SEGMENT REPORTING (Tables)
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12 Months Ended |
Dec. 31, 2018 |
Segment Reporting [Abstract] |
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Schedule of financial results for Company's operating segments, as well as the OMG |
The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the year ended December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | Credit Group | | Private Equity Group | | Real Estate Group | | Total Segments | | OMG | | Total | Management fees (Credit Group includes ARCC Part I Fees of $128,805) | $ | 564,899 |
| | $ | 198,182 |
| | $ | 73,663 |
| | $ | 836,744 |
| | $ | — |
| | $ | 836,744 |
| Other fees | 23,247 |
| | 1,008 |
| | 33 |
| | 24,288 |
| | — |
| | 24,288 |
| Compensation and benefits | (216,843 | ) | | (74,672 | ) | | (38,623 | ) | | (330,138 | ) | | (126,117 | ) | | (456,255 | ) | General, administrative and other expenses | (43,934 | ) | | (18,482 | ) | | (11,123 | ) | | (73,539 | ) | | (75,926 | ) | | (149,465 | ) | Fee related earnings | 327,369 |
|
| 106,036 |
|
| 23,950 |
| | 457,355 |
| | (202,043 | ) | | 255,312 |
| Performance income—realized | 121,270 |
| | 139,820 |
| | 96,117 |
| | 357,207 |
| | — |
| | 357,207 |
| Performance related compensation—realized | (75,541 | ) | | (111,764 | ) | | (64,292 | ) | | (251,597 | ) | | — |
| | (251,597 | ) | Realized net performance income | 45,729 |
|
| 28,056 |
|
| 31,825 |
| | 105,610 |
| | — |
| | 105,610 |
| Investment income—realized | 2,492 |
| | 17,816 |
| | 11,409 |
| | 31,717 |
| | 4,790 |
| | 36,507 |
| Interest and other investment income—realized | 10,350 |
| | 4,624 |
| | 2,257 |
| | 17,231 |
| | 2,184 |
| | 19,415 |
| Interest expense | (11,386 | ) | | (6,000 | ) | | (1,836 | ) | | (19,222 | ) | | (2,226 | ) | | (21,448 | ) | Realized net investment income | 1,456 |
|
| 16,440 |
|
| 11,830 |
| | 29,726 |
| | 4,748 |
| | 34,474 |
| Realized income | $ | 374,554 |
| | $ | 150,532 |
| | $ | 67,605 |
| | $ | 592,691 |
| | $ | (197,295 | ) | | $ | 395,396 |
| Total assets | $ | 729,930 |
| | $ | 942,928 |
| | $ | 469,595 |
| | $ | 2,142,453 |
| | $ | 65,961 |
| | $ | 2,208,414 |
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The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the year ended December 31, 2017:
| | | | | | | | | | | | | | | | | | | | | | | | | | Credit Group | | Private Equity Group | | Real Estate Group | | Total Segments | | OMG | | Total | Management fees (Credit Group includes ARCC Part I Fees of $105,467) | $ | 481,466 |
| | $ | 198,498 |
| | $ | 64,861 |
| | $ | 744,825 |
| | $ | — |
| | $ | 744,825 |
| Other fees | 20,830 |
| | 1,495 |
| | 106 |
| | 22,431 |
| | — |
| | 22,431 |
| Compensation and benefits | (193,347 | ) | | (68,569 | ) | | (39,586 | ) | | (301,502 | ) | | (112,233 | ) | | (413,735 | ) | General, administrative and other expenses | (33,626 | ) | | (17,561 | ) | | (10,519 | ) | | (61,706 | ) | | (74,825 | ) | | (136,531 | ) | Fee related earnings | 275,323 |
|
| 113,863 |
|
| 14,862 |
|
| 404,048 |
|
| (187,058 | ) |
| 216,990 |
| Performance income—realized | 21,087 |
| | 287,092 |
| | 9,608 |
| | 317,787 |
| | — |
| | 317,787 |
| Performance related compensation—realized | (9,218 | ) | | (228,774 | ) | | (4,338 | ) | | (242,330 | ) | | — |
| | (242,330 | ) | Realized net performance income | 11,869 |
|
| 58,318 |
|
| 5,270 |
|
| 75,457 |
|
| — |
|
| 75,457 |
| Investment income—realized | 7,102 |
| | 22,625 |
| | 5,534 |
| | 35,261 |
| | 3,880 |
| | 39,141 |
| Interest and other investment income—realized | 10,192 |
| | 3,226 |
| | 511 |
| | 13,929 |
| | 1,142 |
| | 15,071 |
| Interest expense | (12,405 | ) | | (5,218 | ) | | (1,650 | ) | | (19,273 | ) | | (1,946 | ) | | (21,219 | ) | Realized net investment income | 4,889 |
|
| 20,633 |
|
| 4,395 |
|
| 29,917 |
|
| 3,076 |
|
| 32,993 |
| Realized income | $ | 292,081 |
| | $ | 192,814 |
| | $ | 24,527 |
| | $ | 509,422 |
| | $ | (183,982 | ) | | $ | 325,440 |
