Oaktree Announces Second Quarter 2015 Financial Results

• Assets under management reached a record $103 billion as of June 30, 2015, up 13% year-over-year, on capital inflows of $6.3 billion for the second quarter and a record $24.0 billion for the 12 months ended June 30, 2015.

• Adjusted net income declined to $85.3 million, or $0.44 per Class A unit, for the second quarter of 2015 from $134.7 million, or $0.75, for the second quarter of 2014, primarily on lower investment income and fee-related earnings.

• Distributable earnings declined to $111.2 million, or $0.59 per Class A unit, for the second quarter of 2015 from $116.2 million, or $0.64, for the second quarter of 2014, on lower fee-related earnings.

• GAAP net income attributable to Oaktree Capital Group, LLC was $19.8 million for the second quarter of 2015, as compared with $31.2 million for the second quarter of 2014.

• Oaktree declares a distribution of$0.50 per Class A unit with respect to the second quarter of 2015, bringing aggregate distributions relating to the last four quarters to $2.32.

LOS ANGELES, CA. July 28, 2015 – Oaktree Capital Group, LLC (NYSE: OAK) today reported its unaudited financial results for the quarter ended June 30, 2015.

Jay Wintrob, CEO, said, “Second quarter adjusted net income declined year over year primarily due to lower overall returns from our fund investments.  Fundraising in the second quarter totaled $6.3 billion, helping to achieve our highest-ever assets under management of $103 billion at June 30, up 13% from a year ago.  Gross capital raised over the last twelve months of $24 billion set a new record for any such period, demonstrating the trust and confidence that our clients continue to place in us and the strength of our firm-wide distribution activities.  With record dry powder of $20.1 billion, we’re well positioned for future investment opportunities across multiple strategies.”

Assets under management (“AUM”) and management fee-generating assets under management (“management fee-generating AUM”) as of June 30, 2015 were $103.1 billion and $78.6 billion, respectively, up 13% and 1% from their respective June 30, 2014 balances of $91.1 billion and $77.8 billion. AUM of $103.1 billion surpassed the previous record high of $99.9 billion as of March 31, 2015.

Capital inflows drove the growth in AUM. Gross capital raised was $6.3 billion for the second quarter of 2015 and a record $24.0 billion for the last twelve months. The second quarter included $2.3 billion of new capital commitments for Oaktree Opportunities Funds X and Xb (“Opps X and Xb”), bringing to $9.4 billion their aggregate capital commitments to date, and a first closing of $1.3 billion for Oaktree Real Estate Opportunities Fund VII (“ROF VII”). None of these three funds had begun to generate management fees as of June 30, 2015.

Adjusted net income (“ANI”) declined to $85.3 million and $240.7 million for the second quarter and first six months of 2015, respectively, from $134.7 million and $381.7 million for the comparable periods last year. Distributable earnings declined to $111.2 million and $251.7 million for the second quarter and first six months of 2015, respectively, from $116.2 million and $349.3 million for the comparable periods last year. The second quarter declines were primarily attributable to lower fee-related earnings and, in the case of ANI, lower investment

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income. The declines in ANI and distributable earnings for the six-month period were largely attributable to lower incentive income, primarily stemming from the first quarter’s annual tax-related incentive distributions.

In addition to ANI, Oaktree calculates economic net income (“ENI”) to facilitate comparability with other alternative asset managers that report a measure similar to ENI as a performance metric. Unlike ANI, ENI measures incentive income based on market values of the funds’ holdings. ENI decreased to $17.7 million and $246.5 million for the second quarter and first six months of 2015, respectively, from $211.1 million and $438.4 million for the comparable periods last year. Per Class A unit, ENI was a loss of $0.02 and income of $1.21 for the second quarter and first six months of 2015, respectively, as compared to income of $1.17 and $2.50 for the comparable periods last year.

GAAP-basis results for the second quarter and first six months of 2015 included net income attributable to Oaktree Capital Group, LLC of $19.8 million and $58.1 million, respectively, as compared to $31.2 million and $83.0 million for the comparable periods last year.

Closed-end funds that Oaktree is currently marketing include Oaktree Mezzanine Fund IV (“Mezz IV”), ROF VII, Opps X and Xb, Oaktree Enhanced Income Fund III, Oaktree Infrastructure Fund, European Capital Solutions Fund and Oaktree European Principal Fund IV.

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The table below presents (a) segment revenues, distributable earnings revenues, fee-related earnings revenues and economic net income revenues, in each case for the Operating Group; (b) adjusted net income, distributable earnings, fee-related earnings and economic net income, in each case for both the Operating Group and per Class A unit; and (c) assets under management and accrued incentives (fund level) data. Please refer to the Glossary for definitions. 

	As of or for the Three Months Ended June 30,					As of or for the Six Months Ended June 30,
	2015			2014		2015		2014
	(in thousands, except per unit data or as otherwise indicated)
Segment Results:
Segment revenues	$	270,071		$	302,516	$	664,458	$	830,272
Adjusted net income	85,346			134,749		240,684		381,694
Distributable earnings revenues	285,078			279,829		658,764		792,178
Distributable earnings	111,207			116,173		251,715		349,314
Fee-related earnings revenues	185,558			189,119		373,608		377,519
Fee-related earnings	53,720			63,535		109,675		121,258
Economic net income revenues	144,868			447,594		651,838		1,034,848
Economic net income	17,686			211,146		246,546		438,388
Per Class A unit:
Adjusted net income	$	0.44		$	0.75	$	1.28	$	2.18
Distributable earnings	0.59			0.64		1.39		2.01
Fee-related earnings	0.34			0.34		0.66		0.66
Economic net income (loss)	(0.02		)	1.17		1.21		2.50
Operating Metrics:
Assets under management (in millions):
Assets under management	$	103,060		$	91,089	$	103,060	$	91,089
Management fee-generating assets under management	78,596			77,781		78,596		77,781
Incentive-creating assets under management	33,860			35,088		33,860		35,088
Uncalled capital commitments	20,141			11,040		20,141		11,040
Accrued incentives (fund level):
Incentives created (fund level)	(64,055		)	204,276		201,407		556,650
Incentives created (fund level), net of associated incentive income compensation expense	(36,066		)	106,776		100,233		244,108
Accrued incentives (fund level)	1,936,787			2,481,015		1,936,787		2,481,015
Accrued incentives (fund level), net of associated incentive income compensation expense	1,005,785			1,291,920		1,005,785		1,291,920

Note: Oaktree discloses in this earnings release certain revenues and financial measures, including segment revenues, adjusted net income, adjusted net income per Class A unit, distributable earnings revenues, distributable earnings, distributable earnings per Class A unit, fee-related earnings revenues, fee-related earnings, fee-related earnings per Class A unit, economic net income revenues, economic net income and economic net income per Class A unit, that are calculated and presented on a basis other than generally accepted accounting principles in the United States (“non-GAAP”). Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures are presented at Exhibit A. All non-GAAP measures and all interim results presented in this release are unaudited.

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Operating Metrics

Assets Under Management

AUM was $103.1 billion as of June 30, 2015, $99.9 billion as of March 31, 2015 and $91.1 billion as of June 30, 2014. The $3.2 billion increase since March 31, 2015 reflected $4.7 billion in capital inflows for closed-end funds and a $0.4 billion favorable impact from foreign currency translation, partially offset by $1.4 billion of distributions to closed-end fund investors and $0.6 billion in uncalled capital commitments for closed-end funds at the end of their investment periods. Capital inflows for closed-end funds included $2.3 billion for Opps X and Xb, and $1.3 billion for ROF VII.

The $12.0 billion increase in AUM since June 30, 2014 reflected $18.1 billion of aggregate capital inflows and fee-generating leverage for closed-end and evergreen funds, $2.3 billion from the August 2014 Highstar acquisition and $1.9 billion of net inflows to open-end funds, partially offset by $7.1 billion of distributions to closed-end fund investors, a $2.2 billion negative impact from foreign currency translation and $1.0 billion in uncalled capital commitments for closed-end funds at the end of their investment periods. Capital inflows and fee-generating leverage for closed-end and evergreen funds included $9.4 billion for Opps X and Xb, $1.3 billion for ROF VII, $1.1 billion for Oaktree Enhanced Income Fund II, $1.1 billion for Oaktree Power Opportunities Fund IV (“Power Fund IV”) and $1.1 billion for collateralized loan obligation vehicles (“CLOs”). Distributions to closed-end fund investors included $3.3 billion by Distressed Debt funds, $1.3 billion by Real Estate funds, $1.1 billion by Mezzanine funds and $1.0 billion by Principal Investing funds.

Management Fee-generating Assets Under Management

Management fee-generating AUM was $78.6 billion as of June 30, 2015, $78.5 billion as of March 31, 2015 and $77.8 billion as of June 30, 2014. The $0.1 billion increase since March 31, 2015 reflected $0.4 billion in drawdowns or contributions by closed-end and evergreen funds for which management fees are based on drawn capital or NAV, $0.3 billion from net inflows to open-end funds, a $0.3 billion favorable impact from foreign currency translation and a $0.8 billion decline attributable to closed-end funds in liquidation. Of the $13.0 billion in aggregate potential management fee-generating AUM for Opps X and Xb, ROF VII, Power Fund IV, Oaktree Principal Fund VI (“PF VI”) and Mezz IV, only $168 million from PF VI and Mezz IV had become management fee-generating AUM as of June 30, 2015.

The $0.8 billion increase in management fee-generating AUM since June 30, 2014 reflected $3.0 billion from fee-generating leverage and drawdowns or contributions by closed-end and evergreen funds for which management fees are based on drawn capital or NAV, $1.9 billion from the Highstar acquisition, $1.8 billion from net inflows to open-end funds and $1.3 billion attributable to CLOs and capital commitments to closed-end funds, partially offset by $3.4 billion attributable to closed-end funds in liquidation, a $1.8 billion negative impact from foreign currency translation, $0.6 billion in uncalled capital commitments, $0.6 billion in market-value declines and $0.4 billion of distributions by funds that pay fees based on NAV.

Incentive-creating Assets Under Management

Incentive-creating assets under management (“incentive-creating AUM”) were $33.9 billion as of June 30, 2015, $34.5 billion as of March 31, 2015 and $35.1 billion as of June 30, 2014. The $0.6 billion decrease since March 31, 2015 reflected the net effect of $0.8 billion in drawdowns by closed-end funds, $1.3 billion in distributions by closed-end funds, $0.3 billion in market-value declines and a $0.2 billion positive impact from foreign currency translation. The $1.2 billion decrease since June 30, 2014 reflected the net effect of $4.4 billion in drawdowns by closed-end funds, $1.0 billion from the Highstar acquisition, $0.5 billion in market-value gains, $6.1 billion in distributions by closed-end funds and a $1.0 billion negative impact from foreign currency translation.

Of the $33.9 billion in incentive-creating AUM as of June 30, 2015, $20.1 billion, or 59.3%, was generating incentives at the fund level.

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Accrued Incentives (Fund Level) and Incentives Created (Fund Level)

Accrued incentives (fund level) were $1.9 billion as of June 30, 2015, $2.1 billion as of March 31, 2015 and $2.5 billion as of June 30, 2014. The second quarter of 2015 reflected $64.1 million of negative incentives created (fund level) and $61.1 million of segment incentive income recognized.

Net of incentive income compensation expense, accrued incentives (fund level) were $1.0 billion as of June 30, 2015, $1.1 billion as of March 31, 2015 and $1.3 billion as of June 30, 2014. As of June 30, 2015, March 31, 2015 and June 30, 2014, the portion of net accrued incentives (fund level) represented by funds that were currently paying incentives was $371.1 million, $419.8 million and $475.3 million, respectively, with the remainder arising from funds that as of that date had not yet reached the stage of their cash distribution waterfall where Oaktree was entitled to receive incentives, other than possibly tax-related distributions.

Uncalled Capital Commitments

Uncalled capital commitments were $20.1 billion as of June 30, 2015, $17.2 billion as of March 31, 2015, and $11.0 billion as of June 30, 2014. Capital drawn by closed-end funds during the quarter and twelve months ended June 30, 2015 aggregated $1.5 billion and $7.3 billion, respectively, as compared with $2.5 billion and $7.4 billion for the corresponding prior-year periods.

Segment Results

Revenues

Segment revenues declined $32.4 million, or 10.7%, to $270.1 million in the second quarter of 2015, from $302.5 million in the second quarter of 2014, reflecting decreases of $3.5 million in management fees and $30.8 million in investment income, partially offset by $1.9 million in higher incentive income.

