed to have occurred at the end of the periods. There were no transfers between Level 1 and Level 2 fair value measurements during the period shown.

(2)	Includes unfunded commitments measured at fair value of $(2,525).

(3)	Includes reorganizations and restructuring of investments.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The following tables summarize the significant unobservable inputs the Company used to value its investments categorized within Level 3 as of December 31, 2018 and March 31, 2018. In addition to the techniques and inputs noted in the tables below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The below tables are not intended to be all-inclusive, but rather provide information on the significant unobservable inputs as they relate to the Company’s determination of fair values.

The unobservable inputs used in the fair value measurement of our Level 3 investments as of December 31, 2018 were as follows:

				Quantitative Information about Level 3 Fair Value Measurements
Asset Category	Fair Value			Valuation Techniques/Methodologies	Unobservable Input	Range		Weighted Average (1)
First Lien Secured Debt	$	18,594		Broker Quoted	Broker Quote	N/A	N/A	N/A
	444,200			Discounted Cash Flow	Discount Rate	2.3%	14.1%	12.2%
	117,141			Recovery Analysis	Commodity Price	$61.86	$73.00	$64.99
	9,886			Recovery Analysis	Recoverable Amount	N/A	N/A	N/A
	50,929			Recovery Analysis	Recoverable Amount	N/A	N/A	N/A
				Market Comparable Technique	Comparable Multiple	4.6x	4.6x	4.6x
	75,044			Recent Transaction	Recent Transaction	N/A	N/A	N/A
	15,000			Transaction Price	Expected Proceeds	N/A	N/A	N/A
	748,423			Yield Analysis	Discount Rate	4.4%	19.1%	10.7%
Second Lien Secured Debt	70,526			Broker Quoted	Broker Quote	N/A	N/A	N/A
	14,559			Market Comparable	Comparable Multiple	7.9x	7.9x	7.9x
	32,876			Recovery Analysis	Commodity Price	$66.28	$73.00	$67.90
	239,772			Yield Analysis	Discount Rate	10.9%	15.1%	12.9%
Structured Products and Other	43,226			Discounted Cash Flow	Discount Rate	9.5%	10.0%	9.8%
	13,379			Transaction Price	Transaction Price	N/A	N/A	N/A
Preferred Equity	1,833			Cost	Purchase Price	$5.78	$6.00	$5.82
	677			Discounted Cash Flow	Discount Rate	10.5%	10.5%	10.5%
	20,310			Option Pricing Model	Expected Volatility	35.5%	35.5%	35.5%
	4,952			Yield Analysis	Discount Rate	19.5%	19.5%	19.5%
Common Equity/Interests	440			Broker Quoted	Broker Quote	N/A	N/A	N/A
	173,401			Discounted Cash Flow	Discount Rate	10.5%	27.5%	13.0%
	863			Market Comparable	Comparable Multiple	4.6x	10.8x	9.8x
	—			Option Pricing Model	Expected Volatility	18.0%	18.0%	18.0%
	10,707			Recovery Analysis	Commodity Price	$61.86	$73.00	$64.17
Warrants	153			Option Pricing Model	Expected Volatility	30.0%	60.0%	48.9%
Total Level 3 Investments	$	2,106,891

___________________

(1)	The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the commodity price unobservable input, the weighted average price is an undiscounted price based upon the estimated production level from the underlying reserves.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The unobservable inputs used in the fair value measurement of our Level 3 investments as of March 31, 2018 were as follows:

				Quantitative Information about Level 3 Fair Value Measurements
Asset Category	Fair Value			Valuation Techniques/Methodologies	Unobservable Input	Range		Weighted Average (1)
First Lien Secured Debt	$	(885	)	Broker Quoted	Broker Quote	N/A	N/A	N/A
	401,800			Discounted Cash Flow	Discount Rate	2.3%	14.6%	12.3%
	(337		)	Recent Transaction	Recent Transaction	N/A	N/A	N/A
	120,331			Recovery Analysis	Commodity Price	$60.00	$66.00	$63.27
	47,170			Recovery Analysis	Recoverable Amount	N/A	N/A	N/A
				Market Comparable Technique	Comparable Multiple	4.9x	4.9x	4.9x
	451			Recovery Analysis	Recoverable Amount	N/A	N/A	N/A
				Yield Analysis	Discount Rate	25.0%	25.0%	25.0%
	6,063			Transaction Price	Expected Proceeds	N/A	N/A	N/A
	557,350			Yield Analysis	Discount Rate	3.7%	14.8%	10.8%
Second Lien Secured Debt	37,456			Broker Quoted	Broker Quote	N/A	N/A	N/A
	10,159			Market Comparable Technique	Comparable Multiple	0.8x	7.9x	7.9x
	30,510			Recovery Analysis	Commodity Price	$64.00	$66.00	$65.54
	337,213			Yield Analysis	Discount Rate	10.9%	14.1%	12.7%
Unsecured Debt	90,117			Yield Analysis	Discount Rate	11.2%	17.0%	11.9%
Structured Products and Other	67,967			Discounted Cash Flow	Discount Rate	9.0%	11.0%	10.4%
Preferred Equity	25,711			Option Pricing Model	Expected Volatility	39.5%	39.5%	39.5%
	5,341			Yield Analysis	Discount Rate	10.8%	12.5%	12.4%
Common Equity/Interests	466			Broker Quoted	Broker Quote	N/A	N/A	N/A
	167,132			Discounted Cash Flow	Discount Rate	10.0%	25.0%	13.4%
	6,810			Market Comparable Technique	Comparable Multiple	7.7x	11.4x	9.0x
	33,249			Recovery Analysis	Commodity Price	$60.00	$66.00	$62.51
Warrants	251			Option Pricing Model	Expected Volatility	37.5%	60.0%	53.0%
Total Level 3 Investments	$	1,944,325

____________________

(1)	The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the commodity price unobservable input, the weighted average price is an undiscounted price based upon the estimated production level from the underlying reserves.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity securities are primarily earnings before interest, taxes, depreciation and amortization (“EBITDA”) comparable multiples and market discount rates. The Company typically uses EBITDA comparable multiples on its equity securities to determine the fair value of investments. The Company uses market discount rates for debt securities to determine if the effective yield on a debt security is commensurate with the market yields for that type of debt security. If a debt security’s effective yield is significantly less than the market yield for a similar debt security with a similar credit profile, the resulting fair value of the debt security may be lower. For certain investments where fair value is derived based on a recovery analysis, the Company uses underlying commodity prices from third party market pricing services to determine the fair value and/or recoverable amount, which represents the proceeds expected to be collected through asset sales or liquidation. Further, for certain investments, the Company also considered the probability of future events which are not in management’s control. Significant increases or decreases in any of these inputs in isolation would result in a significantly lower or higher fair value measurement. The significant unobservable inputs used in the fair value measurement of the structured products include the discount rate applied in the valuation models in addition to default and recovery rates applied to projected cash flows in the valuation models. Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of an investment; conversely decreases in the discount rate can significantly increase the fair value of an investment. The discount rate is determined based on the market rates an investor would expect for a similar investment with similar risks. For certain investments such as warrants, the Company may use an option pricing technique, of which the applicable method is the Black-Scholes Option Pricing Method (“BSM”), to perform valuations. The BSM is a model of price variation over time of financial instruments, such as equity, that is used to determine the price of call or put options. Various inputs are required but the primary unobservable input into the BSM model is the underlying asset volatility.

Investment Transactions

For the three and nine months ended December 31, 2018, purchases of investments on a trade date basis were $305,328 and $1,027,842, respectively. For the three and nine months ended December 31, 2017, purchases of investments on a trade date basis were $198,355 and $806,034, respectively.

For the three and nine months ended December 31, 2018, sales and repayments (including prepayments and unamortized fees) of investments on a trade date basis were $290,688 and $934,611, respectively. For the three and nine months ended December 31, 2017, sales and repayments (including prepayments and unamortized fees) of investments on a trade date basis were $204,800 and $796,545, respectively.

PIK Income

The Company holds loans and other investments, including certain preferred equity investments, that have contractual PIK income. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. During the three and nine months ended December 31, 2018, PIK income earned was $2,138 and $7,099, respectively. During the three and nine months ended December 31, 2017, PIK income earned was $5,775 and $17,554, respectively.

The following table shows the change in capitalized PIK balance for the three and nine months ended December 31, 2018 and 2017:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
PIK balance at beginning of period	$	23,843			$	27,696			$	24,454			$	53,262
PIK income capitalized	1,495				2,129				5,584				12,630
Adjustments due to investments exited or written off	(2,446		)		—				(2,446		)		(35,697		)
PIK income received in cash	—				—				(4,700		)		(370		)
PIK balance at end of period	$	22,892			$	29,825			$	22,892			$	29,825

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Dividend Income

The Company holds structured products and other investments. The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. During the three and nine months ended December 31, 2018, dividend income from structured products was $298 and $904, respectively. During the three and nine months ended December 31, 2017, dividend income from structured products was $392 and $2,461, respectively.

Investments on Non-Accrual Status

As of December 31, 2018, 3.4% of total investments at amortized cost, or 2.8% of total investments at fair value, were on non-accrual status. As of March 31, 2018, 3.3% of total investments at amortized cost, or 2.3% of total investments at fair value, were on non-accrual status.