| Total assets | $ | 837,562 |
| | $ | 1,255,454 |
| | $ | 306,463 |
| | $ | 2,399,479 |
| | $ | 119,702 |
| | $ | 2,519,181 |
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The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the year ended December 31, 2016: | | | | | | | | | | | | | | | | | | | | | | | | | | Credit Group | | Private Equity Group | | Real Estate Group | | Total Segments | | OMG | | Total | Management fees (Credit Group includes ARCC Part I Fees of $121,181) | $ | 444,664 |
| | $ | 147,790 |
| | $ | 66,997 |
| | $ | 659,451 |
| | $ | — |
| | $ | 659,451 |
| Other fees | 9,953 |
| | 1,544 |
| | 854 |
| | 12,351 |
| | — |
| | 12,351 |
| Compensation and benefits | (184,571 | ) | | (61,276 | ) | | (41,091 | ) | | (286,938 | ) | | (97,777 | ) | | (384,715 | ) | General, administrative and other expenses | (29,136 | ) | | (14,679 | ) | | (10,603 | ) | | (54,418 | ) | | (60,319 | ) | | (114,737 | ) | Fee related earnings | 240,910 |
|
| 73,379 |
|
| 16,157 |
|
| 330,446 |
|
| (158,096 | ) |
| 172,350 |
| Performance income—realized | 51,435 |
| | 230,162 |
| | 11,401 |
| | 292,998 |
| | — |
| | 292,998 |
| Performance related compensation—realized | (11,772 | ) | | (184,072 | ) | | (2,420 | ) | | (198,264 | ) | | — |
| | (198,264 | ) | Realized net performance income | 39,663 |
|
| 46,090 |
|
| 8,981 |
|
| 94,734 |
|
| — |
|
| 94,734 |
| Investment income (loss)—realized | 4,928 |
| | 18,773 |
| | 931 |
| | 24,632 |
| | (14,606 | ) | | 10,026 |
| Interest and other investment income—realized | 22,547 |
| | 16,891 |
| | 1,598 |
| | 41,036 |
| | 163 |
| | 41,199 |
| Interest expense | (8,609 | ) | | (5,589 | ) | | (1,056 | ) | | (15,254 | ) | | (2,727 | ) | | (17,981 | ) | Realized net investment income (loss) | 18,866 |
|
| 30,075 |
|
| 1,473 |
|
| 50,414 |
|
| (17,170 | ) |
| 33,244 |
| Realized income | $ | 299,439 |
| | $ | 149,544 |
| | $ | 26,611 |
| | $ | 475,594 |
| | $ | (175,266 | ) | | $ | 300,328 |
| Total assets | $ | 650,435 |
| | $ | 1,218,412 |
| | $ | 232,862 |
| | $ | 2,101,709 |
| | $ | 74,383 |
| | $ | 2,176,092 |
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Schedule of segment’ revenue, expenses and other income (expense) |
The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Segment Revenues | | | | | | Management fees (includes ARCC Part I Fees of $128,805, $105,467 and $121,181 for the years ended December 31, 2018, 2017 and 2016, respectively) | $ | 836,744 |
| | $ | 744,825 |
| | $ | 659,451 |
| Other fees | 24,288 |
| | 22,431 |
| | 12,351 |
| Performance income—realized | 357,207 |
| | 317,787 |
| | 292,998 |
| Total segment revenues | $ | 1,218,239 |
| | $ | 1,085,043 |
| | $ | 964,800 |
| Segment Expenses | | | | | | Compensation and benefits | $ | 330,138 |
| | $ | 301,502 |
| | $ | 286,938 |
| General, administrative and other expenses | 73,539 |
| | 61,706 |
| | 54,418 |
| Performance related compensation—realized | 251,597 |
| | 242,330 |
| | 198,264 |
| Total segment expenses | $ | 655,274 |
| | $ | 605,538 |
| | $ | 539,620 |
| Segment Realized Net Investment Income | | | | | | Investment income—realized | $ | 31,717 |
| | $ | 35,261 |
| | $ | 24,632 |
| Interest and other investment income—realized | 17,231 |
| | 13,929 |
| | 41,036 |
| Interest expense | (19,222 | ) | | (19,273 | ) | | (15,254 | ) | Total segment realized net investment income | $ | 29,726 |
| | $ | 29,917 |
| | $ | 50,414 |
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Schedule of segment revenues components |
The following table reconciles the Company's consolidated revenues to segment revenue: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Total consolidated revenue | $ | 958,461 |
| | $ | 1,479,943 |
| | $ | 1,254,373 |
| Performance income—unrealized | 247,212 |
| | (325,915 | ) | | (228,472 | ) | Management fees of Consolidated Funds eliminated in consolidation | 34,242 |
| | 22,406 |
| | 17,383 |