Management Fees

Management fees decreased $3.5 million, or 1.9%, to $185.6 million in the second quarter of 2015, from $189.1 million in the second quarter of 2014. The decline reflected the net effect of an aggregate decrease of $19.6 million primarily among closed-end funds in liquidation and an aggregate increase of $16.1 million from closed-end funds for which management fees are based on drawn capital or NAV, CLOs, net inflows to open-end and evergreen funds, and the Highstar acquisition.

Incentive Income

Incentive income increased $1.9 million, or 3.2%, to $61.1 million in the second quarter of 2015, from $59.2 million in the second quarter of 2014. Oaktree Opportunities Fund VIIb accounted for $59.0 million and $38.9 million of the total incentive income in the second quarters of 2015 and 2014, respectively.

Investment Income

Investment income decreased $30.8 million, or 56.8%, to $23.4 million in the second quarter of 2015, from $54.2 million in the second quarter of 2014, primarily reflecting lower overall returns from our fund investments, amid generally weaker financial markets. Our one-fifth ownership stake in DoubleLine Capital LP and its affiliates (collectively, “DoubleLine”) accounted for investment income of $12.5 million and $10.6 million in the second quarters of 2015 and 2014, respectively, of which performance fees accounted for $0.6 million and $2.6 million, respectively.

Expenses

Compensation and Benefits

Compensation and benefits increased $11.2 million, or 12.1%, to $103.8 million for the second quarter of 2015, from $92.6 million for the second quarter of 2014. The increase primarily reflected growth in headcount, including the Highstar acquisition. The second quarters of 2015 and 2014 included a $1.2 million expense and a $2.0 million

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benefit, respectively, associated with our phantom equity awards, stemming from each period’s equity distribution and change in the Class A unit trading price.

Equity-based Compensation

Equity-based compensation increased $6.8 million, or 133.3%, to $11.9 million for the second quarter of 2015, from $5.1 million for the second quarter of 2014, primarily reflecting non-cash amortization expense associated with vesting of restricted unit grants made to employees and directors subsequent to our initial public offering in 2012.

Incentive Income Compensation

Incentive income compensation expense decreased $0.5 million, or 1.7%, to $29.6 million for the second quarter of 2015, from $30.1 million for the second quarter of 2014. Incentive income compensation expense declined while incentive income increased, primarily due to differences in the applicable compensation percentages.

General and Administrative

General and administrative expense decreased $5.1 million, or 16.4%, to $26.0 million for the second quarter of 2015, from $31.1 million for the second quarter of 2014. Excluding the impact of foreign currency-related items, general and administrative expense decreased $2.3 million, or 7.0%, to $30.4 million from $32.7 million.

Adjusted Net Income

ANI decreased $49.4 million, or 36.7%, to $85.3 million for the second quarter of 2015, from $134.7 million for the second quarter of 2014, primarily reflecting decreases of $30.8 million in investment income and $9.8 million in fee-related earnings. The portion of ANI attributable to our Class A units was $21.4 million and $32.7 million for the second quarters of 2015 and 2014, respectively. Per Class A unit, adjusted net income-OCG was $0.44 and $0.75 for the second quarters of 2015 and 2014, respectively.

The effective tax rate applied to ANI for the second quarters of 2015 and 2014 was 18% and 13%, respectively, resulting from estimated full-year effective rates of 17% and 11%, respectively. The 18% effective tax rate applied to ANI for the second quarter of 2015 was based on an estimated full-year effective tax rate on income that can be reliably forecasted combined with the actual tax expense in the current period on income that cannot be reliably estimated, such as incentive income.  We would expect variability between quarters and for the full year because the effective tax rate is a function of the mix of income and other factors that often vary significantly within or between years, each of which can have a material impact on the particular year’s income tax expense.

Distributable Earnings

Distributable earnings declined $5.0 million, or 4.3%, to $111.2 million for the second quarter of 2015, from $116.2 million for the second quarter of 2014, reflecting a $9.8 million decrease in fee-related earnings, partially offset by a $6.9 million increase in investment income proceeds. For the second quarter of 2015, investment income proceeds totaled $38.4 million, including $30.2 million from fund distributions and $8.2 million from DoubleLine, as compared with total investment income proceeds in the prior-year quarter of $31.5 million, of which $22.9 million and $8.6 million was attributable to fund distributions and DoubleLine, respectively.

The portion of distributable earnings attributable to our Class A units was $0.59 and $0.64 per unit for the second quarters of 2015 and 2014, respectively, reflecting distributable earnings per Operating Group unit of $0.72 and $0.76, respectively, less costs borne by Class A unitholders for professional fees and other expenses, cash taxes attributable to the Intermediate Holding Companies and amounts payable pursuant to the tax receivable agreement.

Fee-related Earnings

Fee-related earnings decreased $9.8 million, or 15.4%, to $53.7 million for the second quarter of 2015, from $63.5 million for the second quarter of 2014. The decrease reflected $3.5 million of lower management fees, an $11.2 million increase in compensation and benefits, and a $5.1 million decrease in general and administrative expense.

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The portion of fee-related earnings attributable to our Class A units was $0.34 per unit for each of the second quarters of 2015 and 2014.

The effective tax rate applicable to fee-related earnings for the second quarters of2015 and 2014 was -1% and 16%, respectively, resulting from full-year effective tax rates of 4% and 15%, respectively.  The rate used for interim fiscal periods is based on the estimated full-year effective tax rate, which is subject to change as the year progresses. In general, the annual effective tax rate increases as annual fee-related earnings increase, and vice versa.

GAAP-basis Results

Net income attributable to Oaktree Capital Group, LLC was $19.8 million for the second quarter of 2015, as compared to $31.2 million for the second quarter of 2014.

Capital and Liquidity

As of June 30, 2015, Oaktree had $1.0 billion of cash and U.S. Treasury securities and $850 million of outstanding debt. Oaktree had then, and currently has, no borrowings outstanding against its $500 million revolving credit facility. As of June 30, 2015, Oaktree’s investments in funds and companies had a carrying value of $1.6 billion, with its 20% investment in DoubleLine carried at cost, as adjusted under the equity method of accounting. Accrued incentives (fund level), net of associated compensation expense, represented an additional $1.0 billion as of that date.

Distribution

Oaktree Capital Group, LLC has declared a distribution attributable to the second quarter of 2015 of $0.50 per Class A unit. This distribution will be paid on August 13, 2015 to Class A unitholders of record at the close of business on August 10, 2015.

Conference Call

Oaktree will host a conference call to discuss its second quarter 2015 results today at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time.  The conference call may be accessed by dialing (888) 769-9724 (U.S. callers) or +1 (415) 228-4639 (non-U.S. callers), participant password OAKTREE.  Alternatively, a live webcast of the conference call can be accessed through the Unitholders – Investor Relations section of the Oaktree website, http://ir.oaktreecapital.com/.

For those individuals unable to listen to the live broadcast of the conference call, a replay will be available for 30 days on Oaktree’s website, or by dialing (800) 873-2041 (U.S. callers) or +1 (203) 369-4005 (non-U.S. callers), beginning approximately one hour after the broadcast.

About Oaktree

Oaktree is a leader among global investment managers specializing in alternative investments, with $103 billion in assets under management as of June 30, 2015. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 900 employees and offices in 17 cities worldwide. For additional information, please visit Oaktree’s website at www.oaktreecapital.com.

Investor Relations Website

Investors and others should note that Oaktree uses the Investors section of its corporate website to announce material information to investors and the marketplace. While not all of the information that Oaktree posts on its corporate website is of a material nature, some information could be deemed to be material. Accordingly, Oaktree encourages investors, the media, and others interested in Oaktree to review the information that it shares on its corporate website at the Unitholders – Investor Relations section of the Oaktree website, http://

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ir.oaktreecapital.com/. Information contained on, or available through, our website is not incorporated by reference into this document.

Contacts:

Investor Relations:	Oaktree Capital Group, LLC
	Andrea D. Williams
	(213) 830-6483
	investorrelations@oaktreecapital.com
Press Relations:	Sard Verbinnen & Co
	John Christiansen
	(415) 618-8750
	jchristiansen@sardverb.com
	Carissa Felger
	(312) 895-4701
	cfelger@sardverb.com

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Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which reflect the current views of Oaktree Capital Group, LLC (“OCG”), with respect to, among other things, our future results of operations and financial performance. In some cases, you can identify forward-looking statements by words such as “anticipate,” “approximately,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “seek,” “should,” “will” and “would” or the negative version of these words or other comparable or similar words. These statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those indicated in these statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity, including, but not limited to, changes in our anticipated revenue and income, which are inherently volatile; changes in the value of our investments; the pace of our raising of new funds; changes in assets under management; the timing and receipt of, and impact of taxes on, carried interest; distributions from and liquidation of our existing funds; the amount and timing of distributions on our Class A units; changes in our operating or other expenses; the degree to which we encounter competition; and general economic and market conditions. The factors listed in the item captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on February 27, 2015, which is accessible on the SEC’s website at www.sec.gov, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations described in our forward-looking statements.

Forward-looking statements speak only as of the date the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

This release and its contents do not constitute and should not be construed as (a) a recommendation to buy, (b) an offer to buy or solicitation of an offer to buy, (c) an offer to sell or (d) advice in relation to, any securities of OCG or securities of any Oaktree investment fund.

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Consolidated Statements of Operations Data (GAAP basis)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Revenues:
Management fees	$	50,923		$	51,560		$	101,742		$	91,991
Incentive income	564			—			564			—
Total revenues	51,487			51,560			102,306			91,991
Expenses:
Compensation and benefits	(107,750		)	(92,735		)	(217,893		)	(191,027		)
Equity-based compensation	(16,083		)	(10,487		)	(27,789		)	(19,669		)
Incentive income compensation	(35,211		)	(36,259		)	(102,103		)	(127,753		)
Total compensation and benefits expense	(159,044		)	(139,481		)	(347,785		)	(338,449		)
General and administrative	(33,488		)	(31,665		)	(40,068		)	(63,903		)
Depreciation and amortization	(3,107		)	(1,815		)	(5,999		)	(3,736		)
Consolidated fund expenses	(50,290		)	(42,424		)	(88,051		)	(67,616		)
Total expenses	(245,929		)	(215,385		)	(481,903		)	(473,704		)
Other income (loss):
Interest expense	(52,742		)	(25,699		)	(99,311		)	(49,699		)
Interest and dividend income	478,311			284,061			1,001,240			646,197
Net realized gain on consolidated funds’ investments	857,548			514,178			1,332,378			1,168,329
Net change in unrealized appreciation (depreciation) on consolidated funds’ investments	(1,418,385		)	699,890			(910,902		)	1,470,368
Investment income	15,694			4,390			28,376			9,381
Other income (expense), net	2,863			9			7,557			(1,689		)
Total other income	(116,711		)	1,476,829			1,359,338			3,242,887
Income (loss) before income taxes	(311,153		)	1,313,004			979,741			2,861,174
Income taxes	(5,485		)	(5,761		)	(13,360		)	(13,747		)
Net income (loss)	(316,638		)	1,307,243			966,381			2,847,427
Less:
Net (income) loss attributable to non-controlling interests in consolidated funds	391,961			(1,184,244		)	(744,704		)	(2,509,076		)
Net income attributable to non-controlling interests in consolidated subsidiaries	(55,509		)	(91,813		)	(163,610		)	(255,371		)
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980
Distributions declared per Class A unit	$	0.64		$	0.98		$	1.20		$	1.98
Net income per unit (basic and diluted):
Net income per Class A unit	$	0.41		$	0.72		$	1.24		$	1.99
Weighted average number of Class A units outstanding	48,372			43,480			46,727			41,600

