Schedule of consolidating effects of the Consolidated Funds on the Company's financial condition |
The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company's financial condition as of September 30, 2017 and December 31, 2016 and results from operations for the three and nine months ended September 30, 2017 and 2016. | | | | | | | | | | | | | | | | | | As of September 30, 2017 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Assets | |
| | |
| | |
| | |
| Cash and cash equivalents | $ | 186,437 |
| | $ | — |
| | $ | — |
| | $ | 186,437 |
| Investments (includes fair value investments of $581,614) | 746,990 |
| | — |
| | (162,295 | ) | | 584,695 |
| Performance fees receivable | 1,001,581 |
| | — |
| | (4,003 | ) | | 997,578 |
| Due from affiliates | 166,214 |
| | — |
| | (4,782 | ) | | 161,432 |
| Deferred tax asset, net | 36,661 |
| | — |
| | — |
| | 36,661 |
| Other assets | 103,885 |
| | — |
| | — |
| | 103,885 |
| Intangible assets, net | 44,115 |
| | — |
| | — |
| | 44,115 |
| Goodwill | 143,880 |
| | — |
| | — |
| | 143,880 |
| Assets of Consolidated Funds | |
| | |
| | |
| |
|
| Cash and cash equivalents | — |
| | 799,609 |
| | — |
| | 799,609 |
| Investments, at fair value | — |
| | 4,915,029 |
| | — |
| | 4,915,029 |
| Due from affiliates | — |
| | 8,047 |
| | — |
| | 8,047 |
| Dividends and interest receivable | — |
| | 10,061 |
| | — |
| | 10,061 |
| Receivable for securities sold | — |
| | 25,926 |
| | — |
| | 25,926 |
| Other assets | — |
| | 2,082 |
| | — |
| | 2,082 |
| Total assets | $ | 2,429,763 |
| | $ | 5,760,754 |
| | $ | (171,080 | ) | | $ | 8,019,437 |
| Liabilities | |
| | |
| | |
| | |
| Accounts payable, accrued expenses and other liabilities | $ | 94,351 |
| | $ | — |
| | $ | — |
| | $ | 94,351 |
| Accrued compensation | 133,799 |
| | — |
| | — |
| | 133,799 |
| Due to affiliates | 17,207 |
| | — |
| | — |
| | 17,207 |
| Performance fee compensation payable | 780,201 |
| | — |
| | — |
| | 780,201 |
| Debt obligations | 486,007 |
| | — |
| | — |
| | 486,007 |
| Liabilities of Consolidated Funds | |
| | |
| | |
| |
|
| Accounts payable, accrued expenses and other liabilities | — |
| | 50,992 |
| | — |
| | 50,992 |
| Due to affiliates | — |
| | 8,786 |
| | (8,786 | ) | | — |
| Payable for securities purchased | — |
| | 481,055 |
| | — |
| | 481,055 |
| CLO loan obligations, at fair value | — |
| | 4,490,085 |
| | (13,442 | ) | | 4,476,643 |
| Fund borrowings | — |
| | 121,261 |
| | — |
| | 121,261 |
| Total liabilities | 1,511,565 |
| | 5,152,179 |
| | (22,228 | ) | | 6,641,516 |
| Commitments and contingencies |
|
| |
|
| |
|
| |
|
| Preferred equity (12,400,000 units issued and outstanding) | 298,761 |
| | — |
| | — |
| | 298,761 |
| Non-controlling interest in Consolidated Funds | — |
| | 608,575 |
| | (148,852 | ) | | 459,723 |
| Non-controlling interest in Ares Operating Group entities | 348,513 |
| | — |
| | — |
| | 348,513 |
| Controlling interest in Ares Management, L.P.: | |
| | |
| | |
| |
|
| Partners' capital (82,211,302 units issued and outstanding) | 275,410 |
| | — |
| | — |
| | 275,410 |
| Accumulated other comprehensive loss, net of tax | (4,486 | ) | | — |
| | — |
| | (4,486 | ) | Total controlling interest in Ares Management, L.P. | 270,924 |
| | — |
| | — |
| | 270,924 |
