Adjusted Net Income |
ANI was as follows: | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | 2014 | | 2013 | | 2014 | | 2013 | Revenues: | |
| | |
| | |
| | |
| Management fees | $ | 189,119 |
| | $ | 182,487 |
| | $ | 377,519 |
| | $ | 366,701 |
| Incentive income | 59,198 |
| | 338,057 |
| | 352,074 |
| | 665,241 |
| Investment income | 54,199 |
| | 34,576 |
| | 100,679 |
| | 116,626 |
| Total revenues | 302,516 |
| | 555,120 |
| | 830,272 |
| | 1,148,568 |
| Expenses: | | | |
| | | | |
| Compensation and benefits | (92,638 | ) | | (90,166 | ) | | (190,832 | ) | | (183,783 | ) | Equity-based compensation | (5,111 | ) | | (924 | ) | | (9,094 | ) | | (1,576 | ) | Incentive income compensation | (30,147 | ) | | (128,953 | ) | | (167,975 | ) | | (259,224 | ) | General and administrative | (31,131 | ) | | (29,512 | ) | | (61,693 | ) | | (53,500 | ) | Depreciation and amortization | (1,815 | ) | | (1,732 | ) | | (3,736 | ) | | (3,475 | ) | Total expenses | (160,842 | ) | | (251,287 | ) | | (433,330 | ) | | (501,558 | ) | Adjusted net income before interest and other income (expense) | 141,674 |
| | 303,833 |
| | 396,942 |
| | 647,010 |
| Interest expense, net of interest income (1) | (6,934 | ) | | (7,136 | ) | | (13,559 | ) | | (14,543 | ) | Other income (expense), net | 9 |
| | 284 |
| | (1,689 | ) | | 264 |
| Adjusted net income | $ | 134,749 |
| | $ | 296,981 |
| | $ | 381,694 |
| | $ | 632,731 |
|
| | (1) | Interest income was $0.7 million and $0.9 million for the three months ended June 30, 2014 and 2013, respectively, and $1.8 million and $1.5 million for the six months ended June 30, 2014 and 2013, respectively. |
|
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 June 30, 2014 | | Segment | | Adjustments | | Consolidated | Management fees (1) | $ | 189,119 |
| | $ | (137,559 | ) | | $ | 51,560 |
| Incentive income (1) | 59,198 |
| | (59,198 | ) | | — |
| Investment income (1) | 54,199 |
| | (49,809 | ) | | 4,390 |
| Total expenses (2) | (160,842 | ) | | (54,543 | ) | | (215,385 | ) | Interest expense, net (3) | (6,934 | ) | | (18,765 | ) | | (25,699 | ) | Other income, net | 9 |
| | — |
| | 9 |
| Other income of consolidated funds (4) | — |
| | 1,498,129 |
| | 1,498,129 |
| Income taxes | — |
| | (5,761 | ) | | (5,761 | ) | Net income attributable to non-controlling interests in consolidated funds | — |
| | (1,184,244 | ) | | (1,184,244 | ) | Net income attributable to OCGH non-controlling interest in consolidated subsidiaries | — |
| | (91,813 | ) | | (91,813 | ) | Adjusted net income/net income attributable to Oaktree Capital Group, LLC | $ | 134,749 |
| | $ | (103,563 | ) | | $ | 31,186 |
| Corporate investments (5) | $ | 1,468,517 |
| | $ | (1,300,354 | ) | | $ | 168,163 |
| Total assets(6) | $ | 2,909,825 |
| | $ | 48,340,012 |
| | $ | 51,249,837 |
|
| | (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 $5,376 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $42,452, (c) expenses incurred by the Intermediate Holding Companies of $603 and (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of $6,112. |
| | (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 Company’s investments in the consolidated funds, including investments in its CLOs, that are treated as equity- or cost-method investments for segment reporting purposes. Of the $1.5 billion, equity-method investments accounted for $1.3 billion. |
| | (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 June 30, 2013 | | Segment | | Adjustments | | Consolidated | Management fees (1) | $ | 182,487 |
| | $ | (132,390 | ) | | $ | 50,097 |
| Incentive income (1) | 338,057 |
| | (335,740 | ) | | 2,317 |
| Investment income (1) | 34,576 |
| | (35,687 | ) | | (1,111 | ) | Total expenses (2) | (251,287 | ) | | (34,253 | ) | | (285,540 | ) | Interest expense, net (3) | (7,136 | ) | | (6,877 | ) | | (14,013 | ) | Other income, net | 284 |
| | — |
| | 284 |
| Other income of consolidated funds (4) | — |
| | 1,300,787 |
| | 1,300,787 |
| Income taxes | — |
| | (7,991 | ) | | (7,991 | ) | Net income attributable to non-controlling interests in consolidated funds | — |