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Segment Financial Data

	As of or for the Three Months Ended June 30,						As of or for the Six Months Ended June 30,
	2015			2014			2015			2014
Segment Statements of Operations Data: (1)	(in thousands, except per unit data or as otherwise indicated)
Revenues:
Management fees	$	185,558		$	189,119		$	373,608		$	377,519
Incentive income	61,148			59,198			214,027			352,074
Investment income	23,365			54,199			76,823			100,679
Total revenues	270,071			302,516			664,458			830,272
Expenses:
Compensation and benefits	(103,761		)	(92,638		)	(209,615		)	(190,832		)
Equity-based compensation	(11,901		)	(5,111		)	(18,924		)	(9,094		)
Incentive income compensation	(29,554		)	(30,147		)	(119,656		)	(167,975		)
General and administrative	(25,972		)	(31,131		)	(50,322		)	(61,693		)
Depreciation and amortization	(2,105		)	(1,815		)	(3,996		)	(3,736		)
Total expenses	(173,293		)	(160,842		)	(402,513		)	(433,330		)
Adjusted net income before interest and other income (expense)	96,778			141,674			261,945			396,942
Interest expense, net of interest income (2).	(8,782		)	(6,934		)	(17,715		)	(13,559		)
Other income (expense), net	(2,650		)	9			(3,546		)	(1,689		)
Adjusted net income	$	85,346		$	134,749		$	240,684		$	381,694
Adjusted net income-OCG	$	21,443		$	32,719		$	59,728		$	90,594
Adjusted net income per Class A unit	0.44			0.75			1.28			2.18
Distributable earnings	111,207			116,173			251,715			349,314
Distributable earnings-OCG	28,656			27,782			64,951			83,594
Distributable earnings per Class A unit	0.59			0.64			1.39			2.01
Fee-related earnings	53,720			63,535			109,675			121,258
Fee-related earnings-OCG	16,451			14,601			31,007			27,524
Fee-related earnings per Class A unit	0.34			0.34			0.66			0.66
Economic net income	17,686			211,146			246,546			438,388
Economic net income (loss)-OCG	(957		)	50,674			56,522			103,896
Economic net income (loss) per Class A unit	(0.02		)	1.17			1.21			2.50
Weighted average number of Operating Group units outstanding	153,839			152,701			153,540			152,487
Weighted average number of Class A units outstanding	48,372			43,480			46,727			41,600
Operating Metrics:
Assets under management (in millions):
Assets under management	$	103,060		$	91,089		$	103,060		$	91,089
Management fee-generating assets under management	78,596			77,781			78,596			77,781
Incentive-creating assets under management	33,860			35,088			33,860			35,088
Uncalled capital commitments (3).	20,141			11,040			20,141			11,040
Accrued incentives (fund level): (4)
Incentives created (fund level)	(64,055		)	204,276			201,407			556,650
Incentives created (fund level), net of associated incentive income compensation expense	(36,066		)	106,776			100,233			244,108
Accrued incentives (fund level)	1,936,787			2,481,015			1,936,787			2,481,015
Accrued incentives (fund level), net of associated incentive income compensation expense	1,005,785			1,291,920			1,005,785			1,291,920

11

(1) Our business is comprised of one segment, our investment management segment, which consists of the investment management services that we provide to our clients. The components of revenues and expenses used in determining adjusted net income do not give effect to the consolidation of the funds that we manage. Segment revenues include investment income (loss) that is classified in other income (loss) in the GAAP-basis statements of operations. Segment revenues and expenses also reflect Oaktree's proportionate economic interest in Highstar, whereby amounts received for contractually reimbursable costs are included with segment expenses, as compared to being recorded as other income under GAAP. In addition, adjusted net income excludes the effect of (a) non-cash equity-based compensation charges related to unit grants made before our initial public offering, (b) acquisition-related items including amortization of intangibles and changes in the contingent consideration liability, (c) differences arising from equity value units (“EVUs”) that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes, (d) income taxes, (e) other income or expenses applicable to OCG or its Intermediate Holding Companies and (f) the adjustment for non-controlling interests. Incentive income and incentive income compensation expense are included in adjusted net income when the underlying fund distributions are known or knowable as of the respective quarter end, which may be later than the time at which the same revenue or expense is included in the GAAP-basis statements of operations, for which the revenue standard is fixed or determinable and the expense standard is probable and reasonably estimable. Adjusted net income is calculated at the Operating Group level. For additional information regarding the reconciling adjustments discussed above, please see Exhibit A.

(2) Interest income was $1.2 million and $0.7 million for the three months ended June 30, 2015 and 2014, respectively, and $2.2 million and $1.8 million for the six months ended June 30, 2015 and 2014, respectively.

(3) Uncalled capital commitments represent undrawn capital commitments by partners (including Oaktree as general partner) of our closed-end funds through their investment periods and certain evergreen funds. If a fund distributes capital during its investment period, that capital is typically subject to possible recall, in which case it is included in uncalled capital commitments.

(4) Our funds record as accrued incentives the incentive income that would be paid to us if the funds were liquidated at their reported values as of the date of the financial statements. Incentives created (fund level) refers to the gross amount of potential incentives generated by the funds during the period. We refer to the amount of incentive income recognized as revenue by us as segment incentive income. Amounts recognized by us as incentive income are no longer included in accrued incentives (fund level), the term we use for remaining fund-level accruals. Incentives created (fund level), incentive income and accrued incentives (fund level) are presented gross, without deduction for direct compensation expense that is owed to our investment professionals associated with the particular fund when we earn the incentive income. We call that charge “incentive income compensation expense.” Incentive income compensation expense varies by the investment strategy and vintage of the particular fund, among many factors.

12

Operating Metrics

We monitor certain operating metrics that are either common to the alternative asset management industry or that we believe provide important data regarding our business. As described below, these operating metrics include AUM, management fee-generating AUM, incentive-creating AUM, incentives created (fund level), accrued incentives (fund level) and uncalled capital commitments.

Assets Under Management				As of
				June 30, 2015			March 31, 2015			June 30, 2014
				(in millions)
Assets Under Management:
Closed-end funds				$	59,014		$	56,259		$	48,162
Open-end funds				38,813			38,340			37,980
Evergreen funds				5,233			5,304			4,947
Total				$	103,060		$	99,903		$	91,089
	Three Months Ended June 30,						Twelve Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Change in Assets Under Management:
Beginning balance	$	99,903		$	86,226		$	91,089		$	76,400
Closed-end funds:
Capital commitments/other (1).	4,741			1,160			16,110			5,801
Acquisition (Highstar)	—			—			2,349			—
Distributions for a realization event/other (2).	(1,405		)	(1,245		)	(7,101		)	(7,335		)
Uncalled capital commitments at end of investment period	(632		)	—			(1,041		)	(146		)
Foreign currency translation	249			(46		)	(1,350		)	293
Change in market value (3).	(209		)	1,138			760			4,923
Change in applicable leverage	11			253			1,125			429
Open-end funds:
Contributions	1,501			3,618			7,021			8,496
Redemptions	(1,189		)	(1,291		)	(5,163		)	(3,569		)
Foreign currency translation	134			(21		)	(825		)	189
Change in market value (3).	27			763			(200		)	3,593
Evergreen funds:
Contributions or new capital commitments	27			544			866			1,830
Redemptions or distributions	(115		)	(94		)	(281		)	(219		)
Distributions from restructured funds	—			—			(44		)	(34		)
Foreign currency translation	2			(1		)	9			2
Change in market value (3).	15			85			(264		)	436
Ending balance	$	103,060		$	91,089		$	103,060		$	91,089

(1) These amounts represent capital commitments, as well as the aggregate par value of collateral assets and principal cash associated with our CLOs.

(2) These amounts represent distributions for a realization event, tax-related distributions, reductions in the par value of collateral assets and principal cash resulting from the repayment of debt by our CLOs, and recallable distributions at the end of the investment period.

(3) The change in market value reflects the change in NAV of our funds resulting from current income and realized and unrealized gains/losses on investments, less management fees and other fund expenses, as well as changes in the aggregate par value of collateral assets and principal cash held by our CLOs resulting from other activities.

13

Management Fee-generating AUM				As of
				June 30, 2015			March 31, 2015			June 30, 2014
Management Fee-generating Assets Under Management:				(in millions)
Closed-end funds:
Senior Loans				$	6,108		$	6,032		$	3,855
Other closed-end funds				30,108			30,614			32,658
Open-end funds				38,731			38,257			37,940
Evergreen funds				3,649			3,594			3,328
Total				$	78,596		$	78,497		$	77,781
	Three Months Ended June 30,						Twelve Months Ended June 30,
	2015			2014			2015			2014
Change in Management Fee-generating Assets Under Management:	(in millions)
Beginning balance	$	78,497		$	74,027		$	77,781		$	64,614
Closed-end funds:
Capital commitments to funds that pay fees based on committed capital/other (1).	114			541			1,287			6,766
Acquisition (Highstar)	—			—			1,882			—
Capital drawn by funds that pay fees based on drawn capital or NAV	203			317			1,002			946
Change attributable to funds in liquidation (2).	(754		)	(603		)	(3,417		)	(4,117		)
Uncalled capital commitments at end of investment period for funds that pay fees based on committed capital	(36		)	—			(640		)	(664		)
Distributions by funds that pay fees based on NAV/other (3).	(136		)	(208		)	(440		)	(522		)
Foreign currency translation	138			(11		)	(964		)	272
Change in market value (4).	(22		)	57			(142		)	298
Change in applicable leverage	63			244			1,135			415
Open-end funds:
Contributions	1,501			3,636			6,976			8,500
Redemptions	(1,189		)	(1,292		)	(5,147		)	(3,572		)
Foreign currency translation	135			(21		)	(823		)	189
Change in market value	27			762			(215		)	3,588
Evergreen funds:
Contributions or capital drawn by funds that pay fees based on drawn capital or NAV	168			369			833			914
Redemptions or distributions	(114		)	(94		)	(261		)	(219		)
Change in market value	1			57			(251		)	373
Ending balance	$	78,596		$	77,781		$	78,596		$	77,781

(1) These amounts represent capital commitments to funds that pay fees based on committed capital, as well as the aggregate par value of collateral assets and principal cash associated with our CLOs.

(2) These amounts represent the change for funds that pay fees based on the lesser of funded capital or cost basis during the liquidation period, as well as recallable distributions at the end of the investment period. For most closed-end funds, management fees are charged during the liquidation period on the lesser of (a) total funded capital or (b) the cost basis of assets remaining in the fund, with the cost basis of assets generally calculated by excluding cash balances. Thus, changes in fee basis during the liquidation period are not dependent on distributions made from the fund; rather, they are tied to the cost basis of the fund’s investments, which generally declines as the fund sells assets.

(3) These amounts represent distributions by funds that pay fees based on NAV, as well as reductions in the par value of collateral assets and principal cash resulting from the repayment of debt by our CLOs.

(4) The change in market value reflects certain funds that pay management fees based on NAV and leverage, as applicable, as well as changes in the aggregate par value of collateral assets and principal cash held by our CLOs resulting from other activities.

14

	As of
	June 30, 2015			March 31, 2015			June 30, 2014
Reconciliation of Assets Under Management to Management Fee-generating Assets Under Management:	(in millions)
Assets under management	$	103,060		$	99,903		$	91,089
Difference between assets under management and committed capital or cost basis for applicable closed-end funds (1).	(4,595		)	(5,620		)	(7,373		)
Undrawn capital commitments to funds that have not yet commenced their investment periods	(13,184		)	(9,190		)	(571		)
Undrawn capital commitments to funds for which management fees are based on drawn capital or NAV	(4,237		)	(4,238		)	(3,623		)
Oaktree’s general partner investments in management fee-generating funds	(1,200		)	(1,200		)	(1,118		)
Closed-end funds that are no longer paying management fees and co-investments that pay no management fees	(1,032		)	(939		)	(425		)
Funds for which management fees were permanently waived	(216		)	(219		)	(198		)
Management fee-generating assets under management	$	78,596		$	78,497		$	77,781

(1) This difference is not applicable to closed-end funds that pay management fees based on NAV or leverage.

The period-end weighted average annual management fee rates applicable to the respective management fee-generating AUM balances above are set forth below, and reflect the applicable contractual fee rates, exclusive of the impact of special items such as retroactive management fees and the collection of deferred contingent management fees. 

