Item 1. Financial Statements

Ares Management Corporation

Condensed Consolidated Statements of Financial Condition (Amounts in Thousands, Except Share Data)

			As of
			March 31, 2023						December 31, 2022
			(unaudited)
Assets
Cash and cash equivalents			$	272,249					$	389,987
Investments (includes accrued carried interest of $3,236,418 and $3,106,577 at March 31, 2023 and December 31, 2022, respectively)			4,100,683						3,974,734
Due from affiliates			707,804						758,472
Other assets			267,068						381,137
Right-of-use operating lease assets			154,970						155,950
Intangible assets, net			1,166,607						1,208,220
Goodwill			998,937						999,656
Assets of Consolidated Funds:
Cash and cash equivalents			754,934						724,641
Investments held in trust account			484,901						1,013,382
Investments, at fair value			12,641,251						12,191,251
Due from affiliates			10,878						15,789
Receivable for securities sold			305,418						124,050
Other assets			62,882						65,570
Total assets			$	21,928,582					$	22,002,839
Liabilities
Accounts payable, accrued expenses and other liabilities			$	261,298					$	231,921
Accrued compensation			214,135						510,130
Due to affiliates			183,451						252,798
Performance related compensation payable			2,365,230						2,282,209
Debt obligations			2,369,292						2,273,854
Operating lease liabilities			191,090						190,616
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities			187,505						168,286
Due to affiliates			—						4,037
Payable for securities purchased			549,415						314,193
CLO loan obligations, at fair value			10,918,007						10,701,720
Fund borrowings			103,046						168,046
Total liabilities			17,342,469						17,097,810
Commitments and contingencies
Redeemable interest in Consolidated Funds			484,801						1,013,282
Redeemable interest in Ares Operating Group entities			21,942						93,129
Non-controlling interests in Consolidated Funds			1,171,402						1,074,356
Non-controlling interests in Ares Operating Group entities			1,238,074						1,135,023
Stockholders’ Equity
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (177,674,055 shares and 173,892,036 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively)			1,777						1,739
Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding at March 31, 2023 and December 31, 2022)			35						35
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding at March 31, 2023 and December 31, 2022)			—						—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (120,638,398 shares and 117,231,288 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively)			1,206						1,172
Additional paid-in-capital			2,100,043						1,970,754
Accumulated deficit			(420,822)						(369,475)
Accumulated other comprehensive loss, net of tax			(12,345)						(14,986)
Total stockholders’ equity			1,669,894						1,589,239
Total equity			4,079,370						3,798,618
Total liabilities, redeemable interest, non-controlling interests and equity			$	21,928,582					$	22,002,839

See accompanying notes to the unaudited condensed consolidated financial statements.

Ares Management Corporation

Condensed Consolidated Statements of Operations

(Amounts in Thousands, Except Share Data)

(unaudited)

									Three months ended March 31,
															2023						2022
Revenues
Management fees															$	600,516					$	477,332
Carried interest allocation															151,488						178,289
Incentive fees															8,923						16,422
Principal investment income															22,758						8,326
Administrative, transaction and other fees															29,677						34,630
Total revenues															813,362						714,999
Expenses
Compensation and benefits															360,781						357,243
Performance related compensation															111,658						129,405
General, administrative and other expenses															148,345						120,523
Expenses of Consolidated Funds															7,852						4,513
Total expenses															628,636						611,684
Other income (expense)
Net realized and unrealized gains on investments															1,515						8,109
Interest and dividend income															3,839						1,502
Interest expense															(24,986)						(15,646)
Other income (expense), net															(923)						1,784
Net realized and unrealized gains on investments of Consolidated Funds															10,700						15,968
Interest and other income of Consolidated Funds															222,938						120,290
Interest expense of Consolidated Funds															(156,687)						(74,013)
Total other income, net															56,396						57,994
Income before taxes															241,122						161,309
Income tax expense															33,806						20,411
Net income															207,316						140,898
Less: Net income attributable to non-controlling interests in Consolidated Funds															26,693						47,382
Net income attributable to Ares Operating Group entities															180,623						93,516
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities															(1,824)						399
Less: Net income attributable to non-controlling interests in Ares Operating Group entities															88,408						47,254
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders															$	94,039					$	45,863
Net income per share of Class A and non-voting common stock:
Basic															$	0.49					$	0.24
Diluted															$	0.49					$	0.24
Weighted-average shares of Class A and non-voting common stock:
Basic															178,976,022						174,215,251
Diluted															178,976,022						174,215,251

Substantially all revenue is earned from affiliated funds of the Company.

See accompanying notes to the unaudited condensed consolidated financial statements.

Ares Management Corporation

Condensed Consolidated Statements of Comprehensive Income

(Amounts in Thousands)

(unaudited)

						Three months ended March 31,
						2023						2022
Net income						$	207,316					$	140,898
Other comprehensive income:
Foreign currency translation adjustments, net of tax						6,639						(12,393)
Total comprehensive income						213,955						128,505
Less: Comprehensive income attributable to non-controlling interests in Consolidated Funds						29,083						42,287
Comprehensive income attributable to Ares Operating Group entities						184,872						86,218
Less: Comprehensive income (loss) attributable to redeemable interest in Ares Operating Group entities						(1,972)						68
Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities						90,164						44,451
Comprehensive income attributable to Ares Management Corporation						$	96,680					$	41,699

See accompanying notes to the unaudited condensed consolidated financial statements.

Ares Management Corporation

Condensed Consolidated Statements of Changes in Equity

(Amounts in Thousands)

(unaudited)

												Class A Common Stock						Non-voting Common Stock						Class C Common Stock						Additional Paid-in-Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (loss)						Non-Controlling Interest in Ares Operating Group Entities						Non-Controlling Interest in Consolidated Funds						Total Equity
Balance at December 31, 2022												$	1,739					$	35					$	1,172					$	1,970,754					$	(369,475)					$	(14,986)					$	1,135,023					$	1,074,356					$	3,798,618
Changes in ownership interests and related tax benefits												19						—						34						(36,777)						—						—						87,541						(4,689)						46,128
Issuances of common stock												14						—						—						115,350						—						—						—						—						115,364
Capital contributions												—						—						—						—						—						—						1,172						93,585						94,757
Dividends/Distributions												—						—						—						—						(145,386)						—						(103,363)						(20,933)						(269,682)
Net income												—						—						—						—						94,039						—						88,408						26,693						209,140
Currency translation adjustment, net of tax												—						—						—						—						—						2,641						1,756						2,390						6,787
Equity compensation												—						—						—						41,541						—						—						27,537						—						69,078
Stock option exercises												5						—						—						9,175						—						—						—						—						9,180
Balance at March 31, 2023												$	1,777					$	35					$	1,206					$	2,100,043					$	(420,822)					$	(12,345)					$	1,238,074					$	1,171,402					$	4,079,370

See accompanying notes to the unaudited condensed consolidated financial statements.

Ares Management Corporation

Condensed Consolidated Statements of Changes in Equity

(Amounts in Thousands)

(unaudited)

												Class A Common Stock						Non-voting Common Stock						Class C Common Stock						Additional Paid-in-Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (loss)						Non-Controlling Interest in Ares Operating Group Entities						Non-Controlling Interest in Consolidated Funds						Total Equity
Balance at December 31, 2021												$	1,684					$	35					$	1,186					$	1,913,559					$	(89,382)					$	(1,855)					$	1,397,747					$	591,452					$	3,814,426
Changes in ownership interests and related tax benefits												28						—						(1)						(110,577)						—						—						(90,843)						19,202						(182,191)
Issuances of common stock												1												—						12,834						—						—						—						—						12,835
Capital contributions												—						—						—						—						—						—						1,079						82,930						84,009
Dividends/Distributions												—						—						—						—						(111,406)						—						(100,480)						(34,958)						(246,844)
Net income												—						—						—						—						45,863						—						47,254						47,382						140,499
Currency translation adjustment, net of tax												—						—						—						—						—						(4,164)						(2,803)						(5,095)						(12,062)
Equity compensation												—						—						—						31,896						—						—						21,706						—						53,602
Stock option exercises												2												—						3,345						—						—						—						—						3,347
Balance at March 31, 2022												1,715						35						1,185						1,851,057						(154,925)						(6,019)						1,273,660						700,913						3,667,621
Changes in ownership interests and related tax benefits												—						—						(1)						(5,599)						—						—						(3,135)						5,815						(2,920)
Capital contributions												—						—						—						—						—						—						969						135,350						136,319
Dividends/Distributions												—						—						—						—						(111,506)						—						(82,958)						(18,680)						(213,144)
Net income (loss)												—						—						—						—						39,731						—						29,354						(15,022)						54,063
Currency translation adjustment, net of tax												—						—						—						—						—						(11,173)						(7,575)						(9,900)						(28,648)
Equity compensation												—						—						—						29,569						—						—						19,990						—						49,559
Stock option exercises												3						—						—						5,294						—						—						—						—						5,297
Balance at June 30, 2022												1,718						35						1,184						1,880,321						(226,700)						(17,192)						1,230,305						798,476						3,668,147
Changes in ownership interests and related tax benefits												3						—						(1)						(3,173)						—						—						(4,354)						(479)						(8,004)
Capital contributions												—						—						—						—						—						—						1,549						80,366						81,915
Dividends/Distributions												—						—						—						—						(111,952)						—						(88,041)						(50,794)						(250,787)
Net income (loss)												—						—						—						—						(35,546)						—						(29,666)						16,340						(48,872)
Currency translation adjustment, net of tax												—						—						—						—						—						(11,627)						(7,852)						(9,199)						(28,678)
Equity compensation												—						—						—						28,704						—						—						19,336						—						48,040
Stock option exercises												3						—						—						5,884						—						—						—						—						5,887
Balance at September 30, 2022												1,724						35						1,183						1,911,736						(374,198)						(28,819)						1,121,277						834,710						3,467,648
Changes in ownership interests and related tax benefits												12						—						(11)						22,936						—						—						(7,348)						(20,532)						(4,943)
Capital contributions												—						—						—						—						—						—						1,598						250,750						252,348
Dividends/Distributions												—						—						—						—						(112,770)						—						(115,364)						(73,859)						(301,993)
Net income												—						—						—						—						117,493						—						105,950						70,633						294,076
Currency translation adjustment, net of tax												—						—						—						—						—						13,833						9,416						12,654						35,903
Equity compensation												—						—						—						29,411						—						—						19,494						—						48,905
Stock option exercises												3						—						—						6,671						—						—						—						—						6,674
Balance at December 31, 2022												$	1,739					$	35					$	1,172					$	1,970,754					$	(369,475)					$	(14,986)					$	1,135,023					$	1,074,356					$	3,798,618

See accompanying notes to the unaudited condensed consolidated financial statements.

Ares Management Corporation

Condensed Consolidated Statements of Cash Flows

(Amounts in Thousands)

(unaudited)

			Three months ended March 31,
			2023						2022
Cash flows from operating activities:
Net income			$	207,316					$	140,898
Adjustments to reconcile net income to net cash provided by operating activities			121,761						53,473
Adjustments to reconcile net income to net cash provided by operating activities allocable to non-controlling interests in Consolidated Funds			328,840						(97,772)
Cash flows due to changes in operating assets and liabilities			7,071						132,346
Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds			42,584						(4,795)
Net cash provided by operating activities			707,572						224,150
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net of disposals			(8,877)						(8,524)
Acquisitions, net of cash acquired			—						(301,624)
Net cash used in investing activities			(8,877)						(310,148)
Cash flows from financing activities:
Proceeds from Credit Facility			245,000						860,000
Proceeds from issuance of senior notes			—						488,915
Repayments of Credit Facility			(150,000)						(905,000)
Dividends and distributions			(251,632)						(211,886)
Stock option exercises			9,180						3,347
Taxes paid related to net share settlement of equity awards			(113,431)						(183,027)
Other financing activities			483						856
Allocable to redeemable and non-controlling interests in Consolidated Funds:
Contributions from redeemable and non-controlling interests in Consolidated Funds			93,585						82,930
Distributions to non-controlling interests in Consolidated Funds			(20,933)						(34,958)
Redemptions of redeemable interests in Consolidated Funds			(538,985)						—
Borrowings under loan obligations by Consolidated Funds			2,914						49,317
Repayments under loan obligations by Consolidated Funds			(97,325)						(57,457)
Net cash provided by (used in) financing activities			(821,144)						93,037
Effect of exchange rate changes			4,711						(4,652)
Net change in cash and cash equivalents			(117,738)						2,387
Cash and cash equivalents, beginning of period			389,987						343,655
Cash and cash equivalents, end of period			$	272,249					$	346,042
Supplemental disclosure of non-cash financing activities:
Issuance of Class A common stock in connection with acquisition-related activity			$	115,364					$	12,835
Issuance of AOG Units in connection with settlement of management incentive program			$	245,647					$	—

See accompanying notes to the unaudited condensed consolidated financial statements.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

1. ORGANIZATION

Ares Management Corporation (the “Company”), a Delaware corporation, together with its subsidiaries, is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Assets and Secondaries. Information about segments should be read together with “Note 13. Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various investment funds and managed accounts within each investment group (the “Ares Funds”). These subsidiaries provide investment advisory services to the Ares Funds in exchange for management fees.