| Total equity | 918,198 |
|
| 608,575 |
|
| (148,852 | ) |
| 1,377,921 |
| Total liabilities and equity | $ | 2,429,763 |
|
| $ | 5,760,754 |
|
| $ | (171,080 | ) |
| $ | 8,019,437 |
|
| | | | | | | | | | | | | | | | | | As of December 31, 2016 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Assets | | | |
| | |
| | |
| Cash and cash equivalents | $ | 342,861 |
| | $ | — |
| | $ | — |
| | $ | 342,861 |
| Investments (includes fair value investments of $448,336) | 622,215 |
| | — |
| | (153,744 | ) | | 468,471 |
| Performance fees receivable | 767,429 |
| | — |
| | (8,330 | ) | | 759,099 |
| Due from affiliates | 169,252 |
| | — |
| | (6,316 | ) | | 162,936 |
| Deferred tax asset, net | 6,731 |
| | — |
| | — |
| | 6,731 |
| Other assets | 65,565 |
| | — |
| | — |
| | 65,565 |
| Intangible assets, net | 58,315 |
| | — |
| | — |
| | 58,315 |
| Goodwill | 143,724 |
| | — |
| | — |
| | 143,724 |
| Assets of Consolidated Funds | | | |
| | |
| |
|
| Cash and cash equivalents | — |
| | 455,280 |
| | — |
| | 455,280 |
| Investments, at fair value | — |
| | 3,330,203 |
| | — |
| | 3,330,203 |
| Due from affiliates | — |
| | 3,592 |
| | — |
| | 3,592 |
| Dividends and interest receivable | — |
| | 8,479 |
| | — |
| | 8,479 |
| Receivable for securities sold | — |
| | 21,955 |
| | — |
| | 21,955 |
| Other assets | — |
| | 2,501 |
| | — |
| | 2,501 |
| Total assets | $ | 2,176,092 |
|
| $ | 3,822,010 |
|
| $ | (168,390 | ) |
| $ | 5,829,712 |
| Liabilities | | | |
| | |
| | |
| Accounts payable, accrued expenses and other liabilities | $ | 83,336 |
| | $ | — |
| | $ | — |
| | $ | 83,336 |
| Accrued compensation | 131,736 |
| | — |
| | — |
| | 131,736 |
| Due to affiliates | 17,959 |
| | — |
| | (395 | ) | | 17,564 |
| Performance fee compensation payable | 598,050 |
| | — |
| | — |
| | 598,050 |
| Debt obligations | 305,784 |
| | — |
| | — |
| | 305,784 |
| Liabilities of Consolidated Funds | | | |
| | |
| |
|
| Accounts payable, accrued expenses and other liabilities | — |
| | 21,056 |
| | — |
| | 21,056 |
| Due to affiliates | — |
| | 10,599 |
| | (10,599 | ) | | — |
| Payable for securities purchased | — |
| | 208,742 |
| | — |
| | 208,742 |
| CLO loan obligations, at fair value | — |
| | 3,064,862 |
| | (33,750 | ) | | 3,031,112 |
| Fund borrowings | — |
| | 55,070 |
| | — |
| | 55,070 |
| Total liabilities | 1,136,865 |
|
| 3,360,329 |
|
| (44,744 | ) |
| 4,452,450 |
| Commitments and contingencies |
|
| |
|
| |
|
| |
|
| Preferred equity (12,400,000 units issued and outstanding) | 298,761 |
| | — |
| | — |
| | 298,761 |
| Non-controlling interest in Consolidated Funds | — |
| | 461,681 |
| | (123,646 | ) | | 338,035 |
| Non-controlling interest in Ares Operating Group entities | 447,615 |
| | — |
| | — |
| | 447,615 |
| Controlling interest in Ares Management, L.P.: | |
| | |
| | |
| | |
| Partners' capital (80,814,732 units issued and outstanding) | 301,790 |
| | — |
| | — |
| | 301,790 |
| Accumulated other comprehensive loss, net of tax | (8,939 | ) | | — |
| | — |
| | (8,939 | ) | Total controlling interest in Ares Management, L.P. | 292,851 |
| | — |
| | — |
| | 292,851 |
| Total equity | 1,039,227 |
|
| 461,681 |
|
| (123,646 | ) |
| 1,377,262 |
| Total liabilities and equity | $ | 2,176,092 |
|
| $ | 3,822,010 |
|