Unconsolidated Significant Subsidiary

The following unconsolidated subsidiary is considered significant subsidiary under SEC Regulation S-X Rule 10-01(b)(1) as of December 31, 2018. Accordingly, summarized, unaudited, comparative financial information is presented below for the unconsolidated significant subsidiary.

Merx Aviation Finance, LLC

Merx Aviation Finance, LLC and its subsidiaries (“Merx Aviation”) are principally engaged in acquiring and leasing commercial aircraft to airlines. Its focus is on current generation aircraft, held either domestically or internationally. Merx Aviation may acquire fleets of aircraft primarily through securitized, non-recourse debt or individual aircraft. Merx Aviation may outsource its aircraft servicing requirements to third parties that have the global staff and expertise necessary to complete such tasks. The following table shows unaudited summarized financial information for Merx Aviation:

	Nine Months Ended December 31,
	2018				2017
Net revenue	$	241,140			$	85,164
Net operating income	146,599				50,685
Earnings before taxes	92,492				19,983
Net profit	93,444				19,833

Note 6. Derivative Instruments

In the normal course of business, the Company enters into derivative instruments which serve as components of the Company’s investment strategies and are utilized primarily to structure the portfolio to economically match the investment strategies of the Company. These instruments are subject to various risks, similar to non-derivative instruments, including market, credit and liquidity risks. The Investment Adviser manages these risks on an aggregate basis along with the risks associated with the Company’s investing activities as part of its overall risk management policy.

Purchased Put Options

Purchased put option contracts give the Company the right, but not the obligation, to sell within a limited time, a financial instrument, commodity or currency at a contracted price that may also be settled in cash, based on differentials between specified indices or prices. Purchasing put options tends to decrease exposure to the underlying instrument. The Company pays a premium, which is recorded as an asset and subsequently marked-to-market to reflect the current value of the option. Premiums paid for purchasing options which expire unexercised are treated as realized losses. Premiums paid for purchasing options which are exercised are added to the amounts paid for, or offset against the proceeds received on, the underlying security or reference investment. The risk associated with purchasing put options is limited to the premium paid.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Written Call Options

Written call options obligate the Company to buy within a limited time, a financial instrument, commodity or currency at a contracted price that may also be settled in cash, based on differentials between specified indices or prices. When the Company writes a call option, an amount equal to the premium received by the Company is treated as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the written call option. If an option which the Company has written either expires unexercised on its stipulated expiration date or the Company enters into a closing purchase transaction, the Company realizes a gain or loss (if the cost of a closing purchase transaction is less than or exceeds, respectively, the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option which the Company has written is exercised, the Company recognizes a realized gain or loss from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. In writing a call option, the Company bears the market risk of an unfavorable change in the price, potentially unlimited in amount, of the derivative instrument or security underlying the written call option.

As of December 31, 2018, the Company did not hold any derivative contacts.

The following table sets forth the gross fair value of derivative contracts, by major risk type, as of March 31, 2018. The table also includes information on the volume of derivatives based on the base notional value of option contracts open at March 31, 2018.

	March 31, 2018
Underlying Risk Type	Base Notional Assets				Derivative Assets Fair Value				Base Notional Liabilities				Derivative Liabilities Fair Value
Commodity:
Purchased Put Options	$	123,750			$	1,226			$	—			$	—
Written Call Options	—				—				(158,117		)		(20,350		)

The volume of derivatives presented in the tables above is representative of activities from September 6, 2017, when the Company started re-entering into these derivatives, through March 31, 2018.

The effect of transactions in derivative instruments to the Statements of Operations during the three and nine months ended December 31, 2018 and 2017 were as follows:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
Net Change in Unrealized Losses on Derivatives
Purchased Put Options	$	1,044			$	(4,071	)		$	4,533			$	(5,108	)
Written Call Options	7,743				(8,029		)		14,613				(8,865		)
Net Change in Unrealized Losses on Derivatives	$	8,787			$	(12,100	)		$	19,146			$	(13,973	)

	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
Net Realized Losses on Derivatives
Purchased Put Options	$	(852	)		$	(1,210	)		$	(5,472	)		$	(1,215	)
Written Call Options	(5,623		)		596				(24,523		)		596
Net Realized Losses on Derivatives	$	(6,475	)		$	(614	)		$	(29,995	)		$	(619	)

The Investment Adviser is exempt from registration with the U.S. Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator (“CPO”) with respect to the Company. To the extent such exemption is no longer available and the Investment Adviser is required to register with the CFTC as a CPO, compliance with the CFTC’s disclosure, reporting and recordkeeping requirements may increase the Company’s expenses and may affect the ability of the Company to use commodity interests (including futures, option contracts, commodities, and swaps) to the extent or in the manner desired.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Note 7. Offsetting Assets and Liabilities

The Company entered into centrally cleared derivative contracts with Chicago Mercantile Exchange (“CME”). Upon entering into the centrally cleared derivative contracts, the Company is required to deposit with the relevant clearing organization cash or securities, which is referred to as the initial margin. Cash deposited as initial margin is reported as cash collateral on the Statements of Assets and Liabilities. Centrally cleared derivative contracts entered into with CME are considered settled-to-market contracts where daily variation margin posted is legally characterized as a settlement payment as opposed to collateral. The settlement payment does not terminate the derivative contract and the contract will continue to exist with no changes to its terms. Daily changes in fair value are recorded as a payable or receivable on the Statements of Assets and Liabilities as variation margin.

The Company has elected not to offset assets and liabilities in the Statements of Assets and Liabilities that may be received or paid as part of collateral arrangements, even when an enforceable master netting arrangement or other agreement is in place that provides the Company, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations. As of December 31, 2018, the Company did not hold any derivative contracts.

The following table presents both gross and net information about derivative instruments eligible for offset in the Statements of Assets and Liabilities as of March 31, 2018.

Counterparty		Gross Amounts of Recognized Assets and Liabilities				Gross Amounts Offset in the Statements of Assets and Liabilities			Net Amounts Presented in the Statements of Assets and Liabilities				Gross Amounts Not Offset in the Statements of Assets and Liabilities
													Financial Instruments			Cash Collateral			Net Amounts
CME Group:
Variation Margin		$	1,846			—			$	1,846		(a)	—			—			$	1,846		(b)

___________________

(a)	The variation margin receivable on option contracts is the result of purchased put options and written call options that are settled-to-market with a fair value of $1,226 and ($20,350), respectively, as of March 31, 2018, offset against the variation margin posted with the CME amounting to $20,970.

(b)	Per GAAP disclosure requirements, the table above does not include excess cash collateral paid in the amount of $5,016.

Note 8. Debt and Foreign Currency Transactions and Translations

On April 4, 2018, the Company’s Board of Directors, including a “required majority” (as defined in Section 57(o) of the Investment Company Act of 1940, as amended) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act of 1940. As a result, effective on April 4, 2019 (unless we receive earlier stockholder approval), our asset coverage requirement applicable to senior securities will be reduced from 200% to 150% (i.e., the revised regulatory leverage limitation permits BDCs to double the amount of borrowings, such that we would be able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us).

The Company’s outstanding debt obligations as of December 31, 2018 were as follows:

	Date Issued/Amended		Total Aggregate Principal Amount Committed				Principal Amount Outstanding				Fair Value				Final Maturity Date
Senior Secured Facility	11/19/2018		$	1,590,000			$	504,979	*		$	505,069		(3)	11/19/2023
2043 Notes	6/17/2013		150,000				150,000				148,980			(1)	7/15/2043
2025 Notes	3/3/2015		350,000				350,000				342,064			(2)	3/3/2025
Total Debt Obligations			$	2,090,000			$	1,004,979			$	996,113
Deferred Financing Cost and Debt Discount							$	(10,492	)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount							$	994,487

____________________

*	Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note to the financial statements.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

(1)	The fair value of these debt obligations would be categorized as Level 1 under ASC 820 as of December 31, 2018. The valuation is based on quoted prices of identical liabilities in active markets.

(2)	The fair value of these debt obligations would be categorized as Level 2 under ASC 820 as of December 31, 2018. The valuation is based on broker quoted prices.

(3)	The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of December 31, 2018. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.

The Company’s outstanding debt obligations as of March 31, 2018 were as follows:

	Date Issued/Amended		Total Aggregate Principal Amount Committed				Principal Amount Outstanding				Fair Value				Final Maturity Date
Senior Secured Facility	12/22/2016		$	1,190,000			$	285,216	*		$	292,338		(1)	12/22/2021
Senior Secured Notes (Series B)	9/29/2011		16,000				16,000				16,191			(1)	9/29/2018
2043 Notes	6/17/2013		150,000				150,000				152,040			(2)	7/15/2043
2025 Notes	3/3/2015		350,000				350,000				351,676			(3)	3/3/2025
Total Debt Obligations			$	1,706,000			$	801,216			$	812,245
Deferred Financing Cost and Debt Discount							$	(11,370	)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount							$	789,846

____________________

*	Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note.

(1)	The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of March 31, 2018. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.

(2)	The fair value of these debt obligations would be categorized as Level 1 under ASC 820 as of March 31, 2018. The valuation is based on quoted prices of identical liabilities in active markets.

(3)	The fair value of these debt obligations would be categorized as Level 2 under ASC 820 as of March 31, 2018. The valuation is based on broker quoted prices.