The accompanying unaudited financial statements include the condensed consolidated results of the Company and its subsidiaries. The Company is a holding company that operates and controls all of the businesses and affairs of and conducts all of its material business activities through Ares Holdings L.P. (“Ares Holdings”). Ares Holdings represents all the activities of the “Ares Operating Group” or “AOG” and may be referred to interchangeably. The Company, indirectly through its wholly owned subsidiary, Ares Holdco LLC, is the general partner of the Ares Operating Group entity.

The Company and its wholly owned subsidiaries manages or controls certain entities that have been consolidated in the accompanying financial statements as described in “Note 2. Summary of Significant Accounting Policies.” These entities include Ares funds, co-investment vehicles, collateralized loan obligations or funds (collectively “CLOs”) and a special purpose acquisition company (“SPAC”) (collectively, the “Consolidated Funds”).

Including the results of the Consolidated Funds significantly increases the reported amounts of the assets, liabilities, revenues, expenses and cash flows within the accompanying unaudited condensed consolidated financial statements. However, the Consolidated Funds results included herein have no direct effect on the net income attributable to Ares Management Corporation or to its Stockholders’ Equity, except where accounting for a redemption or liquidation preference requires the reallocation of ownership based on specific terms of a profit sharing agreement. Instead, economic ownership interests of the investors in the Consolidated Funds are reflected as redeemable and non-controlling interests in Consolidated Funds. Further, cash flows allocable to redeemable and non-controlling interest in Consolidated Funds are specifically identifiable within the Condensed Consolidated Statements of Cash Flows.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”) for interim financial information and instructions to the Quarterly Report on Form 10-Q. The unaudited condensed consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Management believes it has made all necessary adjustments so that the unaudited condensed consolidated financial statements are presented fairly and that estimates made in preparing its unaudited condensed consolidated financial statements are reasonable and prudent, and that all such adjustments are of a normal recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”).

The unaudited condensed consolidated financial statements include the accounts and activities of the AOG entities, their consolidated subsidiaries and certain Consolidated Funds. All intercompany balances and transactions have been eliminated upon consolidation.

The Company has reclassified certain prior period amounts to conform to the current year presentation.

Non-Controlling Interests in Ares Operating Group Entities

The non-controlling interests in AOG entities represent a component of equity and net income attributable to the owners of the Ares Operating Group Units (“AOG Units”) that are not held directly or indirectly by the Company. These owners consist predominantly of Ares Owners Holdings L.P. but also include other strategic distribution partnerships with whom the Company has established joint ventures and other non-controlling strategic investors. Non-controlling interests in

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

AOG entities are adjusted for contributions to and distributions from AOG during the reporting period and are allocated income from the AOG entities either based on their historical ownership percentage for the proportional number of days in the reporting period or based on the activity associated with certain membership interests.

Redeemable Interest

On July 1, 2020, the Company completed its acquisition of a majority interest in SSG Capital Holdings Limited and its operating subsidiaries (“SSG”) (the “SSG Acquisition”). In connection with the SSG Acquisition, the former owners of SSG retained a 20% ownership interest in the operations acquired by the Company. In certain circumstances, the Company had the ability to acquire full ownership of SSG pursuant to a contractual arrangement to be initiated by the Company or by the former owners of SSG. Since the acquisition of the remaining interest in SSG was not within the Company's sole discretion, the ownership interest held by the former owners of SSG was classified as a redeemable interest and represented mezzanine equity.

Redeemable interest in AOG entities was initially recorded at fair value on the date of the SSG Acquisition within mezzanine equity within the Condensed Consolidated Statements of Financial Condition. Income (loss) was allocated based on the ownership percentage attributable to the redeemable interest. As of the date of acquisition, the Company determined that the redemption of the redeemable interest was probable. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount, as defined in accordance with the terms of a contractual arrangement between the Company and the former owners of SSG, to the extent that the redemption amount exceeded the initial measurement on the date of acquisition. The Company recognizes changes in the redemption amount with corresponding adjustments against retained earnings, or additional paid-in-capital in the absence of retained earnings, within stockholders’ equity within the Condensed Consolidated Statements of Financial Condition.

In connection with a merger agreement to acquire the remaining 20% ownership interest in the Ares SSG fee-generating business that was retained by the former owners of SSG (the “SSG Buyout”), a portion of the redeemable interest in AOG entities was purchased on March 31, 2023 and the Company now owns 100% of Ares SSG’s fee-generating business. The SSG Buyout was effectuated through newly issued shares of Class A common stock. The remaining redeemable interest in AOG entities represents ownership in certain investments that were not included in the SSG Buyout and continues to be presented at the redemption amount within mezzanine equity within the Condensed Consolidated Statements of Financial Condition.

Redeemable interest in Consolidated Funds represent the Class A ordinary shares issued by Ares Acquisition Corporation (NYSE: AAC) (“AAC”) that are redeemable for cash by the public shareholders in the event that AAC does not complete a business combination or tender offer associated with stockholder approval provisions. The Class A ordinary shareholders have redemption rights that are considered to be outside of AAC’s control. At each balance sheet date, the carrying value of the redeemable interest is presented at the redemption amount. During the three months ended March 31, 2023, in connection with the extension of the period to complete a business combination, AAC shareholders elected to redeem an aggregate amount of $539.0 million that was paid from AAC’s trust account. At March 31, 2023, the remaining 46,997,081 Class A ordinary shares of AAC continues to be presented at the redemption amount within mezzanine equity within the Condensed Consolidated Statements of Financial Condition.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs were assessed and determined either to be not applicable or expected to have an immaterial impact on its unaudited condensed consolidated financial statements.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

3. GOODWILL AND INTANGIBLE ASSETS

Intangible Assets, Net

The following table summarizes the carrying value, net of accumulated amortization, of the Company’s intangible assets:

			Weighted Average Amortization Period (in years) as of March 31, 2023						As of March 31, 2023						As of December 31, 2022
Management contracts			4.8						$	580,692					$	586,077
Client relationships			9.4						262,301						262,301
Trade name			0.0						—						11,079
Other			1.6						500						500
Finite-lived intangible assets									843,493						859,957
Foreign currency translation									461						935
Total finite-lived intangible assets									843,954						860,892
Less: accumulated amortization									(245,147)						(220,472)
Finite-lived intangible assets, net									598,807						640,420
Management contracts									567,800						567,800
Indefinite-lived intangible assets									567,800						567,800
Intangible assets, net									$	1,166,607					$	1,208,220

During the three months ended March 31, 2023, the Company rebranded Ares SSG as Asia credit and discontinued the use of the SSG trade name. As a result, the Company recorded a non-cash impairment charge equal to the SSG trade name’s carrying value of $7.8 million to accelerate the amortization expense for the three months ended March 31, 2023.

Amortization expense associated with intangible assets, excluding the accelerated amortization described above, was $33.6 million and $33.2 million for the three months ended March 31, 2023 and 2022, respectively, and is presented within general, administrative and other expenses within the Condensed Consolidated Statements of Operations. During the first quarter of 2023, the Company removed $16.5 million of impaired and fully-amortized intangible assets.

Goodwill

The following table summarizes the carrying value of the Company’s goodwill:

			Credit Group						Private Equity Group						Real Assets Group						Secondaries Group						Other						Total
Balance as of December 31, 2022			$	32,196					$	48,070					$	277,183					$	417,620					$	224,587					$	999,656
Acquisitions			—						—						22						—						—						22
Reallocation			224,587						—						—						—						(224,587)						—
Foreign currency translation			(744)						—						—						3						—						(741)
Balance as of March 31, 2023			$	256,039					$	48,070					$	277,205					$	417,623					$	—					$	998,937

In connection with the SSG Buyout described in “Note 2. Summary of Significant Accounting Policies,” the former Ares SSG reporting unit has been transferred in its entirety to the Credit Group and the total goodwill of $224.6 million has been reallocated accordingly.

There was no impairment of goodwill recorded during the three months ended March 31, 2023 and 2022. The impact of foreign currency translation is reflected within other comprehensive income within the Condensed Consolidated Statements of Comprehensive Income.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

4. INVESTMENTS

The Company’s investments are comprised of the following:

															Percentage of total investments
			March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022
Equity method investments:
Equity method - carried interest			$	3,236,418					$	3,106,577					78.9%						78.2%
Equity method private investment partnership interests - principal			535,922						543,592						13.1						13.7
Equity method private investment partnership interests and other (held at fair value)			126,458						123,170						3.1						3.1
Equity method private investment partnership interests and other			48,390						47,439						1.2						1.2
Total equity method investments			3,947,188						3,820,778						96.3						96.2
Collateralized loan obligations			22,653						25,163						0.6						0.6
Other fixed income			52,516						51,771						1.3						1.2
Collateralized loan obligations and other fixed income, at fair value			75,169						76,934						1.9						1.8
Common stock, at fair value			78,326						77,022						1.8						2.0
Total investments			$	4,100,683					$	3,974,734

Equity Method Investments

The Company’s equity method investments include investments that are not consolidated but over which the Company exerts significant influence. The Company evaluates each of its equity method investments to determine if any were significant as defined by guidance from the SEC. As of and for the three months ended March 31, 2023 and 2022, no individual equity method investment held by the Company met the significance criteria.

The Company recognized net gains related to its equity method investments of $23.9 million and $15.2 million for the three months ended March 31, 2023 and 2022, respectively. The net gains were included within principal investment income, net realized and unrealized gains on investments, and interest and dividend income within the Condensed Consolidated Statements of Operations.

With respect to the Company’s equity method investments, the material assets are expected to generate either long term capital appreciation and/or interest income, the material liabilities are debt instruments collateralized by, or related to, the financing of the assets and net income is materially comprised of the changes in fair value of these net assets.

