Global Alternative Investments
Unique Opportunities
Demonstrated Performance
ARES
IR Menu

Contact Information

For investor inquiries regarding Ares Management Corporation, please contact:

Phone (U.S.): (800) 340-6597
Phone (International): (212) 808-1101

Email: IRARES@aresmgmt.com

Priscila Roney
Vice President
proney@aresmgmt.com
(212) 808-1185

Carl Drake
Partner/Head of Public Investor Relations and Communications
cdrake@aresmgmt.com
(678) 538-1981

By Mail:
Ares Management Corporation
Attn: Priscila Roney
245 Park Ave, 44th Floor
New York, NY 10167

For media inquiries regarding Ares Management Corporation, please contact:

Bill Mendel
Mendel Communications bill@mendelcommunications.com
(212) 397-1030

Press Release

Ares Management, L.P. Reports Fourth Quarter and Full Year 2015 Results

Company Release - 2/29/2016 6:00 AM ET
  • Total assets under management (“AUM”)1 increased to $93.6 billion, a 14.5% increase year over year
  • $10.6 billion in gross capital raised during the three months ended December 31, 2015 and $23.0 billion raised over the year ended December 31, 2015
  • Available Capital increased to $22.4 billion compared to $18.2 billion at December 31, 2014
    • AUM Not Yet Earning Fees reached a record $15.5 billion, an increase of 67.6% compared to December 31, 2014
  • Fee related earnings of $39.8 million and $177.0 million for the three months and year ended December 31, 2015, respectively, down 0.6% and up 20.2% from the three months and year ended December 31, 2014, respectively
  • Economic net income of $51.4 million and $216.4 million on a pre-tax basis for the three months and year ended December 31, 2015, respectively, compared to $64.7 million and $289.2 million for the prior year periods
    • Economic net income after tax of $42.6 million and $185.2 million, or $0.20 per unit2 and $0.87 per unit, for the three months and year ended December 31, 2015, respectively
  • Distributable earnings of $50.8 million and $230.6 million for the three months and year ended December 31, 2015, respectively, compared to $64.5 million and $232.8 million for the prior year periods
    • Distributable Earnings after tax per common unit of $0.23 and $0.91 for the three months and year ended December 31, 2015
  • Declared fourth quarter distribution of $0.20 per common unit for a full year distribution of $0.84
  • Fourth quarter net income attributable to Ares Management, L.P. of $0.2 million, inclusive of non-recurring expenses associated with discontinued merger-related activities
    • Net income attributable to Ares Management, L.P. for the twelve months ended December 31, 2015 of $19.4 million

LOS ANGELES--(BUSINESS WIRE)-- Ares Management, L.P. (the “Company,” “Ares,” “we,” and “our”) (NYSE:ARES) today reported its financial results for its fourth quarter and year ended December 31, 2015.

“Despite challenging market conditions, we delivered strong results on several of our key metrics in 2015, including a record $23 billion in gross new capital raised, 14.5% growth in assets under management and 20.2% growth in our fee related earnings,” said Tony Ressler, Chairman and Chief Executive Officer of Ares, “In addition, more than three quarters of our direct institutional capital raised in 2015 was derived from existing institutional investors, a testament to our strong investment performance and value we provide to our investors.”

Ares reported growth in AUM and Fee Earning Assets Under Management (“FEAUM”) of 14.5% and 11.3%, year over year, reaching $93.6 billion and $68.3 billion, respectively. Fourth quarter gross new capital raised totaled $10.6 billion, primarily driven by fundraising in the Private Equity and Direct Lending Groups, bringing the total gross capital raised for the year ended December 31, 2015 to $23.0 billion. Of the $10.6 billion raised during the fourth quarter, $10.1 billion is eligible to earn fees with $2.1 billion earning fees and another $8.0 billion expected to become FEAUM upon deployment or during the investment period.

“With over $22 billion of dry powder, including $13.5 billion in AUM not yet earning fees and available for deployment, we are well positioned to take advantage of the increasingly attractive market for new investment opportunities in 2016,” said Michael Arougheti, President of Ares.

Ares declared a fourth quarter distribution of $0.20 per common unit payable on March 28, 2016 to common unitholders of record as of March 14, 2016.

Ares has also provided additional information in its Fourth Quarter and Full Year 2015 Earnings Presentation, which can be viewed at www.aresmgmt.com under “Investor Resources — Presentations and Reports.”

1

 

In this press release we refer to certain non-GAAP financial measures, including assets under management, fee earning assets under management, economic net income, fee related earnings, performance related earnings and distributable earnings. The definitions and reconciliations of these measures to the most directly comparable GAAP measures, where applicable, are included in this press release.

 

2

Total units outstanding represents the sum of common units, Ares Operating Group Units that are exchangeable for common units on a one-for-one basis, and the dilutive effects of the Company’s equity-based awards. See Exhibit F for more details.

 

ARES MANAGEMENT, L.P.

Key Performance Metrics as of December 31, 2015

       
($ in thousands, except unit data and as otherwise noted) Three months ended
December 31,
% Year ended
December 31,
%
    2015   2014   Change   2015   2014(1)   Change
Management Fees (includes ARCC Part I Fees of $31,520 and $33,396 for the three months ended December 31, 2015 and 2014, respectively, and $121,491 and $118,537 for the year ended December 31, 2015 and 2014, respectively) $165,905   $161,106 3% $650,918 $598,046 9%
Admin. & Other Fees 8,197 8,438 (3%) 30,606 28,447 8%
Compensation & Benefits(2) (100,528) (100,638) 0% (382,210) (373,142) 2%
General & Administrative Expenses(3)   (33,771)   (28,867)   17%   (122,322)   (106,087)   15%
Fee Related Earnings $39,803 $40,039 (1%) $176,992 $147,264 20%
 
Net Performance Fees $(1,960) $20,580 NM $41,912 $71,349 (41%)
Net Investment Income   13,597   4,077   234%   (2,526 ) 70,593   NM
Performance Related Earnings $11,637 $24,657 (53%) $39,386 $141,942 (72%)
 
Economic Net Income(4) $51,440 $64,696 (20%) $216,378 $289,206 (25%)
Economic Net Income After Income Taxes(5) $42,616 $56,728 (25%) $185,235 $266,537 (31%)
Economic Net Income After Income Taxes per Unit(5) $0.20 $0.27 (26%) $0.87 $1.26 (31%)
Distributable Earnings $50,754 $64,538 (21%) $230,589 $232,756 (1%)
Distributable Earnings After Income Taxes per Common Unit(6) $0.23 $0.26 (12%) $0.91 $0.92 (1%)
 
Other Data
Accrued Incentives (Gross) $541,852 $548,098 (1%) $541,852 $548,098 (1%)
Accrued Incentives (Net) 140,137 166,934 (16%) 140,137 166,934 (16%)
Total Fee Revenue(7) 163,945 181,686 (10%) 692,830 669,395 4%
Management Fees as a Percentage of Total Fee Revenue(7) 101.2% 88.7% - 94.0% 89.3% -
 
(1) Ares completed its IPO and related reorganization on May 7, 2014, and accordingly the financial results for the year ended December 31, 2014 reported herein include the results of our predecessor owners.
(2) Includes compensation and benefits expenses attributable to OMG of $31.8 million and $28.4 million for the three months ended December 31, 2015 and 2014, respectively, and $119.7 million and $109.0 million for the year ended December 31, 2015 and 2014, respectively, which are not allocated to an operating segment.
(3) Includes G&A expenses attributable to OMG of $17.7 million and $15.7 million for the three months ended December 31, 2015 and 2014, respectively, and $64.2 million and $56.2 million for the year ended December 31, 2015 and 2014, respectively, which are not allocated to an operating segment.
(4) For the three months and year ended December 31, 2015, expenses for discontinued merger-related activities of $44.6 million and $51.3 million, respectively, have been excluded. The total merger-related expenses were comprised of operating expenses of $35.9 million and $15.4 million of financing related costs.
(5) For the year ended December 31, 2014, represents pro forma results assuming Ares’ IPO and reorganization had taken place on January 1, 2014. Total units of 213,768,526 for the three months ended December 31, 2015 includes common units, Ares Operating Group Units that are exchangeable for common units on a one-for-one basis, and the dilutive effects of the Company’s equity-based awards.
(6) Distributable earnings attributable to common unitholders is presented on a pro forma basis for the year ending December 31, 2014 as if Ares’ IPO occurred on January 1, 2014. The per unit calculation uses total common units outstanding. See “Exhibit G. Per Unit Calculations for more detail.
(7) Total fee revenue is calculated as management fees plus net performance fees.

