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SEGMENT REPORTING (Tables)
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
Schedule of financial results for Company's operating segments, as well as the OMG
The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2017:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $19,143)
$
112,654

 
$
56,427

 
$
16,479

 
$
185,560

 
$
—

 
$
185,560

Other fees
5,663

 
338

 
19

 
6,020

 
—

 
6,020

Compensation and benefits
(44,754
)
 
(18,388
)
 
(9,714
)
 
(72,856
)
 
(30,990
)
 
(103,846
)
General, administrative and other expenses
(7,949
)
 
(4,345
)
 
(3,091
)
 
(15,385
)
 
(18,961
)
 
(34,346
)
Fee related earnings
65,614


34,032


3,693

 
103,339

 
(49,951
)
 
53,388

Performance fees—realized
7,883

 
64,780

 
1,467

 
74,130

 
—

 
74,130

Performance fees—unrealized
5,093

 
228,747

 
29,789

 
263,629

 
—

 
263,629

Performance fee compensation—realized
(1,898
)
 
(50,914
)
 
(161
)
 
(52,973
)
 
—

 
(52,973
)
Performance fee compensation—unrealized
(6,079
)
 
(184,021
)
 
(18,632
)
 
(208,732
)
 
—

 
(208,732
)
Net performance fees
4,999


58,592


12,463

 
76,054

 
—

 
76,054

Investment income—realized
2,525

 
2,717

 
373

 
5,615

 
1,340

 
6,955

Investment income (loss)—unrealized
(3,450
)
 
25,354

 
1,134

 
23,038

 
(2,728
)
 
20,310

Interest and other investment income (expense)
2,958

 
1,983

 
1,534

 
6,475

 
225

 
6,700

Interest expense
(3,065
)
 
(1,397
)
 
(429
)
 
(4,891
)
 
(463
)
 
(5,354
)
Net investment income (loss)
(1,032
)

28,657


2,612

 
30,237

 
(1,626
)
 
28,611

Performance related earnings
3,967


87,249


15,075

 
106,291

 
(1,626
)
 
104,665

Economic net income
$
69,581


$
121,281


$
18,768

 
$
209,630

 
$
(51,577
)
 
$
158,053

Distributable earnings
$
67,010

 
$
47,973

 
$
4,747

 
$
119,730

 
$
(50,038
)
 
$
69,692

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended June 30, 2016:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $28,999)
$
109,141

 
$
37,241

 
$
16,230

 
$
162,612

 
$
—

 
$
162,612

Other fees
550

 
334

 
435

 
1,319

 
—

 
1,319

Compensation and benefits
(45,937
)
 
(15,495
)
 
(10,633
)
 
(72,065
)
 
(24,988
)
 
(97,053
)
General, administrative and other expenses
(6,799
)
 
(3,324
)
 
(2,511
)
 
(12,634
)
 
(14,679
)
 
(27,313
)
Fee related earnings
56,955


18,756


3,521


79,232


(39,667
)

39,565

Performance fees—realized
16,024

 
62,779

 
2,801

 
81,604

 
—

 
81,604

Performance fees—unrealized
16,351

 
105,702

 
1,261

 
123,314

 
—

 
123,314

Performance fee compensation—realized
(754
)
 
(50,224
)
 
(53
)
 
(51,031
)
 
—

 
(51,031
)
Performance fee compensation—unrealized
(14,604
)
 
(84,488
)
 
(1,773
)
 
(100,865
)
 
—

 
(100,865
)
Net performance fees
17,017


33,769


2,236


53,022


—


53,022

Investment income (loss)—realized
(280
)
 
3,406

 
695

 
3,821

 
(31
)
 
3,790

Investment income (loss)—unrealized
5,391

 
2,061

 
(1,067
)
 
6,385

 
(11,904
)
 
(5,519
)
Interest and other investment income (expense)
8,098

 
8,206

 
36

 
16,340

 
(19
)
 
16,321

Interest expense
(2,450
)
 
(1,397
)
 
(272
)
 
(4,119
)
 
(709
)
 
(4,828
)
Net investment income (loss)
10,759


12,276


(608
)

22,427


(12,663
)

9,764

Performance related earnings
27,776


46,045


1,628


75,449


(12,663
)

62,786

Economic net income
$
84,731


$
64,801


$
5,149


$
154,681


$
(52,330
)

$
102,351

Distributable earnings
$
73,342

 
$
40,310

 
$
7,781

 
$
121,433

 
$
(44,613
)
 
$
76,820



The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2017:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $52,400)
$
234,001