Investments of the Consolidated Funds

Investments held in the Consolidated Funds are summarized below:

			Fair Value at												Percentage of total investments as of
			March 31,						December 31,						March 31,						December 31,
			2023						2022						2023						2022
Fixed income investments:
Bonds			$	563,275					$	786,961					4.3%						6.0%
Loans			9,516,748						9,280,522						72.5						70.3
Investments held in trust account			484,901						1,013,382						3.7						7.7
Collateralized loan obligations			82,100						—						0.6						—
Total fixed income investments			10,647,024						11,080,865						81.1						84.0
Equity securities			933,296						731,599						7.1						5.5
Partnership interests			1,545,832						1,392,169						11.8						10.5
Total investments, at fair value			$	13,126,152					$	13,204,633

As of March 31, 2023 and December 31, 2022, no single issuer or investment, including derivative instruments and underlying portfolio investments of the Consolidated Funds, had a fair value that exceeded 5.0% of the Company’s total assets.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

5. FAIR VALUE

Fair Value of Financial Instruments Held by the Company and Consolidated Funds

The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of March 31, 2023:

Financial Instruments of the Company						Level I						Level II						Level III						Investments Measured at NAV						Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income						$	—					$	—					$	75,169					$	—					$	75,169
Common stock and other equity securities						—						78,326						125,073						—						203,399
Partnership interests						—						—						—						1,385						1,385
Total investments, at fair value						—						78,326						200,242						1,385						279,953
Derivatives-foreign currency forward contracts						—						3,151						—						—						3,151
Total assets, at fair value						$	—					$	81,477					$	200,242					$	1,385					$	283,104
Liabilities, at fair value
Derivatives-foreign currency forward contracts						$	—					$	(2,266)					$	—					$	—					$	(2,266)
Total liabilities, at fair value						$	—					$	(2,266)					$	—					$	—					$	(2,266)

Financial Instruments of the Consolidated Funds						Level I						Level II						Level III						Investments Measured at NAV						Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds						$	—					$	559,547					$	3,728					$	—					$	563,275
Loans						—						8,847,972						668,776						—						9,516,748
Investments held in trust account						484,901						—						—						—						484,901
Collateralized loan obligations						—						21,800						60,300						—						82,100
Total fixed income investments						484,901						9,429,319						732,804						—						10,647,024
Equity securities						661						—						932,635						—						933,296
Partnership interests						—						—						374,049						1,171,783						1,545,832
Total investments, at fair value						485,562						9,429,319						2,039,488						1,171,783						13,126,152
Derivatives-foreign currency forward contracts						—						2,440						—						—						2,440
Total assets, at fair value						$	485,562					$	9,431,759					$	2,039,488					$	1,171,783					$	13,128,592
Liabilities, at fair value
Derivatives:
Warrants						$	(17,600)					$	—					$	—					$	—					$	(17,600)
Foreign currency forward contracts						—						(2,414)						—						—						(2,414)
Asset swaps						—						—						(1,698)						—						(1,698)
Total derivative liabilities, at fair value						(17,600)						(2,414)						(1,698)						—						(21,712)
Loan obligations of CLOs						—						(10,918,007)						—						—						(10,918,007)
Total liabilities, at fair value						$	(17,600)					$	(10,920,421)					$	(1,698)					$	—					$	(10,939,719)

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables summarize the financial assets and financial liabilities measured at fair value for the Company and the Consolidated Funds as of December 31, 2022:

Financial Instruments of the Company						Level I						Level II						Level III						Investments Measured at NAV						Total
Assets, at fair value
Investments:
Collateralized loan obligations and other fixed income						$	—					$	—					$	76,934					$	—					$	76,934
Common stock and other equity securities						—						77,022						121,785						—						198,807
Partnership interests						—						—						—						1,385						1,385
Total investments, at fair value						—						77,022						198,719						1,385						277,126
Derivatives-foreign currency forward contracts						—						4,173						—						—						4,173
Total assets, at fair value						$	—					$	81,195					$	198,719					$	1,385					$	281,299
Liabilities, at fair value
Derivatives-foreign currency forward contracts						$	—					$	(3,423)					$	—					$	—					$	(3,423)
Total liabilities, at fair value						$	—					$	(3,423)					$	—					$	—					$	(3,423)

Financial Instruments of the Consolidated Funds						Level I						Level II						Level III						Investments Measured at NAV						Total
Assets, at fair value
Investments:
Fixed income investments:
Bonds						$	—					$	534,137					$	252,824					$	—					$	786,961
Loans						—						8,663,678						616,844						—						9,280,522
Investments held in trust account						1,013,382						—						—						—						1,013,382
Total fixed income investments						1,013,382						9,197,815						869,668						—						11,080,865
Equity securities						719						—						730,880						—						731,599
Partnership interests						—						—						368,655						1,023,514						1,392,169
Total investments, at fair value						1,014,101						9,197,815						1,969,203						1,023,514						13,204,633
Derivatives-foreign currency forward contracts						—						2,900						—						—						2,900
Total assets, at fair value						$	1,014,101					$	9,200,715					$	1,969,203					$	1,023,514					$	13,207,533
Liabilities, at fair value
Derivatives:
Warrants						$	(9,326)					$	—					$	—					$	—					$	(9,326)
Foreign currency forward contracts						—						(2,942)						—						—						(2,942)
Asset swaps						—						—						(3,556)						—						(3,556)
Total derivative liabilities, at fair value						(9,326)						(2,942)						(3,556)						—						(15,824)
Loan obligations of CLOs						—						(10,701,720)						—						—						(10,701,720)
Total liabilities, at fair value						$	(9,326)					$	(10,704,662)					$	(3,556)					$	—					$	(10,717,544)

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2023:

Level III Assets of the Company						Equity Securities						Fixed Income																		Total
Balance, beginning of period						$	121,785					$	76,934																	$	198,719
Purchases(1)						52						1,194																		1,246
Sales/settlements(2)						45						(1,536)																		(1,491)
Realized and unrealized appreciation (depreciation), net						3,191						(1,423)																		1,768
Balance, end of period						$	125,073					$	75,169																	$	200,242
Change in net unrealized appreciation/depreciation and fair value included in earnings related to financial assets still held at the reporting date						$	2,978					$	(1,211)																	$	1,767

Level III Net Assets of Consolidated Funds						Equity Securities						Fixed Income						Partnership Interests						Derivatives, Net						Total
Balance, beginning of period						$	730,880					$	869,668					$	368,655					$	(3,556)					$	1,965,647
Transfer in						—						284,198						—						—						284,198
Transfer out						—						(447,536)						—						—						(447,536)
Purchases(1)						180,372						188,232						49,000						—						417,604
Sales/settlements(2)						(122)						(173,502)						(48,889)						—						(222,513)
Amortized discounts/premiums						—						749						—						—						749
Realized and unrealized appreciation, net						21,505						10,995						5,283						1,858						39,641
Balance, end of period						$	932,635					$	732,804					$	374,049					$	(1,698)					$	2,037,790
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date						$	21,436					$	(20,602)					$	5,283					$	1,848					$	7,965

(1)Purchases include paid-in-kind interest and securities received in connection with restructurings.

(2)Sales/settlements include distributions, principal redemptions and securities disposed of in connection with restructurings.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables set forth a summary of changes in the fair value of the Level III measurements for the three months ended March 31, 2022:

Level III Assets and Liabilities of the Company						Equity Securities						Fixed Income						Partnership Interests						Contingent Consideration												Total
Balance, beginning of period						$	108,949					$	52,397					$	2,575					$	(57,435)											$	106,486
Transfer in due to changes in consolidation						1,491						—						—						—												1,491
Sales/settlements(1)						(213)						(885)						—						47,873												46,775
Change in fair value						—						—						—						(988)												(988)
Realized and unrealized appreciation (depreciation), net						4,272						(54)						—						—												4,218
Balance, end of period						$	114,499					$	51,458					$	2,575					$	(10,550)											$	157,982
Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date						$	4,272					$	(54)					$	—					$	(988)											$	3,230

Level III Net Assets of Consolidated Funds						Equity Securities						Fixed Income						Partnership Interests						Derivatives, Net						Total
Balance, beginning of period						$	339,183					$	742,952					$	238,673					$	(3,105)					$	1,317,703
Transfer in						—						171,945						—						—						171,945
Transfer out						—						(90,417)						—						—						(90,417)
Purchases(2)						7,320						143,577						24,000						—						174,897
Sales/settlements(1)						(10,189)						(97,975)						(21,500)						(2)						(129,666)
Amortized discounts/premiums						—						654						—						—						654
Realized and unrealized appreciation (depreciation), net						14,826						(11,435)						(50)						(55)						3,286
Balance, end of period						$	351,140					$	859,301					$	241,123					$	(3,162)					$	1,448,402
Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date						$	20					$	(9,031)					$	(50)					$	(112)					$	(9,173)

(1)Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments.

(2)Purchases include paid-in-kind interest and securities received in connection with restructurings.

.

Transfers out of Level III were generally attributable to certain investments that experienced a more significant level of market activity during the period and thus were valued using observable inputs either from independent pricing services or multiple brokers. Transfers into Level III were generally attributable to certain investments that experienced a less significant level of market activity during the period and thus were only able to obtain one or fewer quotes from a broker or independent pricing service.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds’ Level III measurements as of March 31, 2023:

Level III Measurements of the Company						Fair Value						Valuation Technique(s)						Significant Unobservable Input(s)						Range						Weighted Average
Assets
Equity securities
						$	61,934					Market approach						Multiple of book value						3.0x						3.0x
						47,643						Market approach						Multiple of book value						1.3x						1.3x
						15,496						Transaction price(1)						N/A						N/A						N/A
Collateralized loan obligations						22,653						Broker quotes and/or 3rd party pricing services						N/A						N/A						N/A
Other fixed income
						30,934						Transaction price(1)						N/A						N/A						N/A
						21,582						Other						N/A						N/A						N/A
Total assets						$	200,242

Level III Measurements of the Consolidated Funds						Fair Value						Valuation Technique(s)						Significant Unobservable Input(s)						Range						Weighted Average
Assets
Equity securities
						$	534,676					Discounted cash flow						Discount rate						8.0% - 18.0%						12.0%
						360,533						Market approach						Multiple of book value						1.0x - 1.2x						1.2x
						34,621						Market approach						Net income multiple						30.0x						30.0x
						2,156						Market approach						EBITDA multiple(2)						6.3x - 38.5x						17.1x
						649						Other						N/A						N/A						N/A
Partnership interest						374,049						Discounted cash flow						Discount rate						11.2% - 23.7%						22.0%
Fixed income investments
						636,026						Broker quotes and/or 3rd party pricing services						N/A						N/A						N/A
						91,030						Market approach						Yield						0.8% - 44.7%						13.2%
						3,331						Market approach						EBITDA multiple						0.1x - 9.0x						8.7x
						2,417						Other						N/A						N/A						N/A
Total assets						$	2,039,488
Liabilities
Derivative instruments						$	(1,698)					Broker quotes and/or 3rd party pricing services						NA						N/A						N/A
Total liabilities						$	(1,698)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there was no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables summarize the quantitative inputs and assumptions used for the Company’s and the Consolidated Funds’ Level III measurements as of December 31, 2022:

Level III Measurements of the Company						Fair Value						Valuation Technique(s)						Significant Unobservable Input(s)						Range						Weighted Average
Assets
Equity securities
						$	62,129					Market approach						Multiple of book value						3.2x						3.2x
						44,166						Market approach						Multiple of book value						1.3x						1.3x
						15,490						Transaction price(1)						N/A						N/A						N/A
Collateralized loan obligations						25,163						Broker quotes and/or 3rd party pricing services						N/A						N/A						N/A
Other fixed income
						30,189						Transaction price(1)						N/A						N/A						N/A
						21,582						Other						N/A						N/A						N/A
Total assets						$	198,719

Level III Measurements of the Consolidated Funds						Fair Value						Valuation Technique(s)						Significant Unobservable Input(s)						Range						Weighted Average
Assets
Equity securities
						$	401,229					Discounted cash flow						Discount rate						8.0% - 18.0%						12.0%
						290,258						Market approach						Multiple of book value						1.0x - 1.2x						1.2x
						36,681						Market approach						Net income multiple						30.0x						30.0x
						2,064						Market approach						EBITDA multiple(2)						6.3x - 31.0x						13.6x
						648						Other						N/A						N/A						N/A
Partnership interests						368,655						Discounted cash flow						Discount rate						10.3% - 22.0%						18.9%
Fixed income investments
						731,708						Broker quotes and/or 3rd party pricing services						N/A						N/A						N/A
						125,612						Market approach						Yield						6.6% - 21.7%						12.8%
						6,155						Transaction price						N/A						N/A						N/A
						4,479						Market approach						EBITDA multiple						8.0x - 9.0x						8.5x
						1,714						Other						N/A						N/A						N/A
Total assets						$	1,969,203
Liabilities
Derivative instruments						$	(3,556)					Broker quotes and/or 3rd party pricing services						N/A						N/A						N/A
Total liabilities						$	(3,556)

(1)Transaction price consists of securities purchased or restructured. The Company determined that there has been no change to the valuation based on the underlying assumptions used at the closing of such transactions.

(2)“EBITDA” in the table above is a non-GAAP financial measure and refers to earnings before interest, tax, depreciation and amortization.