Senior Secured Facility

On November 19, 2018, the Company amended and restated its senior secured, multi-currency, revolving credit facility (the “Senior Secured Facility”) from the previous December 22, 2016 amendment. The amended and restated agreement reduced the Company’s minimum asset coverage financial covenant from 200% to 150%, increased the lenders’ commitments from $1,190 to $1,590 extended the final maturity date through November 19, 2023, and included an accordion provision which allows the Company to increase the total commitments under the existing revolving facility up to an aggregate principal amount of $2,385 from new or existing lenders on the same terms and conditions as the existing commitments. The Senior Secured Facility is secured by substantially all of the assets in the Company’s portfolio, including cash and cash equivalents. Commencing December 31, 2022, the Company is required to repay, in twelve consecutive monthly installments of equal size, the outstanding amount under the Senior Secured Facility as of November 19, 2022. In addition, the stated interest rate on the facility remains as a formula-based calculation based on a minimum borrowing base, resulting in a stated interest rate, depending on the type of borrowing, of (a) either LIBOR plus 1.75% per annum or LIBOR plus 2.00% per annum, or (b) either Alternate Base Rate plus 0.75% per annum or Alternate Base Rate plus 1% per annum. As of December 31, 2018, the stated interest rate on the facility was LIBOR plus 2.00%. The Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Senior Secured Facility and participation fees and fronting fees of up to 2.25% per annum on the letters of credit issued.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The Senior Secured Facility contains affirmative and restrictive covenants, events of default and other customary provisions for similar debt facilities, including: (a) periodic financial reporting requirements, (b) maintaining minimum stockholders’ equity of the greater of (i) 30% of the total assets of the Company and its consolidated subsidiaries as of the last day of any fiscal quarter and (ii) the sum of (A) $870 plus (B) 25% of the net proceeds from the sale of equity interests in the Company after the closing date of the Senior Secured Facility, (c) maintaining a ratio of total assets, less total liabilities (other than indebtedness) to total indebtedness, in each case of the Company and its consolidated subsidiaries, of not less than 1.5:1.0, (d) maintaining a ratio of certain total assets, less total liabilities (other than indebtedness) to total indebtedness, of the Company and its consolidated subsidiaries, of not less than 2.0:1.0, (e) limitations on the incurrence of additional indebtedness, including a requirement to meet a certain minimum liquidity threshold before the Company can incur such additional debt, (f) limitations on liens, (g) limitations on investments (other than in the ordinary course of the Company’s business), (h) limitations on mergers and disposition of assets (other than in the normal course of the Company’s business activities), (i) limitations on the creation or existence of agreements that permit liens on properties of the Company’s consolidated subsidiaries and (j) limitations on the repurchase or redemption of certain unsecured debt and debt securities. In addition to the asset coverage ratio described in clause (c) of the preceding sentence, borrowings under the Senior Secured Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio. The advance rate applicable to any specific type of asset in the Company’s portfolio will also depend on the relevant asset coverage ratio as of the date of determination. Borrowings under the Senior Secured Facility will also continue to be subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.

The Senior Secured Facility also provides for the issuance of letters of credit up to an aggregate amount of $150,000. As of December 31, 2018 and March 31, 2018, the Company had $16,207 and $14,234, respectively, in standby letters of credit issued through the Senior Secured Facility. The amount available for borrowing under the Senior Secured Facility is reduced by any standby letters of credit issued through the Senior Secured Facility. Under GAAP, these letters of credit are considered commitments because no funding has been made and as such are not considered a liability. These letters of credit are not senior securities because they are not in the form of a typical financial guarantee and the portfolio companies are obligated to refund any drawn amounts. The available remaining capacity under the Senior Secured Facility was $1,068,814 and $890,550 as of December 31, 2018 and March 31, 2018, respectively. Terms used in this disclosure have the meanings set forth in the Senior Secured Facility agreement.

Senior Secured Notes — Series A and Series B

On September 29, 2011, the Company closed a private offering of $45,000 aggregate principal amount of senior secured notes consisting of two series: $29,000 aggregate principal amount of 5.875% Senior Secured Notes, Series A, due September 29, 2016 (the “Series A Notes”); and $16,000 aggregate principal amount of 6.250% Senior Secured Notes, Series B, due September 29, 2018 (the “Series B Notes,” and together with the Series A Notes, the “Series A and B Notes”). The Series A and B Notes were issued in a private placement only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Interest on the Series A and B Notes is due semi-annually on March 29 and September 29, commencing on March 29, 2012.

On September 29, 2016, the Series A Notes, which had an outstanding principal balance of $29,000, matured and were repaid in full. The Series B Notes, which had an outstanding principal balance of $16,000, matured and were repaid in full on October 1, 2018.

Senior Unsecured Notes

2042 Notes

On October 9, 2012, the Company issued $150,000 aggregate principal amount of senior unsecured notes for net proceeds of $145,275 (the “2042 Notes”). The 2042 Notes will mature on October 15, 2042. Interest on the 2042 Notes is paid quarterly on January 15, April 15, July 15 and October 15, at an annual rate of 6.625%, commencing on January 15, 2013. The Company may redeem the 2042 Notes in whole or in part at any time or from time to time on or after October 15, 2017. The 2042 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior, unsecured indebtedness. The 2042 Notes were listed on the New York Stock Exchange under the ticker symbol “AIB.”

On October 16, 2017, the Company redeemed the entire $150,000 aggregate principal amount outstanding of the 2042 Notes in accordance with the terms of the indenture governing the 2042 Notes, before its stated maturity date, which resulted in a realized loss on the extinguishment of debt of $5,790.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

2043 Notes

On June 17, 2013, the Company issued $135,000 aggregate principal amount of senior unsecured notes and on June 24, 2013, an additional $15,000 in aggregate principal amount of such notes was issued pursuant to the underwriters’ over-allotment option exercise. In total, $150,000 of aggregate principal was issued for net proceeds of $145,275 (the “2043 Notes”). The 2043 Notes will mature on July 15, 2043. Interest on the 2043 Notes is paid quarterly on January 15, April 15, July 15 and October 15, at an annual rate of 6.875%, commencing on October 15, 2013. The Company may redeem the 2043 Notes in whole or in part at any time or from time to time on or after July 15, 2018. The 2043 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior, unsecured indebtedness. The 2043 Notes are listed on the New York Stock Exchange under the ticker symbol “AIY.”

2025 Notes

On March 3, 2015, the Company issued $350,000 aggregate principal amount of senior unsecured notes for net proceeds of $343,650 (the “2025 Notes”). The 2025 Notes will mature on March 3, 2025. Interest on the 2025 Notes is due semi-annually on March 3 and September 3, at an annual rate of 5.25%, commencing on September 3, 2015. The 2025 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness.

The following table summarizes the average and maximum debt outstanding, and the interest and debt issuance cost for the three and nine months ended December 31, 2018 and 2017:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2018				2017				2018				2017
Average debt outstanding	$	925,141			$	863,916			$	967,265			$	909,872
Maximum amount of debt outstanding	1,013,289				918,439				1,274,562				1,056,929
Weighted average annualized interest cost (1)	5.39		%		5.07		%		5.26		%		5.30		%
Annualized amortized debt issuance cost	0.66		%		0.60		%		0.57		%		0.59		%
Total annualized interest cost	6.05		%		5.67		%		5.83		%		5.89		%

____________________

(1)	Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Commitment fees for the three and nine months ended December 31, 2018 were $885 and $2,196 respectively. Commitment fees for the three and nine months ended December 31, 2017 were $803 and $2,424, respectively.

Foreign Currency Transactions and Translations

The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of December 31, 2018:

	Original Principal Amount (Local)				Original Principal Amount (USD)				Principal Amount Outstanding				Unrealized Gain/(Loss)				Reset Date
Canadian Dollar	C$	2,300			$	1,894			$	1,684			$	210			1/24/2019
Euro	€	14,000			15,129				16,004				(875		)		1/22/2019
Euro	€	24,000			26,696				27,436				(740		)		1/24/2019
British Pound	£	8,000			10,089				10,189				(100		)		1/17/2019
British Pound	£	20,100			29,219				25,599				3,620				1/31/2019
Australian Dollar	A$	6,000			4,406				4,224				182				1/24/2019
					$	87,433			$	85,136			$	2,297

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of March 31, 2018:

	Original Principal Amount (Local)				Original Principal Amount (USD)				Principal Amount Outstanding				Unrealized Gain/(Loss)				Reset Date
Canadian Dollar	C$	2,300			$	1,894			$	1,784			$	110			4/16/2018
Euro	€	14,000			15,129				17,218				(2,089		)		4/12/2018
Euro	€	12,500			13,507				15,372				(1,865		)		4/30/2018
British Pound	£	14,500			21,941				20,340				1,601				4/30/2018
					$	52,471			$	54,714			$	(2,243	)

As of December 31, 2018 and March 31, 2018, the Company was in compliance with all debt covenants for all outstanding debt obligations.

Note 9. Stockholders’ Equity

There were no equity offerings of common stock during the three and nine months ended December 31, 2018 and fiscal year ended March 31, 2018.