 
$
96,246

 
$
32,094

 
$
362,341

 
$
—

 
$
362,341

Other fees
10,166

 
678

 
10

 
10,854

 
—

 
10,854

Compensation and benefits
(96,096
)
 
(31,606
)
 
(19,450
)
 
(147,152
)
 
(57,304
)
 
(204,456
)
General, administrative and other expenses
(15,915
)
 
(8,543
)
 
(5,822
)
 
(30,280
)
 
(38,349
)
 
(68,629
)
Fee related earnings
132,156

 
56,775

 
6,832

 
195,763

 
(95,653
)
 
100,110

Performance fees—realized
16,661

 
64,780

 
1,494

 
82,935

 
—

 
82,935

Performance fees—unrealized
8,029

 
260,984

 
43,877

 
312,890

 
—

 
312,890

Performance fee compensation—realized
(7,183
)
 
(50,914
)
 
(177
)
 
(58,274
)
 
—

 
(58,274
)
Performance fee compensation—unrealized
(7,537
)
 
(209,526
)
 
(27,070
)
 
(244,133
)
 
—

 
(244,133
)
Net performance fees
9,970

 
65,324

 
18,124

 
93,418

 
—

 
93,418

Investment income—realized
2,843

 
3,296

 
2,156

 
8,295

 
3,199

 
11,494

Investment income (loss)—unrealized
1,139

 
33,900

 
690

 
35,729

 
(4,135
)
 
31,594

Interest and other investment income
2,939

 
2,135

 
1,353

 
6,427

 
1,099

 
7,526

Interest expense
(5,523
)
 
(2,910
)
 
(861
)
 
(9,294
)
 
(939
)
 
(10,233
)
Net investment income (loss)
1,398

 
36,421

 
3,338

 
41,157

 
(776
)
 
40,381

Performance related earnings
11,368

 
101,745

 
21,462

 
134,575

 
(776
)
 
133,799

Economic net income
$
143,524

 
$
158,520

 
$
28,294

 
$
330,338

 
$
(96,429
)
 
$
233,909

Distributable earnings
$
131,282

 
$
69,887

 
$
7,860

 
$
209,029

 
$
(98,428
)
 
$
110,601

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the six months ended June 30, 2016:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $57,624)
$
216,388

 
$
75,917

 
$
32,975

 
$
325,280

 
$
—

 
$
325,280

Other fees
659

 
674

 
693

 
2,026

 
—

 
2,026

Compensation and benefits
(89,846
)
 
(29,859
)
 
(21,868
)
 
(141,573
)
 
(51,265
)
 
(192,838
)
General, administrative and other expenses
(12,109
)
 
(6,564
)
 
(5,952
)
 
(24,625
)
 
(31,230
)
 
(55,855
)
Fee related earnings
115,092

 
40,168

 
5,848

 
161,108

 
(82,495
)
 
78,613

Performance fees—realized
22,202

 
62,779

 
2,972

 
87,953

 
—

 
87,953

Performance fees—unrealized
(12,696
)
 
93,279

 
5,383

 
85,966

 
—

 
85,966

Performance fee compensation—realized
(2,737
)
 
(50,224
)
 
(53
)
 
(53,014
)
 
—

 
(53,014
)
Performance fee compensation—unrealized
1,833

 
(75,379
)
 
(4,006
)
 
(77,552
)
 
—

 
(77,552
)
Net performance fees
8,602

 
30,455

 
4,296

 
43,353

 
—

 
43,353

Investment income (loss)—realized
(198
)
 
3,374

 
563

 
3,739

 
(88
)
 
3,651

Investment income (loss)—unrealized
3,796

 
(8,096
)
 
1,732

 
(2,568
)
 
(11,519
)
 
(14,087
)
Interest and other investment income (expense)
15,677

 
8,115

 
928

 
24,720

 
(68
)
 
24,652

Interest expense
(4,898
)
 
(2,802
)
 
(546
)
 
(8,246
)
 
(1,437
)
 
(9,683
)
Net investment income (loss)
14,377

 
591

 
2,677

 
17,645

 
(13,112
)
 
4,533

Performance related earnings
22,979

 
31,046

 
6,973

 
60,998

 
(13,112
)
 
47,886

Economic net income
$
138,071

 
$
71,214

 
$
12,821

 
$
222,106

 
$
(95,607
)
 
$
126,499

Distributable earnings
$
139,815

 
$
58,681

 
$
10,459

 
$
208,955

 
$
(90,854
)
 