The Company has an insurance-related investment in a private fund managed by a third party that is valued using NAV per share. The terms and conditions of this fund do not allow for redemptions without certain events or approvals that are outside the Company’s control. This investment had a fair value of $1.4 million as of March 31, 2023 and December 31, 2022. The Company has no unfunded commitments for this investment.

The Consolidated Funds have limited partnership interests in private equity funds managed by the Company that are valued using NAV per share. The terms and conditions of these funds do not allow for redemptions without certain events or approvals that are outside the Company’s control. As of March 31, 2023, these investments had a fair value of $1,171.8 million and unfunded commitments of $1,025.3 million. As of December 31, 2022, these investments had a fair value of $1,023.5 million and unfunded commitments of $869.0 million.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

6. DEBT

The following table summarizes the Company’s and its subsidiaries’ debt obligations:

																					As of March 31, 2023												As of December 31, 2022
			Debt Origination Date						Maturity						Original Borrowing Amount						Carrying Value						Interest Rate						Carrying Value						Interest Rate
Credit Facility(1)			Revolving						3/31/2027						N/A						$	795,000					5.88%						$	700,000					5.37%
2024 Senior Notes(2)			10/8/2014						10/8/2024						$	250,000					248,872						4.21						248,693						4.21
2030 Senior Notes(3)			6/15/2020						6/15/2030						400,000						396,713						3.28						396,602						3.28
2052 Senior Notes(4)			1/21/2022						2/1/2052						500,000						483,904						3.77						483,802						3.77
2051 Subordinated Notes(5)			6/30/2021						6/30/2051						450,000						444,803						4.13						444,757						4.13
Total debt obligations																					$	2,369,292											$	2,273,854

(1)The revolver commitments were $1.325 billion as of March 31, 2023. Ares Holdings is the borrower under the Credit Facility. The Credit Facility has a variable interest rate based on Secured Overnight Financing Rate (“SOFR”) or a base rate plus an applicable margin, which is subject to adjustment based on the achievement of certain environmental, social and governance-related targets, with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of March 31, 2023, base rate loans bear interest calculated based on the base rate and the SOFR loans bear interest calculated based on SOFR plus 1.00%. The unused commitment fee is 0.10% per annum. There is a base rate and SOFR floor of zero.

(2)The 2024 Senior Notes were issued in October 2014 by Ares Finance Co. LLC, an indirect subsidiary of the Company, at 98.27% of the face amount with interest paid semi-annually. The Company may redeem the 2024 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2024 Notes.

(3)The 2030 Senior Notes were issued in June 2020 by Ares Finance Co. II LLC, an indirect subsidiary of the Company, at 99.77% of the face amount with interest paid semi-annually. The Company may redeem the 2030 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2030 Notes.

(4)The 2052 Senior Notes were issued in January 2022 by Ares Finance Co. IV LLC, an indirect subsidiary of the Company, at 97.78% of the face amount with interest paid semi-annually. The Company may redeem the 2052 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2052 Notes.

(5)The 2051 Subordinated Notes were issued in June 2021 by Ares Finance Co. III LLC, an indirect subsidiary of the Company with interest paid semi-annually at a fixed rate of 4.125%. Beginning June 30, 2026, the interest rate will reset on every fifth year based on the five-year U.S. Treasury Rate plus 3.237%. The Company may redeem the 2051 Subordinated Notes prior to maturity or defer interest payments up to five consecutive years, subject to the terms of the indenture governing the 2051 Subordinated Notes.

As of March 31, 2023, the Company and its subsidiaries were in compliance with all covenants under the debt obligations.

The Company typically incurs and pays debt issuance costs when entering into a new debt obligation or when amending an existing debt agreement. Debt issuance costs related to the 2024, 2030 and 2052 Senior Notes (the “Senior Notes”) and 2051 Subordinated Notes are recorded as a reduction of the corresponding debt obligation, and debt issuance costs related to the Credit Facility are included within other assets within the Condensed Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation into interest expense within the Condensed Consolidated Statements of Operations.

The following table presents the activity of the Company’s debt issuance costs:

			Credit Facility						Senior Notes						Subordinated Notes
Unamortized debt issuance costs as of December 31, 2022			$	5,510					$	8,393					$	5,243
Amortization of debt issuance costs			(324)						(198)						(46)
Unamortized debt issuance costs as of March 31, 2023			$	5,186					$	8,195					$	5,197

Loan Obligations of the Consolidated CLOs

Loan obligations of the Consolidated Funds that are CLOs (“Consolidated CLOs”) represent amounts due to holders of debt securities issued by the Consolidated CLOs. The Company measures the loan obligations of the Consolidated CLOs using the fair value of the financial assets of its Consolidated CLOs.

Table of Contents

Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs:

									As of March 31, 2023																					As of December 31, 2022
									Fair Value of Loan Obligations						Weighted Average Interest Rate						Weighted Average Remaining Maturity (in years)									Fair Value of Loan Obligations						Weighted Average Interest Rate						Weighted Average Remaining Maturity (in years)
Senior secured notes									$	10,293,114					5.46%						8.5									$	10,142,545					4.84%						8.8
Subordinated notes(1)									624,893						N/A						7.5									559,175						N/A						7.8
Total loan obligations of Consolidated CLOs									$	10,918,007																				$	10,701,720

(1)The notes do not have contractual interest rates; instead, holders of the notes receive distributions from the excess cash flows generated by each Consolidated CLO.

Loan obligations of the Consolidated CLOs are collateralized by the assets held by the Consolidated CLOs, consisting of cash and cash equivalents, corporate loans, corporate bonds and other securities. The assets of one Consolidated CLO may not be used to satisfy the liabilities of another Consolidated CLO. Loan obligations of the Consolidated CLOs include floating rate notes, deferrable floating rate notes, revolving lines of credit and subordinated notes. Amounts borrowed under the notes are repaid based on available cash flows subject to priority of payments under each Consolidated CLO’s governing documents. Based on the terms of these facilities, the creditors of the facilities have no recourse to the Company.

Credit Facilities of the Consolidated Funds

Certain Consolidated Funds maintain credit facilities to fund investments between capital drawdowns. These facilities generally are collateralized by the unfunded capital commitments of the Consolidated Funds’ limited partners, bear an annual commitment fee based on unfunded commitments and contain various affirmative and negative covenants and reporting obligations, including restrictions on additional indebtedness, liens, margin stock, affiliate transactions, dividends and distributions, release of capital commitments and portfolio asset dispositions. The creditors of these facilities have no recourse to the Company and only have recourse to a subsidiary of the Company to the extent the debt is guaranteed by such subsidiary. As of March 31, 2023 and December 31, 2022, the Consolidated Funds were in compliance with all covenants under such credit facilities.

The Consolidated Funds had the following revolving bank credit facilities outstanding:

																		As of March 31, 2023															As of December 31, 2022
Consolidated Funds’ Debt Facilities						Maturity Date						Total Capacity						Outstanding Loan**(1)**						Effective Rate									Outstanding Loan**(1)**						Effective Rate
Credit Facilities:
						10/13/2023						$	112,817					$	77,496					6.31%									$	77,496					5.89%
						7/1/2023						18,000						15,550						6.50									15,550						6.25
						7/23/2024						100,000						10,000						7.78									75,000						7.28
						9/24/2026						150,000						—						N/A									—						N/A
						9/12/2027						54,000						—						N/A									—						N/A
Total borrowings of Consolidated Funds																		$	103,046														$	168,046

(1)The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate.

7. COMMITMENTS AND CONTINGENCIES

Indemnification Arrangements

Consistent with standard business practices in the normal course of business, the Company enters into contracts that contain indemnities for affiliates of the Company, persons acting on behalf of the Company or such affiliates and third parties. The terms of the indemnities vary from contract to contract and the Company’s maximum exposure under these arrangements cannot be determined and has not been recorded within the Condensed Consolidated Statements of Financial Condition. As of March 31, 2023, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Commitments

As of March 31, 2023 and December 31, 2022, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $952.3 million and $677.9 million, respectively.

Guarantees

The Company has entered into agreements with financial institutions to guarantee credit facilities held by certain funds. In the ordinary course of business, the guarantee of credit facilities held by funds may indicate control and result in consolidation of the fund. As of March 31, 2023 and December 31, 2022, the Company’s maximum exposure to losses from guarantees was $76.7 million and $31.5 million, respectively.

Contingent Liabilities

In connection with the acquisition of AMP Capital’s Infrastructure Debt platform (the “Infrastructure Debt Acquisition”) during the first quarter of 2022, the Company established a management incentive program (the “Infrastructure Debt MIP”) with certain professionals. The Infrastructure Debt MIP represents a contingent liability not to exceed $48.5 million and is based on the achievement of revenue targets from the fundraising of certain infrastructure debt funds during the measurement periods.

The Company expects to settle each portion of the liability with a combination of 15% cash and 85% equity awards. Expense associated with the cash components are recognized ratably over the respective measurement periods, which will end on the final fundraising date for each of the infrastructure debt funds included in the Infrastructure Debt MIP agreement. Expense associated with the equity component is recognized ratably over the service periods, which will continue for four years beyond each of the measurement period end dates. The Infrastructure Debt MIP is remeasured each period with incremental changes in fair value included within compensation and benefits expense within the Condensed Consolidated Statements of Operations. Following each of the measurement period end dates, the cash component will be paid and restricted units for the portion of the Infrastructure Debt MIP award earned will be granted at fair value. The unpaid liability at the respective measurement period end dates will be reclassified from liability to additional paid-in-capital and any difference between the fair value of the Infrastructure Debt MIP award earned at the respective measurement period end date and the previously recorded compensation expense will be recognized over the remaining four year service period as equity-based compensation expense.

The revenue target was achieved for one of the infrastructure debt funds during the fourth quarter of 2022. As of December 31, 2022, the fair value of the contingent liability related to this portion of the award was $21.8 million and the Company recorded $7.0 million within accrued compensation within the Condensed Consolidated Statements of Financial Condition. During the three months ended March 31, 2023, the associated liability for this portion of the award was settled with a $3.4 million cash payment and the remaining amount equity-settled and reclassified to additional paid-in-capital. For the three months ended March 31, 2022, compensation expense of $1.1 million related to the achieved portion of the award is presented within compensation and benefits within the Condensed Consolidated Statements of Operations.

As of March 31, 2023, the maximum contingent liability associated with the remaining Infrastructure Debt MIP is $15.0 million. As of March 31, 2023 and December 31, 2022, the fair value of the contingent liability was $13.5 million. As of March 31, 2023 and December 31, 2022, the Company has recorded $2.7 million and $2.2 million, respectively, within accrued compensation within the Condensed Consolidated Statements of Financial Condition. Compensation expense associated with the remaining Infrastructure Debt MIP of $0.6 million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively, is presented within compensation and benefits within the Condensed Consolidated Statements of Operations.

Carried Interest

Carried interest is affected by changes in the fair values of the underlying investments in the funds that are advised by the Company. Valuations, on an unrealized basis, can be significantly affected by a variety of external factors including, but not limited to, public equity market volatility, industry trading multiples and interest rates. Generally, if at the termination of a fund (and increasingly at interim points in the life of a fund), the fund has not achieved investment returns that (in most cases) exceed the preferred return threshold or (in all cases) the general partner receives net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company will be obligated to repay carried interest that

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

was received by the Company in excess of the amounts to which the Company is entitled. This contingent obligation is normally reduced by income taxes paid by the Company related to its carried interest.

Senior professionals of the Company who have received carried interest distributions are responsible for funding their proportionate share of any contingent repayment obligations. However, the governing agreements of certain of the Company’s funds provide that if a current or former professional does not fund his or her respective share for such fund, then the Company may have to fund additional amounts beyond what was received in carried interest, although the Company will generally retain the right to pursue any remedies under such governing agreements against those carried interest recipients who fail to fund their obligations.

Additionally, at the end of the life of the funds there could be a payment due to a fund by the Company if the Company has recognized more carried interest than was ultimately earned. The general partner obligation amount, if any, will depend on final realized values of investments at the end of the life of the fund.

