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SEGMENT REPORTING (Tables)
 9 Months Ended
Sep. 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 September 30, 2017:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $24,036)
$
120,178

 
$
51,313

 
$
17,137

 
$
188,628

 
$
—

 
$
188,628

Other fees
5,668

 
449

 
27

 
6,144

 
—

 
6,144

Compensation and benefits
(46,551
)
 
(19,256
)
 
(11,398
)
 
(77,205
)
 
(27,577
)
 
(104,782
)
General, administrative and other expenses
(6,851
)
 
(4,655
)
 
(2,125
)
 
(13,631
)
 
(18,380
)
 
(32,011
)
Fee related earnings
72,444


27,851


3,641

 
103,936

 
(45,957
)
 
57,979

Performance fees—realized
3,296

 
173,304

 
2,389

 
178,989

 
—

 
178,989

Performance fees—unrealized
33,033

 
(142,822
)
 
20,366

 
(89,423
)
 
—

 
(89,423
)
Performance fee compensation—realized
(1,466
)
 
(138,657
)
 
(856
)
 
(140,979
)
 
—

 
(140,979
)
Performance fee compensation—unrealized
(19,820
)
 
114,395

 
(12,233
)
 
82,342

 
—

 
82,342

Net performance fees
15,043


6,220


9,666

 
30,929

 
—

 
30,929

Investment income—realized
6,206

 
14,268

 
1,997

 
22,471

 
18

 
22,489

Investment income (loss)—unrealized
(1,123
)
 
(8,421
)
 
(767
)
 
(10,311
)
 
4,357

 
(5,954
)
Interest and other investment income (expense)
(540
)
 
1,129

 
716

 
1,305

 
26

 
1,331

Interest expense
(3,277
)
 
(1,229
)
 
(396
)
 
(4,902
)
 
(441
)
 
(5,343
)
Net investment income
1,266


5,747


1,550

 
8,563

 
3,960

 
12,523

Performance related earnings
16,309


11,967


11,216

 
39,492

 
3,960

 
43,452

Economic net income
$
88,753


$
39,818


$
14,857

 
$
143,428

 
$
(41,997
)
 
$
101,431

Distributable earnings
$
73,120

 
$
75,809

 
$
4,736

 
$
153,665

 
$
(53,214
)
 
$
100,451

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended September 30, 2016:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $33,260)
$
115,794

 
$
35,183

 
$
17,819

 
$
168,796

 
$
—

 
$
168,796

Other fees
280

 
309

 
162

 
751

 
—

 
751

Compensation and benefits
(45,222
)
 
(16,697
)
 
(9,459
)
 
(71,378
)
 
(25,960
)
 
(97,338
)
General, administrative and other expenses
(7,274
)
 
(3,925
)
 
(2,289
)
 
(13,488
)
 
(13,386
)
 
(26,874
)
Fee related earnings
63,578


14,870


6,233


84,681


(39,346
)

45,335

Performance fees—realized
22,422

 
108,245

 
2,170

 
132,837

 
—

 
132,837

Performance fees—unrealized
11,152

 
16,569

 
4,647

 
32,368

 
—

 
32,368

Performance fee compensation—realized
(7,241
)
 
(86,537
)
 
—

 
(93,778
)
 
—

 
(93,778
)
Performance fee compensation—unrealized
(11,686
)
 
(13,387
)
 
(4,322
)
 
(29,395
)
 
—

 
(29,395
)
Net performance fees
14,647


24,890


2,495


42,032


—


42,032

Investment income (loss)—realized
588

 
11,267

 
(151
)
 
11,704

 
(20,005
)
 
(8,301
)
Investment income—unrealized
5,460

 
7,066

 
6,211

 
18,737

 
15,979

 
34,716

Interest and other investment income
5,940

 
417

 
714

 
7,071

 
15

 
7,086

Interest expense
(1,831
)
 
(1,399
)
 
(242
)
 
(3,472
)
 
(664
)
 
(4,136
)
Net investment income (loss)
10,157


17,351


6,532


34,040


(4,675
)

29,365

Performance related earnings
24,804


42,241


9,027


76,072


(4,675
)

71,397

Economic net income
$
88,382


$
57,111


$
15,260


$
160,753


$
(44,021
)

$
116,732

Distributable earnings
$
81,542

 
$
45,481

 
$
6,408

 
$
133,431

 
$
(66,696
)
 
