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SEGMENT REPORTING (Tables)
 3 Months Ended
Mar. 31, 2018
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 March 31, 2018:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $28,417)
$
131,766

 
$
49,887

 
$
15,173

 
$
196,826

 
$
—

 
$
196,826

Other fees
5,730

 
340

 
3

 
6,073

 
—

 
6,073

Compensation and benefits
(50,280
)
 
(19,199
)
 
(7,639
)
 
(77,118
)
 
(30,606
)
 
(107,724
)
General, administrative and other expenses
(9,629
)
 
(4,041
)
 
(2,432
)
 
(16,102
)
 
(18,616
)
 
(34,718
)
Fee related earnings
77,587


26,987


5,105

 
109,679

 
(49,222
)
 
60,457

Performance income—realized
5,071

 
4,398

 
13,638

 
23,107

 
—

 
23,107

Performance income—unrealized
16,092

 
21,066

 
(2,040
)
 
35,118

 
—

 
35,118

Performance related compensation—realized
(3,088
)
 
(3,560
)
 
(8,221
)
 
(14,869
)
 
—

 
(14,869
)
Performance related compensation—unrealized
7,176

 
(18,694
)
 
509

 
(11,009
)
 
—

 
(11,009
)
Net performance income
25,251


3,210


3,886

 
32,347

 
—

 
32,347

Investment income—realized
771

 
671

 
3,350

 
4,792

 
838

 
5,630

Investment income (loss)—unrealized
(269
)
 
(4,150
)
 
(1,232
)
 
(5,651
)
 
1,231

 
(4,420
)
Interest and other investment income
2,196

 
329

 
1,017

 
3,542

 
1,247

 
4,789

Interest expense
(4,673
)
 
(1,228
)
 
(420
)
 
(6,321
)
 
(548
)
 
(6,869
)
Net investment income (loss)
(1,975
)

(4,378
)

2,715

 
(3,638
)
 
2,768

 
(870
)
Performance related earnings
23,276


(1,168
)

6,601

 
28,709

 
2,768

 
31,477

Economic net income
$
100,863


$
25,819


$
11,706

 
$
138,388

 
$
(46,454
)
 
$
91,934

Realized income
$
78,857

 
$
27,327

 
$
13,669

 
$
119,853

 
$
(47,780
)
 
$
72,073


The following table presents the financial results for the Company’s operating segments, as well as the OMG, for the three months ended March 31, 2017:
 
Credit Group
 
Private Equity Group
 
Real
Estate Group
 
Total
Segments
 
OMG
 
Total
Management fees (Credit Group includes ARCC Part I Fees of $33,257)
$
121,347

 
$
39,819

 
$
15,615

 
$
176,781

 
$
—

 
$
176,781

Other fees
4,503

 
340

 
(9
)
 
4,834

 
—

 
4,834

Compensation and benefits
(51,703
)
 
(13,218
)
 
(9,736
)
 
(74,657
)
 
(25,953
)
 
(100,610
)
General, administrative and other expenses
(8,041
)
 
(4,198
)
 
(2,731
)
 
(14,970
)
 
(19,313
)
 
(34,283
)
Fee related earnings
66,106


22,743


3,139


91,988


(45,266
)

46,722

Performance income—realized
8,778

 
—

 
27

 
8,805

 
—

 
8,805

Performance income—unrealized
2,936

 
32,237

 
14,088

 
49,261

 
—

 
49,261

Performance related compensation—realized
(5,285
)
 
—

 
(16
)
 
(5,301
)
 
—

 
(5,301
)
Performance related compensation—unrealized
(1,458
)
 
(25,505
)
 
(8,438
)
 
(35,401
)
 
—

 
(35,401
)
Net performance income
4,971


6,732


5,661


17,364


—


17,364

Investment income—realized
318

 
579

 
1,783

 
2,680

 
1,859

 
4,539

Investment income (loss)—unrealized
4,589

 
8,546

 
(444
)
 
12,691

 
(1,407
)
 
11,284

Interest and other investment income (expense)
(19
)
 
152

 
(181
)
 
(48
)
 
874

 
826

Interest expense
(2,458
)
 
(1,513
)
 
(432
)
 
(4,403
)
 
(476
)
 
(4,879
)
Net investment income
2,430


7,764


726


10,920


850


11,770

Performance related earnings
7,401


14,496


6,387


28,284


850


29,134

Economic net income
$
73,507


$
37,239


$
9,526


$
120,272


$
(44,416
)

$
75,856

Realized income
$
69,945

 
$
22,345

 
$
4,588

 
$
96,878

 
$
(43,205
)
 
$
53,673
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 
 March 31,
 
2018
 
2017
Segment Revenues
 
 
 
Management fees (includes ARCC Part I Fees of $28,417 and $33,257 for the three months ended March 31, 2018 and 2017, respectively)
$
196,826