At March 31, 2023 and December 31, 2022, if the Company assumed all existing investments were worthless, the amount of carried interest subject to potential repayment, net of tax distributions, which may differ from the recognition of revenue, would have been approximately $122.4 million and $128.4 million, respectively, of which approximately $96.2 million and $101.0 million, respectively, is reimbursable to the Company by certain professionals who are the recipients of such carried interest. Management believes the possibility of all of the investments becoming worthless is remote. As of March 31, 2023 and December 31, 2022, if the funds were liquidated at their fair values, there would be no contingent repayment obligation or liability.

Litigation

From time to time, the Company is named as a defendant in legal actions relating to transactions conducted in the ordinary course of business. Although there can be no assurance of the outcome of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim that would individually or in the aggregate materially affect its results of operations, financial condition or cash flows.

Leases

The Company leases office space and certain office equipment. The Company’s leases have remaining lease terms of one to 11 years. The tables below present certain supplemental quantitative disclosures regarding the Company’s leases:

												As of March 31,						As of December 31,
						Classification						2023						2022
Operating lease assets						Right-of-use operating lease assets						$	154,970					$	155,950
Finance lease assets						Other assets(1)						280						400
Total lease assets												$	155,250					$	156,350
Operating lease liabilities						Operating lease liabilities						$	191,090					$	190,616
Finance lease obligations						Accounts payable, accrued expenses and other liabilities						300						330
Total lease liabilities												$	191,390					$	190,946

(1) Finance lease assets are recorded net of accumulated amortization of $2.1 million as of March 31, 2023 and December 31, 2022.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

									As of March 31, 2023
Maturity of lease liabilities									Operating Leases						Finance Leases
2023									$	35,727					$	134
2024									44,063						162
2025									39,069						12
2026									27,254						—
2027									17,902						—
Thereafter									42,331						—
Total future payments									206,346						308
Less: interest									15,256						8
Total lease liabilities									$	191,090					$	300

												Three months ended March 31,
						Classification						2023						2022
Operating lease expense						General, administrative and other expenses						$	11,888					$	10,063
Finance lease expense:
Amortization of finance lease assets						General, administrative and other expenses						120						162
Interest on finance lease liabilities						Interest expense						2						5
Total lease expense												$	12,010					$	10,230

						Three months ended March 31,
Other information						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases						$	10,911					$	11,125
Operating cash flows for finance leases						2						5
Financing cash flows for finance leases						42						389
Leased assets obtained in exchange for new operating lease liabilities						12,047						1,378

									As of March 31,						As of December 31,
Lease term and discount rate									2023						2022
Weighted-average remaining lease terms (in years):
Operating leases									5.6						5.5
Finance leases									1.8						2.1
Weighted-average discount rate:
Operating leases									2.92%						2.72%
Finance leases									3.00%						2.99%

8. RELATED PARTY TRANSACTIONS

Substantially all of the Company’s revenue is earned from its affiliates. The related accounts receivable are included within due from affiliates within the Condensed Consolidated Statements of Financial Condition, except that accrued carried interest allocations, which is predominantly due from affiliated funds, is presented separately within investments within the Condensed Consolidated Statements of Financial Condition.

The Company has investment management agreements with the Ares Funds that it manages. In accordance with these agreements, these Ares Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Ares Funds.

The Company is reimbursed for expenses incurred in providing administrative services to certain related parties, including our public vehicles, and with certain private funds that pay administrative fees based on invested capital. The Company is also party to agreements with certain real estate funds which pay fees to the Company to provide various services, such as administration, acquisition, development, property management and the sale and distribution of fund shares in our non-traded vehicles, among others.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Employees and other related parties may be permitted to participate in co-investment vehicles that generally invest in Ares funds alongside fund investors. Participation is limited by law to individuals who qualify under applicable securities laws. These co-investment vehicles generally do not require these individuals to pay management fees, carried interest or incentive fees.

Carried interest and incentive fees from the funds can be distributed to professionals or their related entities on a current basis, subject, in the case of carried interest programs, to repayment by the subsidiary of the Company that acts as general partner of the relevant fund in the event that certain specified return thresholds are not ultimately achieved. The professionals have personally guaranteed, subject to certain limitations, the obligations of these subsidiaries in respect of this general partner obligation. Such guarantees are several, and not joint, and are limited to distributions received by the relevant recipient.

The Company considers its professionals and non-consolidated funds to be affiliates. Amounts due from and to affiliates were composed of the following:

			As of March 31,						As of December 31,
			2023						2022
Due from affiliates:
Management fees receivable from non-consolidated funds			$	551,095					$	456,314
Incentive fee receivable from non-consolidated funds			18,621						169,979
Payments made on behalf of and amounts due from non-consolidated funds and employees			138,088						132,179
Due from affiliates—Company			$	707,804					$	758,472
Amounts due from non-consolidated funds			$	10,878					$	15,789
Due from affiliates—Consolidated Funds			$	10,878					$	15,789
Due to affiliates:
Management fee received in advance and rebates payable to non-consolidated funds			$	3,918					$	8,701
Tax receivable agreement liability			113,978						118,466
Undistributed carried interest and incentive fees			61,177						121,332
Payments made by non-consolidated funds on behalf of and payable by the Company			4,378						4,299
Due to affiliates—Company			$	183,451					$	252,798
Amounts due to portfolio companies and non-consolidated funds			$	—					$	4,037
Due to affiliates—Consolidated Funds			$	—					$	4,037

Due from and Due to Ares Funds and Portfolio Companies

In the normal course of business, the Company pays certain expenses on behalf of Consolidated Funds and non-consolidated funds for which it is reimbursed. Conversely, Consolidated Funds and non-consolidated funds may pay certain expenses that are reimbursed by the Company. Amounts advanced on behalf of Consolidated Funds are eliminated in consolidation. Certain expenses initially paid by the Company, primarily professional services, travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies.

9. INCOME TAXES

The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by certain affiliated funds that are consolidated in these financial statements. For the three months ended March 31, 2023 and 2022, the Company recorded income tax expense of $33.8 million and $20.4 million, respectively.

The Company’s effective income tax rate is dependent on many factors, including the estimated nature and amounts of income and expenses allocated to the non-controlling interests without being subject to federal, state and local income taxes at the corporate level. Additionally, the Company’s effective tax rate is influenced by the amount of income tax provision recorded for any affiliated funds and co-investment vehicles that are consolidated in the Company’s unaudited condensed consolidated financial statements. For the three months ended March 31, 2023 and 2022, the Company recorded its interim income tax provision utilizing the estimated annual effective tax rate.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The income tax effects of temporary differences give rise to significant portions of deferred tax assets and liabilities, which are presented on a net basis. As of March 31, 2023 and December 31, 2022, the Company recorded a net deferred tax asset of $28.4 million and $68.9 million, respectively, within other assets within the Condensed Consolidated Statements of Financial Condition.

The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. With limited exceptions, the Company is generally no longer subject to corporate income tax audits by taxing authorities for any years prior to 2019. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s unaudited condensed consolidated financial statements.

10. EARNINGS PER SHARE

The Company has Class A and non-voting common stock outstanding. The non-voting common stock has the same economic rights as the Class A common stock; therefore, earnings per share is presented on a combined basis. Income of the Company has been allocated on a proportionate basis to the two common stock classes.

Basic earnings per share of Class A and non-voting common stock is computed by using the two-class method. Diluted earnings per share of Class A and non-voting common stock is computed using the more dilutive method of either the two-class method or the treasury stock method. For the three months ended March 31, 2023 and 2022, the two-class method was the more dilutive method.

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

			Three months ended March 31,
			2023						2022
Basic earnings per share of Class A and non-voting common stock:
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	94,039					$	45,863
Distributions on unvested restricted units			(5,314)						(3,585)
Net income available to Class A and non-voting common stockholders			$	88,725					$	42,278
Basic weighted-average shares of Class A and non-voting common stock			178,976,022						174,215,251
Basic earnings per share of Class A and non-voting common stock			$	0.49					$	0.24
Diluted earnings per share of Class A and non-voting common stock:
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	94,039					$	45,863
Distributions on unvested restricted units			(5,314)						(3,585)
Net income available to Class A and non-voting common stockholders			$	88,725					$	42,278
Effect of dilutive shares:
Restricted units			—						—
Options			—						—
Diluted weighted-average shares of Class A and non-voting common stock			178,976,022						174,215,251
Diluted earnings per share of Class A and non-voting common stock			$	0.49					$	0.24
Dividend declared and paid per Class A and non-voting common stock			$	0.77					$	0.61

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

11. EQUITY COMPENSATION

Equity Incentive Plan

Equity-based compensation is granted under the Company’s 2014 Equity Incentive Plan (as amended, the “Equity Incentive Plan”). The total number of shares available to be issued under the Equity Incentive Plan resets based on a formula defined in the Equity Incentive Plan and may increase on January 1 of each year. On January 1, 2023, the total number of shares available for issuance under the Equity Incentive Plan reset to 51,149,100 shares and as of March 31, 2023, 45,074,879 shares remained available for issuance.

Generally, unvested restricted units are forfeited upon termination of employment in accordance with the Equity Incentive Plan. The Company recognizes forfeitures as a reversal of previously recognized compensation expense in the period the forfeiture occurs.

Equity-based compensation expense, net of forfeitures, recorded by the Company is presented in the following table:

			Three months ended March 31,
			2023						2022
Restricted units			$	69,252					$	53,650
Equity-based compensation expense			$	69,252					$	53,650

Restricted Units

Each restricted unit represents an unfunded, unsecured right of the holder to receive a share of the Company’s Class A common stock on a specific date. The restricted units generally vest and are settled in shares of Class A common stock either (i) at a rate of one-third per year, beginning on the third anniversary of the grant date, (ii) at a rate of one quarter per year, beginning on the second anniversary of the grant date or the holder’s employment commencement date, or (iii) at a rate of one-third per year, beginning on the first anniversary of the grant date, in each case generally subject to the holder’s continued employment as of the applicable vesting date (subject to accelerated vesting upon certain qualifying terminations of employment or retirement eligibility provisions). Compensation expense associated with restricted units is recognized on a straight-line basis over the requisite service period of the award.

Restricted units are delivered net of the holder’s payroll related taxes upon vesting. For the three months ended March 31, 2023, 3.3 million restricted units vested and 1.9 million shares of Class A common stock were delivered to the holders. For the three months ended March 31, 2022, 5.1 million restricted units vested and 2.8 million shares of Class A common stock were delivered to the holders.

The holders of restricted units, other than awards that have not yet been issued as described in the subsequent sections, generally have the right to receive as current compensation an amount in cash equal to (i) the amount of any dividend paid with respect to a share of Class A common stock multiplied by (ii) the number of restricted units held at the time such dividends are declared (“Dividend Equivalent”). During the three months ended March 31, 2023, the Company declared dividends of $0.77 per share to Class A common stockholders at the close of business on March 17, 2023. For the three months ended March 31, 2023, Dividend Equivalents were made to the holders of restricted units in the aggregate amount of $12.0 million, which are presented as dividends within the Condensed Consolidated Statements of Changes in Equity. When units are forfeited, the cumulative amount of Dividend Equivalents previously paid is reclassified to compensation and benefits expense within the Condensed Consolidated Statements of Operations.

During the first quarter of 2023, the Company approved the future grant of restricted units to certain senior executives in each of 2024, 2025 and 2026, subject to the holder’s continued employment and acceleration in certain instances. The vesting period of these awards are at a rate of 25% per year, beginning on the second anniversary of the grant date. Given that these future restricted units have been communicated to the recipient, the Company accounts for these awards as if they have been granted and recognizes the compensation expense on a straight-line basis over the service period. The restricted units that have been approved and communicated but not yet granted are not eligible to receive a Dividend Equivalent until the grant date.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table presents unvested restricted units’ activity:

			Restricted Units						Weighted Average Grant Date Fair Value Per Unit
Balance - December 31, 2022			16,662,999						$	48.76
Granted			4,683,244						78.71
Vested			(3,260,427)						37.86
Forfeited			(94,023)						49.78
Balance - March 31, 2023			17,991,793						$	58.53

The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $840.1 million as of March 31, 2023 and is expected to be recognized over the remaining weighted average period of 3.8 years.