| $ | (168,390 | ) | | $ | 5,829,712 |
|
|
Schedule of results from operations |
| | | | | | | | | | | | | | | | | | For the Three Months Ended September 30, 2017 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Revenues | |
| | |
| | |
| | |
| Management fees (includes ARCC Part I Fees of $24,036) | $ | 188,628 |
| | $ | — |
| | $ | (5,451 | ) | | $ | 183,177 |
| Performance fees | 88,379 |
| | — |
| | (1,371 | ) | | 87,008 |
| Administrative and other fees | 13,486 |
| | — |
| | — |
| | 13,486 |
| Total revenues | 290,493 |
|
| — |
|
| (6,822 | ) |
| 283,671 |
| Expenses | |
| | |
| | |
| | | Compensation and benefits | 129,347 |
| | — |
| | — |
| | 129,347 |
| Performance fee compensation | 58,637 |
| | — |
| | — |
| | 58,637 |
| General, administrative and other expense | 47,104 |
| | — |
| | — |
| | 47,104 |
| Expenses of the Consolidated Funds | — |
| | 25,862 |
| | (6,823 | ) | | 19,039 |
| Total expenses | 235,088 |
|
| 25,862 |
|
| (6,823 | ) |
| 254,127 |
| Other income (expense) | |
| | |
| | |
| | | Investment income and net interest expense (includes interest expense of $5,343) | (1,606 | ) | | — |
| | (225 | ) | | (1,831 | ) | Other expense, net | (2,492 | ) | | — |
| | — |
| | (2,492 | ) | Net realized and unrealized gain on investments | 17,724 |
| | — |
| | (10,515 | ) | | 7,209 |
| Investment income and net interest income of the Consolidated Funds (includes interest expense of $28,127) | — |
| | 7,169 |
| | 12,885 |
| | 20,054 |
| Net realized and unrealized gain on investments of the Consolidated Funds | — |
| | 48,058 |
| | (12,118 | ) | | 35,940 |
| Total other income | 13,626 |
|
| 55,227 |
|
| (9,973 | ) |
| 58,880 |
| Income before taxes | 69,031 |
|
| 29,365 |
|
| (9,972 | ) |
| 88,424 |
| Income tax expense | 3,354 |
| | 1,198 |
| | — |
| | 4,552 |
| Net income | 65,677 |
|
| 28,167 |
|
| (9,972 | ) |
| 83,872 |
| Less: Net income attributable to non-controlling interests in Consolidated Funds | — |
| | 28,167 |
| | (9,972 | ) | | 18,195 |
| Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 37,839 |
| | — |
| | — |
| | 37,839 |
| Net income attributable to Ares Management, L.P. | 27,838 |
|
| — |
|
| — |
|
| 27,838 |
| Less: Preferred equity distributions paid | 5,425 |
| | — |
| | — |
| | 5,425 |
| Net income attributable to Ares Management, L.P. common unitholders | $ | 22,413 |
|
| $ | — |
|
| $ | — |
|
| $ | 22,413 |
|
| | | | | | | | | | | | | | | | | | For the Three Months Ended September 30, 2016 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Revenues | |
| | |
| | |
| | |
| Management fees (includes ARCC Part I Fees of $33,260) | $ | 168,796 |
| | $ | — |
| | $ | (5,187 | ) | | $ | 163,609 |
| Performance fees | 165,281 |
| | — |
| | (799 | ) | | 164,482 |
| Administrative and other fees | 7,369 |
| | — |
| | — |
| | 7,369 |
| Total revenues | 341,446 |
|
| — |
|
| (5,986 | ) |
| 335,460 |
| Expenses | |
| | |
| | |
| | | Compensation and benefits | 111,916 |
| | — |
| | — |
| | 111,916 |
| Performance fee compensation | 123,173 |
| | — |
| | — |
| | 123,173 |
| General, administrative and other expense | 38,197 |
| | — |
| | — |
| | 38,197 |
| Expenses of the Consolidated Funds | — |
| | 16,068 |
| | (5,980 | ) | | 10,088 |
| Total expenses | 273,286 |
|
| 16,068 |
|
| (5,980 | ) |