Management Fee Revenue. Management fee revenue increased by $4.8 million to $165.9 million for the three months ended December 31, 2015 compared to the three months ended December 31, 2014. For the year ended December 31, 2015, management fee revenue increased by $52.9 million to $650.9 million over the same period in 2014. The increase for both periods was primarily due to management fee contracts acquired in the Energy Investors Funds (“EIF”) acquisition in the first quarter of 2015, deployment of European Direct Lending funds and incremental fees from new funds that were raised during the second half of 2014 and 2015 in the Tradable Credit and Direct Lending Groups. The increase was partially offset by a decrease in management fees in the Real Estate and Tradable Credit Groups due to certain funds moving past their respective reinvestment periods, as well as fund liquidations and distributions and one-time catch up fees attributable to certain funds in the Real Estate Group recognized in the fourth quarter of 2014.

Compensation and Benefits. Compensation and benefits expenses decreased by $0.1 million to $100.5 million for the three months ended December 31, 2015 compared to the three months ended December 31, 2014. For the year ended December 31, 2015, compensation and benefits expenses increased by $9.1 million to $382.2 million over the same period in 2014. The increase was attributable to increased headcount associated with the 2014 acquisition of Keltic Financial Services and Keltic Financial Partners (“Keltic”), as well as the 2015 acquisitions of First Capital Holdings (“FCC”) and EIF.

General and Administrative Expenses. General and administrative expenses increased by $4.9 million to $33.8 million for the three months ended December 31, 2015 compared to the three months ended December 31, 2014. For the year ended December 31, 2015, general and administrative expenses increased by $16.2 million to $122.3 million over the same period in 2014. Both increases were primarily driven by additional occupancy and office expenses, growth in personnel and geographical expansion and expenses relating to the Keltic, FCC and EIF acquisitions.

Fee Related Earnings. FRE decreased by $0.2 million, or 0.6%, to $39.8 million for the three months ended December 31, 2015 compared to the three months ended December 31, 2014. The decrease was primarily attributable to a decrease in management fees in the Real Estate Group due to certain funds moving past their reinvestment periods and one-time catch up fees attributable to certain funds in the Real Estate Group recognized in the fourth quarter of 2014. The decline was partially offset by an increase in management fees in the Private Equity and Direct Lending Groups. FRE increased by $29.7 million, or 20.2%, to $177.0 million for the year ended December 31, 2015 compared to the year ended December 31, 2014. The growth in FRE was primarily attributable to an increase in management fees in the Private Equity and Direct Lending Groups and a decrease in compensation and benefits expenses in the Tradable Credit, Direct Lending and Real Estate Groups.

Performance Related Earnings. PRE was $11.6 million for the three months ended December 31, 2015 compared to $24.7 million for the three months ended December 31, 2014. The decrease in PRE was primarily attributable to lower performance of certain underlying investments in certain funds in the Tradable Credit Group that were negatively impacted by weakening credit markets, and to a lesser extent, ARCC Part II Fees in the Direct Lending Group, which resulted in the reversal of previously recognized unrealized performance fees. The decline in PRE for the three months ended December 31, 2015 was partially offset by unrealized appreciation in equity investments made by ACOF Asia in the Private Equity Group. PRE was $39.4 million for the year ended December 31, 2015 compared to $141.9 million for the year ended December 31, 2014. For the year ended December 31, 2015, the decrease in PRE was primarily attributable to lower performance of certain underlying investments in certain funds in the Tradable Credit Group and the reversal of previously recognized unrealized ARCC Part II Fees in the Direct Lending Group, and to a lesser extent, to unrealized market depreciation of equity investments held by ACOF Asia in the Private Equity Group.

Economic Net Income. ENI was $51.4 million for the three months ended December 31, 2015 compared to $64.7 million for the three months ended December 31, 2014. ENI after provision for income taxes was $42.6 million, or $0.20 per unit, for the three months ended December 31, 2015 compared to $56.7 million, or $0.27 per unit for the three months ended December 31, 2014. The decrease in ENI was due to a decline in net performance fees of $22.5 million. The decline was partially offset by an increase in net investment income of $9.5 million. For the year ended December 31, 2015, ENI was $216.4 million, compared to $289.2 million for the year ended December 31, 2014. The decrease in ENI was primarily driven by a decline in net investment income of $73.1 million and net performance fees of $29.4 million. The decline was partially offset by an increase in FRE of $29.7 million. ENI after provision for taxes was $185.2 million, or $0.87 per unit, for the year ended December 31, 2015 compared to $266.5 million, or $1.26 per unit for the year ended December 31, 2014.

Distributable Earnings. Total distributable earnings decreased by $13.8 million to $50.8 million for the three months ended December 31, 2015 compared to the three months ended December 31, 2014. The decrease for the three months ended December 31, 2015 was primarily driven by declines in realized net performance fees in the Direct Lending, Tradable Credit and Private Equity Groups, realized net investment income in the Tradable Credit and Private Equity Groups and fee related earnings in the Real Estate Group. This decrease was partially offset by an increase in fee related earnings in the Private Equity, Tradable Credit and Direct Lending Groups. For the year ended December 31, 2015, total distributable earnings decreased by $2.2 million to $230.6 million compared to the year ended December 31, 2014. The decrease for the twelve months ended December 31, 2015 was primarily driven by declines in realized net performance fees in the Direct Lending, Tradable Credit and Private Equity Groups and in realized net investment income in the Tradable Credit and Private Equity Groups and in fee related earnings in the Real Estate Group. This decrease was partially offset by an increase in fee related earnings in the Private Equity, Tradable Credit and Direct Lending Groups and in realized net performance fees in the Real Estate Group.

Accrued Incentives Fees. Net accrued incentive fees as of December 31, 2015 decreased by $26.7 million to $140.1 million compared to $166.9 million as of December 31, 2014. The decrease in net accrued incentive fees was primarily attributable to the Tradable Credit Group as a result of (i) fund realizations and (ii) the reversal of unrealized performance fees due to weakening credit markets during 2015. This decrease was partially offset by (i) an increase in accrued incentive fees from ACOF III and ACOF IV in the Private Equity Group, as a result of market appreciation of their investment portfolios and (ii) an increase in accrued performance fees from ACE II in the Direct Lending Group, as a result of continued strong performance of the fund, which continues to exceed its performance fee hurdle rate on an increased capital base compared to the prior year.