Options

Upon exercise, each option entitles the holders to purchase from the Company one share of Class A common stock at the stated exercise price. The term of the options is generally 10 years, beginning on the grant date.

A summary of options activity during the three months ended March 31, 2023 is presented below:

			Options						Weighted Average Exercise Price						Weighted Average Remaining Life (in years)						Aggregate Intrinsic Value
Balance - December 31, 2022			5,170,219						$	19.00					1.3						$	255,616
Exercised			(483,126)						19.00						—						—
Expired			—						—						—						—
Forfeited			—						—						—						—
Balance - March 31, 2023			4,687,093						$	19.00					1.1						$	302,036
Exercisable at March 31, 2023			4,687,093						$	19.00					1.1						$	302,036

Net cash proceeds from exercises of stock options were $9.2 million for the three months ended March 31, 2023. The Company realized tax benefits of approximately $4.5 million from those exercises.

12. EQUITY AND REDEEMABLE INTEREST

Common Stock

The Company’s common stock consists of Class A, Class B, Class C and non-voting common stock, each $0.01 par value per share. The non-voting common stock has the same economic rights as the Class A common stock. Sumitomo Mitsui Banking Corporation (“SMBC”) is the sole holder of the non-voting common stock. The Class B common stock and Class C common stock are non-economic and holders are not entitled to dividends from the Company or to receive any assets of the Company in the event of any dissolution, liquidation or winding up of the Company. Ares Management GP LLC is the sole holder of the Class B common stock and Ares Voting LLC (“Ares Voting”) is the sole holder of the Class C common stock.

In February 2023, the Company's board of directors authorized the renewal of the stock repurchase program that allows for the repurchase of up to $150 million of shares of Class A common stock. Under the program, shares may be repurchased from time to time in open market purchases, privately negotiated transactions or otherwise, including in reliance on Rule 10b5-1 of the Securities Act. The program is scheduled to expire in March 2024. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the three months ended March 31, 2023, the Company did not repurchase any shares as part of the stock repurchase program.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table presents the changes in each class of common stock:

			Class A Common Stock						Non-Voting Common Stock						Class B Common Stock						Class C Common Stock						Total
Balance - December 31, 2022			173,892,036						3,489,911						1,000						117,231,288						294,614,235
Issuance of stock			1,382,596						—						—						—						1,382,596
Issuance of AOG Units(1)			—						—						—						3,473,026						3,473,026
Exchanges of AOG Units			65,916						—						—						(65,916)						—
Stock option exercises, net of shares withheld for tax			483,126						—						—						—						483,126
Vesting of restricted stock awards, net of shares withheld for tax			1,850,381						—						—						—						1,850,381
Balance - March 31, 2023			177,674,055						3,489,911						1,000						120,638,398						301,803,364

(1) Represents issuance of AOG Units to the recipients of the management incentive program from the acquisition of Black Creek Group’s real estate investment advisory and distribution business (the “Black Creek Acquisition”), which relieved the associated liability following the maximum contingent payment being met as of December 31, 2022. Pursuant to an agreement with the recipients of the Black Creek Acquisition management incentive program, a portion of such AOG Units were issued in lieu of cash consideration which was payable pursuant to the Black Creek Acquisition management incentive program. Issuances of Class C Common stock corresponds with increases in Ares Owners Holdings L.P.’s ownership interest in the AOG entities.

The following table presents each partner’s AOG Units and corresponding ownership interest in each of the Ares Operating Group entities, as well as its daily average ownership of AOG Units in each of the Ares Operating Group entities:

																																							Daily Average Ownership
						As of March 31, 2023												As of December 31, 2022																		Three months ended March 31,
						AOG Units						Direct Ownership Interest						AOG Units						Direct Ownership Interest																		2023						2022
Ares Management Corporation						181,163,966						60.03		%				177,381,947						60.21		%																60.14		%				59.51		%
Ares Owners Holdings, L.P.						120,638,398						39.97						117,231,288						39.79																		39.86						40.49
Total						301,802,364						100.00		%				294,613,235						100.00		%

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Redeemable Interest

The following table summarizes the activities associated with the redeemable interest in Ares Operating Group entities:

			Total
Balance - December 31, 2021			$	96,008
Changes in ownership interests and related tax benefits			231
Net income			399
Currency translation adjustment, net of tax			(331)
Equity compensation			48
Distributions			(8)
Balance - March 31, 2022			96,347
Changes in ownership interests and related tax benefits			(1,445)
Net loss			(457)
Currency translation adjustment, net of tax			(996)
Equity compensation			77
Distributions			(8)
Balance- June 30, 2022			93,518
Changes in ownership interests and related tax benefits			1,214
Net income			93
Currency translation adjustment, net of tax			(933)
Equity compensation			77
Distributions			(1,861)
Balance- September 30, 2022			92,108
Net loss			(886)
Currency translation adjustment, net of tax			1,834
Equity compensation			83
Distribution			(10)
Balance - December 31, 2022			93,129
Changes in ownership interests and related tax benefits			(66,506)
Net loss			(1,824)
Currency translation adjustment, net of tax			(148)
Equity compensation			174
Distributions			(2,883)
Balance - March 31, 2023			$	21,942

The following table summarizes the activities associated with the redeemable interest in Consolidated Funds:

			Total
Balance - December 31, 2021			$	1,000,000
Change in redemption value			—
Balance - March 31, 2022			1,000,000
Change in redemption value			—
Balance - June 30, 2022			1,000,000
Change in redemption value			4,994
Balance - September 30, 2022			1,004,994
Change in redemption value			8,288
Balance - December 31, 2022			1,013,282
Change in redemption value			10,504
Redemption			(538,985)
Balance - March 31, 2023			$	484,801

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

13. SEGMENT REPORTING

The Company operates through its distinct operating segments. On March 31, 2023, the Company executed the SSG Buyout. The Company rebranded Ares SSG as Ares Asia and the Ares SSG credit business, including the Asian special situations, Asian secured lending and APAC direct lending strategies, as Asia credit. Asia credit has been reclassified effective January 1, 2023 and is now presented within the Credit Group. In connection with this reclassification, the Company will no longer use Strategic Initiatives to describe all other operating segments, instead reporting the collective results as Other. The Company reclassified activities of Asia credit to the Credit Group to better align the segment presentation with the global asset classes and investment strategies. The Company has modified historical results to conform with its current presentation. The Company operating segments are summarized below:

Credit Group: The Credit Group manages credit strategies across the liquid and illiquid spectrum, including liquid credit, alternative credit and direct lending. Our liquid credit investment solutions help traditional fixed income investors access the syndicated loan and high yield bond markets and capitalize on opportunities across multi-asset credit. The syndicated loans strategy focuses on evaluating individual credit opportunities related primarily to non-investment grade senior secured loans and primarily targets first lien secured debt, with a secondary focus on second lien secured loans and subordinated and other unsecured loans. The high yield bond strategy seeks to deliver a diversified portfolio of liquid, traded non-investment grade corporate bonds, including secured, unsecured and subordinated debt instruments. Multi-asset credit is a “go anywhere” strategy designed to offer investors a flexible solution to global credit investing by allowing us to tactically allocate between multiple asset classes in various market conditions. The alternative credit strategy seeks to capitalize on asset-focused investment opportunities that fall outside of traditional, well-defined markets such as corporate debt, real estate and private equity. The alternative credit strategy emphasizes downside protection and capital preservation through a focus on investments that tend to share the following key attributes: asset security, covenants, structural protections and cash flow velocity. The direct lending strategy is one of the largest self-originating direct lenders, lending in the U.S., European and Asia-Pacific markets with a multi-channel origination strategy designed to address a broad set of investment opportunities in the middle market. The direct lending team maintains a flexible investment strategy with the capability to invest in first lien senior secured loans (including unitranche loans which are loans that combine senior and subordinated debt, generally in a first lien position), second lien senior secured loans, subordinated debt, preferred equity and non-control equity co-investments in private middle market companies. U.S. direct lending activities are managed through a publicly-traded business development company (“BDC”), Ares Capital Corporation (“ARCC”), our non-traded BDC, Ares Strategic Income Fund (“ASIF”), as well as through private commingled funds and separately managed accounts (“SMAs”). Our Asia credit platform provides flexible, value-add capital solutions to complex situations through our local origination presence and experience.

Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity and special opportunities. In the corporate private equity strategy, the Company targets four principal transactions types: (i) prudently leveraged control buyouts; (ii) growth equity; (iii) rescue capital; and (iv) distressed-for-control. This differentiated strategy, together with the broad resources of the Ares platform, widens our universe of potential investment opportunities and allows us to remain active across various market environments and to be highly selective in making investments by identifying the most attractive relative value opportunities. In the special opportunities strategy, the Company employs a flexible capital strategy to finance debt and non-control equity solutions in middle market companies undergoing transformational change or stress. The strategy seeks to consistently invest in a range of private, special-situation opportunities and flex into distressed public market debt when attractive.

Real Assets Group: The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments.

The real estate strategy focuses on activities categorized as core/core-plus, value-add, opportunistic and debt. Real estate equity strategies involve high-quality properties and locations and de-risked developments with an opportunity to create value through repositioning, lease-up, re-tenanting, redevelopment, and/or complex recapitalizations. The U.S. core/core-plus investment activities focuses on the acquisition of assets with strong long-term cash flow potential and durable tenancy diversified across end-user industries and geographies. The value-add investment activities focus on acquiring underperforming, income-producing, institutional-quality assets that can be improved through select value-creation initiatives across the U.S. and Europe. The opportunistic activities focus on capitalizing on distressed and special situations, repositioning underperforming assets and undertaking select development and redevelopment projects across the U.S. and Europe. The real estate debt strategy primarily focuses on directly originating a wide range of financing opportunities in the U.S. and Europe leveraging the Real Asset Group’s diverse sources of capital. In addition to managing private commingled funds and SMAs investing in equity and debt strategies, the real estate strategy also makes investments through Ares Real Estate Income Trust,

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Inc. (“AREIT”) and Ares Industrial Real Estate Income Trust, Inc. (“AIREIT”), its non-traded REITs, and ACRE, a publicly traded commercial mortgage REIT.

The infrastructure strategy focuses on investment strategies broadly categorized as infrastructure opportunities and infrastructure debt. Infrastructure opportunities is a market leader in infrastructure and power investing with a focus on climate infrastructure, natural gas generation and energy transportation sectors. The infrastructure opportunities strategy targets essential infrastructure assets and companies with stable cash flow profiles through long-term contracts and high-barriers to entry. The infrastructure debt strategy targets global assets and businesses with defensive characteristics across the digital, transport, energy and utility sectors. Leveraging the established long standing relationships, the strategy seeks to generate exclusive deal flow and high-quality investment opportunities.

Secondaries Group: The Secondaries Group invests in secondary markets across a range of alternative asset class strategies, including private equity, real estate, infrastructure and credit. The Company acquires interests across a range of partnership vehicles, including funds, multi-asset portfolios and single asset joint ventures. Activities within each strategy include recapitalizing and restructuring the funds, including transactions that can address pending fund maturity, strategy change or the need for additional equity capital. The private equity secondaries strategy seeks to achieve attractive secondary cash flow and diversification characteristics by investing across the spectrum of private equity secondaries transactions. In the real estate secondaries strategy, the Company seeks broad diversification by property sector and geography and to drive investment results through underwriting, transaction structuring and portfolio construction. In the infrastructure secondaries strategy, the Company focuses on achieving diversification through a portfolio that provides inflation protection and exposure to uncorrelated assets. The credit secondaries strategy seeks to create a highly diversified portfolio of primarily senior secured private credit interests across North America and Europe, acquired directly or indirectly through secondary market transactions.

Other: Other represents a compilation of operating segments and strategic investments that seek to expand the Company’s reach and its scale in new and existing global markets but individually do not meet reporting thresholds. These results include activities from (i) Ares Insurance Solutions (“AIS”), the Company’s insurance platform that provides solutions to insurance clients including asset management, capital solutions and corporate development and (ii) AAC, among others.