	As of
Weighted Average Annual Management Fee Rates:	June 30, 2015		March 31, 2015		June 30, 2014
Closed-end funds:
Senior Loans	0.50	%	0.50	%	0.50	%
Other closed-end funds	1.54		1.54		1.55
Open-end funds	0.48		0.47		0.47
Evergreen funds	1.49		1.50		1.57
Overall	0.93		0.94		0.97

15

Incentive-creating AUM

	As of
	June 30, 2015		March 31, 2015		June 30, 2014
Incentive-creating Assets Under Management:	(in millions)
Closed-end funds	$	31,811	$	32,374	$	32,789
Evergreen funds	2,049		2,084		2,299
Total	$	33,860	$	34,458	$	35,088

Accrued Incentives (Fund Level) and Incentives Created (Fund Level)

	As of or for the Three Months Ended June 30,						As of or for the Six Months Ended June 30,
	2015			2014			2015			2014
Accrued Incentives (Fund Level):	(in thousands)
Beginning balance	$	2,061,990		$	2,335,937		$	1,949,407		$	2,276,439
Incentives created (fund level):
Closed-end funds	(64,685		)	197,639			200,772			535,222
Evergreen funds	630			6,637			635			21,428
Total incentives created (fund level)	(64,055		)	204,276			201,407			556,650
Less: segment incentive income recognized by us	(61,148		)	(59,198		)	(214,027		)	(352,074		)
Ending balance	$	1,936,787		$	2,481,015		$	1,936,787		$	2,481,015
Accrued incentives (fund level), net of associated incentive income compensation expense	$	1,005,785		$	1,291,920		$	1,005,785		$	1,291,920

Uncalled Capital Commitments

Uncalled capital commitments were $20.1 billion as of June 30, 2015, as compared with $17.2 billion as of March 31, 2015 and $11.0 billion as of June 30, 2014.

16

Segment Results

Our business is comprised of one segment, our investment management segment, which consists of the investment management services that we provide to our clients.

Adjusted Net Income

Adjusted net income and adjusted net income-OCG, as well as per unit data, are set forth below: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Revenues:
Management fees	$	185,558		$	189,119		$	373,608		$	377,519
Incentive income	61,148			59,198			214,027			352,074
Investment income	23,365			54,199			76,823			100,679
Total revenues	270,071			302,516			664,458			830,272
Expenses:
Compensation and benefits	(103,761		)	(92,638		)	(209,615		)	(190,832		)
Equity-based compensation	(11,901		)	(5,111		)	(18,924		)	(9,094		)
Incentive income compensation	(29,554		)	(30,147		)	(119,656		)	(167,975		)
General and administrative	(25,972		)	(31,131		)	(50,322		)	(61,693		)
Depreciation and amortization	(2,105		)	(1,815		)	(3,996		)	(3,736		)
Total expenses	(173,293		)	(160,842		)	(402,513		)	(433,330		)
Adjusted net income before interest and other income (expense)	96,778			141,674			261,945			396,942
Interest expense, net of interest income	(8,782		)	(6,934		)	(17,715		)	(13,559		)
Other income (expense), net	(2,650		)	9			(3,546		)	(1,689		)
Adjusted net income	85,346			134,749			240,684			381,694
Adjusted net income attributable to OCGH non-controlling interest	(58,510		)	(96,382		)	(168,167		)	(278,943		)
Non-Operating Group expenses	(626		)	(603		)	(960		)	(885		)
Adjusted net income-OCG before income taxes	26,210			37,764			71,557			101,866
Income taxes-OCG	(4,767		)	(5,045		)	(11,829		)	(11,272		)
Adjusted net income-OCG	$	21,443		$	32,719		$	59,728		$	90,594
Adjusted net income per Class A unit	$	0.44		$	0.75		$	1.28		$	2.18
Weighted average number of Class A units outstanding	48,372			43,480			46,727			41,600

17

Investment Income

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
Income (loss) from investments in funds:	(in thousands)
Oaktree funds:
Corporate Debt	$	4,662		$	8,329	$	16,013		$	17,164
Convertible Securities	63			531		1,011			939
Distressed Debt	(6,648		)	18,719		(4,712		)	39,193
Control Investing	1,526			5,640		19,283			16,682
Real Estate	3,254			7,272		9,023			12,738
Listed Equities	6,010			10,131		9,150			6,171
Non-Oaktree funds	2,140			380		4,733			1,303
Income from investments in companies	12,358			3,197		22,322			6,489
Total investment income	$	23,365		$	54,199	$	76,823		$	100,679

18

Distributable Earnings and Distribution Calculation

Distributable earnings and the calculation of distributions are set forth below: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Distributable Earnings:	(in thousands, except per unit data)
Revenues:
Management fees	$	185,558		$	189,119		$	373,608		$	377,519
Incentive income	61,148			59,198			214,027			352,074
Receipts of investment income from funds (1).	30,197			22,911			54,158			44,569
Receipts of investment income from companies	8,175			8,601			16,971			18,016
Total distributable earnings revenues	285,078			279,829			658,764			792,178
Expenses:
Compensation and benefits	(103,761		)	(92,638		)	(209,615		)	(190,832		)
Incentive income compensation	(29,554		)	(30,147		)	(119,656		)	(167,975		)
General and administrative	(25,972		)	(31,131		)	(50,322		)	(61,693		)
Depreciation and amortization	(2,105		)	(1,815		)	(3,996		)	(3,736		)
Total expenses	(161,392		)	(155,731		)	(383,589		)	(424,236		)
Other income (expense):
Interest expense, net of interest income	(8,782		)	(6,934		)	(17,715		)	(13,559		)
Operating Group income taxes	(1,047		)	(1,000		)	(2,199		)	(3,380		)
Other income (expense), net	(2,650		)	9			(3,546		)	(1,689		)
Distributable earnings	$	111,207		$	116,173		$	251,715		$	349,314
Distribution Calculation:
Operating Group distribution with respect to the period	$	93,940		$	102,307		$	212,398		$	287,078
Distribution per Operating Group unit	$	0.61		$	0.67		$	1.38		$	1.88
Adjustments per Class A unit:
Distributable earnings-OCG income tax expense	—			(0.02		)	(0.02		)	(0.15		)
Tax receivable agreement	(0.10		)	(0.09		)	(0.20		)	(0.18		)
Non-Operating Group expenses	(0.01		)	(0.01		)	(0.02		)	(0.02		)
Distribution per Class A unit (2).	$	0.50		$	0.55		$	1.14		$	1.53

(1) This adjustment characterizes a portion of the distributions received from funds as receipts of investment income or loss. In general, the income or loss component of a fund distribution is calculated by multiplying the amount of the distribution by the ratio of our investment’s undistributed income or loss to our remaining investment balance. In addition, if the distribution is made during the investment period, it is generally not reflected in distributable earnings until after the investment period ends.

(2) With respect to the quarter ended June 30, 2015, the distribution was announced on July 28, 2015 and is payable on August 13, 2015.

19

Units Outstanding

	Three Months Ended June 30,		Six Months Ended June 30,
	2015	2014	2015	2014
	(in thousands)
Weighted Average Units:
OCGH	105,467	109,221	106,813	110,887
Class A	48,372	43,480	46,727	41,600
Total	153,839	152,701	153,540	152,487
Units Eligible for Fiscal Period Distribution:
OCGH	105,628	109,217
Class A	48,372	43,480
Total	154,000	152,697

Fee-related Earnings

Fee-related earnings and fee-related earnings-OCG, as well as per unit data, are set forth below: 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Management fees:
Closed-end funds	$	124,508		$	132,256		$	254,110		$	269,294
Open-end funds	46,577			43,544			91,018			83,198
Evergreen funds	14,473			13,319			28,480			25,027
Total management fees	185,558			189,119			373,608			377,519
Expenses:
Compensation and benefits	(103,761		)	(92,638		)	(209,615		)	(190,832		)
General and administrative	(25,972		)	(31,131		)	(50,322		)	(61,693		)
Depreciation and amortization	(2,105		)	(1,815		)	(3,996		)	(3,736		)
Total expenses	(131,838		)	(125,584		)	(263,933		)	(256,261		)
Fee-related earnings	53,720			63,535			109,675			121,258
Fee-related earnings attributable to OCGH non-controlling interest	(36,829		)	(45,445		)	(76,329		)	(88,118		)
Non-Operating Group expenses	(652		)	(604		)	(987		)	(886		)
Fee-related earnings-OCG before income taxes	16,239			17,486			32,359			32,254
Fee-related earnings-OCG income tax (expense) benefit	212			(2,885		)	(1,352		)	(4,730		)
Fee-related earnings-OCG	$	16,451		$	14,601		$	31,007		$	27,524
Fee-related earnings per Class A unit	$	0.34		$	0.34		$	0.66		$	0.66
Weighted average number of Class A units outstanding	48,372			43,480			46,727			41,600

20

Segment Statements of Financial Condition

	As of
	June 30, 2015		March 31, 2015		June 30, 2014
	(in thousands)
Assets:
Cash and cash-equivalents	$	308,192	$	434,232	$	413,864
U.S. Treasury securities	681,197		570,749		405,089
Corporate investments	1,560,235		1,503,621		1,468,517
Deferred tax assets	430,756		430,873		373,037
Receivables and other assets	269,112		313,599		249,318
Total assets	$	3,249,492	$	3,253,074	$	2,909,825
Liabilities and Capital:
Liabilities:
Accounts payable and accrued expenses	$	267,925	$	252,006	$	261,104
Due to affiliates	371,276		371,988		322,949
Debt obligations	850,000		850,000		600,000
Total liabilities	1,489,201		1,473,994		1,184,053
Capital:
OCGH non-controlling interest in consolidated subsidiaries	1,146,303		1,159,339		1,180,620
Unitholders’ capital attributable to Oaktree Capital Group, LLC	613,988		619,741		545,152
Total capital	1,760,291		1,779,080		1,725,772
Total liabilities and capital	$	3,249,492	$	3,253,074	$	2,909,825

Corporate Investments

	As of
	June 30, 2015		March 31, 2015		June 30, 2014
Investments in funds:	(in thousands)
Oaktree funds:
Corporate Debt	$	491,685	$	426,543	$	291,241
Convertible Securities	19,709		19,647		19,494
Distressed Debt	416,532		429,173		508,477
Control Investing	256,963		262,492		244,913
Real Estate	142,513		145,330		136,312
Listed Equities	152,914		148,383		145,934
Non-Oaktree funds	65,351		49,706		50,400
Investments in companies	14,568		22,347		71,746
Total corporate investments	$	1,560,235	$	1,503,621	$	1,468,517

21

Fund Data

Information regarding our closed-end, open-end and evergreen funds, together with benchmark data where applicable, is set forth below. For our closed-end and evergreen funds, no benchmarks are presented in the tables as there are no known comparable benchmarks for these funds’ investment philosophy, strategy and implementation.