Assets Under Management

 
($ in millions)   For the three
months ended
December 31, 2015
  For the
year ended
December 31, 2015
Beginning of Period AUM $91,517 $81,761
Acquisitions (1) - 4,581
Commitments (2) 9,931 22,004
Capital Reduction (3) (6,341) (9,274)
Distribution (4) (1,309) (5,829)
Change in Fund Value (5) (166) 389
End of Period AUM $93,632 $93,632
Average AUM $92,574 $87,696
 
(1) Represents AUM acquired via acquisition.
(2) Represents net new commitments during the period, including equity and debt commitments, reductions of previous commitments, and gross inflows into our open-ended managed accounts and sub-advised accounts, as well as equity offerings by our publicly traded vehicles.
(3) Represents the permanent reduction in leverage during the period.
(4) Represents distributions and redemptions net of recallable amounts.
(5) Includes fund net income, including interest income, realized and unrealized gains (losses), fees and expenses and the impact of foreign currency.

Total AUM was $93.6 billion as of December 31, 2015, an increase of $2.1 billion, or 2.3%, compared to total AUM of $91.5 billion as of September 30, 2015. For the three months ended December 31, 2015, the increase in AUM was primarily driven by net new commitments of $9.9 billion, which mainly consisted of (i) $408.5 million in debt commitments to the Tradable Credit Group’s long-only credit funds, (ii) $2.1 billion in equity commitments and $625.7 million in debt commitments to the Direct Lending Group’s funds, (iii) $6.2 billion in equity commitments to the Private Equity Group (consisting of $5.7 billion in our fifth North American/European flexible capital private equity fund and $370.8 million in our fifth power private equity fund) and (iv) $579.8 million in equity commitments to the Real Estate Group’s funds. The increase in AUM was partially offset by capital reductions of $6.3 billion primarily attributable the reduction in unfunded co-investment capital previously made available by General Electric Company and General Electric Capital Corporation (“GE”) of $5.7 billion(1) and distributions of $1.3 billion, of which $488.3 million was attributable to the Tradable Credit Group, $246.8 million to the Direct Lending Group, $55.5 million to the Private Equity Group and $518.3 million to the Real Estate Group.

(1) During 2015, GE and affiliates exited the corporate lending sectors in the U.S. and Europe, which caused a fourth quarter 2015 reduction in AUM for Ares of $5.7 billion ($3.1 billion in the Direct Lending Group and $2.6 billion in the Tradable Credit Group), but it had no impact on FEAUM. The reduction was accounted for as a capital reduction/reduction of leverage. No direct management fees would have been paid on $5.0 billion of the $5.7 billion reduction in capital made available by GE.

Fee-Earning Assets Under Management

   
($ in millions) For the three
months ended
December 31, 2015
For the
year ended
December 31, 2015
Beginning of Period FEAUM $66,722 $61,359
Acquisitions (1) - 4,046
Commitments (2) 2,163 6,215
Subscriptions / Deployment / Increase in Leverage (3) 2,015 6,256
Redemptions / Distributions / Decrease in Leverage (4) (2,196) (8,754)
Change in Fund Value (5) (431) (189)
Change in Fee Basis - (660)
End of Period FEAUM $68,272 $68,272
Average FEAUM $67,497 $64,816
 

(1)

Represents fee earning AUM acquired via acquisition.

(2)

Represents net new commitments during the period for funds that earn management fees based on committed capital.

(3)

Represents subscriptions, capital deployment and increase in leverage (for funds that earn fees on a gross asset basis).

(4)

Represents redemptions, distributions and decrease in leverage (for funds that earn fees on a gross asset basis).

(5)

Includes fund net income, including interest income, realized and unrealized gains (losses), fees and expenses and the impact of foreign currency for funds that earn management fees based on market value.
 

Total FEAUM was $68.3 billion as of December 31, 2015, an increase of $1.6 billion, or 2.3%, compared to total FEAUM of $66.7 billion as of September 30, 2015. The increase in FEAUM was primarily driven by net new commitments of $2.2 billion, primarily comprised of $1.4 billion in the Tradable Credit Group, $448.3 million in the Private Equity Group, and $266.1 million in the Real Estate Group. Subscriptions / deployment / increase in leverage of $2.0 billion further added to the increase in FEAUM. Partially offsetting the increase in FEAUM were redemptions / distributions / decreases in leverage of $2.2 billion, comprised of $1.1 billion in the Tradable Credit Group, $857.3 million in the Direct Lending Group, $185.2 million in the Real Estate Group and $57.3 million in the Private Equity Group.

 

Incentive Generating AUM and Incentive Eligible AUM

($ in millions)

   
As of December 31, 2015 As of December 31, 2014
Incentive
Generating AUM
  Incentive Eligible
AUM
Incentive
Generating AUM
  Incentive Eligible
AUM
Tradable Credit Group $737 $5,316 $2,891 $7,065
Direct Lending Group 3,275 18,456 11,037 14,466
Private Equity Group 7,748 15,216 6,541 9,457
Real Estate Group 2,136 6,784 2,079 6,365
Total $13,896 $45,772 $22,547 $37,354
 

Total Incentive Generating AUM (“IGAUM”) was $13.9 billion as of December 31, 2015 compared to total IGAUM of $22.5 billion as of December 31, 2014. The decrease was primarily attributable to a reduction in previously accrued ARCC Part II Fees during the fourth quarter, which were impacted by lower fund realization events and a decrease in the valuation of certain underlying investments. The reversal of $5.4 million of net ARCC Part II Fees accrued during the nine months ended September 30, 2015 was tied to ARCC’s gross asset value and therefore triggered a reduction of $9.2 billion in IGAUM. This reduction in IGAUM was offset by additional funds exceeding their hurdle rates in the Direct Lending Group and market appreciation and capital deployment in the Private Equity Group.

Total Incentive Eligible AUM (“IEAUM”) was $45.8 billion as of December 31, 2015, compared to IEAUM of $37.4 billion as of December 31, 2014. The increase was primarily attributable to new fund closings in Direct Lending and Private Equity Groups, of which most of the capital has not yet been invested.

Available Capital and Assets Under Management Not Yet Earning Fees

($ in millions)

   
As of December 31, 2015 As of December 31, 2014
Available
Capital
  AUM Not Yet
Earning Fees
Available
Capital
  AUM Not Yet
Earning Fees
Tradable Credit Group $2,310 $1,663 $5,716 $1,884
Direct Lending Group 7,950 6,676 5,432 5,177
Private Equity Group 8,553 6,185 3,050 674
Real Estate Group 3,606 934 4,022 1,490
Total $22,419 $15,457 $18,221 $9,225
 

Total Available Capital was $22.4 billion as of December 31, 2015, an increase of 23.0%, compared to $18.2 billion as of December 31, 2014. The increase was driven by $14.4 billion of new equity commitments and $2.8 billion of new debt commitments, primarily in the Direct Lending and Private Equity Groups and was partially offset by net capital reductions of $6.0 billion mainly due to the reduction in available capital from GE and a decrease in fund value of $0.6 billion due to the impact of foreign currency for funds that earn management fees based on market value.

Total AUM Not Yet Earning Fees was $15.5 billion as of December 31, 2015, an increase of 67.6%, compared to $9.2 billion as of December 31, 2014. The increase in AUM Not Yet Earning Fees was primarily due to new commitments of $5.4 billion to Private Equity Group funds for which fees have not yet been activated and new commitments to Direct Lending Group funds that pay fees based on invested capital. Of the $15.5 billion, approximately $12.4 billion is available for deployment, $1.1 billion is available for deployment for follow-on investments, $1.4 billion is currently in funds unlikely to be drawn due to desired leverage targets, and $0.6 billion is in funds that are in or are expected to be in wind down.

Results Excluding Consolidated Funds

Net income of the consolidated company entities was $4.2 million and $68.1 million for the three and twelve months ended December 31, 2015, respectively.