The Company adopted the following plans, approved by the Board of Directors, for the purpose of repurchasing its common stock in accordance with applicable rules specified in the Securities Exchange Act of 1934 (the “1934 Act”) (the “Repurchase Plans”):

Date of Agreement/Amendment		Maximum Cost of Shares That May Be Repurchased				Cost of Shares Repurchased				Remaining Cost of Shares That May Be Repurchased
August 5, 2015		$	50,000			$	50,000			$	—
December 14, 2015		50,000				50,000				—
September 14, 2016		50,000				50,000				—
October 30, 2018		50,000				16,150				33,850
Total as of December 31, 2018		$	200,000			$	166,150			$	33,850

The Repurchase Plans were designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company will have the authority under the terms and limitations specified in an agreement with the Company to repurchase shares on the Company’s behalf in accordance with the terms of the Repurchase Plans. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the Repurchase Plans. Pursuant to the Repurchase Plans, the Company may from time to time repurchase a portion of its shares of common stock and the Company is hereby notifying stockholders of its intention as required by applicable securities laws.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Under the Repurchase Plans described above, the Company allocated the following amounts to be repurchased in accordance with SEC Rule 10b5-1 (the “10b5-1 Repurchase Plans”):

Effective Date		Termination Date		Amount Allocated to 10b5-1 Repurchase Plans
September 15, 2015		November 5, 2015		$	5,000
January 1, 2016		February 5, 2016		10,000
April 1, 2016		May 19, 2016		5,000
July 1, 2016		August 5, 2016		15,000
September 30, 2016		November 8, 2016		20,000
January 4, 2017		February 6, 2017		10,000
March 31, 2017		May 19, 2017		10,000
June 30, 2017		August 7, 2017		10,000
October 2, 2017		November 6, 2017		10,000
January 3, 2018		February 8, 2018		10,000
June 18, 2018		August 9, 2018		10,000
September 17, 2018		October 31, 2018		10,000
December 12, 2018		February 7, 2019		10,000

During the nine months ended December 31, 2018, the Company repurchased 2,916,198 shares at a weighted average price per share of $15.79, inclusive of commissions, for a total cost of $46,049. This represents a discount of approximately 18.51% of the average net asset value per share for the nine months ended December 31, 2018.

During the year ended March 31, 2018, the Company repurchased 1,127,519 shares at a weighted average price per share of $17.51, inclusive of commissions, for a total cost of $19,746. This represents a discount of approximately 12.47% of the average net asset value per share for the year ended March 31, 2018.

Since the inception of the Repurchase Plans through December 31, 2018, the Company repurchased 9,725,950 shares at a weighted average price per share of $17.08, inclusive of commissions, for a total cost of $166,150. Including fractional shares, the Company has repurchased 9,725,980 shares at a weighted average price per share of $17.08, inclusive of commissions, for a total cost of $166,150.

On September 12, 2014, the Company announced an at-the-market offering program (the “ATM Program”) through which it can sell up to 16 million shares of its common stock from time to time. As of December 31, 2018, no shares had been sold through the Company’s ATM Program.

On October 30, 2018, the Company’s Board of Directors approved a one-for-three reverse stock split of the Company’s common stock which was effective as of the close of business on November 30, 2018. The Company's common stock began trading on a split-adjusted basis on December 3, 2018. The fractional shares that resulted from the Reverse Stock Split were approximately 29 shares and they were canceled by paying cash in lieu of the fair value.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Note 10. Commitments and Contingencies

The Company has various commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2018 and March 31, 2018, the Company had the following unfunded commitments to its portfolio companies:

	December 31, 2018				March 31, 2018
Unfunded revolver obligations and bridge loan commitments (1)	$	199,579			$	239,689
Standby letters of credit issued and outstanding (2)	22,924				20,692
Unfunded delayed draw loan commitments (3)	80,543				21,959
Unfunded delayed draw loan commitments (performance thresholds not met) (4)	71,196				15,244
Total Unfunded Commitments	$	374,242			$	297,584

____________________

(1)

The unfunded revolver obligations may or may not be funded to the borrowing party in the future. The amounts relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers as of December 31, 2018 and March 31, 2018, subject to the terms of each loan’s respective credit agreements which includes borrowing covenants that need to be met prior to funding. As of December 31, 2018 and March 31, 2018, the bridge loan commitments included in the balances were $0 and $99,666, respectively.

(2)

For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. None of the letters of credit issued and outstanding are recorded as a liability on the Company’s Statements of Assets and Liabilities as such letters of credit are considered in the valuation of the investments in the portfolio company.

(3)	The Company’s commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions which can include covenants to maintain specified leverage levels and other related borrowing base covenants.

(4)	The borrowers are required to meet certain performance thresholds before the Company is obligated to fulfill the commitments and those performance thresholds were not met as of December 31, 2018 and March 31, 2018.

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NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

Note 11. Financial Highlights

The following is a schedule of financial highlights for the nine months ended December 31, 2018 and fiscal year ended March 31, 2018.

	Nine Months Ended December 31, 2018				Year Ended March 31, 2018
	(Unaudited)
Per Share Data*
Net asset value at beginning of period	$	19.67			$	20.22
Net investment income (1)	1.34				1.83
Net realized and change in unrealized losses (1)	(0.77		)		(0.63		)
Net increase in net assets resulting from operations	0.56				1.20
Distribution of net investment income (2)	(1.35		)		(1.20		)
Distribution of return of capital (2)	—				(0.60		)
Accretion due to share repurchases	0.16				0.03
Net asset value at end of period	$	19.03			$	19.67
Per share market value at end of period	$	12.40			$	15.66
Total return (3)	(13.82		)%		(12.06		)%
Shares outstanding at end of period	69,187,804				72,104,032
Weighted average shares outstanding	71,144,888				72,874,613
Ratio/Supplemental Data
Net assets at end of period (in millions)	$	1,316.6			$	1,418.1
Annualized ratio of operating expenses to average net assets (4)(5)	5.42		%		5.02		%
Annualized ratio of interest and other debt expenses to average net assets (5)	4.09		%		3.61		%
Annualized ratio of total expenses to average net assets (4)(5)	9.51		%		8.63		%
Annualized ratio of net investment income to average net assets (5)	9.19		%		9.15		%
Average debt outstanding (in millions)	$	967.3			$	899.3
Average debt per share	$	13.60			$	12.33
Annualized portfolio turnover rate (5)	53.14		%		45.06		%
Asset coverage per unit (6)	$	2,310			$	2,770

____________________

*	Totals may not foot due to rounding.

(1)	Financial highlights are based on the weighted average number of shares outstanding for the period presented.

(2)

The tax character of distributions are determined based on taxable income calculated in accordance with income tax regulations which may differ from amounts determined under GAAP. Although the tax character of distributions paid to stockholders through December 31, 2018 may include return of capital, the exact amount cannot be determined at this point. Per share amounts are based on actual rate per share.

(3)	Total return is based on the change in market price per share during the respective periods. Total return also takes into account distributions, if any, reinvested in accordance with the Company’s dividend reinvestment plan.

(4)

The ratio of operating expenses to average net assets and the ratio of total expenses to average net assets are shown inclusive of all voluntary management and incentive fee waivers (See Note 3 to the financial statements). For the nine months ended December 31, 2018, the annualized ratio of operating expenses to average net assets and the annualized ratio of total expenses to average net assets would be 5.97% and 10.09%, respectively, without the voluntary fee waivers. For the year ended March 31, 2018, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 6.39% and 10.03%, respectively, without the voluntary fee waivers.

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APOLLO INVESTMENT CORPORATION

NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)

(In thousands, except share and per share data)

(5)	Annualized for the nine months ended December 31, 2018.

(6)	The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by one thousand to determine the asset coverage per unit.

Note 12. Subsequent Events

Management has evaluated subsequent events through the date of issuance of these financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements other than those disclosed below.

On January 17, 2019, the Company announced that effective January 16, 2019, Mr. Gary Rothschild, President and Chief Executive Officer of Merx Aviation Finance, LLC (“Merx”), became an employee of Apollo Management Holdings, L.P., an affiliate of the Investment Adviser.  Mr. Rothschild also will retain his role as the President and Chief Executive Officer of Merx.  Merx is a wholly-owned portfolio company of the Company that operates as a global aircraft leasing, management and finance company.

At a meeting held on January 15, 2019, the Company’s Board of Directors approved an agreement between the Investment Adviser and the Company to offset certain incentive fees payable to the Investment Adviser by the Company (the “Fee Offset Agreement”). The calculation of the fee offset amount is described in Note 3 to the Financial Statements. The Fee Offset Agreement is included as Exhibit 10.2 to this report.

On February 6, 2019, the Company’s Board of Directors approved a new stock repurchase plan (the “Repurchase Plan”) to acquire up to $50 million of the Company’s common stock. The new Repurchase Plan is in addition to the Company's existing share repurchase authorization, of which approximately $33.9 million of repurchase capacity remains. Accordingly, the Company now has approximately $83.9 million available for stock repurchases under its repurchase program. 