Closed-end Funds

			As of June 30, 2015
	Investment Period		Total Committed Capital		Drawn Capital (1)		Fund Net Income Since Inception			Distri-butions Since Inception		Net Asset Value		Manage- ment Fee-gener- ating AUM		Oaktree Segment Incentive Income Recog- nized		Accrued Incentives (Fund Level) (2)		Unreturned Drawn Capital Plus Accrued Preferred Return (3)		IRR Since Inception (4)				Multiple of Drawn Capital (5)
	Start Date	End Date																				Gross		Net
	(in millions)
Distressed Debt
Oaktree Opportunities Fund Xb	TBD	—	$	6,657	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—	n/a		n/a		n/a
Oaktree Opportunities Fund X	TBD	—	2,793		—		—			—		—		—		—		—		—		n/a		n/a		n/a
Oaktree Opportunities Fund IX	Jan. 2014	Jan. 2017	5,066		4,813		(25		)	2		4,786		4,966		—		—		5,296		3.5	%	(0.5	)%	1.1x
Oaktree Opportunities Fund VIIIb	Aug. 2011	Aug. 2014	2,692		2,692		656			631		2,717		2,319		44		—		2,756		10.9		8.1		1.3
Special Account B	Nov. 2009	Nov. 2012	1,031		1,092		556			950		698		698		15		9		549		15.4		12.9		1.6
Oaktree Opportunities Fund VIII	Oct. 2009	Oct. 2012	4,507		4,507		2,268			3,936		2,839		2,282		140		302		2,112		14.3		10.0		1.6
Special Account A	Nov. 2008	Oct. 2012	253		253		306			463		96		75		42		19		—		29.5		24.0		2.2
OCM Opportunities Fund VIIb	May 2008	May 2011	10,940		9,844		9,123			17,327		1,640		1,389		1,453		320		—		22.6		17.2		2.0
OCM Opportunities Fund VII	Mar. 2007	Mar. 2010	3,598		3,598		1,515			4,506		607		880		81		—		631		10.6		8.1		1.5
OCM Opportunities Fund VI	Jul. 2005	Jul. 2008	1,773		1,773		1,320			2,833		260		378		134		124		—		12.1		8.9		1.8
OCM Opportunities Fund V	Jun. 2004	Jun. 2007	1,179		1,179		956			2,049		86		—		170		17		—		18.5		14.2		1.9
Legacy funds (6).	Various	Various	9,543		9,543		8,199			17,695		47		—		1,113		10		—		24.2		19.3		1.9
																						22.4	%	16.8	%
Real Estate Opportunities
Oaktree Real Estate Opportunities Fund VII	TBD	—	$	1,345	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—	n/a		n/a		n/a
Oaktree Real Estate Opportunities Fund VI	Aug. 2012	Aug. 2016	2,677		2,410		780			52		3,138		2,610		2		149		2,667		25.1	%	16.8	%	1.4x
Oaktree Real Estate Opportunities Fund V	Mar. 2011	Mar. 2015	1,283		1,283		827			876		1,234		704		28		130		789		19.4		14.2		1.7
Special Account D	Nov. 2009	Nov. 2012	256		263		171			246		188		96		2		15		122		15.8		13.6		1.7
Oaktree Real Estate Opportunities Fund IV	Dec. 2007	Dec. 2011	450		450		384			534		300		190		15		57		126		16.9		11.5		2.0
OCM Real Estate Opportunities Fund III	Sep. 2002	Sep. 2005	707		707		643			1,290		60		—		115		12		—		15.5		11.6		2.0
Legacy funds (6).	Various	Various	1,634		1,610		1,399			3,009		—		—		112		—		—		15.2		12.0		1.9
																						15.9	%	12.4	%
Real Estate Debt
Oaktree Real Estate Debt Fund (7).	Sep. 2013	Sep. 2016	$	1,112	$	173	$	29		$	16	$	186	$	189	$	—	$	4	$	165	25.8	%	18.0	%	1.2x
Oaktree PPIP Fund (8).	Dec. 2009	Dec. 2012	2,322		1,113		457			1,570		—		—		47		—		—		28.2		n/a		1.4
European Principal Investments (9)
Oaktree European Principal Fund III	Nov. 2011	Nov. 2016	€	3,164	€	2,291	€	1,037		€	284	€	3,044	€	3,230	€	—	€	201	€	2,411	24.2	%	15.5	%	1.6x
OCM European Principal Opportunities Fund II	Dec. 2007	Dec. 2012	€	1,759	€	1,685	€	863		€	1,475	€	1,073	€	1,007	€	29	€	123	€	909	13.4		8.4		1.7
OCM European Principal Opportunities Fund	Mar. 2006	Mar. 2009	$	495	$	473	$	452		$	822	$	103	$	91	$	30	$	56	$	—	11.8		8.9		2.1
																						15.4	%	10.4	%
European Private Debt
Oaktree European Dislocation Fund (7).	Oct. 2013	Oct. 2016	€	294	€	127	€	19		€	48	€	98	€	124	€	—	€	3	€	83	36.4%		26.6%		1.2x
Special Account E	Oct. 2013	Apr. 2015	€	379	€	245	€	34		€	29	€	250	€	202	€	—	€	5	€	232	19.3		15.0		1.2
																						23.4%		17.8%

22

			As of June 30, 2015
	Investment Period		Total Committed Capital		Drawn Capital (1)			Fund Net Income Since Inception			Distri-butions Since Inception		Net Asset Value		Manage- ment Fee-gener- ating AUM			Oaktree Segment Incentive Income Recog- nized		Accrued Incentives (Fund Level) (2)			Unreturned Drawn Capital Plus Accrued Preferred Return (3)		IRR Since Inception (4)					Multiple of Drawn Capital (5)
	Start Date	End Date																							Gross			Net
	(in millions)
Global Principal Investments
Oaktree Principal Fund VI (10)	TBD (11)	—	$	1,006	$	59		$	29		$	14	$	74	$	58		$	—	$	—		$	47	nm			nm		1.6x
Oaktree Principal Fund V	Feb. 2009	Feb. 2015	2,827		2,586			683			1,100		2,169		1,839			50		—			2,265		12.0	%		7.6	%	1.4
Special Account C	Dec. 2008	Feb. 2014	505		457			281			296		442		395			16		39			323		15.9			11.4		1.7
OCM Principal Opportunities Fund IV	Oct. 2006	Oct. 2011	3,328		3,328			2,051			3,438		1,941		1,225			22		190			1,703		11.1			8.2		1.7
OCM Principal Opportunities Fund III	Nov. 2003	Nov. 2008	1,400		1,400			885			2,159		126		—			147		24			—		13.9			9.6		1.8
Legacy funds (6).	Various	Various	2,301		2,301			1,839			4,137		3		—			236		1			—		14.5			11.6		1.8
																									13.4	%		9.9	%
Power Opportunities
Oaktree Power Opportunities Fund IV	TBD	—	$	1,106	$	—		$	—		$	—	$	—	$	—		$	—	$	—		$	—	n/a			n/a		n/a
Oaktree Power Opportunities Fund III	Apr. 2010	Apr. 2015	1,062		648			197			195		650		511			—		37			573		19.7	%		10.4	%	1.4x
OCM/GFI Power Opportunities Fund II	Nov. 2004	Nov. 2009	1,021		541			1,458			1,930		69		39			96		4			—		76.1			58.8		3.9
OCM/GFI Power Opportunities Fund	Nov. 1999	Nov. 2004	449		383			251			634		—		—			23		—			—		20.1			13.1		1.8
																									34.7	%		26.6	%
Infrastructure Investing
Highstar Capital IV (12).	Nov. 2010	Nov. 2016	$	2,346	$	1,843		$	251		$	268	$	1,826	$	1,882		$	—	$	—		$	1,492	14.1	%		6.7	%	1.3x
Mezzanine Finance
Oaktree Mezzanine Fund IV (7) (10)	Oct. 2014	Oct. 2019	$	597	$	114		$	3		$	—	$	117	$	111		$	—	$	—		$	117	nm			nm		1.0x
Oaktree Mezzanine Fund III (13).	Dec. 2009	Dec. 2014	1,592		1,423			307			1,069		661		618			1		11			648		15.1	%	10.4% / 8.1%			1.3
OCM Mezzanine Fund II	Jun. 2005	Jun. 2010	1,251		1,107			517			1,396		228		260			—		—			241		11.4			7.9		1.6
OCM Mezzanine Fund (14).	Oct. 2001	Oct. 2006	808		773			302			1,073		2		—			38		—			—		15.4			10.8 / 10.5		1.5
																									13.2	%		8.9	%
Emerging Markets Opportunities
Oaktree Emerging Market Opportunities Fund	Sep. 2013	Sep. 2016	$	384	$	162		$	(19	)	$	—	$	143	$	364		$	—	$	—		$	176	(7.5	)%		(10.8	)%	0.9x
Special Account F (10).	Jan. 2014	Jan. 2017	253		112			(13		)	—		99		98			—		—			120		nm			nm		0.9
					69,858		(15)								29,351		(15)			1,900		(15)
		Other (16)			11,015										6,565					32
		Total (17)			$	80,873	(18)								$	35,916				$	1,932

(1) Drawn capital reflects the capital contributions of investors in the fund, net of any distributions to such investors of uninvested capital.

(2) Accrued incentives (fund level) exclude Oaktree segment incentive income previously recognized.

(3) Unreturned drawn capital plus accrued preferred return reflects the amount the fund needs to distribute to its investors as a return of capital and a preferred return (as applicable) before Oaktree is entitled to receive incentive income (other than tax distributions) from the fund.

(4) The internal rate of return (“IRR”) is the annualized implied discount rate calculated from a series of cash flows. It is the return that equates the present value of all capital invested in an investment to the present value of all returns of capital, or the discount rate that will provide a net present value of all cash flows equal to zero. Fund-level IRRs are calculated based upon the actual timing of cash contributions/distributions to investors and the residual value of such investor’s capital accounts at the end of the applicable period being measured. Gross IRRs reflect returns before allocation of management fees, expenses and any incentive allocation to the fund’s general partner. To the extent material, gross returns include certain transaction, advisory, directors or other ancillary fees (“fee income”) paid directly to us in connection with our funds’ activities (we credit all such fee income back to the respective fund(s) so that our funds’ investors share pro rata in the fee income’s economic benefit). Net IRRs reflect returns to non-affiliated investors after allocation of management fees, expenses and any incentive allocation to the fund’s general partner.

(5) Multiple of drawn capital is calculated as drawn capital plus gross income and, if applicable, fee income before fees and expenses divided by drawn capital.

(6) Legacy funds represent certain predecessor funds within the relevant strategy that have substantially or completely liquidated their assets, including funds managed by certain Oaktree investment professionals while employed at the Trust Company of the West prior to Oaktree’s founding in 1995. When these employees joined Oaktree upon, or shortly after, its founding, they continued to manage the fund through the end of its term pursuant to a sub-advisory relationship between the Trust Company of the West and Oaktree.

(7) Management fees during the investment period are calculated on drawn, rather than committed, capital. As a result, as of June 30, 2015 management fee-generating AUM included only that portion of committed capital that had been drawn.

(8) Due to the differences in allocations of income and expenses to this fund’s two primary limited partners, the U.S. Treasury and Oaktree PPIP Private Fund, a combined net IRR is not presented. Oaktree PPIP Fund had liquidated all of its investments and made its final liquidating distribution as of December 31, 2013. Oaktree PPIP Fund and Oaktree PPIP Private Fund were dissolved as of December 31, 2013. Of the $2,322 million in capital commitments, $1,161 million related to the Oaktree PPIP Private Fund. The gross and net IRR for the Oaktree PPIP Private Fund were 24.7% and 18.6%, respectively.

(9) Aggregate IRRs are based on the conversion of cash flows from Euros to USD using the June 30, 2015 spot rate of $1.11.

(10) The IRR is not considered meaningful (“nm”) as the period from the initial capital contribution through June 30, 2015 was less than 18 months.

(11) As of June 30, 2015, Oaktree Principal Fund VI had made an aggregate $59 million drawdown against its $1.0 billion of committed capital. Oaktree has not yet commenced the fund's investment period and, as a result, as of June 30, 2015 management fees were assessed only on the drawn capital, and management fee-generating AUM included only that portion of committed capital.

(12) The fund includes co-investments of $456 million in AUM for which we earn no management fees or incentive allocation. Those co-investments have been excluded from the calculation of gross and net IRR, as well as the unreturned drawn capital plus accrued preferred return amount and multiple of drawn capital. The fund follows the American-style distribution waterfall, whereby the general partner may receive an incentive allocation as soon as it has returned the drawn capital and paid a preferred return on the fund’s realized investments (i.e., on a

23

deal-by-deal basis). However, such cash distributions of incentives may be subject to repayment, or clawback. As of June 30, 2015, Oaktree had not recognized any incentive income from this fund. Additionally, under the terms of the Highstar acquisition, Oaktree is effectively entitled to approximately 8% of the potential incentives generated by this fund.

(13) The fund’s partnership interests are divided into Class A and Class B interests, with the Class A interests having priority with respect to the distribution of current income and disposition proceeds. The net IRR for Class A interests was 10.4% and Class B interests was 8.1%. The combined net IRR for Class A and Class B interests was 9.5%.

(14) The fund’s partnership interests are divided into Class A and Class B interests, with the Class A interests having priority with respect to the distribution of current income and disposition proceeds. The net IRR for Class A interests was 10.8% and Class B interests was 10.5%. The combined net IRR for the Class A and Class B interests was 10.6%.

(15) Totals are based on the conversion of Euro amounts to USD using the June 30, 2015 spot rate of $1.11.

(16) This includes our closed-end Senior Loan funds, Oaktree Asia Special Situations Fund, OCM Asia Principal Opportunities Fund, CLOs, two closed-end separate accounts and, in the case of management fee-generating AUM and accrued incentives (fund level), a non-Oaktree fund and two evergreen separate accounts in our Real Estate Debt strategy.

(17) This excludes two closed-end funds with management fee-generating AUM aggregating $445 million as of June 30, 2015, which has been included as part of the Strategic Credit strategy within the evergreen funds table, and includes two evergreen separate accounts in our Real Estate Debt strategy with an aggregate $145 million of management fee-generating AUM.

(18) The aggregate change in drawn capital for the three months ended June 30, 2015 was $1.5 billion.