| | (762,487 | ) | | (762,487 | ) | Net income attributable to OCGH non-controlling interest in consolidated subsidiaries | — |
| | (225,766 | ) | | (225,766 | ) | Adjusted net income/net income attributable to Oaktree Capital Group, LLC | $ | 296,981 |
| | $ | (240,404 | ) | | $ | 56,577 |
| Corporate investments (5) | $ | 1,061,793 |
| | $ | (977,461 | ) | | $ | 84,332 |
| Total assets (6) | $ | 2,678,187 |
| | $ | 41,217,230 |
| | $ | 43,895,417 |
|
| | (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 $6,181 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $27,606 and (c) expenses incurred by the Intermediate Holding Companies of $466. |
| | (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 Company’s investments in 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 Six Months Ended June 30, 2014 | | Segment | | Adjustments | | Consolidated | Management fees (1) | $ | 377,519 |
| | $ | (285,528 | ) | | $ | 91,991 |
| Incentive income (1) | 352,074 |
| | (352,074 | ) | | — |
| Investment income (1) | 100,679 |
| | (91,298 | ) | | 9,381 |
| Total expenses (2) | (433,330 | ) | | (40,374 | ) | | (473,704 | ) | Interest expense, net (3) | (13,559 | ) | | (36,140 | ) | | (49,699 | ) | Other income, net | (1,689 | ) | | — |
| | (1,689 | ) | Other income of consolidated funds (4) | — |
| | 3,284,894 |
| | 3,284,894 |
| Income taxes | — |
| | (13,747 | ) | | (13,747 | ) | Net income attributable to non-controlling interests in consolidated funds | — |
| | (2,509,076 | ) | | (2,509,076 | ) | Net income attributable to OCGH non-controlling interest in consolidated subsidiaries | — |
| | (255,371 | ) | | (255,371 | ) | Adjusted net income/net income attributable to Oaktree Capital Group, LLC | $ | 381,694 |
| | $ | (298,714 | ) | | $ | 82,980 |
| Corporate investments (5) | $ | 1,468,517 |
| | $ | (1,300,354 | ) | | $ | 168,163 |
| Total assets(6) | $ | 2,909,825 |
| | $ | 48,340,012 |
| | $ | 51,249,837 |
|
| | (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 $10,575 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $69,136, (c) expenses incurred by the Intermediate Holding Companies of $885 and (d) the effect of timing differences in the recognition of incentive income compensation expense between adjusted net income and net income attributable to OCG of $40,222. |
| | (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 Company’s investments in the consolidated funds, including investments in its CLOs, that are treated as equity- or cost-method investments for segment reporting purposes. Of the $1.5 billion, equity-method investments accounted for $1.3 billion. |
| | (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 Six Months Ended June 30, 2013 | | Segment | | Adjustments | | Consolidated | Management fees (1) | $ | 366,701 |
| | $ | (274,065 | ) | | $ | 92,636 |
| Incentive income (1) | 665,241 |
| | (662,924 | ) | | 2,317 |
| Investment income (1) | 116,626 |
| | (105,494 | ) | | 11,132 |
| Total expenses (2) | (501,558 | ) | | (59,487 | ) | | (561,045 | ) | Interest expense, net (3) | (14,543 | ) | | (11,051 | ) | | (25,594 | ) | Other income, net | 264 |
| | — |
| | 264 |
| Other income of consolidated funds (4) | — |
| | 3,926,816 |
| | 3,926,816 |
| Income taxes | — |
| | (18,148 | ) | | (18,148 | ) | Net income attributable to non-controlling interests in consolidated funds | — |
| | (2,826,452 | ) | | (2,826,452 | ) | Net income attributable to OCGH non-controlling interest in consolidated subsidiaries | — |
| | (487,783 | ) | | (487,783 | ) | Adjusted net income/net income attributable to Oaktree Capital Group, LLC | $ | 632,731 |
| | $ | (518,588 | ) | | $ | 114,143 |
| Corporate investments (5) | $ | 1,061,793 |
| | $ | (977,461 | ) | | $ | 84,332 |
| Total assets (6) | $ | 2,678,187 |
| | $ | 41,217,230 |
| | $ | 43,895,417 |
|
| | (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 $11,981 related to unit grants made before the Company’s initial public offering, (b) consolidated fund expenses of $46,830 and (c) expenses incurred by the Intermediate Holding Companies of $676. |
| | (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 Company’s investments in 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. |
|