| 283,374 |
| Other income (expense) | |
| | |
| | |
| | | Investment income and net interest expense (includes interest expense of $4,136) | (675 | ) | | — |
| | (1,006 | ) | | (1,681 | ) | Other income, net | 23,042 |
| | — |
| | — |
| | 23,042 |
| Net realized and unrealized gain on investments | 26,340 |
| | — |
| | (6,982 | ) | | 19,358 |
| Investment income and net interest income of the Consolidated Funds (includes interest expense of $26,413) | — |
| | 6,525 |
| | 2,212 |
| | 8,737 |
| Net realized and unrealized gain on investments of the Consolidated Funds | — |
| | 23,656 |
| | 227 |
| | 23,883 |
| Total other income | 48,707 |
| | 30,181 |
| | (5,549 | ) | | 73,339 |
| Income before taxes | 116,867 |
|
| 14,113 |
|
| (5,555 | ) |
| 125,425 |
| Income tax expense | 6,944 |
| | 697 |
| | — |
| | 7,641 |
| Net income | 109,923 |
| | 13,416 |
| | (5,555 | ) | | 117,784 |
| Less: Net income attributable to non-controlling interests in Consolidated Funds | — |
| | 13,416 |
| | (5,555 | ) | | 7,861 |
| Less: Net income attributable to redeemable interests in Ares Operating Group entities | 107 |
| | — |
| | — |
| | 107 |
| Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 66,511 |
| | — |
| | — |
| | 66,511 |
| Net income attributable to Ares Management, L.P. | 43,305 |
|
| — |
|
| — |
|
| 43,305 |
| Less: Preferred equity distributions paid | 6,751 |
| | — |
| | — |
| | 6,751 |
| Net income attributable to Ares Management, L.P. common unitholders | $ | 36,554 |
|
| $ | — |
|
| $ | — |
|
| $ | 36,554 |
|
| | | | | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2017 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Revenues | |
| | |
| | |
| | |
| Management fees (includes ARCC Part I Fees of $76,436) | $ | 550,969 |
| | $ | — |
| | $ | (14,979 | ) | | $ | 535,990 |
| Performance fees | 483,963 |
| | — |
| | (3,759 | ) | | 480,204 |
| Administrative and other fees | 43,024 |
| | — |
| | — |
| | 43,024 |
| Total revenues | 1,077,956 |
|
| — |
|
| (18,738 | ) |
| 1,059,218 |
| Expenses | |
| | |
| | |
| | | Compensation and benefits | 384,905 |
| | — |
| | — |
| | 384,905 |
| Performance fee compensation | 361,044 |
| | — |
| | — |
| | 361,044 |
| General, administrative and other expense | 145,193 |
| | — |
| | — |
| | 145,193 |
| Transaction support expense | 275,177 |
| | — |
| | — |
| | 275,177 |
| Expenses of the Consolidated Funds | — |
| | 45,196 |
| | (17,724 | ) | | 27,472 |
| Total expenses | 1,166,319 |
|
| 45,196 |
|
| (17,724 | ) |
| 1,193,791 |
| Other income (expense) | |
| | |
| | |
| | | Investment income and net interest expense (includes interest expense of $15,576) | (4,064 | ) | | — |
| | (2,154 | ) | | (6,218 | ) | Other income, net | 16,826 |
| | — |
| | — |
| | 16,826 |
| Net realized and unrealized gain on investments | 61,052 |
| | — |
| | (21,109 | ) | | 39,943 |
| Investment income and net interest income of the Consolidated Funds (includes interest expense of $86,324) | — |
| | 11,072 |
| | 30,603 |
| | 41,675 |
| Net realized and unrealized gain on investments of the Consolidated Funds | — |
| | 79,450 |
| | (24,187 | ) | | 55,263 |
| Total other income | 73,814 |
|
| 90,522 |
|
| (16,847 | ) |
| 147,489 |
| Income (loss) before taxes | (14,549 | ) |
| 45,326 |
|
| (17,861 | ) |