$
66,735



The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the nine months ended September 30, 2017:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $76,436)
$
354,179

 
$
147,559

 
$
49,231

 
$
550,969

 
$
—

 
$
550,969

Other fees
15,834

 
1,127

 
37

 
16,998

 
—

 
16,998

Compensation and benefits
(142,647
)
 
(50,862
)
 
(30,848
)
 
(224,357
)
 
(84,881
)
 
(309,238
)
General, administrative and other expenses
(22,766
)
 
(13,198
)
 
(7,947
)
 
(43,911
)
 
(56,729
)
 
(100,640
)
Fee related earnings
204,600

 
84,626

 
10,473

 
299,699

 
(141,610
)
 
158,089

Performance fees—realized
19,957

 
238,084

 
3,883

 
261,924

 
—

 
261,924

Performance fees—unrealized
41,062

 
118,162

 
64,243

 
223,467

 
—

 
223,467

Performance fee compensation—realized
(8,649
)
 
(189,571
)
 
(1,033
)
 
(199,253
)
 
—

 
(199,253
)
Performance fee compensation—unrealized
(27,357
)
 
(95,131
)
 
(39,303
)
 
(161,791
)
 
—

 
(161,791
)
Net performance fees
25,013

 
71,544

 
27,790

 
124,347

 
—

 
124,347

Investment income—realized
9,049

 
17,564

 
4,153

 
30,766

 
3,217

 
33,983

Investment income (loss)—unrealized
16

 
25,479

 
(77
)
 
25,418

 
222

 
25,640

Interest and other investment income
2,399

 
3,264

 
2,069

 
7,732

 
1,125

 
8,857

Interest expense
(8,800
)
 
(4,139
)
 
(1,257
)
 
(14,196
)
 
(1,380
)
 
(15,576
)
Net investment income
2,664

 
42,168

 
4,888

 
49,720

 
3,184

 
52,904

Performance related earnings
27,677

 
113,712

 
32,678

 
174,067

 
3,184

 
177,251

Economic net income
$
232,277

 
$
198,338

 
$
43,151

 
$
473,766

 
$
(138,426
)
 
$
335,340

Distributable earnings
$
204,402

 
$
145,696

 
$
12,596

 
$
362,694

 
$
(151,642
)
 
$
211,052

The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the nine months ended September 30, 2016:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $90,884)
$
332,182

 
$
111,100

 
$
50,794

 
$
494,076

 
$
—

 
$
494,076

Other fees
939

 
983

 
855

 
2,777

 
—

 
2,777

Compensation and benefits
(135,068
)
 
(46,556
)
 
(31,327
)
 
(212,951
)
 
(77,225
)
 
(290,176
)
General, administrative and other expenses
(19,383
)
 
(10,489
)
 
(8,241
)
 
(38,113
)
 
(44,616
)
 
(82,729
)
Fee related earnings
178,670

 
55,038

 
12,081

 
245,789

 
(121,841
)
 
123,948

Performance fees—realized
44,624

 
171,024

 
5,142

 
220,790

 
—

 
220,790

Performance fees—unrealized
(1,544
)
 
109,848

 
10,030

 
118,334

 
—

 
118,334

Performance fee compensation—realized
(9,978
)
 
(136,761
)
 
(53
)
 
(146,792
)
 
—

 
(146,792
)
Performance fee compensation—unrealized
(9,853
)
 
(88,766
)
 
(8,328
)
 
(106,947
)
 
—

 
(106,947
)
Net performance fees
23,249

 
55,345

 
6,791

 
85,385

 
—

 
85,385

Investment income (loss)—realized
390

 
14,641

 
412

 
15,443

 
(20,093
)
 
(4,650
)
Investment income (loss)—unrealized
9,256

 
(1,030
)
 
7,943

 
16,169

 
4,460

 
20,629

Interest and other investment income (expense)
21,617

 
8,532

 
1,642

 
31,791

 
(53
)
 
31,738

Interest expense
(6,729
)
 
(4,201
)
 
(788
)
 
(11,718
)
 
(2,101
)
 
(13,819
)
Net investment income (loss)
24,534

 
17,942

 
9,209

 
51,685

 
(17,787
)
 
33,898

Performance related earnings
47,783

 
73,287

 
16,000

 
137,070

 
(17,787
)
 