Investment Capacity and Liquidity

As of December 31, 2015, our cash and cash equivalents were $121.5 million, investments were $636.1 million, net performance fees receivable were $140.1 million and $110.0 million was drawn against the $1.03 billion revolving credit facility.

($ in thousands)   As of
December 31, 2015
  As of
December 31, 2014
 
Cash and cash equivalents $121,483 $148,858
Investments 636,092 598,074
Debt obligations 389,120 243,491
Net performance fees receivable 140,137 166,934

Distribution

We declared a quarterly distribution of $0.20 per common unit, payable to common unitholders of record at the close of business on March 14, 2016, payable on March 28, 2016.

Recent Developments

  • On February 16, 2016, we announced that we are combining our Tradable Credit Group and Direct Lending Group to form a single segment called the Ares Credit Group in order to manage Ares’ broad array of credit products in a more effective manner. With total combined AUM of $62 billion and fee earning AUM of $50 billion as of December 31, 2015, the Credit Group will offer comprehensive and global credit management client solutions and be well positioned to capitalize on future growth opportunities. We do not expect any material changes to existing strategies, teams or portfolio management as a result of the combination. Ares will begin reporting the new Credit Group as an operating segment for the quarter ending March 31, 2016.
  • Since December 31, 2015, we have held closings for an additional $1.1 billion of equity commitments to our fifth North American/European flexible capital private equity fund, bringing total commitments to date to $6.8 billion, above our target of $6.5 billion and compared to $4.7 billion for the predecessor fund.

Conference Call and Webcast Information

On February 29, 2016, the Company invites all interested persons to attend its webcast/conference call at 12:00pm (Eastern Time) to discuss its fourth quarter 2015 financial results.

All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Home page of the Investor Resources section of our website at http://www.aresmgmt.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing (888) 317-6003. International callers can access the conference call by dialing +1 (412) 317-6061. All callers will need to enter the Participant Elite Entry Number 5336351 followed by the # sign and reference “Ares Management, L.P.” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected. For interested parties, an archived replay of the call will be available through March 29, 2016 to domestic callers by dialing (877) 344-7529 and to international callers by dialing +1 (412) 317-0088. For all replays, please reference conference number 10078855. An archived replay will also be available through March 29, 2016 on a webcast link located on the Home page of the Investor Resources section of our website.

Availability of SEC Filings

We filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 with the U.S. Securities and Exchange Commission on March 20, 2015. We filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 with the U.S. Securities and Exchange Commission on February 29, 2016.

Copies of our filings with the SEC are available through our website at www.aresmgmt.com by selecting the “SEC Filings” sub-tab under the “Investor Resources “ section, as well as on the SEC’s website at www.sec.gov. Unitholders can request a printed copy of the complete audited financial statements free of charge upon request to IRARES@aresmgmt.com or by written request addressed to Ares Management, L.P, Attn: Investor Relations, 245 Park Ave, 44th Floor New York, NY 10167

About Ares Management, L.P.

Ares Management, L.P. is a publicly traded, leading global alternative asset manager with approximately $94 billion of assets under management as of December 31, 2015 and more than 15 offices in the United States, Europe and Asia. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its four distinct but complementary investment groups in Tradable Credit, Direct Lending, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares was built upon the fundamental principle that each group benefits from being part of the greater whole.

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Ares Management, L.P. undertakes no duty to update any forward-looking statements made herein or on the webcast/conference call.

Nothing in this press release constitutes an offer to sell or solicitation of an offer to buy any securities of Ares or an investment fund managed by Ares or its affiliates.

Available Information

Ares Management, L.P.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website at www.aresmgmt.com. The contents of such website are not and should not be deemed to be incorporated by reference herein.

Appendix

Exhibit A. Operating Segments as of December 31, 2015

($ in millions)

     
Available
Capital
Fair Value of
Capital
AUM
Tradable Credit Group $2,310 $27,290 $29,600
Direct Lending Group 7,950 24,698 32,649
Private Equity Group 8,553 12,563 21,115
Real Estate Group 3,606 6,662 10,268
Total $22,419 $71,213 $93,632
 

Exhibit B. Segment Results

($ in thousands)

As of and for the three months ended December 31, 2015:

             
Tradable Direct Private Real Total
Credit Lending Equity Estate Total Stand
Group Group Group Group Segments OMG Alone
Management fees (includes ARCC Part I Fees of $31,520) $ 36,806 $ 75,800 $ 36,257 $ 17,042 $ 165,905 $ $ 165,905
Administrative fees and other income 40 74 678 643 1,435 6,762 8,197
Compensation and benefits (7,943) (37,619) (12,965) (10,206) (68,733) (31,795) (100,528)
General, administrative and other expenses (3,898) (3,094) (5,140) (3,919) (16,051) (17,720) (33,771)
Fee related earnings (loss) 25,005 35,161 18,830 3,560 82,556 (42,753) 39,803
Performance fees—realized 10,549 2,697 6,370 19,616 19,616
Performance fees—unrealized (25,283) (5,107) 2,019 5,836 (22,535) (22,535)
Performance fee compensation—realized (1,868) (2,158) (4,026) (4,026)
Performance fee compensation—unrealized 8,515 3,280 (1,218) (5,592) 4,985 4,985
Net performance fees (8,807) (1,827) 1,340 6,614 (1,960) (1,960)
Investment income (loss)—realized 438 312 (408) 1,208 1,550 (23) 1,527
Investment income (loss)—unrealized (11,555) (243) 21,222 560 9,984 52 10,036
Interest and other investment income 2,977 370 149 54 3,550 379 3,929
Interest expense (440) (69) (193) (35) (737) (1,158) (1,895)
Net investment income (loss) (8,580) 370 20,770 1,787 14,347 (750) 13,597
Performance related earnings (loss) (16,667) (1,457) 22,110 8,401 12,387 (750) 11,637
Economic net income (loss) $ 8,338 $ 33,704 $ 40,940 $ 11,961 $ 94,943 $ (43,503) $ 51,440
Distributable earnings (loss) $ 36,239 $ 34,507 $ 18,297 $ 9,409 $ 98,452 $ (47,698) $ 50,754
Total assets $ 302,167 $ 273,896 $ 882,454 $ 186,058 $ 1,644,575 $ 96,637 $ 1,741,211
 

As of and for the three months ended December 31, 2014:

             
Tradable Direct Private Real Total
Credit Lending Equity Estate Total Stand
Group Group Group Group Segments OMG Alone
Management fees (includes ARCC Part I Fees of $33,396) $ 37,300 $ 75,608 $ 22,498 $ 25,700 $ 161,106 $ $ 161,106
Administrative fees and other income 583 82 186 766 1,617 6,821 8,438
Compensation and benefits (11,536) (39,165) (9,666) (11,909) (72,276) (28,362) (100,638)
General, administrative and other expenses (3,576) (3,353) (2,557) (3,721) (13,207) (15,660) (28,867)
Fee related earnings (loss) 22,771 33,172 10,461 10,836 77,240 (37,201) 40,039
Performance fees—realized 30,891 24,839 1,057 56,787 56,787
Performance fees—unrealized (29,190) (8,593) 39,403 6,256 7,876 7,876
Performance fee compensation—realized (18,976) (14,900) (33,876) (33,876)
Performance fee compensation—unrealized 18,716 5,134 (31,835) (2,222) (10,207) (10,207)
Net performance fees 1,441 6,480 7,568 5,091 20,580 20,580
Investment income (loss)—realized 13,163 2,020 (347) 1,502 16,338 16,338
Investment income (loss)—unrealized (10,004) (322) (1,778) (294) (12,398) (12,398)
Interest and other investment income 3,285 188 62 (21) 3,514 3,514
Interest expense (640) (681) (1,889) (167) (3,377) (3,377)
Net investment income (loss) 5,804 1,205 (3,952) 1,020 4,077 4,077
Performance related earnings (loss) 7,245 7,685 3,616 6,111 24,657 24,657
Economic net income (loss) $ 30,016 $ 40,857 $ 14,077 $ 16,947 $ 101,897 $ (37,201) $ 64,696
Distributable earnings (loss) $ 49,738 $ 44,009 $ 6,376 $ 2,845 $ 102,968 $ (38,430) $ 64,538
Total assets $ 656,710 $ 289,310 $ 501,392 $ 224,333 $ 1,671,745 $ 15,206 $ 1,686,951
 