On February 6, 2019, the Board of Directors declared a distribution of $0.45 per share, payable on April 5, 2019 to stockholders of record as of March 21, 2019.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Apollo Investment Corporation

Results of Review of Interim Financial Statements

We have reviewed the accompanying statement of assets and liabilities, including the schedule of investments, of Apollo Investment Corporation (the “Company”) as of December 31, 2018, and the related statements of operations for the three-month and nine-month periods ended December 31, 2018 and 2017, the statement of changes in net assets for the nine-month period ended December 31, 2018, and the statements of cash flows for the nine-month periods ended December 31, 2018 and 2017, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statement of assets and liabilities, including the schedule of investments, of the Company as of March 31, 2018, and the related statements of operations, of changes in net assets and of cash flows for the year then ended (not presented herein), and in our report dated May 18, 2018, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying statement of assets and liabilities, including the schedule of investments, as of March 31, 2018, and the accompanying statement of changes in net assets for the year then ended, is fairly stated, in all material respects, in relation to the statement of assets and liabilities, including the schedule of investments, and the statement of changes in net assets from which they have been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 6, 2019

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this report. Some of the statements in this report constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained herein involve risks and uncertainties, including statements as to:

•	our future operating results;

•	our business prospects and the prospects of our portfolio companies;

•	the impact of investments that we expect to make;

•	our contractual arrangements and relationships with third parties;

•	the dependence of our future success on the general economy and its impact on the industries in which we invest;

•	the ability of our portfolio companies to achieve their objectives;

•	our expected financings and investments;

•	the adequacy of our cash resources and working capital; and

•	the timing of cash flows, if any, from the operations of our portfolio companies.

We generally use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason, including any factors set forth in “Risk Factors” and elsewhere in this report.

We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission (“SEC”), including any annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Overview

Apollo Investment Corporation (the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” or “our”) was incorporated under the Maryland General Corporation Law in February 2004. We have elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As such, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, for federal income tax purposes we have elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to this election and assuming we qualify as a RIC, we generally do not have to pay corporate-level federal income taxes on any income we distribute to our stockholders. We commenced operations on April 8, 2004 upon completion of our initial public offering that raised $870 million in net proceeds from selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split). Since then, and through December 31, 2018, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $166.2 million.

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Apollo Investment Management, L.P. (the “Investment Adviser” or “AIM”) is our investment adviser and an affiliate of Apollo Global Management, LLC and its consolidated subsidiaries (“AGM”). The Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of, and provides investment advisory services to the Company. AGM and other affiliates manage other funds that may have investment mandates that are similar, in whole or in part, with ours. AIM and its affiliates may determine that an investment is appropriate both for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, AIM may determine that we should invest on a side-by-side basis with one or more other funds. We make all such investments subject to compliance with applicable regulations and interpretations, and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order (the “Order”) we received from the SEC permitting us to do so. Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors’ approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.

Apollo Investment Administration, LLC (the “Administrator” or “AIA”), an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. In addition to furnishing us with office facilities, equipment, and clerical, bookkeeping and recordkeeping services, AIA also oversees our financial records as well as prepares our reports to stockholders and reports filed with the SEC. AIA also performs the calculation and publication of our net asset value, the payment of our expenses and oversees the performance of various third-party service providers and the preparation and filing of our tax returns. Furthermore, AIA provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.

Investments

Our investment objective is to generate current income and capital appreciation. We invest primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. We may also invest in the securities of public companies and in structured products and other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”). Our portfolio is comprised primarily of investments in debt, including secured and unsecured debt of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $250 million. Our portfolio also includes equity interests such as common stock, preferred stock, warrants or options.

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment, and the competitive environment for the types of investments we make. As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). As of December 31, 2018, non-qualifying assets represented approximately 16.5% of the total assets of the Company.

Revenue

We generate revenue primarily in the form of interest and dividend income from the securities we hold and capital gains, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of mezzanine or senior secured loans, generally have a stated term of five to ten years and bear interest at a fixed rate or a floating rate usually determined on the basis of a benchmark, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate, or the prime rate. Interest on debt securities is generally payable quarterly or semiannually and while U.S. subordinated debt and corporate notes typically accrue interest at fixed rates, some of our investments may include zero coupon and/or step-up bonds that accrue income on a constant yield to call or maturity basis. In addition, some of our investments provide for payment-in-kind (“PIK”) interest or dividends. Such amounts of accrued PIK interest or dividends are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer. We may also generate revenue in the form of commitment, origination, structuring fees, fees for providing managerial assistance and, if applicable, consulting fees, etc.

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Expenses

For all investment professionals of AIM and their staff, when and to the extent engaged in providing investment advisory and management services to us, the compensation and routine overhead expenses of that personnel which is allocable to those services are provided and paid for by AIM. We bear all other costs and expenses of our operations and transactions, including those relating to:

•	investment advisory and management fees;

•	expenses incurred by AIM payable to third parties, including agents, consultants or other advisors, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies;

•	calculation of our net asset value (including the cost and expenses of any independent valuation firm);

•	direct costs and expenses of administration, including independent registered public accounting and legal costs;

•	costs of preparing and filing reports or other documents with the SEC;

•	interest payable on debt, if any, incurred to finance our investments;

•	offerings of our common stock and other securities;

•	registration and listing fees;

•	fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments;

•	transfer agent and custodial fees;

•	taxes;

•	independent directors’ fees and expenses;

•	marketing and distribution-related expenses;

•	the costs of any reports, proxy statements or other notices to stockholders, including printing and postage costs;

•	our allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

•	organizational costs; and

•	all other expenses incurred by us or the Administrator in connection with administering our business, such as our allocable portion of overhead under the administration agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs.

We expect our general and administrative operating expenses related to our ongoing operations to increase moderately in dollar terms. During periods of asset growth, we generally expect our general and administrative operating expenses to decline as a percentage of our total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities, among others, may also increase or reduce overall operating expenses based on portfolio performance, interest rate benchmarks, and offerings of our securities relative to comparative periods, among other factors.

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Portfolio and Investment Activity

Our portfolio and investment activity during the three and nine months ended December 31, 2018 and 2017 was as follows:

	Three Months Ended December 31,								Nine Months Ended December 31,
(in millions)*	2018				2017				2018				2017
Investments made in portfolio companies	$	305.3			$	198.4			$	1,027.8			$	806.0
Investments sold	(16.3		)		(48.1		)		(194.4		)		(69.7		)
Net activity before repaid investments	289.0				150.3				833.4				736.3
Investments repaid	(274.4		)		(156.7		)		(740.2		)		(726.8		)
Net investment activity	$	14.6			$	(6.4	)		$	93.2			$	9.5
Portfolio companies at beginning of period	98				87				90				86
Number of new portfolio companies	14				8				30				31
Number of exited portfolio companies	(9		)		(9		)		(17		)		(31		)
Portfolio companies at end of period	103				86				103				86
Number of investments made in existing portfolio companies	26				12				35				19

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*	Totals may not foot due to rounding.

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Our portfolio composition and weighted average yields as of December 31, 2018 and March 31, 2018 were as follows:

	December 31, 2018				March 31, 2018
Portfolio composition, at fair value:
First lien secured debt	64		%		50		%
Second lien secured debt	24		%		31		%
Total secured debt	88		%		82		%
Unsecured debt	0		%		5		%
Structured products and other	3		%		3		%
Preferred equity	1		%		1		%
Common equity/interests and warrants	8		%		9		%
Weighted average yields, at amortized cost (1):
First lien secured debt (2)	10.4		%		10.5		%
Second lien secured debt (2)	11.4		%		10.9		%
Total secured debt (2)	10.7		%		10.7		%
Unsecured debt portfolio (2)	—				11.3		%
Total debt portfolio (2)	10.7		%		10.7		%
Total portfolio (3)	9.6		%		9.6		%
Interest rate type, at fair value (4):
Fixed rate amount	—					$0.1	billion
Floating rate amount		$1.4	billion			$1.2	billion
Fixed rate, as percentage of total	0		%		8		%
Floating rate, as percentage of total	100		%		92		%
Interest rate type, at amortized cost (4):
Fixed rate amount	—					$0.1	billion
Floating rate amount		$1.4	billion			$1.2	billion
Fixed rate, as percentage of total	0		%		8		%
Floating rate, as percentage of total	100		%		92		%

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(1)	An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses.

(2)	Exclusive of investments on non-accrual status.

(3)	Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status.

(4)	The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.

Since the initial public offering of Apollo Investment in April 2004 and through December 31, 2018, invested capital totaled $19.1 billion in 466 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.

Recent Developments

On February 6, 2019, the Company’s Board of Directors approved a new stock repurchase plan to acquire up to $50 million of the Company’s common stock. The new Repurchase Plan is in addition to the Company's existing share repurchase authorization, of which approximately $33.9 million of repurchase capacity remains. Accordingly, the Company now has approximately $83.9 million available for stock repurchases under its repurchase program. 

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Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, gains and losses. Changes in the economic environment, financial markets, credit worthiness of portfolio companies and any other parameters used in determining such estimates could cause actual results to differ materially. In addition to the discussion below, our critical accounting policies are further described in the notes to the financial statements.

Fair Value Measurements

The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:

Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.

Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: Unobservable inputs for the asset or liability.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the values that would be received upon an actual disposition of such investments.

As of December 31, 2018, $2.11 billion or 91.3% of the Company’s investments were classified as Level 3. The high proportion of Level 3 investments relative to our total investments is directly related to our investment philosophy and target portfolio, which consists primarily of long-term secured debt, as well as unsecured and mezzanine positions of private middle-market companies. A fundamental difference exists between our investments and those of comparable publicly traded fixed income investments, namely high-yield bonds, and this difference affects the valuation of our private investments relative to comparable publicly traded instruments.