119,283

Economic net income
$
226,453

 
$
128,325

 
$
28,081

 
$
382,859

 
$
(139,628
)
 
$
243,231

Distributable earnings
$
221,357

 
$
104,162

 
$
16,867

 
$
342,386

 
$
(157,550
)
 
$
184,836
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 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2017
 
2016
 
2017
 
2016
Segment Revenues
 
 
 
 
 
 
 
Management fees (includes ARCC Part I Fees of $24,036, $76,436 and $33,260, $90,884 for the three and nine months ended September 30, 2017 and 2016, respectively)
$
188,628

 
$
168,796

 
$
550,969

 
$
494,076

Other fees
6,144

 
751

 
16,998

 
2,777

Performance fees—realized
178,989

 
132,837

 
261,924

 
220,790

Performance fees—unrealized
(89,423
)
 
32,368

 
223,467

 
118,334

Total segment revenues
$
284,338

 
$
334,752

 
$
1,053,358

 
$
835,977

Segment Expenses
 
 
 
 
 
 
 
Compensation and benefits
$
77,205

 
$
71,378

 
$
224,357

 
$
212,951

General, administrative and other expenses
13,631

 
13,488

 
43,911

 
38,113

Performance fee compensation—realized
140,979

 
93,778

 
199,253

 
146,792

Performance fee compensation—unrealized
(82,342
)
 
29,395

 
161,791

 
106,947

Total segment expenses
$
149,473

 
$
208,039

 
$
629,312

 
$
504,803

Other Income (Expense)
 
 
 
 
 
 
 
Investment income—realized
$
22,471

 
$
11,704

 
$
30,766

 
$
15,443

Investment income (loss)—unrealized
(10,311
)
 
18,737

 
25,418

 
16,169

Interest and other investment income
1,305

 
7,071

 
7,732

 
31,791

Interest expense
(4,902
)
 
(3,472
)
 
(14,196
)
 
(11,718
)
Total other income
$
8,563

 
$
34,040

 
$
49,720

 
$
51,685
Schedule of segment revenues components
The following table reconciles segment revenue to Ares consolidated revenues:
 
For the Three Months Ended 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2017
 
2016
 
2017
 
2016
Total segment revenue
$
284,338

 
$
334,752

 
$
1,053,358

 
$
835,977

Revenue of Consolidated Funds eliminated in consolidation
(6,822
)
 
(5,986
)
 
(18,738
)
 
(13,439
)
Administrative fees(1)
7,352

 
6,618

 
26,090

 
19,984

Performance fees reclass(2)
(1,187
)
 
76

 
(1,428
)
 
(1,512
)
Revenue of non-controlling interests in consolidated
subsidiaries(3)
(10
)
 
—

 
(64
)
 
—

Total consolidated adjustments and reconciling items
(667
)
 
708

 
5,860

 
5,033

Total consolidated revenue
$
283,671

 
$
335,460

 
$
1,059,218


$
841,010

 
(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 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2017
 
2016
 
2017
 
2016
Total segment expenses
$
149,473

 
$
208,039

 
$
629,312

 
$
504,803

Expenses of Consolidated Funds added in consolidation
25,862

 
16,068

 
45,196

 
27,334

Expenses of Consolidated Funds eliminated in consolidation
(6,823
)
 
(5,980
)
 
(17,724
)
 
(16,320
)
Administrative fees(1)
7,352

 
6,618

 
26,090

 
19,984

OMG expenses
45,957

 
39,346

 
141,610

 
121,841

Acquisition and merger-related expenses
2,818

 
79

 
278,878

 
432

Equity compensation expense
18,091

 
8,476

 
52,097

 
27,185

Placement fees and underwriting costs
4,495

 
2,202

 
14,317

 
4,886

Amortization of intangibles
3,651

 
6,378

 
14,200

 
20,762

Depreciation expense
3,468

 
2,148

 
9,458

 
5,940

Expenses of non-controlling interests in consolidated subsidiaries(2)
(217
)
 
—

 
357

 
—

Total consolidation adjustments and reconciling items
104,654

 
75,335

 
564,479

 
212,044

Total consolidated expenses
$
254,127

 
$
283,374

 
$
1,193,791


$
716,847

 
(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 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2017
 