Exhibit B. Segment Results (continued)

($ in thousands)

As of and for the year ended December 31, 2015:

             
Tradable Direct Private Real Total
Credit Lending Equity Estate Total Stand
Group Group Group Group Segments OMG Alone
Management fees (includes ARCC Part I Fees of $121,491) $ 148,180 $ 291,543 $ 145,150 $ 66,045 $ 650,918 $ $ 650,918
Administrative fees and other income 113 301 1,406 2,779 4,599 26,007 30,606
Compensation and benefits (35,471) (137,391) (49,104) (40,591) (262,557) (119,653) (382,210)
General, administrative and other expenses (15,539) (13,271) (14,266) (15,044) (58,120) (64,202) (122,322)
Fee related earnings (loss) 97,283 141,182 83,186 13,189 334,840 (157,848) 176,992
Performance fees—realized 86,137 4,295 22,000 9,516 121,948 121,948
Performance fees—unrealized (114,858) 31,845 99,482 15,179 31,648 31,648
Performance fee compensation—realized (43,190) (2,575) (17,600) (1,826) (65,191) (65,191)
Performance fee compensation—unrealized 61,796 (18,134) (81,602) (8,553) (46,492) (46,492)
Net performance fees (10,115) 15,431 22,280 14,316 41,912 41,912
Investment income (loss)—realized 14,293 1,632 4,189 2,658 22,772 (23) 22,749
Investment income (loss)—unrealized (36,899) 1,563 6,400 1,522 (27,414) 52 (27,362)
Interest and other investment income 9,292 1,140 6,163 259 16,854 379 17,233
Interest expense (5,157) (1,918) (5,936) (977) (13,988) (1,158) (15,146)
Net investment income (loss) (18,471) 2,417 10,816 3,462 (1,776) (750) (2,526)
Performance related earnings (loss) (28,586) 17,848 33,096 17,778 40,136 (750) 39,386
Economic net income (loss) $ 68,697 $ 159,030 $ 116,282 $ 30,967 $ 374,976 $ (158,598) $ 216,378
Distributable earnings (loss) $ 153,677 $ 137,850 $ 89,364 $ 17,615 $ 398,506 $ (167,918) $ 230,589
Total assets $ 302,167 $ 273,896 $ 882,453 $ 186,058 $ 1,644,574 $ 96,637 $ 1,741,211
 

As of and for the year ended December 31, 2014:

 
  Tradable   Direct   Private   Real       Total
Credit Lending Equity Estate Total Stand
Group Group Group Group Segments OMG Alone
Management fees (includes ARCC Part I Fees of $118,537) $ 144,102 $ 275,571 $ 90,690 $ 87,683 $ 598,046 $ $ 598,046
Administrative fees and other income 636 556 219 4,889 6,300 22,147 28,447
Compensation and benefits (43,607) (138,945) (34,386) (47,174) (264,112) (109,030) (373,142)
General, administrative and other expenses (13,909) (11,196) (9,166) (15,632) (49,903) (56,184) (106,087)
Fee related earnings (loss) 87,222 125,986 47,357 29,766 290,331 (143,067) 147,264
Performance fees—realized 96,985 24,878 22,775 1,856 146,494 146,494
Performance fees—unrealized (71,825) 11,447 137,853 17,408 94,883 94,883
Performance fee compensation—realized (47,441) (14,938) (18,220) (80,599) (80,599)
Performance fee compensation—unrealized 29,017 (6,740) (108,876) (2,830) (89,429) (89,429)
Net performance fees 6,736 14,647 33,532 16,434 71,349 71,349
Investment income (loss)—realized 44,616 918 4,701 2,344 52,579 52,579
Investment income (loss)—unrealized (28,629) 5,305 34,318 (61) 10,933 10,933
Interest and other investment income 10,086 606 4,741 265 15,698 15,698
Interest expense (2,017) (1,538) (3,925) (1,137) (8,617) (8,617)
Net investment income (loss) 24,056 5,291 39,835 1,411 70,593 70,593
Performance related earnings (loss) 30,792 19,938 73,367 17,845 141,942 141,942
Economic net income (loss) $ 118,014 $ 145,924 $ 120,724 $ 47,611 $ 432,273 $ (143,067) $ 289,206
Distributable earnings (loss) $ 183,479 $ 133,510 $ 54,156 $ 10,460 $ 381,605 $ (148,849) $ 232,756
Total assets $ 656,710 $ 289,310 $ 501,392 $ 224,333 $ 1,671,745 $ 15,206 $ 1,686,951
 

Exhibit C. Consolidated Statements of Financial Condition and Statements of Operations (GAAP Financials)

($ in thousands, except unit data)

 
As of December 31,
2015   2014
Assets
Cash and cash equivalents $ 121,483 $ 148,858
Restricted cash and cash equivalents 234 32,734
Investments 468,287 174,052
Derivative assets, at fair value 1,339 7,623
Performance fees receivable 534,661 187,059
Due from affiliates 144,982 146,534
Other assets 61,402 58,716
Intangible assets, net 84,971 40,948
Goodwill 144,067 85,582
Assets of Consolidated Funds:
Cash and cash equivalents 159,507 1,314,397
Investments, at fair value 2,559,783 19,123,950
Loans held for investment, net 77,514
Due from affiliates 12,923 11,342
Dividends and interest receivable 13,005 81,331
Receivable for securities sold 13,416 132,753
Derivative assets, at fair value 3,126
Other assets 1,348 12,473
Total assets $ 4,321,408 $ 21,638,992
Liabilities
Accounts payable and accrued expenses $ 103,974 $ 101,310
Accrued compensation 125,032 129,433
Derivative liabilities, at fair value 390 2,850
Due to affiliates 11,163 19,030
Performance fee compensation payable 401,715 380,268
Debt obligations 389,120 243,491
Equity compensation put option liability 20,000 20,000
Deferred tax liability, net 21,288 19,861
Liabilities of Consolidated Funds:
Accounts payable and accrued expenses 8,275 68,589
Due to affiliates 2,441
Payable for securities purchased 51,778 618,902
Derivative liabilities, at fair value 10,676 42,332
Securities sold short, at fair value 3,763
Deferred tax liability, net 22,214
CLO loan obligations, at fair value 2,174,352 12,049,170
Fund borrowings 11,734 777,600
Mezzanine debt 378,365
Total liabilities 3,329,497 14,879,619
Commitments and contingencies
Redeemable interest in Consolidated Funds 1,037,450
Redeemable interest in Ares Operating Group entities 23,505 23,988
Non-controlling interest in Consolidated Funds:
Non-controlling interest in Consolidated Funds 320,238 4,988,729
Equity appropriated for Consolidated Funds 3,367 (37,926)
Non-controlling interest in Consolidated Funds 323,606 4,950,803
Non-controlling interest in Ares Operating Group entities 397,883 463,493
Controlling interest in Ares Management, L.P. :
Partners’ Capital (80,679,600 units and 80,667,664 units, issued and outstanding at December 31, 2015 and 2014, respectively) 251,537 285,025
Accumulated other comprehensive loss (4,619) (1,386)
Total controlling interest in Ares Management, L.P 246,917 283,639
Total equity 968,406 5,697,935
Total liabilities, redeemable interest, non-controlling interests and equity $ 4,321,408 $ 21,638,992
 