| 12,916 |
| Income tax expense (benefit) | (30,521 | ) | | 2,062 |
| | — |
| | (28,459 | ) | Net income | 15,972 |
|
| 43,264 |
|
| (17,861 | ) |
| 41,375 |
| Less: Net income attributable to non-controlling interests in Consolidated Funds | — |
| | 43,264 |
| | (17,861 | ) | | 25,403 |
| Less: Net loss attributable to non-controlling interests in Ares Operating Group entities | (20,610 | ) | | — |
| | — |
| | (20,610 | ) | Net income attributable to Ares Management, L.P. | 36,582 |
|
| — |
|
| — |
|
| 36,582 |
| Less: Preferred equity distributions paid | 16,275 |
| | — |
| | — |
| | 16,275 |
| Net income attributable to Ares Management, L.P. common unitholders | $ | 20,307 |
|
| $ | — |
|
| $ | — |
|
| $ | 20,307 |
|
| | | | | | | | | | | | | | | | | | For the Nine Months Ended September 30, 2016 | | Consolidated Company Entities | | Consolidated Funds | | Eliminations | | Consolidated | Revenues | |
| | |
| | |
| | |
| Management fees (includes ARCC Part I Fees of $90,884) | $ | 494,076 |
| | $ | — |
| | $ | (13,513 | ) | | $ | 480,563 |
| Performance fees | 337,612 |
| | — |
| | 74 |
| | 337,686 |
| Administrative and other fees | 22,761 |
| | — |
| | — |
| | 22,761 |
| Total revenues | 854,449 |
| | — |
| | (13,439 | ) | | 841,010 |
| Expenses | |
| | |
| | |
| | | Compensation and benefits | 335,249 |
| | — |
| | — |
| | 335,249 |
| Performance fee compensation | 253,739 |
| | — |
| | — |
| | 253,739 |
| General, administrative and other expense | 116,845 |
| | — |
| | — |
| | 116,845 |
| Expenses of the Consolidated Funds | — |
| | 27,334 |
| | (16,320 | ) | | 11,014 |
| Total expenses | 705,833 |
| | 27,334 |
| | (16,320 | ) | | 716,847 |
| Other income (expense) | |
| | |
| | |
| | | Investment income and net interest income (expense) (includes interest expense of $13,819) | 3,177 |
| | — |
| | (3,224 | ) | | (47 | ) | Other income, net | 33,956 |
| | — |
| | — |
| | 33,956 |
| Net realized and unrealized gain on investments | 17,491 |
| | — |
| | 3,858 |
| | 21,349 |
| Investment income and net interest income of the Consolidated Funds (includes interest expense of $67,469) | — |
| | 20,133 |
| | 5,626 |
| | 25,759 |
| Net realized and unrealized loss on investments of the Consolidated Funds | — |
| | (5,588 | ) | | (135 | ) | | (5,723 | ) | Total other income | 54,624 |
| | 14,545 |
| | 6,125 |
| | 75,294 |
| Income (loss) before taxes | 203,240 |
| | (12,789 | ) | | 9,006 |
| | 199,457 |
| Income tax expense (benefit) | 8,587 |
| | (719 | ) | | — |
| | 7,868 |
| Net income (loss) | 194,653 |
| | (12,070 | ) | | 9,006 |
| | 191,589 |
| Less: Net loss attributable to non-controlling interests in Consolidated Funds | — |
| | (12,070 | ) | | 9,006 |
| | (3,064 | ) | Less: Net income attributable to redeemable interests in Ares Operating Group entities | 456 |
| | — |
| | — |
| | 456 |
| Less: Net income attributable to non-controlling interests in Ares Operating Group entities | 116,404 |
| | — |
| | — |
| | 116,404 |
| Net income attributable to Ares Management, L.P. | 77,793 |
| | — |
| | — |
| | 77,793 |
| Less: Preferred equity distributions paid | 6,751 |
| | — |
| | — |
| | 6,751 |
| Net income attributable to Ares Management, L.P. common unitholders | $ | 71,042 |
|
| $ | — |
|
| $ | — |
|
| $ | 71,042 |
|
|