$
118,101
Schedule of segment’ revenue, expenses and other income (expense)
The following table presents the components of the Company’s operating segments’ revenue, expenses and other income (expense):
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Segment Revenues
 
 
 
 
 
 
 
Management fees (includes ARCC Part I Fees of $19,143, $52,400 and $28,999, $57,624 for the three and six months ended June 30, 2017 and 2016, respectively)
$
185,560

 
$
162,612

 
$
362,341

 
$
325,280

Other fees
6,020

 
1,319

 
10,854

 
2,026

Performance fees—realized
74,130

 
81,604

 
82,935

 
87,953

Performance fees—unrealized
263,629

 
123,314

 
312,890

 
85,966

Total segment revenues
$
529,339

 
$
368,849

 
$
769,020

 
$
501,225

Segment Expenses
 
 
 
 
 
 
 
Compensation and benefits
$
72,856

 
$
72,065

 
$
147,152

 
$
141,573

General, administrative and other expenses
15,385

 
12,634

 
30,280

 
24,625

Performance fee compensation—realized
52,973

 
51,031

 
58,274

 
53,014

Performance fee compensation—unrealized
208,732

 
100,865

 
244,133

 
77,552

Total segment expenses
$
349,946

 
$
236,595

 
$
479,839

 
$
296,764

Other Income (Expense)
 
 
 
 
 
 
 
Investment income (loss)—realized
$
5,615

 
$
3,821

 
$
8,295

 
$
3,739

Investment income (loss)—unrealized
23,038

 
6,385

 
35,729

 
(2,568
)
Interest and other investment income (expense)
6,475

 
16,340

 
6,427

 
24,720

Interest expense
(4,891
)
 
(4,119
)
 
(9,294
)
 
(8,246
)
Total other income (expense)
$
30,237

 
$
22,427

 
$
41,157

 
$
17,645
Schedule of segment revenues components
The following table reconciles segment revenue to Ares consolidated revenues:
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Total segment revenue
$
529,339

 
$
368,849

 
$
769,020

 
$
501,225

Revenue of Consolidated Funds eliminated in consolidation
(4,310
)
 
(4,842
)
 
(11,916
)
 
(7,453
)
Administrative fees(1)
9,132

 
6,544

 
18,738

 
13,366

Performance fees reclass(2)
(217
)
 
(1,016
)
 
(241
)
 
(1,588
)
Revenue of non-controlling interests in consolidated
subsidiaries(3)
(54
)
 
—

 
(54
)
 
—

Total consolidated adjustments and reconciling items
4,551

 
686

 
6,527

 
4,325

Total consolidated revenue
$
533,890

 
$
369,535

 
$
775,547


$
505,550

 
(1)
Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.
(2)
Related to performance fees for AREA Sponsor Holdings LLC, an investment pool. Changes in value of this investment are reflected within other income (expense) in the Company’s Condensed Consolidated Statements of Operations.
(3)
Adjustments for administrative fees reimbursed and other revenue items attributable to certain of our joint venture partners.
Schedule of segment expenses components
The following table reconciles segment expenses to Ares consolidated expenses:
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Total segment expenses
$
349,946

 
$
236,595

 
$
479,839

 
$
296,764

Expenses of Consolidated Funds added in consolidation
8,825

 
5,288

 
19,334

 
11,267

Expenses of Consolidated Funds eliminated in consolidation
(4,303
)
 
(4,589
)
 
(10,901
)
 
(10,341
)
Administrative fees(1)
9,132

 
6,544

 
18,738

 
13,366

OMG expenses
49,951

 
39,667

 
95,653

 
82,495

Acquisition and merger-related expenses
724

 
85

 
276,060

 
353

Equity compensation expense
18,917

 
9,536

 
34,006

 
18,709

Placement fees and underwriting costs
6,383

 
1,754

 
9,822

 
2,684

Amortization of intangibles
5,274

 
7,121

 
10,549

 
14,384

Depreciation expense
2,774

 
1,934

 
5,990

 
3,792

Expenses of non-controlling interests in consolidated subsidiaries(2)
574

 
—

 
574

 
—

Total consolidation adjustments and reconciling items
98,251

 
67,340

 
459,825

 
136,709

Total consolidated expenses
$
448,197

 
$
303,935

 
$
939,664


$
433,473

 
(1)
Represents administrative fees that are presented in administrative and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.
(2)
Adjustments to eliminate costs being borne by certain of our joint venture partners.
Schedule of segment other income (expense) components
The following table reconciles segment other income (expense) to Ares consolidated other income:
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Total other income (expense)
$
30,237