Exhibit C. Consolidated Statements of Financial Condition and Statements of Operations (GAAP Financials) (continued)

($ in thousands, except unit data)

 
For the Years Ended December 31,
2015   2014   2013
(Predecessor)
Revenues
Management fees (includes ARCC Part I Fees of $121,491, $118,537 and $110,511 for the years ended December 31, 2015, 2014 and 2013, respectively) $ 634,399 $ 486,477 $ 375,572
Performance fees 150,615 91,412 79,800
Other fees 29,428 26,000 23,283
Total revenues 814,442 603,889 478,655
Expenses
Compensation and benefits 414,454 456,372 333,902
Performance fee compensation 111,683 170,028 194,294
General, administrative and other expenses 224,798 166,839 138,464
Consolidated Funds’ expenses 18,105 66,800 135,237
Total expenses 769,040 860,039 801,897
Other income (expense)
Interest and other investment income 14,045 7,244 5,996
Interest expense (18,949) (8,617) (9,475)
Debt extinguishment expense (11,641) (1,862)
Other income (expense), net 21,680 (2,422) (200)
Net realized gain (loss) on investments 20,090 7,812 (6,373)
Net change in unrealized appreciation on investments (3,081) 24,316 15,295
Interest and other investment income of Consolidated Funds 117,373 937,835 1,236,037
Interest expense of Consolidated Funds (78,819) (666,373) (534,431)
Debt extinguishment gain of Consolidated Funds 11,800
Net realized gain (loss) on investments of Consolidated Funds (8,659) 44,781 64,382
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds (15,957) 468,489 414,714
Total other income 36,082 813,065 1,195,883
Income before taxes 81,484 556,915 872,641
Income tax expense 19,064 11,253 59,263
Net income 62,420 545,662 813,378
Less: Net income (loss) attributable to redeemable interests in Consolidated Funds 2,565 137,924
Less: Net income attributable to non-controlling interests in Consolidated Funds (5,686) 417,793 448,847
Less: Net income attributable to redeemable interests in Ares Operating Group entities 338 731 2,451
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 48,390 89,585 43,674
Less: Net income attributable to controlling interests in Predecessor 180,482
Net income attributable to Ares Management, L.P. $ 19,378 $ 34,988 $
Net income attributable to Ares Management, L.P. per common unit
Basic $ 0.23 0.43
Diluted $ 0.23 0.43
Weighted-average common units
Basic 80,673,360 80,358,036
Diluted 80,673,360 80,358,036
Distribution declared per common unit $ 0.88 $ 0.42 $ N/A
 

Exhibit D. Supplemental Financial Information Consolidating Schedules

($ in thousands, except unit data)

 
As of December 31, 2015
Consolidated   Consolidated    
Company Entities Funds Eliminations Consolidated
Assets
Cash and cash equivalents $ 121,483 $ $ $ 121,483
Restricted cash and cash equivalents 234 234
Investments 636,092 (167,805) 468,287
Derivative assets, at fair value 1,339 1,339
Performance fees receivable 541,852 (7,191) 534,661
Due from affiliates 149,771 (4,789) 144,982
Other assets 61,402 61,402
Intangible assets, net 84,971 84,971
Goodwill 144,067 144,067
Assets of Consolidated Funds
Cash and cash equivalents 159,507 159,507
Investments, at fair value 2,559,783 2,559,783
Due from affiliates 13,360 (437) 12,923
Dividends and interest receivable 13,005 13,005
Receivable for securities sold 13,416 13,416
Derivative assets, at fair value
Other assets 1,348 1,348
Total assets $ 1,741,211 $ 2,760,419 $ (180,222) $ 4,321,408
Liabilities
Accounts payable and accrued expenses $ 104,082 $ $ (108) $ 103,974
Accrued compensation 125,032 125,032
Derivative liabilities, at fair value 390 390
Due to affiliates 11,278 (115) 11,163
Performance fee compensation payable 401,715 401,715
Debt obligations 389,120 389,120
Equity compensation put option liability 20,000 20,000
Deferred tax liability, net 21,288 21,288
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities 8,280 (5) 8,275
Due to affiliates 5,617 (5,617)
Payable for securities purchased 51,778 51,778
Derivative liabilities, at fair value 10,676 10,676
CLO loan obligations 2,202,628 (28,276) 2,174,352
Fund borrowings 11,734 11,734
Total liabilities 1,072,905 2,290,713 (34,121) 3,329,497
Commitments and contingencies
Redeemable interest in Ares Operating Group entities 23,505 23,505
Non-controlling interest in Consolidated Funds
Non-controlling interest in Consolidated Funds 466,339 (146,101) 320,238
Equity appropriated for Consolidated Funds 3,367 3,367
Non-controlling interest in Consolidated Funds 469,706 (146,101) 323,606
Non-controlling interest in Ares Operating Group entities 397,883 397,883
Controlling interest in Ares Management, L.P.:
Partners’ Capital (80,679,600 units issued and outstanding) 251,537 251,537
Accumulated other comprehensive loss (4,619) (4,619)
Total controlling interest in Ares Management, L.P 246,917 246,917
Total equity 644,801 469,706 (146,101) 968,406
Total liabilities, redeemable interests, non-controlling interests and equity $ 1,741,211 2,760,419 (180,222) $ 4,321,408
 

Exhibit D. Supplemental Financial Information Consolidating Schedules (continued)

($ in thousands)

 
As of December 31, 2014
Consolidated
Company Entities
  Consolidated
Funds
  Eliminations   Consolidated
Assets
Cash and cash equivalents $ 148,858 $ $ $ 148,858
Restricted cash and cash equivalents 32,734 32,734
Investments 598,074 (424,022) 174,052
Derivative assets, at fair value 7,623 7,623
Performance fees receivable 548,098 (361,039) 187,059
Due from affiliates 166,225 (19,691) 146,534
Other assets 58,809 (93) 58,716
Intangible assets, net 40,948 40,948
Goodwill 85,582 85,582
Assets of Consolidated Funds
Cash and cash equivalents 1,314,397 1,314,397
Investments, at fair value 19,123,950 19,123,950
Loans held for investment, net 77,514 77,514
Due from affiliates 13,262 (1,920) 11,342
Dividends and interest receivable 81,331 81,331
Receivable for securities sold 132,753 132,753
Derivative assets, at fair value 3,126 3,126
Other assets 12,473 12,473
Total assets $ 1,686,951 $ 20,758,806 $ (806,765) $ 21,638,992
Liabilities
Accounts payable and accrued expenses 101,912 (602) 101,310
Accrued compensation 129,433 129,433
Derivative liabilities, at fair value 2,850 2,850
Due to affiliates 19,881 (851) 19,030
Performance fee compensation payable 381,164 (896) 380,268
Debt obligations 243,491 243,491
Equity compensation put option liability 20,000 20,000
Deferred tax liability, net 19,861 19,861
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities 68,674 (85) 68,589
Due to affiliates 63,417 (60,976) 2,441
Payable for securities purchased 618,902 618,902
Derivative liabilities, at fair value 42,332 42,332
Securities sold short, at fair value 3,763 3,763
Deferred tax liability, net 22,214 22,214
CLO loan obligations 12,120,842 (71,672) 12,049,170
Fund borrowings 777,600 777,600
Mezzanine debt 378,365 378,365
Total liabilities 918,592 14,096,109 (135,082) 14,879,619
Commitments and contingencies
Redeemable interest in Consolidated Funds 1,037,450 1,037,450
Redeemable interest in Ares Operating Group entities 23,988 23,988
Non-controlling interest in Consolidated Funds:
Non-controlling interest in Consolidated Funds 5,663,172 (674,443) 4,988,729
Equity appropriated for Consolidated Funds (37,926) (37,926)
Non-controlling interest in Consolidated Funds 5,625,246 (674,443) 4,950,803
Non-controlling interest in Ares Operating Group entities 463,493 463,493
Controlling interest in Ares Management, L.P.:
Partners’ Capital (80,667,664 units issued and outstanding) 285,025 285,025
Accumulated other comprehensive loss (4,146) 2,760 (1,386)
Total controlling interest in Ares Management, L.P 280,879 2,760 283,639
Total equity 744,372 5,625,246 (671,683) 5,697,935
Total liabilities, redeemable interests, non-controlling interests and equity $ 1,686,951 $ 20,758,806 $ (806,765) $ 21,638,992
 