24

Open-end Funds

		Manage- ment Fee-gener- ating AUM as of June 30, 2015		Twelve Months Ended June 30, 2015						Since Inception through June 30, 2015
	Strategy Inception			Rates of Return (1)						Annualized Rates of Return (1)						Sharpe Ratio
				Oaktree				Rele- vant Bench- mark		Oaktree				Rele- vant Bench- mark		Oaktree Gross	Rele- vant Bench- mark
				Gross		Net				Gross		Net
		(in millions)
U.S. High Yield Bonds	Jan. 1986	$	16,365	(0.1	)%	(0.6	)%	(0.8	)%	9.6	%	9.1	%	8.5	%	0.81	0.56
Global High Yield Bonds	Nov. 2010	4,345		0.1		(0.4	)	(0.1	)	8.0		7.4		7.1		1.21	1.15
European High Yield Bonds	May 1999	1,146		3.0		2.5		2.2		8.2		7.6		6.2		0.67	0.40
U.S. Convertibles	Apr. 1987	5,100		0.7		0.2		3.5		9.9		9.4		8.4		0.43	0.28
Non-U.S. Convertibles	Oct. 1994	2,423		4.8		4.3		4.8		8.8		8.3		6.0		0.80	0.42
High Income Convertibles	Aug. 1989	965		2.3		1.5		(0.9	)	11.7		10.8		8.4		1.05	0.59
U.S. Senior Loans	Sep. 2008	2,814		0.9		0.4		2.2		6.8		6.2		5.6		1.15	0.63
European Senior Loans	May 2009	1,562		2.4		1.9		3.4		9.3		8.8		10.4		1.73	1.81
Emerging Markets Equities	Jul. 2011	4,011		(9.9	)	(10.6	)	(5.1	)	(0.6	)	(1.4	)	(1.6	)	(0.03)	(0.09)
Total		$	38,731

(1) Returns represent time-weighted rates of return, including reinvestment of income, net of commissions and transaction costs. The returns for Relevant Benchmarks are presented on a gross basis.

Evergreen Funds

		As of June 30, 2015							Twelve Months Ended June 30, 2015				Since Inception through June 30, 2015
		AUM		Manage- ment Fee-gener- ating AUM		Accrued Incen- tives (Fund Level)
	Strategy Inception								Rates of Return (1)				Annualized Rates of Return (1)
									Gross		Net		Gross		Net
		(in millions)
Strategic Credit (2).	Jul. 2012	$	3,098	$	1,884	$ n/a			(0.8	)%	(1.4	)%	10.5	%	8.0	%
Value Opportunities	Sep. 2007	1,641		1,578		—		(3)	(10.1	)	(11.1	)	10.9		6.5
Value Equities (4).	Apr. 2014	332		216		—		(3)	nm		nm		nm		nm
Emerging Markets Opportunities	Sep. 2013	197		83		—		(3)	(16.1	)	(17.0	)	4.7		(1.1	)
Emerging Markets Total Return (4)	Jan. 2014	135		50		—			nm		nm		nm		nm
Emerging Markets Absolute Return	Apr. 1997	161		138		—		(3)	(1.2	)	(1.6	)	14.0		9.5
				3,949		—
Restructured funds (5)				—		5
Total (2)(6)				$	3,949	$	5

(1) Returns represent time-weighted rates of return.

(2) Includes two closed-end funds with an aggregate $748 million and $445 million of AUM and management fee-generating AUM, respectively.

(3) As of June 30, 2015, the aggregate depreciation below high-water marks previously established for individual investors in the fund totaled approximately $111 million for Value Opportunities, $4 million for Value Equities, $15 million for Emerging Markets Opportunities and $1 million for Emerging Markets Absolute Return.

(4) Rates of return are not considered meaningful (“nm”) because the since-inception period as of June 30, 2015 was less than 18 months.

(5) Oaktree manages three restructured evergreen funds that are in liquidation: Oaktree European Credit Opportunities Fund, Oaktree High Yield Plus Fund and Oaktree Japan Opportunities Fund (Yen class). As of June 30, 2015, these funds had gross and net IRRs since inception of (2.2)% and (4.7)%, 7.6% and 5.3%, and (4.8)% and (5.7)%, respectively, and in the aggregate had AUM of $128 million. Additionally, Oaktree High Yield Plus Fund had accrued incentives (fund level) of $5 million as of June 30, 2015.

(6) Total excludes two evergreen separate accounts in our Real Estate Debt strategy with an aggregate $145 million of management fee-generating AUM.

25

GLOSSARY

Accrued incentives (fund level) represents the incentive income that would be paid to us if the funds were liquidated at their reported values as of the date of the financial statements. Incentives created (fund level) refers to the gross amount of potential incentives generated by the funds during the period. We refer to the amount of incentive income recognized as revenue by us as segment incentive income. Amounts recognized by us as incentive income are no longer included in accrued incentives (fund level), the term we use for remaining fund-level accruals.

Adjusted net income (“ANI”) is a measure of profitability for our investment management segment. The components of revenues (“segment revenues”) and expenses used in the determination of ANI do not give effect to the consolidation of the funds that we manage. Segment revenues include investment income (loss) that is classified in other income (loss) in the GAAP-basis statements of operations. Segment revenues and expenses also reflect Oaktree's proportionate economic interest in Highstar, whereby amounts received for contractually reimbursable costs are included with segment expenses, as compared to being recorded as other income under GAAP. In addition, ANI excludes the effect of (a) non-cash equity-based compensation charges related to unit grants made before our initial public offering, (b) acquisition-related items including amortization of intangibles and changes in the contingent consideration liability, (c) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes, (d) income taxes, (e) other income or expenses applicable to OCG or its Intermediate Holding Companies and (f) the adjustment for non-controlling interests. Incentive income and incentive income compensation expense are included in ANI when the underlying fund distributions are known or knowable as of the respective quarter end, which may be later than the time at which the same revenue or expense is included in the GAAP-basis statements of operations, for which the revenue standard is fixed or determinable and the expense standard is probable and reasonably estimable. ANI is calculated at the Operating Group level.

Adjusted net income–OCG, or adjusted net income per Class A unit, a non-GAAP measure, is calculated to provide Class A unitholders with a measure that shows the portion of ANI attributable to their ownership. Adjusted net income-OCG represents ANI including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG. Two of our Intermediate Holding Companies incur federal and state income taxes for their shares of Operating Group income. Generally, those two corporate entities hold an interest in the Operating Group’s management fee-generating assets and a small portion of its incentive and investment income-generating assets. As a result, historically our fee-related earnings generally have been subject to corporate-level taxation, and most of our incentive income and investment income generally has not been subject to corporate-level taxation. Thus, the blended effective income tax rate has generally tended to be higher to the extent that fee-related earnings represented a larger proportion of our ANI. Myriad other factors affect income tax expense and the effective income tax rate, and there can be no assurance that this historical relationship will continue going forward.

Assets under management (“AUM”) generally refers to the assets we manage and equals the NAV of the assets we manage, the fund-level leverage on which management fees are charged, the undrawn capital that we are entitled to call from investors in our funds pursuant to their capital commitments and the aggregate par value of collateral assets and principal cash held by our CLOs.

• Management fee-generating assets under management (“management fee-generating AUM”) is a forward-looking metric and reflects the AUM on which we will earn management fees in the following quarter. Our closed-end funds typically pay management fees based on committed capital or drawn capital during the investment period, without regard to changes in NAV, and during the liquidation period on the lesser of (a) total funded capital or (b) the cost basis of assets remaining in the fund. The annual management fee rate remains unchanged from the investment period through the liquidation period. Our open-end and evergreen funds typically pay management fees based on their NAV, and our CLOs pay management fees based on the aggregate par value of collateral assets and principal cash held by them, as defined in the applicable CLO indentures. As compared with AUM, management fee-generating AUM generally excludes the following:

26

◦ Differences between AUM and either committed capital or cost basis for most closed-end funds, other than for closed-end funds that pay management fees based on NAV and leverage, as applicable;

◦ Undrawn capital commitments to closed-end funds that have not yet commenced their investment periods;

◦ Undrawn capital commitments to funds for which management fees are based on drawn capital or NAV;

◦ The investments we make in our funds as general partner;

◦ Closed-end funds that are beyond the term during which they pay management fees and co-investments that pay no management fees; and

◦ AUM in restructured and liquidating evergreen funds for which management fees were waived.

• Incentive-creating assets under management (“incentive-creating AUM”) refers to the AUM that may eventually produce incentive income. It represents the NAV of our funds for which we are entitled to receive an incentive allocation, excluding CLOs and investments made by us and our employees and directors (which are not subject to an incentive allocation). All funds for which we are entitled to receive an incentive allocation are included in incentive-creating AUM, regardless of whether or not they are currently generating incentives. Incentive-creating AUM does not include undrawn capital commitments.

Consolidated funds refers to the funds and CLOs that Oaktree consolidates through a majority voting interest or otherwise, including those funds in which Oaktree as the general partner is presumed to have control.

Distributable earnings is a non-GAAP performance measure derived from our segment results that we use to measure our earnings at the Operating Group level without the effects of the consolidated funds for the purpose of, among other things, assisting in the determination of equity distributions from the Operating Group. However, the declaration, payment and determination of the amount of equity distributions, if any, is at the sole discretion of our board of directors, which may change our distribution policy at any time.

Distributable earnings and distributable earnings revenues differ from ANI in that they exclude segment investment income or loss and include the receipt of investment income or loss from distributions by our investments in funds and companies. In addition, distributable earnings differs from ANI in that it is net of Operating Group income taxes and excludes non-cash equity-based compensation charges related to unit grants made after our initial public offering in 2012.

Distributable earnings–OCG, or distributable earnings per Class A unit, a non-GAAP measure, is calculated to provide Class A unitholders with a measure that shows the portion of distributable earnings attributable to their ownership.  Distributable earnings-OCG represents distributable earnings including the effect of (a) the OCGH non-controlling interest, (b) expenses, such as current income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) amounts payable under a tax receivable agreement.  The income tax expense included in distributable earnings-OCG represents the implied current provision for income taxes calculated using an approach similar to that which is used in calculating the income tax provision for adjusted net income-OCG.

Economic net income (“ENI”) is a non-GAAP measure that we use to evaluate the financial performance of our segment by applying the “Method 2,” instead of the “Method 1,” revenue recognition approach to accounting for incentive income. ANI follows Method 1, except incentive income is recognized when the underlying fund distributions are known or knowable as of the respective quarter end, as opposed to the fixed or determinable standard of Method 1. The Method 2 approach followed by ENI recognizes incentive income as if the funds were liquidated at their reported values as of the date of the financial statements. ENI is computed by adjusting ANI for the change in accrued incentives (fund level), net of associated incentive income compensation expense, during the period.

27

Economic net income revenues is a non-GAAP measure applying the Method 2, instead of the Method 1, approach to accounting for segment incentive income, and reflects the adjustments described above and under the definition of ANI.

Economic net income–OCG, or economic net income per Class A unit, a non-GAAP measure, is calculated to provide Class A unitholders with a measure that shows the portion of ENI attributable to their ownership. Economic net income-OCG represents ENI, including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG.  The income tax expense included in economic net income-OCG represents the implied provision for income taxes calculated using an approach similar to that which is used in calculating the income tax provision for adjusted net income-OCG.

Equity value units (“EVUs”) represent special limited partnership units in Oaktree Capital Group Holdings, L.P. (“OCGH”) that entitle the holder the right to receive a one-time special distribution that will be settled in OCGH units, based on value created during a specified period (“Term”) in excess of a fixed “Base Value.” The value created will be measured on a per unit basis, based on Class A unit trading prices and certain components of quarterly distributions with respect to the period during the Term. EVUs also give the holder the right, subject to service vesting and Oaktree performance relative to the accreting Base Value, to receive certain quarterly distributions from OCGH. EVUs do not entitle the holder to any voting rights.

Fee-related earnings (“FRE”) is a non-GAAP measure that we use to monitor the baseline earnings of our business. FRE is comprised of segment management fees (“fee-related earnings revenues”) less segment operating expenses other than incentive income compensation expense and non-cash equity-based compensation charges related to unit grants made after our initial public offering. FRE is considered baseline because it applies all cash compensation and benefits other than incentive income compensation expense, as well as all general and administrative expenses, to management fees, even though a significant portion of those expenses is attributable to incentive and investment income. FRE is presented before income taxes.

Fee-related earnings–OCG, or fee-related earnings per Class A unit, is a non-GAAP measure calculated to provide Class A unitholders with a measure that shows the portion of FRE attributable to their ownership. Fee-related earnings–OCG represents FRE including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG. Fee-related earnings–OCG income taxes is calculated excluding any segment incentive income or investment income (loss).

Intermediate Holding Companies collectively refers to the subsidiaries wholly owned by us.

Net asset value (“NAV”) refers to the value of all the assets of a fund (including cash and accrued interest and dividends) less all liabilities of the fund (including accrued expenses and any reserves established by us, in our discretion, for contingent liabilities) without reduction for accrued incentives (fund level) because they are reflected in the partners’ capital of the fund.

