EARNINGS PER COMMON UNIT

12 Months Ended

Dec. 31, 2017

Basic earnings per common unit is computed by dividing income available to common unitholders by the weighted‑average number of common units outstanding during the period. Diluted earnings per common unit is computed using the more dilutive method of either the two-class method or the treasury stock method.

The treasury stock method is used to determine potentially dilutive securities resulting from options and unvested restricted units granted under the 2014 Equity Incentive Plan. The two-class method is an earnings allocation method under which earnings per unit is calculated for common units and participating securities considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Because the holders of unvested restricted units have the right to participate in distributions when declared, the unvested restricted units are considered participating securities to the extent they are expected to vest.

For the years ended December 31, 2017 and 2015, the two-class method was the more dilutive method for the unvested restricted units. For the year ended December 31, 2016 the treasury stock method was the more dilutive method for the unvested restricted units. No participating securities had rights to undistributed earnings during any period presented.

The computation of diluted earnings per common unit for the years ended December 31, 2017, 2016 and 2015 excludes the following options, restricted units and AOG Units, as their effect would have been anti-dilutive:



	For the Year Ended December 31,
	2017	2016	2015
Options	21,001,916	22,781,597	24,082,415
Restricted units	14,105,481	47,182	4,657,761
AOG Units	130,244,013	131,499,652	132,427,608

The following table presents the computation of basic and diluted earnings per common unit:



	For the Year Ended December 31,
	2017			2016			2015
Net income attributable to Ares Management, L.P. common unitholders	$	54,478		$	99,632		$	19,378
Earnings distributed to participating securities (restricted units)	(3,588		)	(1,257		)	(646		)
Preferred stock dividends(1)	—			(8		)	(15		)
Net income available to common unitholders	$	50,890		$	98,367		$	18,717
Basic weighted-average common units	81,838,007			80,749,671			80,673,360
Basic earnings per common unit	$	0.62		$	1.22		$	0.23
Net income (loss) attributable to Ares Management, L.P. common unitholders	$	54,478		$	99,632		$	19,378
Earnings distributed to participating securities (restricted units)	(3,588		)	—			(646		)
Preferred stock dividends(1)	—			(8		)	(15		)
Net income available to common unitholders	$	50,890		$	99,624		$	18,717
Effect of dilutive units:
Restricted units	—			2,187,359			—
Diluted weighted-average common units	81,838,007			82,937,030			80,673,360
Diluted earnings per common unit	$	0.62		$	1.20		$	0.23


(1)	Dividends relate to the preferred shares that were issued by Ares Real Estate Holdings LLC and were redeemed on July 1, 2016.