Item 6. Selected Financial Data

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Item 6. Selected Financial Data

The following tables present selected consolidated financial information and other data of the Company and its Predecessor. The Company was formed on November 15, 2013 to serve as a holding partnership for our businesses. See “Item 1. Business—Organizational Structure.”

We derived the following selected consolidated financial data of the Company as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 from the audited consolidated financial statements included elsewhere in this Annual Report on Form 10‑K. The selected consolidated financial data of the Company as of and for the year ended 2014 was derived from the audited consolidated financial statements of the Company, which are not included in this Annual Report on Form 10-K. The selected consolidated financial data as of and for the year ended December 31, 2013 was derived from the audited consolidated financial statements of the Predecessor, which are not included in this Annual Report on Form 10-K. The consolidated financial statements were prepared on substantially the same basis as the audited consolidated financial statements and include all adjustments that we consider necessary for a fair presentation of the Predecessor’s consolidated financial position and results of operations. The selected historical financial data is not indicative of the expected future operating results of the Company.

For the period ended December 31, 2013, non-controlling interests in Ares Operating Group entities represent equity interests and net income attributable to various minority non-control oriented strategic investment partners, including the Predecessor’s historical results. The net income attributable to controlling interests in the Predecessor, from January 1, 2014 to April 30, 2014, is presented together with net income attributable to non-controlling interests in Ares Operating Group entities within the Consolidated Statements of Operations.

The entities comprising our Consolidated Funds are not the same entities for all periods presented primarily due to the adoption of new consolidation guidance. Pursuant to revised consolidation guidance that became effective for us on January 1, 2015, we consolidated entities where we hold a controlling financial interest. The consolidation of funds during the periods generally has the effect of grossing up reported assets, liabilities and cash flow, and has no effect on net income attributable to the Company and the Predecessor. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Consolidation and Deconsolidation of Ares Funds” and “—Critical Accounting Estimates—Principles of Consolidation” and Note 2, “Summary of Significant Accounting Policies,” to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

The following selected historical consolidated financial data should be read together with “Item 1. Business—Organizational Structure,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”and our historical consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10‑K.



	For the Year Ended December 31,
	2017			2016			2015			2014			2013
													(Predecessor)
	(Dollars in thousands)
Statements of operations data
Revenues
Management fees (includes ARCC Part I Fees of $105,467, $121,181, $121,491, $118,537 and $110,511 for the years ended December 31, 2017, 2016, 2015, 2014 and 2013, respectively)	$	722,419		$	642,068		$	634,399		$	486,477		$	375,572
Performance fees	636,674			517,852			150,615			91,412			79,800
Administrative, transaction and other fees	56,406			39,285			29,428			26,000			23,283
Total revenues	1,415,499			1,199,205			814,442			603,889			478,655
Expenses
Compensation and benefits	514,109			447,725			414,454			456,372			333,902
Performance fee compensation	479,722			387,846			111,683			170,028			194,294
General, administrative and other expenses	196,730			159,776			224,798			166,839			138,464
Transaction support expense	275,177			—			—			—			—
Expenses of Consolidated Funds	39,020			21,073			18,105			66,800			135,237
Total expenses	1,504,758			1,016,420			769,040			860,039			801,897
Other income (expense)
Net realized and unrealized gain on investments	67,034			28,251			17,009			32,128			8,922
Interest and dividend income	12,715			23,781			14,045			7,244			5,996
Interest expense	(21,219		)	(17,981		)	(18,949		)	(8,617		)	(9,475		)
Debt extinguishment expense	—			—			(11,641		)	—			(1,862		)
Other income (expense), net	19,470			35,650			21,680			(2,422		)	(200		)
Net realized and unrealized gain (loss) on investments of Consolidated Funds	100,124			(2,057		)	(24,616		)	513,270			479,096
Interest and other income of Consolidated Funds	187,721			138,943			117,373			937,835			1,236,037
Interest expense of Consolidated Funds	(126,727		)	(91,452		)	(78,819		)	(666,373		)	(534,431		)
Debt extinguishment gain of Consolidated Funds	—			—			—			—			11,800
Total other income	239,118			115,135			36,082			813,065			1,195,883
Income before taxes	149,859			297,920			81,484			556,915			872,641
Income tax expense (benefit)	(23,052		)	11,019			19,064			11,253			59,263
Net income	172,911			286,901			62,420			545,662			813,378
Less: Net income attributable to redeemable interests in Consolidated Funds	—			—			—			2,565			137,924
Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds	60,818			3,386			(5,686		)	417,793			448,847
Less: Net income attributable to redeemable interests in Ares Operating Group entities	—			456			338			731			2,451
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	35,915			171,251			48,390			89,585			224,156
Net income attributable to Ares Management, L.P.	76,178			111,808			19,378			34,988			—
Less: Preferred equity distributions paid	21,700			12,176			—			—			—
Net income attributable to Ares Management, L.P. common unitholders	$	54,478		$	99,632		$	19,378		$	34,988		$	—



	As of December 31,
	2017		2016		2015		2014		2013
									(Predecessor)
	(Dollars in thousands)
Statements of financial condition data
Cash and cash equivalents	$	118,929	$	342,861	$	121,483	$	148,858	$	89,802
Cash and cash equivalents of Consolidated Funds	556,500		455,280		159,507		1,314,397		1,638,003
Investments	647,335		468,471		468,287		174,052		89,438
Investments, at fair value, of Consolidated Funds	5,582,842		3,330,203		2,559,783		19,123,950		20,823,338
Total assets	8,563,522		5,829,712		4,321,408		21,638,992		23,705,384
Debt obligations	616,176		305,784		389,120		243,491		153,119
CLO loan obligations of Consolidated Funds	4,963,194		3,031,112		2,174,352		12,049,170		11,774,157
Consolidated Funds’ borrowings	138,198		55,070		11,734		777,600		2,070,598
Mezzanine debt of Consolidated Funds	—		—		—		378,365		323,164
Total liabilities	7,103,230		4,452,450		3,329,497		14,879,619		16,030,319
Redeemable interest in Consolidated Funds	—		—		—		1,037,450		1,093,770
Redeemable interest in Ares Operating Group entities	—		—		23,505		23,988		40,751
Non‑controlling interest in Consolidated Funds	528,488		338,035		323,606		4,950,803		5,847,135
Non‑controlling interest in Ares Operating Group entities	358,186		447,615		397,883		463,493		167,731
Total controlling interest in Ares Management, L.P.	274,857		292,851		246,917		283,639		525,678
Total equity	1,460,292		1,377,262		968,406		5,697,935		6,540,544
Total liabilities, redeemable interest, non‑controlling interests and equity	8,563,522		5,829,712		4,321,408		21,638,992		23,705,384

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