| Carried interest allocation of Consolidated Funds eliminated in consolidation | — |
| | 1,017 |
| | (2,926 | ) | Incentive fees of Consolidated Funds eliminated in consolidation | 4,000 |
| | 4,075 |
| | 4,065 |
| Principal investment income of Consolidated Funds eliminated in consolidation | 2,502 |
| | 24,587 |
| | (4,760 | ) | Administrative fees(1) | (27,380 | ) | | (34,049 | ) | | (26,934 | ) | Performance income reclass(2) | 205 |
| | 1,936 |
| | 2,479 |
| Principal investment income | (1,047 | ) | | (89,031 | ) | | (50,408 | ) | Revenue of non-controlling interests in consolidated subsidiaries(3) | 44 |
| | 74 |
| | — |
| Total consolidation adjustments and reconciling items | 259,778 |
| | (394,900 | ) | | (289,573 | ) | Total segment revenue | $ | 1,218,239 |
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| $ | 1,085,043 |
| | $ | 964,800 |
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| | (1) | Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. |
| | (2) | Related to performance income for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Consolidated Statements of Operations. |
| | (3) | Adjustments for administrative fees reimbursed attributable to certain of our joint venture partners. |
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Schedule of segment expenses components |
The following table reconciles the Company's consolidated expenses to segment expenses: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Total consolidated expenses | $ | 870,362 |
| | $ | 1,504,758 |
| | $ | 1,016,420 |
| Performance related compensation—unrealized | 221,343 |
| | (237,392 | ) | | (189,582 | ) | Expenses of Consolidated Funds added in consolidation | (92,006 | ) | | (65,501 | ) | | (42,520 | ) | Expenses of Consolidated Funds eliminated in consolidation | 38,242 |
| | 26,481 |
| | 21,447 |
| Administrative fees(1) | (27,380 | ) | | (34,049 | ) | | (26,934 | ) | OMG expenses | (202,043 | ) | | (187,058 | ) | | (158,096 | ) | Acquisition and merger-related expenses | (2,936 | ) | | (280,055 | ) | | (773 | ) | Equity compensation expense | (89,724 | ) | | (69,711 | ) | | (39,065 | ) | Placement fees and underwriting costs | (20,343 | ) | | (19,765 | ) | | (6,424 | ) | Amortization of intangibles | (9,032 | ) | | (17,850 | ) | | (26,638 | ) | Depreciation expense | (16,055 | ) | | (12,631 | ) | | (8,215 | ) | Other expenses(2) | (11,836 | ) | | — |
| | — |
| Expenses of non-controlling interests in consolidated subsidiaries(3) | (3,318 | ) | | (1,689 | ) | | — |
| Total consolidation adjustments and reconciling items | (215,088 | ) | | (899,220 | ) | | (476,800 | ) | Total segment expenses | $ | 655,274 |
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| $ | 605,538 |
| | $ | 539,620 |
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| | (1) | Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. |
| | (2) | Year ended December 31, 2018 includes an $11.8 million payment made to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. |
| | (3) | Costs being borne by certain of our joint venture partners. |
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Schedule of segment other income (expense) components |
The following table reconciles the Company's consolidated other income to segment realized net investment income: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Total consolidated other income | $ | 96,242 |
| | $ | 174,674 |
| | $ | 59,967 |
| Investment (income) loss—unrealized | 49,241 |
| | (46,860 | ) | | (16,653 | ) | Interest and other investment (income) loss—unrealized | 233 |
| | 1,868 |
| | (3,323 | ) | Other income from Consolidated Funds added in consolidation, net | (114,286 | ) | | (154,869 | ) | | (37,388 | ) | Other (income) expense from Consolidated Funds eliminated in consolidation, net | (865 | ) | | 1,059 |
| | (96 | ) | OMG other expense | (3,315 | ) | | (11,828 | ) | | 19,381 |
| Performance income reclass(1) | (205 | ) | | (1,936 | ) | | (2,479 | ) | Principal investment income | 1,047 |