Oaktree, OCG, we, us, our or the Company refers to Oaktree Capital Group, LLC and, where applicable, its subsidiaries and affiliates.

Oaktree Operating Group (“Operating Group”) refers collectively to the entities that control the general partners and investment advisors of our funds in which we have a minority economic interest and indirect control.

Relevant Benchmark refers, with respect to:

• our U.S. High Yield Bond strategy, to the Citigroup U.S. High Yield Cash-Pay Capped Index;

• our Global High Yield Bond strategy, to an Oaktree custom global high yield index that represents 60% BofA Merrill Lynch High Yield Master II Constrained Index and 40% BofA Merrill Lynch Global Non-Financial High Yield European Issuers 3% Constrained, ex-Russia Index – USD Hedged from inception through December 31, 2012, and the BofA Merrill Lynch Non-Financial Developed Markets High Yield Constrained Index – USD Hedged thereafter;

28

• our European High Yield Bond strategy, to the BofA Merrill Lynch Global Non-Financial High Yield European Issuers excluding Russia 3% Constrained Index (USD Hedged);

• our U.S. Senior Loan strategy (with the exception of the closed-end funds), to the Credit Suisse Leveraged Loan Index;

• our European Senior Loan strategy, to the Credit Suisse Western European Leveraged Loan Index (EUR Hedged);

• our U.S. Convertible Securities strategy, to an Oaktree custom convertible index that represents the Credit Suisse Convertible Securities Index from inception through December 31, 1999, the Goldman Sachs/Bloomberg Convertible 100 Index from January 1, 2000 through June 30, 2004 and the BofA Merrill Lynch All U.S. Convertibles Index thereafter;

• our non-U.S. Convertible Securities strategy, to an Oaktree custom non-U.S. convertible index that represents the JACI Global ex-U.S. (Local) Index from inception through December 31, 2014 and the Thomson Reuters Global Focus ex-U.S. (USD hedged) Index thereafter;

• our High Income Convertible Securities strategy, to the Citigroup U.S. High Yield Market Index; and

• our Emerging Markets Equities strategy, to the Morgan Stanley Capital International Emerging Markets Index (Net).

Sharpe Ratio refers to a metric used to calculate risk-adjusted return. The Sharpe Ratio is the ratio of excess return to volatility, with excess return defined as the return above that of a riskless asset (based on the three-month U.S. Treasury bill, or for our European senior loan strategy, the Euro Overnight Index Average) divided by the standard deviation of such return. A higher Sharpe Ratio indicates a return that is higher than would be expected for the level of risk compared to the risk-free rate.

29

EXHIBIT A

Use of Non-GAAP Financial Information

Oaktree discloses certain non-GAAP financial measures in this earnings release. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented below. Management makes operating decisions and assesses the performance of Oaktree’s business based on these non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

Reconciliation of Segment Results to GAAP Net Income

The following table reconciles fee-related earnings and adjusted net income to net income attributable to Oaktree Capital Group, LLC. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Fee-related earnings (1)	$	53,720		$	63,535		$	109,675		$	121,258
Incentive income	61,148			59,198			214,027			352,074
Incentive income compensation	(29,554		)	(30,147		)	(119,656		)	(167,975		)
Investment income	23,365			54,199			76,823			100,679
Equity-based compensation (2)	(11,901		)	(5,111		)	(18,924		)	(9,094		)
Interest expense, net of interest income	(8,782		)	(6,934		)	(17,715		)	(13,559		)
Other income (expense), net	(2,650		)	9			(3,546		)	(1,689		)
Adjusted net income	85,346			134,749			240,684			381,694
Incentive income (3)	5,805			6,102			(11,573		)	(58,358		)
Incentive income compensation (3)	(5,657		)	(6,112		)	17,553			40,222
Equity-based compensation (4)	(4,182		)	(5,376		)	(8,865		)	(10,575		)
Acquisition-related items (5)	(1,695		)	—			(3,502		)	—
Income taxes (6)	(5,485		)	(5,761		)	(13,360		)	(13,747		)
Non-Operating Group expenses (7)	(626		)	(603		)	(960		)	(885		)
Non-controlling interests (7)	(53,692		)	(91,813		)	(161,910		)	(255,371		)
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) Fee-related earnings is a component of adjusted net income and is comprised of segment management fees less segment operating expenses other than incentive income compensation expense and non-cash equity-based compensation charges related to unit grants made after our initial public offering.

(2) This adjustment adds back the effect of equity-based compensation charges related to unit grants made after our initial public offering, which is excluded from fee-related earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.

(3) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income and net income attributable to OCG.

(4) This adjustment adds back the effect of (a) equity-based compensation charges related to unit grants made before our initial public offering, which is excluded from adjusted net income and fee-related earnings because it is a non-cash charge that does not affect our financial position, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(5) This adjustment adds back the effect of acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability.

(6) Because adjusted net income and fee-related earnings are pre-tax measures, this adjustment adds back the effect of income tax expense.

(7) Because adjusted net income and fee-related earnings are calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or non-controlling interests.

30

The following table reconciles fee-related earnings-OCG and adjusted net income-OCG to net income attributable to Oaktree Capital Group, LLC. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Fee-related earnings-OCG (1)	$	16,451		$	14,601		$	31,007		$	27,524
Incentive income attributable to OCG	19,227			16,856			64,185			93,215
Incentive income compensation attributable to OCG	(9,292		)	(8,584		)	(35,789		)	(44,519		)
Investment income attributable to OCG	7,346			15,433			23,067			27,551
Equity-based compensation attributable to OCG (2)	(3,742		)	(1,455		)	(5,807		)	(2,494		)
Interest expense, net of interest income attributable to OCG	(2,735		)	(1,975		)	(5,361		)	(3,701		)
Other income (expense) attributable to OCG	(833		)	3			(1,097		)	(440		)
Non-fee-related earnings income taxes attributable to OCG (3)	(4,979		)	(2,160		)	(10,477		)	(6,542		)
Adjusted net income-OCG (1)	21,443			32,719			59,728			90,594
Incentive income attributable to OCG (4)	1,825			1,738			(3,285		)	(15,068		)
Incentive income compensation attributable to OCG (4)	(1,778		)	(1,740		)	5,047			10,340
Equity-based compensation attributable to OCG (5)	(1,315		)	(1,531		)	(2,692		)	(2,886		)
Acquisition-related items attributable to OCG (6)	(533		)	—			(1,064		)	—
Non-controlling interests attributable to OCG (6)	172			—			333			—
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) Fee-related earnings-OCG and adjusted net income-OCG are calculated to evaluate the portion of adjusted net income and fee-related earnings attributable to Class A unitholders. These measures are net of income taxes and other income or expenses applicable to OCG or its Intermediate Holding Companies.

(2) This adjustment adds back the effect of equity-based compensation charges attributable to OCG related to unit grants made after our initial public offering, which is excluded from fee-related earnings-OCG because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.

(3) This adjustment adds back income taxes associated with segment incentive income, incentive income compensation expense or investment income or loss, which are not included in the calculation of fee-related earnings-OCG.

(4) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense attributable to OCG between adjusted net income-OCG and net income attributable to OCG.

(5) This adjustment adds back the effect of (a) equity-based compensation charges attributable to OCG related to unit grants made before our initial public offering, which is excluded from adjusted net income-OCG and fee-related earnings-OCG because it is a non-cash charge that does not affect our financial position, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(6) This adjustment adds back the effect of (a) acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability and (b) non-controlling interests.

The following table reconciles fee-related earnings revenues and segment revenues to GAAP revenues. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Fee-related earnings revenues	$	185,558		$	189,119		$	373,608		$	377,519
Incentive income	61,148			59,198			214,027			352,074
Investment income	23,365			54,199			76,823			100,679
Segment revenues	270,071			302,516			664,458			830,272
Consolidated funds (1)	(202,890		)	(246,566		)	(533,776		)	(728,900		)
Investment income (2)	(15,694		)	(4,390		)	(28,376		)	(9,381		)
GAAP revenues	$	51,487		$	51,560		$	102,306		$	91,991

(1) This adjustment reflects the elimination of amounts attributable to the consolidated funds.

(2) This adjustment reclassifies consolidated investment income from revenues to other income (loss).

31

The following table reconciles distributable earnings and adjusted net income to net income attributable to Oaktree Capital Group, LLC. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Distributable earnings	$	111,207		$	116,173		$	251,715		$	349,314
Investment income (1)	23,365			54,199			76,823			100,679
Receipts of investment income from funds (2)	(30,197		)	(22,911		)	(54,158		)	(44,569		)
Receipts of investment income from companies	(8,175		)	(8,601		)	(16,971		)	(18,016		)
Equity-based compensation (3)	(11,901		)	(5,111		)	(18,924		)	(9,094		)
Operating Group income taxes	1,047			1,000			2,199			3,380
Adjusted net income	85,346			134,749			240,684			381,694
Incentive income (4)	5,805			6,102			(11,573		)	(58,358		)
Incentive income compensation (4)	(5,657		)	(6,112		)	17,553			40,222
Equity-based compensation (5)	(4,182		)	(5,376		)	(8,865		)	(10,575		)
Acquisition-related items (6)	(1,695		)	—			(3,502		)	—
Income taxes (7)	(5,485		)	(5,761		)	(13,360		)	(13,747		)
Non-Operating Group expenses (8)	(626		)	(603		)	(960		)	(885		)
Non-controlling interests (8)	(53,692		)	(91,813		)	(161,910		)	(255,371		)
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) This adjustment adds back segment investment income, which with respect to investments in funds is initially largely non-cash in nature and is thus not available to fund our operations or make equity distributions.

(2) This adjustment eliminates the portion of distributions received from funds characterized as receipts of investment income or loss. In general, the income or loss component of a distribution from a fund is calculated by multiplying the amount of the distribution by the ratio of our investment’s undistributed income or loss to our remaining investment balance. In addition, if the distribution is made during the investment period, it is generally not reflected in distributable earnings until after the investment period ends.

(3) This adjustment adds back the effect of equity-based compensation charges related to unit grants made after our initial public offering, which is excluded from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.

(4) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income and net income attributable to OCG.

(5) This adjustment adds back the effect of (a) equity-based compensation charges related to unit grants made before our initial public offering, which is excluded from adjusted net income because it does not affect our financial position and from distributable earnings because it is non-cash in nature and does not impact our ability to fund operations or make equity distributions, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(6) This adjustment adds back the effect of acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability.

(7) Because adjusted net income and distributable earnings are pre-tax measures, this adjustment adds back the effect of income tax expense.

(8) Because adjusted net income and distributable earnings are calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or non-controlling interests.

32

The following table reconciles distributable earnings-OCG and adjusted net income-OCG to net income attributable to Oaktree Capital Group, LLC. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Distributable earnings-OCG (1)	$	28,656		$	27,782		$	64,951		$	83,594
Investment income attributable to OCG	7,346			15,433			23,067			27,551
Receipts of investment income from funds attributable to OCG	(9,495		)	(6,524		)	(16,541		)	(12,171		)
Receipts of investment income from companies attributable to OCG	(2,570		)	(2,449		)	(5,157		)	(4,904		)
Equity-based compensation attributable to OCG (2)	(3,742		)	(1,455		)	(5,807		)	(2,494		)
Distributable earnings-OCG income taxes	806			739			1,086			1,478
Tax receivable agreement	4,880			3,954			9,290			7,907
Income taxes of Intermediate Holding Companies	(4,438		)	(4,761		)	(11,161		)	(10,367		)
Adjusted net income-OCG (1)	21,443			32,719			59,728			90,594
Incentive income attributable to OCG (3)	1,825			1,738			(3,285		)	(15,068		)
Incentive income compensation attributable to OCG (3)	(1,778		)	(1,740		)	5,047			10,340
Equity-based compensation attributable to OCG (4)	(1,315		)	(1,531		)	(2,692		)	(2,886		)
Acquisition-related items attributable to OCG (5)	(533		)	—			(1,064		)	—
Non-controlling interests attributable to OCG (5)	172			—			333			—
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) Distributable earnings-OCG and adjusted net income-OCG are calculated to evaluate the portion of adjusted net income and distributable earnings attributable to Class A unitholders. These measures are net of income taxes and expenses applicable to OCG or its Intermediate Holding Companies. A reconciliation of distributable earnings to distributable earnings-OCG is presented below.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Distributable earnings	$	111,207		$	116,173		$	251,715		$	349,314
Distributable earnings attributable to OCGH non-controlling interest	(76,239		)	(83,095		)	(175,428		)	(255,450		)
Non-Operating Group expenses	(626		)	(603		)	(960		)	(885		)
Distributable earnings-OCG income taxes	(806		)	(739		)	(1,086		)	(1,478		)
Tax receivable agreement	(4,880		)	(3,954		)	(9,290		)	(7,907		)
Distributable earnings-OCG	$	28,656		$	27,782		$	64,951		$	83,594
Distributable earnings-OCG per Class A unit	$	0.59		$	0.64		$	1.39		$	2.01

(2) This adjustment adds back the effect of equity-based compensation charges attributable to OCG related to unit grants made after our initial public offering, which is excluded from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions.