The OMG consists of shared resource groups to support the Company’s operating segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, legal, compliance, human resources, strategy, relationship management and distribution. The OMG includes Ares Wealth Management Solutions, LLC (“AWMS”) that facilitates the product development, distribution, marketing and client management activities for investment offerings in the global wealth management channel. Additionally, the OMG provides services to certain of the Company’s managed funds and vehicles, which reimburse the OMG for expenses equal to the costs of services provided. The OMG’s revenues and expenses are not allocated to the Company’s operating segments but the Company does consider the financial results of the OMG when evaluating its financial performance.

Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the Condensed Consolidated Statements of Operations prepared in accordance with GAAP.

Fee related earnings (“FRE”) is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees and fee related performance revenues, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes net performance income, investment income from the Consolidated Funds and non-consolidated funds and certain other items that the Company believes are not indicative of its core operating performance. Fee related performance revenues, together with fee related performance compensation, is presented within FRE because it represents incentive fees from perpetual capital vehicles that is measured and received on a recurring basis and not dependent on realization events from the underlying investments.

Realized income (“RI”) is an operating metric used by management to evaluate performance of the business based on operating performance and the contribution of each of the business segments to that performance, while removing the fluctuations of unrealized income and expenses, which may or may not be eventually realized at the levels presented and whose realizations depend more on future outcomes than current business operations. RI differs from income before taxes by excluding (i) operating results of the Consolidated Funds, (ii) depreciation and amortization expense, (iii) the effects of changes arising from corporate actions, (iv) unrealized gains and losses related to carried interest, incentive fees and investment performance and (v) certain other items that the Company believes are not indicative of operating performance. Changes arising from corporate actions include equity-based compensation expenses, the amortization of intangible assets, transaction costs associated with mergers, acquisitions and capital activities, underwriting costs and expenses incurred in connection with corporate reorganization. RI is reduced by a placement fee adjustment that represents the net portion of either expense deferral

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

or amortization that is required to match the timing of expense recognition with the period over which management fees are expected to be earned from the associated fund for segment purposes but have been expensed up front in accordance with GAAP. For periods in which the amortization of placement fees for segment purposes is higher than the GAAP expense, the placement fee adjustment is presented as a reduction to RI. Management believes RI is a more appropriate metric to evaluate the Company’s current business operations.

Management makes operating decisions and assesses the performance of each of the Company’s business segments based on financial and operating metrics and other data that is presented before giving effect to the consolidation of any of the Consolidated Funds. Consequently, all segment data excludes the assets, liabilities and operating results related to the Consolidated Funds and non-consolidated funds. Total assets by segments is not disclosed because such information is not used by the Company’s chief operating decision maker in evaluating the segments.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following tables present the financial results for the Company’s operating segments, as well as the OMG:

			Three months ended March 31, 2023
			Credit Group						Private Equity Group						Real Assets Group						Secondaries Group						Other						Total Segments						OMG						Total
Management fees			$	405,650					$	54,657					$	97,470					$	39,863					$	4,979					$	602,619					$	—					$	602,619
Fee related performance revenues			600						—						—						3,271						—						3,871						—						3,871
Other fees			8,870						673						6,462						—						50						16,055						4,640						20,695
Compensation and benefits			(116,216)						(22,310)						(37,986)						(13,412)						(3,140)						(193,064)						(84,967)						(278,031)
General, administrative and other expenses			(21,595)						(9,566)						(12,284)						(4,292)						(608)						(48,345)						(46,172)						(94,517)
Fee related earnings			277,309						23,454						53,662						25,430						1,281						381,136						(126,499)						254,637
Performance income—realized			6,593						18,457						6,086						—						—						31,136						—						31,136
Performance related compensation—realized			(4,997)						(15,104)						(3,758)						—						—						(23,859)						—						(23,859)
Realized net performance income			1,596						3,353						2,328						—						—						7,277						—						7,277
Investment income (loss)—realized			506						879						(1,772)						—						170						(217)						—						(217)
Interest and other investment income (expense)—realized			6,418						1,861						1,821						1,225						6,348						17,673						(92)						17,581
Interest expense			(7,820)						(5,615)						(3,896)						(2,305)						(5,324)						(24,960)						(26)						(24,986)
Realized net investment income (loss)			(896)						(2,875)						(3,847)						(1,080)						1,194						(7,504)						(118)						(7,622)
Realized income			$	278,009					$	23,932					$	52,143					$	24,350					$	2,475					$	380,909					$	(126,617)					$	254,292
			Three months ended March 31, 2022
			Credit Group						Private Equity Group						Real Assets Group						Secondaries Group						Other						Total Segments						OMG						Total
Management fees			$	317,489					$	45,957					$	72,487					$	44,504					$	2,484					$	482,921					$	—					$	482,921
Fee related performance revenues			12,353						—						358						—						—						12,711						—						12,711
Other fees			5,766						297						7,866						—						50						13,979						5,876						19,855
Compensation and benefits			(110,711)						(19,566)						(33,637)						(11,640)						(2,386)						(177,940)						(64,067)						(242,007)
General, administrative and other expenses			(18,193)						(6,288)						(7,637)						(3,078)						(230)						(35,426)						(32,384)						(67,810)
Fee related earnings			206,704						20,400						39,437						29,786						(82)						296,245						(90,575)						205,670
Performance income—realized			7,363						2,212						34,293						—						—						43,868						—						43,868
Performance related compensation—realized			(4,580)						(1,786)						(22,209)						—						—						(28,575)						—						(28,575)
Realized net performance income			2,783						426						12,084						—						—						15,293						—						15,293
Investment income—realized			415						1,603						3,453						—						861						6,332						—						6,332
Interest and other investment income (expense)—realized			5,728						1,502						2,777						644						1						10,652						(284)						10,368
Interest expense			(3,468)						(3,373)						(2,389)						(465)						(5,784)						(15,479)						(167)						(15,646)
Realized net investment income (loss)			2,675						(268)						3,841						179						(4,922)						1,505						(451)						1,054
Realized income			$	212,162					$	20,558					$	55,362					$	29,965					$	(5,004)					$	313,043					$	(91,026)					$	222,017

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income:

			Three months ended March 31,
			2023						2022
Segment revenues
Management fees			$	602,619					$	482,921
Fee related performance revenues			3,871						12,711
Other fees			16,055						13,979
Performance income—realized			31,136						43,868
Total segment revenues			$	653,681					$	553,479
Segment expenses
Compensation and benefits			$	193,064					$	177,940
General, administrative and other expenses			48,345						35,426
Performance related compensation—realized			23,859						28,575
Total segment expenses			$	265,268					$	241,941
Segment realized net investment income (expense)
Investment income (loss)—realized			$	(217)					$	6,332
Interest and other investment income —realized			17,673						10,652
Interest expense			(24,960)						(15,479)
Total segment realized net investment income (expense)			$	(7,504)					$	1,505

The following table reconciles the Company’s consolidated revenues to segment revenue:

			Three months ended March 31,
			2023						2022
Total consolidated revenue			$	813,362					$	714,999
Performance income—unrealized			(127,713)						(133,532)
Management fees of Consolidated Funds eliminated in consolidation			11,601						11,479
Carried interest allocation of Consolidated Funds eliminated in consolidation			3,407						—
Incentive fees of Consolidated Funds eliminated in consolidation			138						34
Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation			4,843						4,769
Administrative fees(1)			(13,650)						(19,475)
OMG revenue			(4,640)						(5,876)
Principal investment income, net of eliminations			(22,758)						(8,326)
Net revenue of non-controlling interests in consolidated subsidiaries			(10,909)						(10,593)
Total consolidation adjustments and reconciling items			(159,681)						(161,520)
Total segment revenue			$	653,681					$	553,479

(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table reconciles the Company’s consolidated expenses to segment expenses:

			Three months ended March 31,
			2023						2022
Total consolidated expenses			$	628,636					$	611,684
Performance related compensation-unrealized			(85,150)						(91,198)
Expenses of Consolidated Funds added in consolidation			(19,641)						(16,077)
Expenses of Consolidated Funds eliminated in consolidation			12,132						11,564
Administrative fees(1)			(13,277)						(18,890)
OMG expenses			(131,139)						(96,451)
Acquisition and merger-related expense			(4,955)						(9,042)
Equity compensation expense			(69,077)						(53,602)
Acquisition-related compensation expense(2)			(642)						(48,001)
Placement fee adjustment			3,232						693
Depreciation and amortization expense			(45,659)						(38,126)
Expense of non-controlling interests in consolidated subsidiaries			(9,192)						(10,613)
Total consolidation adjustments and reconciling items			(363,368)						(369,743)
Total segment expenses			$	265,268					$	241,941

(1)Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Condensed Consolidated Statements of Operations and are netted against the respective expenses for segment reporting.

(2)Represents contingent obligations resulting from the acquisition of Landmark Partners, LLC (the “Landmark Acquisition”), the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Condensed Consolidated Statements of Operations.

The following table reconciles the Company’s consolidated other income to segment realized net investment income:

			Three months ended March 31,
			2023						2022
Total consolidated other income			$	56,396					$	57,994
Investment (income) loss—unrealized			(28,985)						7,854
Interest and other investment (income) loss—unrealized			208						(6,032)
Other income from Consolidated Funds added in consolidation, net			(62,917)						(66,848)
Other expense from Consolidated Funds eliminated in consolidation, net			(4,451)						(7,518)
OMG other expense			651						4,593
Principal investment income			35,457						14,490
Other expense, net			91						1,981
Other income of non-controlling interests in consolidated subsidiaries			(3,954)						(5,009)
Total consolidation adjustments and reconciling items			(63,900)						(56,489)
Total segment realized net investment income (expense)			$	(7,504)					$	1,505

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

The following table presents the reconciliation of income before taxes as reported in the Condensed Consolidated Statements of Operations to segment results of RI and FRE:

			Three months ended March 31,
			2023						2022
Income before taxes			$	241,122					$	161,309
Adjustments:
Depreciation and amortization expense			45,659						38,126
Equity compensation expense			68,704						53,017
Acquisition-related compensation expense(1)			642						48,001
Acquisition and merger-related expense			4,955						9,042
Placement fee adjustment			(3,232)						(693)
OMG expense, net			127,150						95,168
Other expense, net			91						1,981
Net income of non-controlling interests in consolidated subsidiaries			(5,671)						(4,989)
Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations			(27,171)						(47,407)
Total performance income—unrealized			(127,713)						(133,532)
Total performance related compensation—unrealized			85,150						91,198
Total investment (income) loss—unrealized			(28,777)						1,822
Realized income			380,909						313,043
Total performance income—realized			(31,136)						(43,868)
Total performance related compensation—realized			23,859						28,575
Total investment income—realized			7,504						(1,505)
Fee related earnings			$	381,136					$	296,245

(1)Represents contingent obligations resulting from the Landmark Acquisition, the Black Creek Acquisition and the Infrastructure Debt Acquisition that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Condensed Consolidated Statements of Operations.

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

14. CONSOLIDATION

Investments in Consolidated Variable Interest Entities

The Company consolidates entities in which the Company has a variable interest and as the general partner or investment manager, has both the power to direct the most significant activities and a potentially significant economic interest. Investments in the consolidated VIEs are reported at fair value and represent the Company’s maximum exposure to loss.

Investments in Non-Consolidated Variable Interest Entities

The Company holds interests in certain VIEs that are not consolidated as the Company is not the primary beneficiary. The Company’s interest in such entities generally is in the form of direct equity interests, fixed fee arrangements or both. The maximum exposure to loss represents the potential loss of assets by the Company relating to these non-consolidated entities. Investments in the non-consolidated VIEs are carried at fair value.