| | 89,031 |
| | 50,408 |
| Change in value of contingent consideration | — |
| | (20,156 | ) | | (17,675 | ) | Other (income) expense | 1,653 |
| | (1,042 | ) | | (1,728 | ) | Other income of non-controlling interests in consolidated subsidiaries(2) | (19 | ) | | (24 | ) | | — |
| Total consolidation adjustments and reconciling items | (66,516 | ) | | (144,757 | ) | | (9,553 | ) | Total segment realized net investment income
| $ | 29,726 |
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| $ | 29,917 |
| | $ | 50,414 |
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| | (1) | Related to performance income for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within net realized and unrealized gain (loss) on investments in the Company’s Consolidated Statements of Operations. |
| | (2) | Costs being borne by certain of our joint venture partners. |
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Reconciliation of segment results to the Company's income before taxes and total assets |
The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Income before taxes | $ | 184,341 |
| | $ | 149,859 |
| | $ | 297,920 |
| Adjustments: | | | | | | Amortization of intangibles | 9,032 |
| | 17,850 |
| | 26,638 |
| Depreciation expense | 16,055 |
| | 12,631 |
| | 8,215 |
| Equity compensation expenses | 89,724 |
| | 69,711 |
| | 39,065 |
| Acquisition and merger-related expenses | 2,936 |
| | 259,899 |
| | (16,902 | ) | Placement fees and underwriting costs | 20,343 |
| | 19,765 |
| | 6,424 |
| OMG expenses, net | 198,728 |
| | 175,230 |
| | 177,477 |
| Other (income) expense(1) | 13,489 |
| | (1,042 | ) | | (1,728 | ) | Expense of non-controlling interests in consolidated subsidiaries(2) | 3,343 |
| | 1,739 |
| | — |
| Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations | (20,643 | ) | | (62,705 | ) | | (2,649 | ) | Total performance (income) loss - unrealized | 247,212 |
| | (325,915 | ) | | (228,472 | ) | Total performance related compensation - unrealized | (221,343 | ) | | 237,392 |
| | 189,582 |
| Total net investment (income) loss - unrealized | 49,474 |
| | (44,992 | ) | | (19,976 | ) | Realized income | 592,691 |
| | 509,422 |
| | 475,594 |
| Total performance income - realized | (357,207 | ) | | (317,787 | ) | | (292,998 | ) | Total performance related compensation - realized | 251,597 |
| | 242,330 |
| | 198,264 |
| Total net investment income - realized | (29,726 | ) | | (29,917 | ) | | (50,414 | ) | Fee related earnings | $ | 457,355 |
| | $ | 404,048 |
| | $ | 330,446 |
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| | (1) | Year ended December 31, 2018 expenses include an $11.8 million payment made to ARCC for rent and utilities for the years ended 2017, 2016, 2015 and 2014, and the first quarter of 2018. |
| | (2) | Adjustments for administrative fees reimbursed and other revenue items attributable to certain of our joint venture partners. |
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Schedule of reconciliation of total segment assets to total assets reported in the Consolidated Statements of Financial Condition |
The reconciliation of total assets reported in the Consolidated Statements of Financial Condition to total segment assets consists of the following: | | | | | | | | | | | | | | For the Year Ended December 31, | | 2018 | | 2017 | | 2016 | Total consolidated assets | $ | 10,154,692 |
| | $ | 8,563,522 |
| | $ | 5,829,712 |
| Total assets from Consolidated Funds added in consolidation | (8,141,280 | ) | | (6,231,245 | ) | | (3,822,010 | ) | Total assets from the Company eliminated in consolidation | 195,002 |
| | 186,904 |
| | 168,390 |
| OMG assets | (65,961 | ) | | (119,702 | ) | | (74,383 | ) | Total consolidation adjustments and reconciling items | (8,012,239 | ) | | (6,164,043 | ) | | (3,728,003 | ) | Total segment assets | $ | 2,142,453 |
| | $ | 2,399,479 |
| | $ | 2,101,709 |
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|