Senior secured loans, or senior loans, are higher in the capital structure than high-yield bonds, and are typically secured by assets of the borrowing company. This improves their recovery prospects in the event of default and affords senior loans a structural advantage over high-yield bonds. Many of the Company’s investments are also privately negotiated and contain covenant protections that limit the issuer to take actions that could harm us as a creditor. High-yield bonds typically do not contain such covenants.

Given the structural advantages of capital seniority and covenant protection, the valuation of our private debt portfolio is driven more by investment specific credit factors than movements in the broader debt capital markets. Each security is evaluated individually and as indicated below, we value our private investments based upon a multi-step valuation process, including valuation recommendations from independent valuation firms.

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Investment Valuation Process

Under procedures established by our Board of Directors, we value investments, including certain secured debt, unsecured debt, and other debt securities with maturities greater than 60 days, for which market quotations are readily available, at such market quotations (unless they are deemed not to represent fair value). We attempt to obtain market quotations from at least two brokers or dealers (if available, otherwise from a principal market maker, primary market dealer or other independent pricing service). We utilize mid-market pricing as a practical expedient for fair value unless a different point within the range is more representative. If and when market quotations are deemed not to represent fair value, we typically utilize independent third party valuation firms to assist us in determining fair value. Accordingly, such investments go through our multi-step valuation process as described below. In each case, our independent valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such investments. Investments purchased within 15 business days before the valuation date and debt investments with remaining maturities of 60 days or less may each be valued at cost with interest accrued or discount amortized to the date of maturity (although they are typically valued at available market quotations), unless such valuation, in the judgment of our Investment Adviser, does not represent fair value. In this case, such investments shall be valued at fair value as determined in good faith by or under the direction of our Board of Directors, including using market quotations where available. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of our Board of Directors. Such determination of fair values may involve subjective judgments and estimates.

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board of Directors has approved a multi-step valuation process each quarter, as described below:

1.	Our quarterly valuation process begins with each investment being initially valued by the investment professionals of our Investment Adviser who are responsible for the portfolio company.

2.	Preliminary valuation conclusions are then documented and discussed with senior management of our Investment Adviser.

3.	Independent valuation firms are engaged by our Board of Directors to conduct independent appraisals by reviewing our Investment Adviser’s preliminary valuations and then making their own independent assessment.

4.	The Audit Committee of the Board of Directors reviews the preliminary valuation of our Investment Adviser and the valuation prepared by the independent valuation firms and responds, if warranted, to the valuation recommendation of the independent valuation firms.

5.	The Board of Directors discusses valuations and determines in good faith the fair value of each investment in our portfolio based on the input of our Investment Adviser, the applicable independent valuation firm, and the Audit Committee of the Board of Directors.

Investments determined by these valuation procedures which have a fair value of less than $1 million during the prior fiscal quarter may be valued based on inputs identified by the Investment Adviser without the necessity of obtaining valuation from an independent valuation firm, if once annually an independent valuation firm using the procedures described herein provides a valuation. Investments in all asset classes are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, seniority of investment in the investee company’s capital structure, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors. When readily available, broker quotations and/or quotations provided by pricing services are considered in the valuation process of independent valuation firms. During the nine months ended December 31, 2018, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.

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Investment Income Recognition

The Company records interest and dividend income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Some of our loans and other investments, including certain preferred equity investments, may have contractual PIK interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. Certain PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At the point the Company believes PIK is not expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company believes that PIK is expected to be realized.

Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining interest or dividend obligations. Interest or dividend cash payments received on non-accrual designated investments may be recognized as income or applied to principal depending upon management’s judgment.

Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. Other income generally includes amendment fees, administrative fees, management fees, bridge fees, and structuring fees which are recorded when earned.

The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. Such assumptions include the rate and timing of principal and interest receipts (which may be subject to prepayments and defaults) of the underlying pools of assets. These assumptions are updated on at least a quarterly basis to reflect changes related to a particular security, actual historical data, and market changes. A structured product investment typically has an underlying pool of assets. Payments on structured product investments are payable solely from the cash flows from such assets. As such any unforeseen event in these underlying pools of assets might impact the expected recovery and future accrual of income.

Expenses

Expenses include management fees, performance-based incentive fees, insurance expenses, administrative service fees, legal fees, directors’ fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis.

Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses)

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized gain (loss) reflects the net change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gains or losses.

Within the context of these critical accounting policies, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

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Results of Operations

Operating results for the three and nine months ended December 31, 2018 and 2017 were as follows:

	Three Months Ended December 31,								Nine Months Ended December 31,
(in millions)*	2018				2017				2018				2017
Investment Income
Interest income (excluding Payment-in-kind (“PIK”) interest income)	$	54.6			$	51.8			$	168.2			$	159.4
Dividend income	3.6				5.6				11.5				15.9
PIK interest income	2.1				5.8				7.1				17.6
Other income	3.7				1.5				7.0				5.0
Total investment income	$	64.0			$	64.8			$	193.7			$	197.8
Expenses
Management and performance-based incentive fees, net of amounts waived	$	14.3			$	14.5			$	42.5			$	44.8
Interest and other debt expenses, net of reimbursements	14.1				12.3				42.4				40.2
Administrative services expense, net of reimbursements	1.6				1.6				5.0				4.9
Other general and administrative expenses	2.6				2.3				8.6				6.4
Net Expenses	$	32.6			$	30.8			$	98.5			$	96.4
Net Investment Income	$	31.5			$	34.0			$	95.2			$	101.4
Net Realized and Change in Unrealized Gains (Losses)
Net realized losses	$	(19.0	)		$	(0.6	)		$	(50.2	)		$	(238.0	)
Net change in unrealized losses	(13.7		)		(27.6		)		(4.9		)		202.9
Net Realized and Change in Unrealized Losses	(32.7		)		(28.1		)		$	(55.1	)		$	(35.0	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(1.2	)		$	5.8			$	40.1			$	66.4
Net Investment Income on Per Average Share Basis (1)	$	0.45			$	0.47			$	1.34			$	1.39
Earnings (loss) per share — basic (1)	$	(0.02	)		$	0.08			$	0.56			$	0.91

____________________

*	Totals may not foot due to rounding.

(1)	Based on the weighted average number of shares outstanding for the period presented.

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Total Investment Income

For the three months ended December 31, 2018 as compared to the three months ended December 31, 2017

The decrease in total investment income for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 was primarily driven by the decrease in dividend income of $2.0 million and the decrease in total interest income (including PIK) of $0.9 million. The decrease in dividend income was due to the sales of structured products investments (Ivy Hill Middle Market Credit Fund IX, Ltd) and a decrease of $1.9 million in dividends from Merx Aviation Finance, LLC. The decrease in total interest income (including PIK) primary was due to a decrease in average yielding investments.The decrease in total interest income (including PIK) was partially offset by the increase in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $2.9 million and $2.8 million for the three months ended December 31, 2018 and three months ended December 31, 2017, respectively. Furthermore, there was an increase in other income of $2.3 million, which was due to higher structuring fees and syndication fees.

For the nine months ended December 31, 2018 as compared to the nine months ended December 31, 2017

The decrease in total investment income for the nine months ended December 31, 2018 compared to the nine months ended December 31, 2017 was primarily driven by the decrease in dividend income of $4.3 million and decrease in total interest income (including PIK) of $1.7 million. The decrease in dividend income was due to the sales of structured products investments (MCF CLO I LLC, MCF CLO III, LLC, and Ivy Hill Middle Market Credit Fund IX, Ltd.) and a decrease of $2.9 million in dividends from Merx Aviation Finance, LLC. The decrease in total interest income (including PIK) primarily was due to the decrease in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments which totaled $7.4 million and $9.8 million for the nine months ended December 31, 2018 and nine months ended December 31, 2017, respectively. The decrease in total interest income (including PIK) was also due to a was due to a decrease in average yielding investments. Furthermore, there was an increase in other income of $2.0 million due to higher structuring fees and syndication fees.

Net Expenses

For the three months ended December 31, 2018 as compared to the three months ended December 31, 2017

The increase in net expenses for the three months ended December 31, 2018 compared to the three months ended December 31, 2017 was primarily due to the increase in interest and other debt expenses of $1.8 million. The increase in interest and other debt expenses was due to increases in LIBOR and to the increase in the average debt outstanding and net leverage from $0.86 billion and 0.62x, respectively during the three months ended December 31, 2017, to $0.93 billion and 0.74x, respectively during the three months ended December 31, 2018. In addition, the increase in net expenses was partially offset by the decrease of $0.3 million in management and performance-based incentive fees (net of amounts waived) due to lower net investment income during the three months ended December 31, 2018 compared to the three months ended December 31, 2017.

For the nine months ended December 31, 2018 as compared to the nine months ended December 31, 2017

The increase in net expenses for the nine months ended December 31, 2018 compared to the nine months ended December 31, 2017 was due to the increase in interest and other debt expenses of $2.2 million and the increase in other general and administrative expenses of $2.2 million.The increase in interest and other debt expenses was due to the increase in the average debt outstanding and net leverage from $0.91 billion and 0.62x, respectively during the nine months ended December 31, 2017, to $0.97 billion and 0.74x, respectively during the nine months ended December 31, 2018. The increase in other general administrative services expense was due to an increase in legal fees from $2.5 million for the nine months ended December 31, 2017 to $3.9 million for the nine months ended December 31, 2018. In addition, the increase in net expenses was partially offset by the decrease of $2.3 million in management and performance-based incentive fees (net of amounts waived) due to lower net investment income during the nine months ended December 31, 2018 compared to the nine months ended December 31, 2017.