Exhibit D. Supplemental Financial Information Consolidating Schedules (continued)

($ in thousands)

 
For the Three months ended December 31, 2015
Consolidated
Company Entities
  Consolidated
Funds
  Eliminations   Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $31,520) $ 165,905 $ $ (4,847) $ 161,058
Performance fees (5,807) (3,929) (9,736)
Other fees 8,197 8,197
Total revenues 168,295 (8,776) 159,519
Expenses
Compensation and benefits 108,646 108,646
Performance fee compensation (960) (960)
General, administrative and other expense 75,058 75,058
Consolidated Fund expenses 8,340 (5,462) 2,878
Total expenses 182,744 8,340 (5,462) 185,622
Other income (expense)
Interest and other investment income 2,473 (874) 1,599
Interest Expense (5,698) (5,698)
Debt extinguishment expense (11,641) (11,641)
Other income (expense), net 22,240 59 22,479
Net realized gain (loss) on investments 7,897 (531) 7,366
Net change in unrealized appreciation (depreciation) on investments 6,553 (8,945) (2,392)
Interest and other investment income of Consolidated Funds 27,381 27,381
Interest expense of Consolidated Funds (19,991) 1,164 (18,827)
Net realized gain (loss) on investments of Consolidated Funds (21,152) (21,152)
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds 33,501 3,057 36,558
Total other income (expense) 22,004 19,739 (6,070) 35,673
Income before taxes 7,555 11,399 (9,384) 9,570
Income tax expense (benefit) 3,328 (4) 3323
Net income 4,227 11,403 (9,384) 6247
Less: Net income attributable to non-controlling interests in Consolidated Funds 11,403 (9,384) 2,020
Less: Net income attributable to redeemable interests in Ares Operating Group entities 28 28
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 4,014 4,014
Net income attributable to Ares Management, L.P. $ 185 $ $ $ 185
 

Exhibit D. Supplemental Financial Information Consolidating Schedules (continued)

($ in thousands)

 
For the Three Months Ended December 31, 2014
Consolidated
Company Entities
  Consolidated
Funds
  Eliminations   Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $33,396) $ 161,106 $ $ (27,068) $ 134,038
Performance fees 61,013 (38,875) 22,138
Other fees 8,438 (1,132) 7,306
Total revenues 230,557 (67,075) 163,482
Expenses
Compensation and benefits 108,781 108,781
Performance fee compensation 44,080 44,080
General, administrative and other expense 46,867 46,867
Consolidated Fund expenses 43,480 (29,738) 13,742
Total expenses 199,728 43,480 (29,738) 213,470
Other income (expense)
Interest, dividend and other investment income 2,185 (2,614) (429)
Interest expense (3,376) (3,376)
Other income (expense), net 1,203 1,222 2,425
Net realized gain (loss) on investments 17,395 (10,057) 7,338
Net change in unrealized appreciation (depreciation) on investments (9,802) 9,160 (642)
Interest, dividend and other investment income of Consolidated Funds 199,683 (131) 199,552
Interest expense of Consolidated Funds (105,966) 3,900 (102,066)
Net realized gain (loss) on investments of Consolidated Funds (27,052) (27,052)
Net change in unrealized appreciation (depreciation) on investments of Consolidated Funds 145,998 (4,122) 141,876
Total other income (expense) 7,605 212,663 (2,642) 217,626
Income (loss) before taxes 38,434 169,183 (39,980) 167,638
Income tax expense (benefit) 13,073 (2,791) 10,282
Net income 25,361 171,974 (39,980) 157,356
Less: Net income attributable to redeemable interests in Consolidated Funds (24,995) 793 (24,202)
Less: Net income attributable to non-controlling interests in Consolidated Funds 196,969 (40,773) 156,196
Less: Net income attributable to redeemable interests in Ares Operating Group entities 158 158
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 22,029 22,029
Net income attributable to Ares Management, L.P. $ 3,173 $ $ $ 3,173
 

Exhibit D. Supplemental Financial Information Consolidating Schedules (continued)

($ in thousands)

 
For the Year Ended December 31, 2015
Consolidated   Consolidated    
Company Entities Funds Eliminations Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $121,491) $ 650,918 $ $ (16,519) $ 634,399
Performance fees 146,197 4,418 150,615
Other fees 30,606 (1,178) 29,428
Total revenues 827,721 (13,279) 814,442
Expenses
Compensation and benefits 414,454 414,454
Performance fee compensation 111,683 111,683
General, administrative and other expense 224,798 224,798
Consolidated Fund expenses 36,417 (18,312) 18,105
Total expenses 750,935 36,417 (18,312) 769,040
Other income (expense)
Interest and other investment income 17,542 (3,497) 14,045
Interest expense (18,949) (18,949)
Debt extinguishment expense (11,641) (11,641)
Other income (expense), net 20,644 1,036 21,680
Net realized gain (loss) on investments 29,221 (9,131) 20,090
Net change in unrealized appreciation (depreciation) on investments (26,437) 23,356 (3,081)
Interest and other investment income of Consolidated Funds 117,373 117,373
Interest expense of Consolidated Funds (86,064) 7,245 (78,819)
Net realized gain (loss) on investments of Consolidated Funds (8,659) (8,659)
Net change in unrealized appreciation on investments of Consolidated Funds (8,955) (7,002) (15,957)
Total other income (expense) 10,380 13,695 12,007 36,082
Income (loss) before taxes 87,165 (22,721) 17,040 81,484
Income tax expense 19,059 5 19,064
Net income (loss) 68,106 (22,726) 17,040 62,420
Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds (22,726) 17,040 (5,686)
Less: Net income attributable to redeemable interests in Ares Operating Group entities 338 338
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 48,390 48,390
Net income attributable to Ares Management, L.P. $ 19,378 $ $ $ 19,378
 

Exhibit D. Supplemental Financial Information Consolidating Schedules (continued)

($ in thousands)

