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SEGMENT REPORTING (Tables)
 3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
Adjusted Net Income
Adjusted Net Income
The Company’s chief operating decision maker uses adjusted net income (“ANI”) to evaluate the financial performance of, and make resource allocations and other operating decisions for, the investment management segment. The components of revenues and expenses used in the determination of ANI do not give effect to the consolidation of the funds that the Company manages. In addition, ANI excludes the effect of: (a) non-cash equity-based compensation charges related to unit grants made before the Company’s initial public offering, (b) income taxes, (c) expenses that Oaktree Capital Group, LLC or its Intermediate Holding Companies bear directly and (d) the adjustment for the OCGH non-controlling interest. ANI is calculated at the Oaktree Operating Group level.
ANI was as follows:  
 
Three Months Ended March 31,
 
2013
 
2012
Revenues:
 

 
 

Management fees
$
184,214

 
$
191,262

Incentive income
327,184

 
62,669

Investment income
82,050

 
64,340

Total revenues
593,448

 
318,271

Expenses:
 
 
 

Compensation and benefits
(93,617
)
 
(84,404
)
Equity-based compensation
(652
)
 
—

Incentive income compensation
(130,271
)
 
(27,757
)
General and administrative
(23,988
)
 
(24,794
)
Depreciation and amortization
(1,743
)
 
(1,787
)
Total expenses
(250,271
)
 
(138,742
)
Adjusted net income before interest and other income (expense)
343,177

 
179,529

Interest expense, net of interest income (1)
(7,407
)
 
(8,164
)
Other income (expense), net
(20
)
 
2,267

Adjusted net income
$
335,750

 
$
173,632

 
 
 
 
 
(1)
Interest income was $0.6 million and $0.5 million for the three months ended March 31, 2013 and 2012, respectively.
Reconciliation of Net Income (Loss) Attributable to Oaktree Capital Group, LLC to Adjusted Net Income
A reconciliation of net income attributable to Oaktree Capital Group, LLC to adjusted net income of the investment management segment is presented below.  
 
Three Months Ended March 31,
 
2013
 
2012
Net income attributable to Oaktree Capital Group, LLC
$
57,566

 
$
18,608

Equity-based compensation (1) 
5,800

 
12,189

Income taxes (2)
10,157

 
7,767

Non-Operating Group expenses (3)
210

 
178

OCGH non-controlling interest (3) 
262,017

 
134,890

Adjusted net income
$
335,750

 
$
173,632

 
 
 
 
 
(1)
This adjustment adds back the effect of equity-based compensation charges related to unit grants made before the Company’s initial public offering, which is excluded from adjusted net income because it is a non-cash charge that does not affect the Company's financial position.
(2)
Because adjusted net income is a pre-tax measure, this adjustment eliminates the effect of income tax expense.
(3)
Because adjusted net income is calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or the OCGH non-controlling interest.
Schedule of Reconciliation of Total Segments to Income Loss Attributable to Oaktree Capital Group, LLC and Total Assets
The following tables reconcile the Company’s segment information to the condensed consolidated financial statements:
 
As of or for the Three Months Ended March 31, 2013
 
Segment
 
Adjustments
 
Consolidated
Management fees (1)
$
184,214

 
$
(141,675
)
 
$
42,539

Incentive income (1)
327,184

 
(327,184
)
 
—

Investment income (1)
82,050

 
(69,807
)
 
12,243

Total expenses (2) 
(250,271
)
 
(25,234
)
 
(275,505
)
Interest expense, net (3)
(7,407
)
 
(4,174
)
 
(11,581
)
Other expense, net
(20
)
 
—

 
(20
)
Other income of consolidated funds (4)
—

 
2,626,029

 
2,626,029

Income taxes
—

 
(10,157
)
 
(10,157
)
Net income attributable to non-controlling redeemable interests in consolidated funds
—

 
(2,063,965
)
 
(2,063,965
)
Net income attributable to OCGH non-controlling interest in consolidated subsidiaries
—

 
(262,017
)
 
(262,017
)
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
$
335,750

 
$
(278,184
)
 
$
57,566

Corporate investments, at equity (5)
$
1,117,848

 
$
(1,022,196
)
 
$
95,652

Total assets(6) 
$
2,500,367

 
$
42,416,711

 
$
44,917,078

 
 
 
 
 
(1)
The adjustment represents the elimination of amounts attributable to the consolidated funds.
(2)
The expense adjustment consists of: (a) equity-based compensation charges of $5,800 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $19,224 and (c) expenses incurred by the Intermediate Holding Companies of $210.
(3)
The interest expense adjustment represents the inclusion of interest expense attributable to non-controlling interests of the consolidated funds and the exclusion of segment interest income.
(4)
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income attributable to non-controlling interests of the consolidated funds.
(5)
The adjustment to corporate investments is to remove from segment assets the consolidated funds that are treated as equity method investments for segment reporting purposes.
(6)
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.
 
 
As of or for the Three Months Ended March 31, 2012
 
Segment
 
Adjustments
 
Consolidated
Management fees (1) 
$
191,262

 
$
(159,242
)
 
$
32,020

Incentive income (1)
62,669

 
(57,621
)
 
5,048

Investment income (1)
64,340

 
(58,660
)
 
5,680

Total expenses (2) 
(138,742
)
 
(28,825
)
 
(167,567
)
Interest expense, net (3) 
(8,164
)
 
(2,826
)
 
(10,990
)
Other income, net
2,267

 
—

 
2,267

Other income of consolidated funds (4) 
—

 
2,419,579

 
2,419,579

Income taxes
—

 
(7,767
)
 
(7,767
)
Net income attributable to non-controlling redeemable interests in consolidated funds
—

 
(2,124,772
)
 
(2,124,772
)
Net income attributable to OCGH non-controlling interest in consolidated subsidiaries
—

 
(134,890
)
 
(134,890
)
Adjusted net income/net income attributable to Oaktree Capital Group, LLC
$
173,632

 
$
(155,024
)
 
$
18,608

Corporate investments, at equity (5)
$
1,178,784

 
$
(1,053,070
)
 
$
125,714

Total assets (6)
$
2,072,424

 
$
43,425,604

 
$
45,498,028

 
 
 
 
 
(1)
The adjustment represents the elimination of amounts attributable to the consolidated funds.
(2)
The expense adjustment consists of: (a) equity-based compensation charges of $12,189 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $16,458 and (c) expenses incurred by the Intermediate Holding Companies of $178.
(3)
The interest expense adjustment represents the inclusion of interest expense attributable to non-controlling interests of the consolidated funds and the exclusion of segment interest income.
(4)
The adjustment to other income of consolidated funds primarily represents the inclusion of interest, dividend and other investment income attributable to non-controlling interests of the consolidated funds.
(5)
The adjustment to corporate investments is to remove from segment assets the consolidated funds that are treated as equity method investments for segment reporting purposes.
(6)
The total assets adjustment represents the inclusion of investments and other assets of the consolidated funds, net of segment assets eliminated in consolidation, which are primarily corporate investments in funds and incentive income receivable.