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Net Realized Gains (Losses)

For the three months ended December 31, 2018 as compared to the three months ended December 31, 2017

During the three months ended December 31, 2018, we recognized gross realized gains of $0.0 million and gross realized losses of $19.0 million, resulting in net realized losses of $19.0 million. Significant realized gains (losses) for the three months ended December 31, 2018 are summarized below:

(in millions)		Net Realized Gain (Loss)
WTI Crude Oil Call/Put Options		$	(6.5	)
Elements Behavioral Health, Inc.		(11.9		)	*

* Elements Behavioral Health, Inc. was written off during the period as no proceeds were expected to be realized. The realized loss was recorded in prior quaters as an unrealized loss.

During the three months ended December 31, 2017, we recognized gross realized gains of $6.2 million and gross realized losses of $6.8 million, resulting in net realized loss of $0.6 million. Significant realized gains (losses) for the three months ended December 31, 2017 are summarized below:

(in millions)		Net Realized Gain (Loss)
Renew Financial LLC		$	3.8
Ivy Hill Middle Market Credit Fund IX, Ltd		2.0
Ivy Hill Middle Market Credit Fund X, Ltd		(0.2		)	*
Solarplicity Group Limited		(0.2		)

* Ivy Hill Middle Market Credit Fund X, Ltd. was sold during the quarter and the realized loss was previously recorded as an unrealized loss

For the nine months ended December 31, 2018 as compared to the nine months ended December 31, 2017

During the nine months ended December 31, 2018, we recognized gross realized gains of $2.5 million and gross realized losses of $52.7 million, resulting in net realized losses of $50.2 million. Significant realized gains (losses) for the nine months ended December 31, 2018 are summarized below:

(in millions)		Net Realized Gain (Loss)
Renew Financial LLC (f/k/a Renewable Funding, LLC)		$	2.0
WTI Crude Oil Call/Put Options		(30.0		)
Elements Behavioral Health, Inc.		(11.9		)	*
Accelerate Parent Corp. (American Tire)		(10.1		)

* Elements Behavioral Health, Inc. was written off during the period as no proceeds were expected to be realized and the realized loss was previously recorded as an unrealized loss.

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During the nine months ended December 31, 2017, we recognized gross realized gains of $17.1 million and gross realized losses of $255.1 million, resulting in net realized loss of $238.0 million. Significant realized gains (losses) for the nine months ended December 31, 2017 are summarized below:

(in millions)		Net Realized Gain (Loss)
Renew Financial LLC (f/k/a renewable Funding, LLC)		$	7.8
Ivy Hill Middle Market Credit Fund IX, Ltd.		2.0
Venoco, Inc.		(89.0		)	*
Delta Education Systems, Inc./Gryphon Colleges Corp.		(72.8		)	*
AIC SPV Holdings I, LLC		(44.3		)	*
LVI Group Investments, LLC		(17.5		)	*
Magnetation, LLC		(10.4		)	*
Clothesline Holdings, Inc.		(6.0		)	*
Sungevity Inc.		(4.4		)	*
SCM Insurance Services		(3.1		)	*

* Venoco, Inc., Delta Education Systems, Inc./Gryphon Colleges Corp., Magnetation, LLC, Clothesline Holdings, Inc. and Sungevity Inc. were written off during the period as no proceeds were expected to be realized. AIC SPV Holdings I, LLC, LVI Group Investments, LLC and SCM Insurances Services, Inc. were sold during the period. The realized losses on these investments were previously recorded as unrealized losses.

Net Change in Unrealized Gains (Losses)

For the three months ended December 31, 2018 as compared to the three months ended December 31, 2017

During the three months ended December 31, 2018, we recognized gross unrealized gains of $26.8 million and gross unrealized losses of $40.5 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $13.7 million. Significant changes in unrealized gains (losses) for the three months ended December 31, 2018 are summarized below:

(in millions)		Net Change in Unrealized Gain (Loss)
Elements Behavioral Health, Inc.		$	11.9
WTI Crude Oil Call/Put Options		8.8
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)		(8.9		)
Spotted Hawk		(8.4		)
Renew Financial LLC (f/k/a Renewable Funding, LLC)		(4.6		)
Solarplicity Group Limited (f/k/a AMP Solar UK)		(3.2		)
Dynamic Product Tankers (Prime), LLC		(2.1		)

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During the three months ended December 31, 2017, we recognized gross unrealized gains of $12.7 million and gross unrealized losses of $40.3 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $27.6 million. Significant changes in unrealized gains (losses) for the three months ended December 31, 2017 are summarized below:

(in millions)		Net Change in Unrealized Gain (Loss)
SHD Oil & Gas, LLC		$	4.3
Glacier Oil & Gas Corp.		2.3
STG-Fairway Acquisitions		0.9
Ivy Hill Middle Market Credit Fund X, Ltd.		0.6
Elements Behavioral Health, Inc.		(8.3		)
Solarplicity Group Limited		(6.8		)
Merx Aviation Finance, LLC		(1.7		)
Asset Repackaging Trust Six B.V.		(0.9		)
Lanai Holdings III, Inc.		(0.9		)

For the nine months ended December 31, 2018 as compared to the nine months ended December 31, 2017

During the nine months ended December 31, 2018, we recognized gross unrealized gains of $60.0 million and gross unrealized losses of $64.9 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $4.9 million. Significant changes in unrealized gains (losses) for the nine months ended December 31, 2018 are summarized below:

(in millions)		Net Change in Unrealized Gain (Loss)
WTI Crude Oil Call/Put Options		19.1
Elements Behavioral Health, Inc.		11.9
Merx Aviation Finance, LLC		11.0
Sprint Industrial Holdings, LLC.		4.4
MSEA Tankers LLC		2.0
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)		(15.5	)
Renew Financial LLC (f/k/a Renewable Funding, LLC)		(6.6	)
Crowne Automotive		(6.4	)
Dynamic Product Tankers (Prime), LLC		(5.0	)
Solarplicity Group Limited (f/k/a AMP Solar UK)		(4.8	)
Accelerate Parent Corp. (American Tire)		(2.6	)
Spotted Hawk		(1.4	)
LabVantage Solutions		(1.3	)
Pelican Energy, LLC		(1.3	)
BioClinica Holding I, LP		(1.3	)

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During the nine months ended December 31, 2017, we recognized gross unrealized gains of $272.3 million and gross unrealized losses of $69.4 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $202.9 million. Significant changes in unrealized gains (losses) for the nine months ended December 31, 2017 are summarized below:

(in millions)		Net Change in Unrealized Gain (Loss)
Venoco, Inc.		$	89.0
Delta Career Education Corporation		72.8
AIC SPV Holdings I, LLC		44.8
LVI Group Investments, LLC		17.5
Magnetation, LLC		10.7
SCM Insurance Services, Inc		7.9
Clothesline Holdings, Inc		6.0
Sungevity Inc.		4.4
Solarplicity Group Limited		3.0
SHD Oil & Gas, LLC		2.8
Elements Behavioral Health, Inc		(9.2		)
Merx Aviation Finance		(3.6		)
Sprint Industrial Holdings, LLC.		(2.1		)
Golden Bear 2016-R, LLC		(1.8		)

Liquidity and Capital Resources

The Company’s liquidity and capital resources are generated and generally available through periodic follow-on equity and debt offerings, our Senior Secured Facility (as defined in Note 8 to the financial statements), our senior secured notes, our senior unsecured notes, investments in special purpose entities in which we hold and finance particular investments on a non-recourse basis, as well as from cash flows from operations, investment sales of liquid assets and repayments of senior and subordinated loans and income earned from investments.

Cash Equivalents

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents (See Note 2 to the financial statements.) At the end of each fiscal quarter, we consider taking proactive steps utilizing cash equivalents with the objective of enhancing our investment flexibility during the following quarter, pursuant to Section 55 of the 1940 Act. More specifically, we may purchase U.S. Treasury bills from time-to-time on the last business day of the quarter and typically close out that position on the following business day, settling the sale transaction on a net cash basis with the purchase, subsequent to quarter end. Apollo Investment may also utilize repurchase agreements or other balance sheet transactions, including drawing down on our Senior Secured Facility, as we deem appropriate. The amount of these transactions or such drawn cash for this purpose is excluded from total assets for purposes of computing the asset base upon which the management fee is determined.

Debt

See Note 8 to the financial statements for information on the Company’s debt.

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The following table shows the contractual maturities of our debt obligations as of December 31, 2018:

	Payments Due by Period
(in millions)	Total				Less than 1 Year				1 to 3 Years				3 to 5 Years				More than 5 Years
Senior Secured Facility (1)	$	505.0			$	—			$	—			$	505.0			$	—
2043 Notes	150.0				—				—				—				150.0
2025 Notes	350.0				—				—				—				350.0
Total Debt Obligations	$	1,005.0			$	—			$	—			$	505.0			$	500.0

____________________

(1)	As of December 31, 2018, aggregate lender commitments under the Senior Secured Facility totaled $1.59 billion and $1.07 billion of unused capacity. As of December 31, 2018, there were $16.2 million of letters of credit issued under the Senior Secured Facility as shown as part of total commitments in Note 10 to the financial statements.

Stockholders’ Equity

See Note 9 to the financial statements for information on the Company’s public offerings and share repurchase plans.