 
For the Year Ended December 31, 2014
Consolidated
Company Entities
  Consolidated
Funds
  Eliminations   Consolidated
Revenues
Management fees (includes ARCC Part I Fees of $118,537) $ 598,046 $ $ (111,569) $ 486,477
Performance fees 226,790 (135,378) 91,412
Other fees 28,447 (2,447) 26,000
Total revenues 853,283 (249,394) 603,889
Expenses
Compensation and benefits 456,372 456,372
Performance fee compensation 170,028 170,028
General, administrative and other expense 166,839 166,839
Consolidated Fund expenses 187,494 (120,694) 66,800
Total expenses 793,239 187,494 (120,694) 860,039
Other income (expense)
Interest and other investment income 15,956 (8,712) 7,244
Interest expense (8,617) (8,617)
Other income (expense), net (3,644) 1,222 (2,422)
Net realized gain on investments 54,434 (46,622) 7,812
Net change in unrealized appreciation on investments 23,667 649 24,316
Interest and other investment income of Consolidated Funds 939,735 (1,900) 937,835
Interest expense of Consolidated Funds (674,373) 8,000 (666,373)
Net realized gain on investments of Consolidated Funds 44,781 44,781
Net change in unrealized appreciation on investments of Consolidated Funds 475,009 (6,520) 468,489
Total other income (expense) 81,796 785,152 (53,883) 813,065
Income before taxes 141,840 597,658 (182,583) 556,915
Income tax expense (benefit) 16,536 (5,283) 11,253
Net income 125,304 602,941 (182,583) 545,662
Less: Net income attributable to redeemable interests in Consolidated Funds 3,071 (506) 2,565
Less: Net income attributable to non-controlling interests in Consolidated Funds 599,870 (182,077) 417,793
Less: Net income attributable to redeemable interests in Ares Operating Group entities 731 731
Less: Net income attributable to non-controlling interests in Ares Operating Group entities 89,585 89,585
Net income attributable to Ares Management, L.P. $ 34,988 $ $ $ 34,988
 

Exhibit E. Reconciliation from Segments(1) to GAAP Financials

($ in thousands)

       
For the Three
Months Ended
December 31, 2015
For the Three
Months Ended
December 31, 2014
For the Year Ended
December 31, 2015
For the Year Ended
December 31, 2014
Economic net income:
Income (loss) before taxes $ 9,570 $ 167,638 $ 81,484 $ 556,915
Adjustments:
Amortization of intangibles 8,628 5,918 46,228 27,610
Depreciation expense 1,878 1,696 6,941 7,347
Equity compensation expenses 8,118 8,142 32,244 83,230
Net acquisition-related expenses (income) (20,757) 3,459 (16,473) 11,043
Merger-related expenses 43,556 51,335
Placement fees and underwriting costs 2,362 6,928 8,825 14,753
OMG expenses, net 43,503 37,201 158,598 143,067
Loss on fixed asset disposal 125 10 3,062
Other non-cash expense 100 100 324
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net eliminations (2,015) (129,203) 5,681 (415,075)
Total consolidation adjustments and reconciling items 85,373 (65,734) 293,489 (124,640)
Economic net income $ 94,943 $ 101, 897 $ 374,976 $ 432,273
Total performance fees income—realized (19,616) (56,787) (121,948) (146,494)
Total performance fees income—unrealized 22,535 (7,876) (31,648) (94,883)
Total performance fee compensation expense—realized 4,026 33,876 65,191 80,599
Total performance fee compensation expense—unrealized (4,985) 10,207 46,492 89,429
Net investment income (14,347) (4,077) 1,776 (70,593)
Fee related earnings $ 82,556 $ 77,240 $ 334,840 $ 290,331
Management fees $ 165,905 $ 161,106 $ 650,918 $ 598,046
Administrative fees and other income 1,435 1,617 4,599 6,300
Compensation and benefits (68,733) (72,276) (262,557) (264,112)
General, administrative and other expenses (16,051) (13,207) (58,120) (49,903)
Fee related earnings $ 82,556 $ 77,240 $ 334,840 $ 290,331
Distributable Earnings:
Income (loss) before taxes $ 9,570 $ 167,638 $ 81,484 $ 556,915
Adjustments:
Amortization of intangibles 8,628 5,918 46,228 27,610
Equity compensation expenses 8,118 8,142 32,224 83,230
OMG distributable loss 46,336 38,430 167,918 148,849
Non-cash acquisition-related expenses (21,020) (19,390)
Merger-related expenses 43,556 51,335
Taxes paid (1,556) (1,115) (5,209) (2,335)
Dividend equivalent (493) (3,337)
Other non-cash items (186) (1,525) (658) (1,201)
Income (loss) before taxes of non-controlling interests in Consolidated Funds, net eliminations (2,051) (129,203) 5,681 (415,075)
Unrealized performance fees 22,535 (7,876) (31,648) (94,883)
Unrealized performance fee compensation (4,985) 10,207 46,492 89,429
Unrealized investment and other income (loss) (10,036) 12,398 27,362 (10,933)
Distributable Earnings $ 98,452 $ 102,968 $ 398,506 $ 381,605
Fee related earnings $ 82,556 $ 77,240 $ 334,840 $ 290,331
Performance fees—realized 19,616 56,787 121,948 146,494
Performance fee compensation—realized (4,026) (33,876) (65,191) (80,599)
Investment and other income realized, net 4,363 14,950 25,638 59,659
Net performance related earnings—realized 19,953 37,861 82,395 125,554
Less:
Dividend equivalent (371) (2,501)
One-time acquisition costs (94) (2,939) (1,553) (8,446)
Income tax expense (368) (1,150) (1,462) (1,722)
Non-cash income items (286) (758) (1,525)
Placement fees and underwriting costs (2,354) (6,928) (8,817) (14,753)
Non-cash depreciation and amortization (584) (1,117) (3,638) (7,832)
Distributable earnings $ 98,452 $ 102,968 $ 398,506 $ 381,605
 

(1) Segment results do not give effect to the revenues and expenses associated with the Operations Management Group.

Exhibit F. Weighted Average Units Outstanding as of December 31, 2015

 

   
Units Outstanding Adjusted Common
Units Outstanding
Ares Management, L.P. Common Units 80,678,042 80,678,042
Ares Operating Group Units exchangeable into Common Units 132,405,131
Dilutive Effect of Unvested Restricted Common Units(1) 685,353 259,475(2)
Dilutive Effect of Unvested Options
Total 213,768,526 80,937,517

(1) For the three months ended December 31, 2015, we apply the treasury stock method to determine the dilutive weighted-average common units represented by our restricted units to be settled in common units and options to acquire common units. Under the treasury stock method, compensation expense attributed to future services and not yet recognized is presumed to be used to acquire outstanding common units, thus reducing the weighted-average number of units and the dilutive effect of these awards.

(2) Represent proportional dilutive impact based upon the percentage of the Ares Operating Group owned by Ares Management, L.P. (37.86%).

Exhibit G. Per Unit Calculations ($ in thousands, except per unit data)

         
Q4-15   Q3-15   Q2-15   Q1-15   Q4-14
After Tax Economic Net Income per Unit
Economic Net Income Before Taxes $51,440 $6,035 $75,977 $82,930 $64,696
Less: Entity Level Foreign, State and Local Taxes   2,919   905   906   479   1,155
Economic Net Income After Entity Level, Foreign, State and Local Taxes $48,521 $5,127 $75,071 $82,451 $63,541
x Tax Rate 12.2% 111.0% 8.7% 9.4% 10.7%
Less: Income Tax Provision (1)   5,905   5,689   6,565   7,776   6,813
After Tax Economic Net Income (Loss) $42,616 ($562) $68,506 $74,675 $56,728
After Tax Economic Net Income (Loss) per Unit Outstanding $0.20 ($0.00) $0.32 $0.35 $0.27
 
After Tax Economic Net Income per Common Unit
Economic Net Income After Entity Level, Foreign, State and Local Taxes $48,521 $5,127 $75,071 $82,451 $63,541
x Common Ownership Percentage 37.86% 37.86% 37.86% 37.85% 38.14%
Economic Net Income Attributable to Common Unitholders $18,370 $1,941