 
$
22,427

 
$
41,157

 
$
17,645

Other income (expense) from Consolidated Funds added in consolidation, net
(3,150
)
 
7,168

 
35,295

 
(15,635
)
Other income (expense) from Consolidated Funds eliminated in consolidation, net
3,731

 
(566
)
 
(6,874
)
 
11,673

Other income of non-controlling interests in consolidated subsidiaries(1)
5

 
—

 
5

 
—

OMG other expense
(1,626
)
 
(12,663
)
 
(776
)
 
(13,112
)
Performance fee reclass(2)
217

 
1,016

 
241

 
1,588

Changes in fair value of contingent consideration
(32
)
 
24

 
20,216

 
(204
)
Offering costs
5

 
—

 
(655
)
 
—

Total consolidation adjustments and reconciling items
(850
)
 
(5,021
)
 
47,452

 
(15,690
)
Total consolidated other income
$
29,387

 
$
17,406

 
$
88,609


$
1,955

 
(1)
Adjustments to eliminate costs being borne by certain of our joint venture partners.
(2)
Related to performance fees for AREA Sponsor Holdings LLC. Changes in value of this investment are reflected within other (income) expense in the Company’s Condensed Consolidated Statements of Operations.
Reconciliation of segment results to the Company's income before taxes and total assets
The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of ENI, FRE, PRE and DE:
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Economic net income
 
 
 
 
 
 
 
Income (loss) before taxes
$
115,080

 
$
83,006

 
$
(75,508
)
 
$
74,032

Adjustments:
 
 
 
 
 
 
 
Amortization of intangibles
5,274

 
7,121

 
10,549

 
14,384

Depreciation expense
2,774

 
1,934

 
5,990

 
3,792

Equity compensation expenses
18,917

 
9,536

 
34,006

 
18,709

Acquisition and merger-related expenses
756

 
61

 
255,844

 
557

Placement fees and underwriting costs
6,383

 
1,754

 
9,822

 
2,684

OMG expenses, net
51,577

 
52,330

 
96,429

 
95,607

Offering costs
(5
)
 
—

 
655

 
—

(Income) loss before taxes of non-controlling interests in consolidated subsidiaries(1)
623

 
—

 
623

 
—

(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations
8,251

 
(1,061
)
 
(8,072
)
 
12,341

Total consolidation adjustments and reconciling items
94,550

 
71,675


405,846


148,074

Economic net income
209,630

 
154,681


330,338


222,106

Total performance fees income - realized
(74,130
)
 
(81,604
)
 
(82,935
)
 
(87,953
)
Total performance fees income - unrealized
(263,629
)
 
(123,314
)
 
(312,890
)
 
(85,966
)
Total performance fee compensation - realized
52,973

 
51,031

 
58,274

 
53,014

Total performance fee compensation - unrealized
208,732

 
100,865

 
244,133

 
77,552

Total investment income
(30,237
)
 
(22,427
)
 
(41,157
)
 
(17,645
)
Fee related earnings
103,339

 
79,232


195,763


161,108

Performance fees—realized
74,130

 
81,604

 
82,935

 
87,953

Performance fee compensation—realized
(52,973
)
 
(51,031
)
 
(58,274
)
 
(53,014
)
Investment and other income (expense) realized, net
4,522

 
14,657

 
5,907

 
18,828

Additional adjustments:
 
 
 
 
 
 
 
Dividend equivalent(2)
(1,520
)
 
(706
)
 
(4,201
)
 
(1,390
)
One-time acquisition costs(2)
(11
)
 
(12
)
 
(23
)
 
(282
)
Income tax expense(2)
(381
)
 
(249
)
 
(607
)
 
(481
)
Non-cash items
322

 
683

 
136

 
847

Placement fees and underwriting costs(2)
(6,383
)
 
(1,747
)
 
(9,822
)
 
(2,685
)
Depreciation and amortization(2)
(1,315
)
 
(998
)
 
(2,785
)
 
(1,929
)
Distributable earnings
$
119,730

 
$
121,433


$
209,029


$
208,955

Performance related earnings
 
 
 
 
 
 
 
Economic net income
$
209,630

 
$
154,681


$
330,338


$
222,106

Less: fee related earnings
(103,339
)
 
(79,232
)

(195,763
)

(161,108
)
Performance related earnings
$
106,291


$
75,449


$
134,575


$
60,998

 
(1)
Adjustments to eliminate costs being borne by certain of our joint venture partners.
(2)
Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results.