2016
 
2017
 
2016
Total other income
$
8,563

 
$
34,040

 
$
49,720

 
$
51,685

Other income from Consolidated Funds added in consolidation, net
55,227

 
30,181

 
90,522

 
14,545

Other income (expense) from Consolidated Funds eliminated in consolidation, net
(9,973
)
 
(5,549
)
 
(16,847
)
 
6,125

Other income of non-controlling interests in consolidated subsidiaries
9

 
—

 
14

 
—

OMG other expense
3,960

 
(4,675
)
 
3,184

 
(17,787
)
Performance fee reclass(1)
1,187

 
(76
)
 
1,428

 
1,512

Changes in fair value of contingent consideration
(60
)
 
17,690

 
20,156

 
17,486

Other non-cash expense
—

 
1,728

 
—

 
1,728

Offering costs
(33
)
 
—

 
(688
)
 
—

Total consolidation adjustments and reconciling items
50,317

 
39,299

 
97,769

 
23,609

Total consolidated other income
$
58,880

 
$
73,339

 
$
147,489


$
75,294

 
(1)
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 
 September 30,
 
For the Nine Months Ended 
 September 30,
 
2017
 
2016
 
2017
 
2016
Economic net income
 
 
 
 
 
 
 
Income before taxes
$
88,424

 
$
125,425

 
$
12,916

 
$
199,457

Adjustments:
 
 
 
 
 
 
 
Amortization of intangibles
3,651

 
6,378

 
14,200

 
20,762

Depreciation expense
3,468

 
2,148

 
9,458

 
5,940

Equity compensation expenses
18,091

 
8,476

 
52,097

 
27,185

Acquisition and merger-related expenses
2,878

 
(17,611
)
 
258,722

 
(17,054
)
Placement fees and underwriting costs
4,495

 
2,202

 
14,317

 
4,886

OMG expenses, net
41,997

 
44,021

 
138,426

 
139,628

Offering costs
33

 
—

 
688

 
—

Other non-cash expense
—

 
(1,728
)
 
—

 
(1,728
)
(Income) loss before taxes of non-controlling interests in consolidated subsidiaries
(216
)
 
—

 
407

 
—

(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations
(19,393
)
 
(8,558
)
 
(27,465
)
 
3,783

Total consolidation adjustments and reconciling items
55,004

 
35,328


460,850


183,402

Economic net income
143,428

 
160,753


473,766


382,859

Total performance fees income - realized
(178,989
)
 
(132,837
)
 
(261,924
)
 
(220,790
)
Total performance fees income - unrealized
89,423

 
(32,368
)
 
(223,467
)
 
(118,334
)
Total performance fee compensation - realized
140,979

 
93,778

 
199,253

 
146,792

Total performance fee compensation - unrealized
(82,342
)
 
29,395

 
161,791

 
106,947

Total investment income
(8,563
)
 
(34,040
)
 
(49,720
)
 
(51,685
)
Fee related earnings
103,936

 
84,681


299,699


245,789

Performance fees—realized
178,989

 
132,837

 
261,924

 
220,790

Performance fee compensation—realized
(140,979
)
 
(93,778
)
 
(199,253
)
 
(146,792
)
Investment and other income realized, net
21,160

 
14,777

 
27,067

 
33,605

Additional adjustments:
 
 
 
 
 
 
 
Dividend equivalent(1)
(3,540
)
 
(1,649
)
 
(7,741
)
 
(3,039
)
One-time acquisition costs(1)
(12
)
 
(12
)
 
(35
)
 
(294
)
Income tax expense(1)
(343
)
 
(292
)
 
(950
)
 
(773
)
Non-cash items
397

 
36

 
533

 
883

Placement fees and underwriting costs(1)
(4,495
)
 
(2,209
)
 
(14,317
)
 
(4,894
)
Depreciation and amortization(1)
(1,448
)
 
(960
)
 
(4,233
)
 
(2,889
)
Distributable earnings
$
153,665

 
$
133,431


$
362,694


$
342,386

Performance related earnings
 
 
 
 
 
 
 
Economic net income
$
143,428

 
$
160,753


$
473,766


$
382,859

Less: fee related earnings
(103,936
)
 
(84,681
)

(299,699
)

(245,789
)
Performance related earnings
$
39,492


$
76,072


$
174,067


$
137,070

 
(1)
Certain costs are reduced by the amounts attributable to OMG, which is excluded from segment results.