 
$
176,781

Other fees
6,073

 
4,834

Performance income—realized
23,107

 
8,805

Performance income—unrealized
35,118

 
49,261

Total segment revenues
$
261,124

 
$
239,681

Segment Expenses
 
 
 
Compensation and benefits
$
77,118

 
$
74,657

General, administrative and other expenses
16,102

 
14,970

Performance related compensation—realized
14,869

 
5,301

Performance related compensation—unrealized
11,009

 
35,401

Total segment expenses
$
119,098

 
$
130,329

Other Income (Expense)
 
 
 
Investment income—realized
$
4,792

 
$
2,680

Investment income (loss)—unrealized
(5,651
)
 
12,691

Interest and other investment income (expense)
3,542

 
(48
)
Interest expense
(6,321
)
 
(4,403
)
Total other income (expense)
$
(3,638
)
 
$
10,920
Schedule of segment revenues components
The following table reconciles segment revenue to Ares consolidated revenues:
 
For the Three Months Ended 
 March 31,
 
2018
 
2017
Total segment revenue
$
261,124

 
$
239,681

Revenue of Consolidated Funds eliminated in consolidation
(5,110
)
 
(18,188
)
Administrative fees(1)
6,412

 
9,606

Performance income reclass(2)
975

 
(24
)
Principal investment income
2,708

 
13,169

Revenue of non-controlling interests in consolidated
subsidiaries(3)
(20
)
 
—

Total consolidated adjustments and reconciling items
4,965

 
4,563

Total consolidated revenue
$
266,089

 
$
244,244

 
(1)
Represents administrative fees that are presented in administrative, transaction 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 income 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 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 
 March 31,
 
2018
 
2017
Total segment expenses
$
119,098

 
$
130,329

Expenses of Consolidated Funds added in consolidation
8,629

 
10,509

Expenses of Consolidated Funds eliminated in consolidation
(7,313
)
 
(6,598
)
Administrative fees(1)
6,412

 
9,606

OMG expenses
49,222

 
45,266

Acquisition and merger-related expenses
(319
)
 
275,336

Equity compensation expense
21,087

 
15,089

Placement fees and underwriting costs
1,664

 
3,439

Amortization of intangibles
3,287

 
5,275

Depreciation expense
3,889

 
3,216

Expenses of non-controlling interests in consolidated subsidiaries(2)
627

 
—

Total consolidation adjustments and reconciling items
87,185

 
361,138

Total consolidated expenses
$
206,283

 
$
491,467

 
(1)
Represents administrative fees that are presented in administrative, transaction and other fees in the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.
(2)
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 
 March 31,
 
2018
 
2017
Total other income (expense)
$
(3,638
)
 
$
10,920

Other income from Consolidated Funds added in consolidation, net
7,252

 
38,445

Other expense from Consolidated Funds eliminated in consolidation, net
(459
)
 
(23
)
Other income of non-controlling interests in consolidated subsidiaries
7

 
—

OMG other expense
2,768

 
850

Performance income reclass(1)
(975
)
 
24

Principal investment income
(2,708
)
 
(13,169
)
Changes in value of contingent consideration
—

 
20,248

Other non-cash expense
(7
)
 
—

Offering costs
—

 
(660
)
Total consolidation adjustments and reconciling items
5,878

 
45,715

Total consolidated other income
$
2,240

 
$
56,635

 
(1)
Related to performance income 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, RI, FRE and PRE:
 
For the Three Months Ended 
 March 31,
 
2018
 
2017
Economic net income
 
 
 
Income (loss) before taxes
$
62,046

 
$
(190,588
)
Adjustments:
 
 
 
Amortization of intangibles
3,287

 
5,275

Depreciation expense
3,889

 
3,216

Equity compensation expenses
21,087

 
15,089

Acquisition and merger-related expenses
(319
)
 
255,088

Placement fees and underwriting costs
1,664

 
3,439

OMG expenses, net
46,454

 
44,416

Offering costs
—

 
660

Other non-cash expense
7

 
—

Expense of non-controlling interests in consolidated subsidiaries(1)
640

 
—

(Income) loss before taxes of non-controlling interests in Consolidated Funds, net of eliminations
(367
)
 
(16,323
)
Total consolidation adjustments and reconciling items
76,342

 
310,860

Economic net income
138,388

 
120,272

Total performance income - unrealized
(35,118
)
 
(49,261
)
Total performance related compensation - unrealized
11,009

 
35,401

Total investment (income) loss - unrealized
5,574

 
(9,534
)
Realized income
119,853

 
96,878

Total performance income - realized
(23,107
)
 
(8,805
)
Total performance related compensation - realized
14,869

 
5,301

Total investment income - realized
(1,936
)
 
(1,386
)
Fee related earnings
109,679

 
91,988

Performance related earnings
 
 
 
Economic net income
$
138,388

 
$
120,272

Less: fee related earnings
(109,679
)
 
(91,988
)
Performance related earnings
$
28,709


$
28,284

 
(1)