Distributions

Distributions paid to stockholders during the three and nine months ended December 31, 2018 totaled $31.9 million ($0.45 per share) and $96.7 million million ($1.35 per share), respectively. Distributions paid to stockholders during the three and nine months ended December 31, 2017 totaled $32.9 million ($0.45 per share) and $98.8 million ($1.35 per share), respectively. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. Although the tax character of distributions paid to stockholders through December 31, 2018 may include return of capital, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ended March 31, 2019. Tax characteristics of all distributions will be reported to stockholders on Form 1099 after the end of the calendar year. Our quarterly distributions, if any, will be determined by our Board of Directors.

To maintain our RIC status, we must distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. Although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. Currently, we have substantial net capital loss carryforwards and consequently do not expect to generate cumulative net capital gains in the foreseeable future.

We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a dividend, then stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash dividends.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, due to the asset coverage test applicable to us as a BDC, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare dividends if we default under certain provisions or fail to satisfy certain other conditions. If we do not distribute a certain percentage of our income annually, we may suffer adverse tax consequences, including possible loss of the tax benefits available to us as a RIC. In addition, in accordance with GAAP and tax regulations, we include in income certain amounts that we have not yet received in cash, such as contractual PIK, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may not be able to meet the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC.

With respect to the distributions to stockholders, income from origination, structuring, closing, commitment and other upfront fees associated with investments in portfolio companies is treated as taxable income and accordingly, distributed to stockholders.

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PIK Income

For the three and nine months ended December 31, 2018, PIK income totaled $2.1 million and $7.1 million on total investment income of $64.0 million and $193.7 million respectively. For the three and nine months ended December 31, 2017, PIK income totaled $5.8 million and $17.6 million on total investment income of $64.8 million and $197.8 million respectively. In order to maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders annually in the form of distributions, even though the Company has not yet collected the cash. See Note 5 to the financial statements for more information on the Company’s PIK income.

Related Party Transactions

See Note 3 to the financial statements for information on the Company’s related party transactions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. During the three and nine months ended December 31, 2018, many of the loans in our portfolio had floating interest rates. These loans are usually based on LIBOR and typically have durations of one to six months after which they reset to current market interest rates. The Company also has a Senior Secured Facility that is based on LIBOR rates.

The following table shows the estimated annual impact on net investment income of base rate changes in interest rates (considering interest rate flows for variable rate instruments) to our loan portfolio and outstanding debt as of December 31, 2018, assuming no changes in our investment and borrowing structure:

Basis Point Change		Net Investment Income				Net Investment Income Per Share
Up 400 basis points		$	26.8	million		$	0.387
Up 300 basis points		20.1		million		0.291
Up 200 basis points		13.4		million		0.194
Up 100 basis points		6.7		million		0.097
Down 100 basis points		(6.9		) million		(0.100		)

We may hedge against interest rate fluctuations from time-to-time by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio of investments.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of December 31, 2018 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

Changes in Internal Control Over Financial Reporting

Management has not identified any change in the Company’s internal control over financial reporting that occurred during the third fiscal quarter of 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While we do not expect that the resolution of these matters if they arise would materially affect our business, financial condition or results of operations, resolution will be subject to various uncertainties and could result in the expenditure of significant financial and managerial resources.

On May 20, 2013, the Company was named as a defendant in a complaint by the bankruptcy trustee of DSI Renal Holdings and related companies (“DSI”). The complaint alleges, among other things, that the Company participated in a “fraudulent conveyance” involving a restructuring and subsequent sale of DSI in 2010 and 2011. The complaint seeks, jointly and severally from all defendants, (1) damages of approximately $425 million, of which the Company’s share would be approximately $41 million, and the return of 9,000 shares of common stock of DSI obtained by the Company in the restructuring and sale and (2) punitive damages. At this point in time, the Company is unable to assess whether it may have any liability in this action. On July 20, 2017, the United States Bankruptcy Court for the District of Delaware, where the action is pending, granted in part and denied in part the Company’s (and other defendants’) motion to dismiss the complaint. Discovery is underway. No trial date has been set. The Company has not made any determination that this action is or may be material to the Company and intends to vigorously defend itself.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2018, which could materially affect our business, financial condition and/or operating results. These risks are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

The Company adopted the following plans, approved by the Board of Directors, for the purpose of repurchasing its common stock in accordance with applicable rules specified in the 1934 Act (the “Repurchase Plans”):

Date of Agreement/Amendment		Maximum Cost of Shares That May Be Repurchased				Cost of Shares Repurchased				Remaining Cost of Shares That May Be Repurchased
August 5, 2015		$	50.0	million		$	50.0	million		$	—
December 14, 2015		50.0		million		50.0		million		—
September 14, 2016		50.0		million		50.0		million		—
October 30, 2018		50.0		million		16.1		million		33.9		million
Total as of December 31, 2018		$	200.0	million		$	166.1	million		$	33.9	million

The Repurchase Plans were designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company will have the authority under the terms and limitations specified in an agreement with the Company to repurchase shares on the Company’s behalf in accordance with the terms of the Repurchase Plans. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the Repurchase Plans. Pursuant to the Repurchase Plans, the Company may from time to time repurchase a portion of its shares of common stock and the Company is hereby notifying stockholders of its intention as required by applicable securities laws.

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Under the Repurchase Plans described above, the Company allocated the following amounts to be repurchased in accordance with SEC Rule 10b5-1 (the “10b5-1 Repurchase Plans”):

Effective Date		Termination Date		Amount Allocated to 10b5-1 Repurchase Plans
September 15, 2015		November 5, 2015		$	5.0	million
January 1, 2016		February 5, 2016		10.0		million
April 1, 2016		May 19, 2016		5.0		million
July 1, 2016		August 5, 2016		15.0		million
September 30, 2016		November 8, 2016		20.0		million
January 4, 2017		February 6, 2017		10.0		million
March 31, 2017		May 19, 2017		10.0		million
June 30, 2017		August 7, 2017		10.0		million
October 2, 2017		November 6, 2017		10.0		million
January 3, 2018		February 8, 2018		10.0		million
June 18, 2018		August 9, 2018		10.0		million
September 17, 2018		October 31, 2018		10.0		million
December 12, 2018		February 7, 2019		10.0		million

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The following table presents information with respect to the Company’s purchases of its common stock since adoption of the Repurchase Plans through December 31, 2018:

Month		Total Number of Shares Purchased			Average Price Paid Per Share*				Total Number of Shares Purchased as Part of Publicly Announced Plans			Maximum Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans
August 2015		510,000			$	19.71			510,000			$	40.0	million
September 2015		603,466			18.46				603,466			28.8		million
November 2015		1,116,666			18.10				1,116,666			8.6		million
December 2015		627,443			17.58				627,443			47.6		million
January 2016		670,708			14.91				670,708			37.6		million
June 2016		362,933			16.73				362,933			31.5		million
July 2016		16,491			16.53				16,491			31.2		million
August 2016		596,294			17.67				596,294			20.7		million
September 2016		411,523			18.13				411,523			63.2		million
October 2016		527,417			17.82				527,417			53.8		million
November 2016		239,289			17.45				239,289			49.6		million
August 2017		33,333			17.96				33,333			49.0		million
September 2017		186,767			17.98				186,767			45.7		million
October 2017		144,867			17.96				144,867			43.1		million
November 2017		64,500			17.79				64,500			41.9		million
December 2017		50,100			17.89				50,100			41.0		million
January 2018		577,386			17.32				577,386			31.0		million
February 2018		70,567			16.23				70,567			29.9		million
May 2018		263,667			17.12				263,667			25.4		million
June 2018		198,601			16.94				198,601			22.0		million
July 2018		8,867			16.75				8,867			21.9		million
August 2018		502,767			17.11				502,767			13.3		million
September 2018		444,467			16.54				444,467			5.9		million
October 2018		160,800			16.46				160,800			53.3		million
November 2018		595,672			15.81				595,672			43.9		million
December 2018		741,389			13.49				741,359			33.9		million
Total		9,725,980			$	17.08			9,725,950

____________________

* The average price per share is inclusive of commissions.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

(a)    Exhibits

3.1(a)	Articles of Amendment (1)
3.1(b)	Articles of Amendment and Restatement (2)
3.2	Fifth Amended and Restated Bylaws (3)
10.1	Third Amended and Restated Investment Advisory Management Agreement (4)
10.2	Fee Offset Agreement*
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)*

_________________________

*	Filed herewith.

(1)	Incorporated by reference from the Registrant’s pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, as Form N-2, filed on June 20, 2005.

(2)	Incorporated by reference from the Registrant’s post-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on August 14, 2006.

(3)	Incorporated by reference to Exhibit 3.2 as applicable, to the Registrant’s Form 8-K, filed on May 18, 2018.

(4)	Incorporated by reference to Exhibit 10.1 as applicable, to the Registrant’s Form 8-K, filed on August 10, 2018.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 6, 2019.

	APOLLO INVESTMENT CORPORATION
	By:	/s/ HOWARD WIDRA
	Howard Widra
	Chief Executive Officer
	By:	/s/ GREGORY W. HUNT
	Gregory W. Hunt
	Chief Financial Officer and Treasurer
	By:	/s/ AMIT JOSHI
	Amit Joshi
	Chief Accounting Officer and Assistant Treasurer

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