(3) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense attributable to OCG between adjusted net income-OCG and net income attributable to OCG.

(4) This adjustment adds back the effect of (a) equity-based compensation charges attributable to OCG related to unit grants made before our initial public offering, which is excluded from adjusted net income because it does not affect our financial position and from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(5) This adjustment adds back the effect of (a) acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability and (b) non-controlling interests.

33

The following table reconciles distributable earnings revenues and segment revenues to GAAP revenues.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Distributable earnings revenues	$	285,078		$	279,829		$	658,764		$	792,178
Investment income	23,365			54,199			76,823			100,679
Receipts of investment income from funds	(30,197		)	(22,911		)	(54,158		)	(44,569		)
Receipts of investment income from companies	(8,175		)	(8,601		)	(16,971		)	(18,016		)
Segment revenues	270,071			302,516			664,458			830,272
Consolidated funds (1)	(202,890		)	(246,566		)	(533,776		)	(728,900		)
Investment income (2)	(15,694		)	(4,390		)	(28,376		)	(9,381		)
GAAP revenues	$	51,487		$	51,560		$	102,306		$	91,991

(1) This adjustment reflects the elimination of amounts attributable to the consolidated funds.

(2) This adjustment reclassifies consolidated investment income from revenues to other income (loss).

The following table reconciles economic net income and adjusted net income to net income attributable to Oaktree Capital Group, LLC. 

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Economic net income (1)	$	17,686		$	211,146		$	246,546		$	438,388
Change in accrued incentives (fund level), net of associated incentive income compensation (2).	67,660			(76,397		)	(5,862		)	(56,694		)
Adjusted net income	85,346			134,749			240,684			381,694
Incentive income (3)	5,805			6,102			(11,573		)	(58,358		)
Incentive income compensation (3)	(5,657		)	(6,112		)	17,553			40,222
Equity-based compensation (4)	(4,182		)	(5,376		)	(8,865		)	(10,575		)
Acquisition-related items (5)	(1,695		)	—			(3,502		)	—
Income taxes (6)	(5,485		)	(5,761		)	(13,360		)	(13,747		)
Non-Operating Group expenses (7)	(626		)	(603		)	(960		)	(885		)
Non-controlling interests (7)	(53,692		)	(91,813		)	(161,910		)	(255,371		)
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) Please see Glossary for the definition of economic net income.

(2) The change in accrued incentives (fund level), net of associated incentive income compensation expense, represents the difference between (a) our recognition of net incentive income and (b) the incentive income generated by the funds during the period that would be due to us if the funds were liquidated at their reported values as of that date, net of associated incentive income compensation expense.

(3) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense between adjusted net income and net income attributable to OCG.

(4) This adjustment adds back the effect of (a) equity-based compensation charges related to unit grants made before our initial public offering, which is excluded from adjusted net income and economic net income because it is a non-cash charge that does not affect our financial position, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(5) This adjustment adds back the effect of acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability.

(6) Because adjusted net income and economic net income are pre-tax measures, this adjustment adds back the effect of income tax expense.

(7) Because adjusted net income and economic net income are calculated at the Operating Group level, this adjustment adds back the effect of items applicable to OCG, its Intermediate Holding Companies or non-controlling interests.

34

The following table reconciles economic net income-OCG and adjusted net income-OCG to net income attributable to Oaktree Capital Group, LLC.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Economic net income (loss)-OCG (1)	$	(957	)	$	50,674		$	56,522		$	103,896
Change in accrued incentives (fund level), net of associated incentive income compensation attributable to OCG	21,274			(21,753		)	(348		)	(16,616		)
Economic net income (loss)-OCG income taxes	5,893			8,843			15,383			14,586
Income taxes-OCG	(4,767		)	(5,045		)	(11,829		)	(11,272		)
Adjusted net income-OCG (1)	21,443			32,719			59,728			90,594
Incentive income attributable to OCG (2)	1,825			1,738			(3,285		)	(15,068		)
Incentive income compensation attributable to OCG (2)	(1,778		)	(1,740		)	5,047			10,340
Equity-based compensation attributable to OCG (3)	(1,315		)	(1,531		)	(2,692		)	(2,886		)
Acquisition-related items attributable to OCG (4)	(533		)	—			(1,064		)	—
Non-controlling interests attributable to OCG (4)	172			—			333			—
Net income attributable to Oaktree Capital Group, LLC	$	19,814		$	31,186		$	58,067		$	82,980

(1) Economic net income-OCG and adjusted net income-OCG are calculated to evaluate the portion of adjusted net income and economic net income attributable to Class A unitholders. These measures are net of income taxes and other income or expenses applicable to OCG or its Intermediate Holding Companies. A reconciliation of economic net income to economic net income-OCG is presented below.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands, except per unit data)
Economic net income	$	17,686		$	211,146		$	246,546		$	438,388
Economic net income attributable to OCGH non-controlling interest	(12,124		)	(151,026		)	(173,681		)	(319,021		)
Non-Operating Group expenses	(626		)	(603		)	(960		)	(885		)
Economic net income (loss)-OCG income taxes	(5,893		)	(8,843		)	(15,383		)	(14,586		)
Economic net income (loss)-OCG	$	(957	)	$	50,674		$	56,522		$	103,896
Economic net income (loss) per Class A unit	$	(0.02	)	$	1.17		$	1.21		$	2.50

(2) This adjustment adds back the effect of timing differences associated with the recognition of incentive income and incentive income compensation expense attributable to OCG between adjusted net income-OCG and net income attributable to OCG.

(3) This adjustment adds back the effect of (a) equity-based compensation charges attributable to OCG related to unit grants made before our initial public offering, which is excluded from adjusted net income because it does not affect our financial position and from distributable earnings because it is non-cash in nature and does not impact our ability to fund our operations or make equity distributions, and (b) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes.

(4) This adjustment adds back the effect of (a) acquisition-related items associated with the amortization of intangibles and changes in the contingent consideration liability and (b) non-controlling interests.

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The following table reconciles economic net income revenues and segment revenues to GAAP revenues.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in thousands)
Economic net income revenues	$	144,868		$	447,594		$	651,838		$	1,034,848
Incentives created	64,055			(204,276		)	(201,407		)	(556,650		)
Incentive income	61,148			59,198			214,027			352,074
Segment revenues	270,071			302,516			664,458			830,272
Consolidated funds (1)	(202,890		)	(246,566		)	(533,776		)	(728,900		)
Investment income (2)	(15,694		)	(4,390		)	(28,376		)	(9,381		)
GAAP revenues	$	51,487		$	51,560		$	102,306		$	91,991

(1) This adjustment reflects the elimination of amounts attributable to the consolidated funds.

(2) This adjustment reclassifies consolidated investment income from revenues to other income (loss).

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The following tables reconcile segment information to consolidated financial data: 

	As of or for the Three Months Ended June 30, 2015
	Segment			Adjustments			Consolidated
	(in thousands)
Management fees (1)	$	185,558		$	(134,635	)	$	50,923
Incentive income (1)	61,148			(60,584		)	564
Investment income (1)	23,365			(7,671		)	15,694
Total expenses (2)	(173,293		)	(72,636		)	(245,929		)
Interest expense, net (3)	(8,782		)	(43,960		)	(52,742		)
Other income (expense), net (4)	(2,650		)	5,513			2,863
Other income of consolidated funds (5)	—			(82,526		)	(82,526		)
Income taxes	—			(5,485		)	(5,485		)
Net loss attributable to non-controlling interests in consolidated funds	—			391,961			391,961
Net income attributable to non-controlling interests in consolidated subsidiaries	—			(55,509		)	(55,509		)
Adjusted net income/net income attributable to Oaktree Capital Group, LLC	$	85,346		$	(65,532	)	$	19,814
Corporate investments (6)	$	1,560,235		$	(1,383,557	)	$	176,678
Total assets (7)	$	3,249,492		$	51,962,327		$	55,211,819

(1) The adjustment represents the elimination of amounts earned from the consolidated funds.

(2) The expense adjustment consists of (a) equity-based compensation charges of $4,010 related to unit grants made before our initial public offering, (b) consolidated fund expenses of $54,920, (c) expenses incurred by the Intermediate Holding Companies of $652, (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 $5,657, (e) acquisition-related items of $1,695, (f) adjustments related to amounts received for contractually reimbursable costs that are included with segment expenses, as compared to being recorded as other income under GAAP of $5,513, (g) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes of $173 and (h) other expenses of $16.

(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 (expense), net represents adjustments related to amounts received for contractually reimbursable costs that are included with segment expenses, as compared to being recorded as other income under GAAP.

(5) 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.

(6) The adjustment to corporate investments is to remove from segment assets our investments in the consolidated funds, including investments in our CLOs, that are treated as equity- or cost-method investments for segment reporting. Of the $1.6 billion, equity-method investments accounted for $1.3 billion.

(7) 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.

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	As of or for the Three Months Ended June 30, 2014
	Segment			Adjustments			Consolidated
	(in thousands)
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 non-controlling interests 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 earned from the consolidated funds.

(2) The expense adjustment consists of (a) equity-based compensation charges of $5,376 related to unit grants made before our 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 our investments in the consolidated funds, including investments in our CLOs, that are treated as equity- or cost-method investments for segment reporting. 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.

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	As of or for the Six Months Ended June 30, 2015
	Segment			Adjustments			Consolidated
	(in thousands)
Management fees (1)	$	373,608		$	(271,866	)	$	101,742
Incentive income (1)	214,027			(213,463		)	564
Investment income (1)	76,823			(48,447		)	28,376
Total expenses (2)	(402,513		)	(79,390		)	(481,903		)
Interest expense, net (3)	(17,715		)	(81,596		)	(99,311		)
Other income (expense), net (4)	(3,546		)	11,103			7,557
Other income of consolidated funds (5)	—			1,422,716			1,422,716
Income taxes	—			(13,360		)	(13,360		)
Net income attributable to non-controlling interests in consolidated funds	—			(744,704		)	(744,704		)
Net income attributable to non-controlling interests in consolidated subsidiaries	—			(163,610		)	(163,610		)
Adjusted net income/net income attributable to Oaktree Capital Group, LLC	$	240,684		$	(182,617	)	$	58,067
Corporate investments (6)	$	1,560,235		$	(1,383,557	)	$	176,678
Total assets (7)	$	3,249,492		$	51,962,327		$	55,211,819

(1) The adjustment represents the elimination of amounts earned from the consolidated funds.

(2) The expense adjustment consists of (a) equity-based compensation charges of $8,605 related to unit grants made before our initial public offering, (b) consolidated fund expenses of $72,430, (c) expenses incurred by the Intermediate Holding Companies of $987, (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 $17,553, (e) acquisition-related items of $3,502, (f) adjustments related to amounts received for contractually reimbursable costs that are included with segment expenses, as compared to being recorded as other income under GAAP of $11,103, (g) differences arising from EVUs that are classified as liability awards under GAAP, but classified as equity awards for segment reporting purposes of $261 and (h) other expenses of $55.

(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 (expense), net represents adjustments related to amounts received for contractually reimbursable costs that are included with segment expenses, as compared to being recorded as other income under GAAP.

(5) 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.

(6) The adjustment to corporate investments is to remove from segment assets our investments in the consolidated funds, including investments in our CLOs, that are treated as equity- or cost-method investments for segment reporting. Of the $1.6 billion, equity-method investments accounted for $1.3 billion.

(7) 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.

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	As of or for the Six Months Ended June 30, 2014
	Segment			Adjustments			Consolidated
	(in thousands)
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 non-controlling interests 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 earned from the consolidated funds.

(2) The expense adjustment consists of (a) equity-based compensation charges of $10,575 related to unit grants made before our 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 our investments in the consolidated funds, including investments in our CLOs, that are treated as equity- or cost-method investments for segment reporting. 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.

40