The Company’s interests in consolidated and non-consolidated VIEs, as presented within the Condensed Consolidated Statements of Financial Condition, its respective maximum exposure to loss relating to non-consolidated VIEs, and its net income attributable to non-controlling interests related to consolidated VIEs, as presented within the Condensed Consolidated Statements of Operations, are as follows:

			As of March 31,						As of December 31,
			2023						2022
Maximum exposure to loss attributable to the Company’s investment in non-consolidated VIEs(1)			$	370,402					$	393,549
Maximum exposure to loss attributable to the Company’s investment in consolidated VIEs(1)			552,278						537,239
Assets of consolidated VIEs			13,781,266						13,128,088
Liabilities of consolidated VIEs			12,108,023						11,593,867

(1)As of March 31, 2023 and December 31, 2022, the Company’s maximum exposure of loss for CLO securities was equal to the cumulative fair value of our capital interest in CLOs and totaled $81.0 million and $82.0 million, respectively.

			Three months ended March 31,
			2023						2022
Net income attributable to non-controlling interests related to consolidated VIEs			$	37,131					$	38,462

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

Consolidating Schedules

The following supplemental financial information illustrates the consolidating effects of the Consolidated Funds on the Company’s financial condition, results from operations and cash flows:

			As of March 31, 2023
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Assets
Cash and cash equivalents			$	272,249					$	—					$	—					$	272,249
Investments (includes $3,236,418 of accrued carried interest)			4,666,602						—						(565,919)						4,100,683
Due from affiliates			1,035,397						—						(327,593)						707,804
Other assets			267,068						—						—						267,068
Right-of-use operating lease assets			154,970						—						—						154,970
Intangible assets, net			1,166,607						—						—						1,166,607
Goodwill			998,937						—						—						998,937
Assets of Consolidated Funds
Cash and cash equivalents			—						754,934						—						754,934
Investments held in trust account			—						484,901						—						484,901
Investments, at fair value			—						12,636,458						4,793						12,641,251
Due from affiliates			—						21,711						(10,833)						10,878
Receivable for securities sold			—						305,418						—						305,418
Other assets			—						62,882						—						62,882
Total assets			$	8,561,830					$	14,266,304					$	(899,552)					$	21,928,582
Liabilities
Accounts payable, accrued expenses and other liabilities			$	272,131					$	—					$	(10,833)					$	261,298
Accrued compensation			214,135						—						—						214,135
Due to affiliates			183,451						—						—						183,451
Performance related compensation payable			2,365,230						—						—						2,365,230
Debt obligations			2,369,292						—						—						2,369,292
Operating lease liabilities			191,090						—						—						191,090
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities			—						200,998						(13,493)						187,505
Due to affiliates			—						322,800						(322,800)						—
Payable for securities purchased			—						549,415						—						549,415
CLO loan obligations, at fair value			—						11,013,602						(95,595)						10,918,007
Fund borrowings			—						103,046						—						103,046
Total liabilities			5,595,329						12,189,861						(442,721)						17,342,469
Commitments and contingencies
Redeemable interest in Consolidated Funds			—						484,801						—						484,801
Redeemable interest in Ares Operating Group entities			21,942						—						—						21,942
Non-controlling interest in Consolidated Funds			—						1,591,642						(420,240)						1,171,402
Non-controlling interest in Ares Operating Group entities			1,252,700						—						(14,626)						1,238,074
Stockholders’ Equity
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (177,674,055 shares issued and outstanding)			1,777						—						—						1,777
Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding)			35						—						—						35
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding)			—						—						—						—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (120,638,398 shares issued and outstanding)			1,206						—						—						1,206
Additional paid-in-capital			2,122,008						—						(21,965)						2,100,043
Accumulated deficit			(420,822)						—						—						(420,822)
Accumulated other comprehensive loss, net of tax			(12,345)						—						—						(12,345)
Total stockholders’ equity			1,691,859						—						(21,965)						1,669,894
Total equity			2,944,559						1,591,642						(456,831)						4,079,370
Total liabilities, redeemable interest, non-controlling interests and equity			$	8,561,830					$	14,266,304					$	(899,552)					$	21,928,582

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

			As of December 31, 2022
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Assets
Cash and cash equivalents			$	389,987					$	—					$	—					$	389,987
Investments (includes $3,106,577 of accrued carried interest)			4,515,955						—						(541,221)						3,974,734
Due from affiliates			949,532						—						(191,060)						758,472
Other assets			381,137						—						—						381,137
Right-of-use operating lease assets			155,950						—						—						155,950
Intangible assets, net			1,208,220						—						—						1,208,220
Goodwill			999,656						—						—						999,656
Assets of Consolidated Funds
Cash and cash equivalents			—						724,641						—						724,641
Investments held in trust account			—						1,013,382						—						1,013,382
Investments, at fair value			—						12,187,392						3,859						12,191,251
Due from affiliates			—						26,531						(10,742)						15,789
Receivable for securities sold			—						124,050						—						124,050
Other assets			—						65,570						—						65,570
Total assets			$	8,600,437					$	14,141,566					$	(739,164)					$	22,002,839
Liabilities
Accounts payable, accrued expenses and other liabilities			$	242,663					$	—					$	(10,742)					$	231,921
Accrued compensation			510,130						—						—						510,130
Due to affiliates			252,798						—						—						252,798
Performance related compensation payable			2,282,209						—						—						2,282,209
Debt obligations			2,273,854						—						—						2,273,854
Operating lease liabilities			190,616						—						—						190,616
Liabilities of Consolidated Funds
Accounts payable, accrued expenses and other liabilities			—						175,435						(7,149)						168,286
Due to affiliates			—						191,238						(187,201)						4,037
Payable for securities purchased			—						314,193						—						314,193
CLO loan obligations, at fair value			—						10,797,332						(95,612)						10,701,720
Fund borrowings			—						168,046						—						168,046
Total liabilities			5,752,270						11,646,244						(300,704)						17,097,810
Commitments and contingencies
Redeemable interest in Consolidated Funds			—						1,013,282						—						1,013,282
Redeemable interest in Ares Operating Group entities			93,129						—						—						93,129
Non-controlling interest in Consolidated Funds			—						1,482,040						(407,684)						1,074,356
Non-controlling interest in Ares Operating Group entities			1,147,269						—						(12,246)						1,135,023
Stockholders’ Equity
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (173,892,036 shares issued and outstanding)			1,739						—						—						1,739
Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 shares issued and outstanding)			35						—						—						35
Class B common stock, $0.01 par value, 1,000 shares authorized ($1,000 shares issued and outstanding)			—						—						—						—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (117,231,288 shares issued and outstanding)			1,172						—						—						1,172
Additional paid-in-capital			1,989,284						—						(18,530)						1,970,754
Accumulated deficit			(369,475)						—						—						(369,475)
Accumulated other comprehensive loss, net of tax			(14,986)						—						—						(14,986)
Total stockholders’ equity			1,607,769						—						(18,530)						1,589,239
Total equity			2,755,038						1,482,040						(438,460)						3,798,618
Total liabilities, redeemable interest, non-controlling interests and equity			$	8,600,437					$	14,141,566					$	(739,164)					$	22,002,839

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

			Three months ended March 31, 2023
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Revenues
Management fees			$	612,117					$	—					$	(11,601)					$	600,516
Carried interest allocation			154,895						—						(3,407)						151,488
Incentive fees			9,061						—						(138)						8,923
Principal investment income			35,457						—						(12,699)						22,758
Administrative, transaction and other fees			34,520						—						(4,843)						29,677
Total revenues			846,050						—						(32,688)						813,362
Expenses
Compensation and benefits			360,781						—						—						360,781
Performance related compensation			111,658						—						—						111,658
General, administrative and other expense			148,688						—						(343)						148,345
Expenses of the Consolidated Funds			—						19,641						(11,789)						7,852
Total expenses			621,127						19,641						(12,132)						628,636
Other income (expense)
Net realized and unrealized gains on investments			7,852						—						(6,337)						1,515
Interest and dividend income			7,176						—						(3,337)						3,839
Interest expense			(24,986)						—						—						(24,986)
Other expense, net			(1,014)						—						91						(923)
Net realized and unrealized gains (losses) on investments of the Consolidated Funds			—						(2,069)						12,769						10,700
Interest and other income of the Consolidated Funds			—						223,029						(91)						222,938
Interest expense of the Consolidated Funds			—						(158,043)						1,356						(156,687)
Total other income (expense), net			(10,972)						62,917						4,451						56,396
Income before taxes			213,951						43,276						(16,105)						241,122
Income tax expense			33,328						478						—						33,806
Net income			180,623						42,798						(16,105)						207,316
Less: Net income attributable to non-controlling interests in Consolidated Funds			—						42,798						(16,105)						26,693
Net income attributable to Ares Operating Group entities			180,623						—						—						180,623
Less: Net loss attributable to redeemable interest in Ares Operating Group entities			(1,824)						—						—						(1,824)
Less: Net income attributable to non-controlling interests in Ares Operating Group entities			88,408						—						—						88,408
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	94,039					$	—					$	—					$	94,039

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

			Three months ended March 31, 2022
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Revenues
Management fees			$	488,811					$	—					$	(11,479)					$	477,332
Carried interest allocation			178,289						—						—						178,289
Incentive fees			16,456						—						(34)						16,422
Principal investment income			14,490						—						(6,164)						8,326
Administrative, transaction and other fees			39,399						—						(4,769)						34,630
Total revenues			737,445						—						(22,446)						714,999
Expenses
Compensation and benefits			357,243						—						—						357,243
Performance related compensation			129,405						—						—						129,405
General, administrative and other expense			120,523						—						—						120,523
Expenses of the Consolidated Funds			—						16,077						(11,564)						4,513
Total expenses			607,171						16,077						(11,564)						611,684
Other income (expense)
Net realized and unrealized gains (losses) on investments			(4,926)						—						13,035						8,109
Interest and dividend income			3,410						—						(1,908)						1,502
Interest expense			(15,646)						—						—						(15,646)
Other income, net			790						—						994						1,784
Net realized and unrealized gains on investments of the Consolidated Funds			—						23,011						(7,043)						15,968
Interest and other income of the Consolidated Funds			—						121,284						(994)						120,290
Interest expense of the Consolidated Funds			—						(77,447)						3,434						(74,013)
Total other income (expense), net			(16,372)						66,848						7,518						57,994
Income before taxes			113,902						50,771						(3,364)						161,309
Income tax expense			20,386						25						—						20,411
Net income			93,516						50,746						(3,364)						140,898
Less: Net income attributable to non-controlling interests in Consolidated Funds			—						50,746						(3,364)						47,382
Net income attributable to Ares Operating Group entities			93,516						—						—						93,516
Less: Net income attributable to redeemable interest in Ares Operating Group entities			399						—						—						399
Less: Net income attributable to non-controlling interests in Ares Operating Group entities			47,254						—						—						47,254
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders			$	45,863					$	—					$	—					$	45,863

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

			Three months ended March 31, 2023
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Cash flows from operating activities:
Net income			$	180,623					$	42,798					$	(16,105)					$	207,316
Adjustments to reconcile net income to net cash provided by operating activities			100,469						—						21,292						121,761
Adjustments to reconcile net income to net cash provided by operating activities allocable to non-controlling interests in Consolidated Funds			—						341,609						(12,769)						328,840
Cash flows due to changes in operating assets and liabilities			(132,777)						—						139,848						7,071
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds			—						202,877						(160,293)						42,584
Net cash provided by operating activities			148,315						587,284						(28,027)						707,572
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net of disposals			(8,877)						—						—						(8,877)
Acquisitions, net of cash acquired			—						—						—						—
Net cash used in investing activities			(8,877)						—						—						(8,877)
Cash flows from financing activities:
Proceeds from Credit Facility			245,000						—						—						245,000
Repayments of Credit Facility			(150,000)						—						—						(150,000)
Dividends and distributions			(251,632)						—						—						(251,632)
Stock option exercises			9,180						—						—						9,180
Taxes paid related to net share settlement of equity awards			(113,431)						—						—						(113,431)
Other financing activities			483						—						—						483
Allocable to redeemable and non-controlling interests in Consolidated Funds:
Contributions from redeemable and non-controlling interests in Consolidated Funds			—						103,808						(10,223)						93,585
Distributions to non-controlling interests in Consolidated Funds			—						(28,890)						7,957						(20,933)
Redemptions of redeemable interests in Consolidated Funds			—						(538,985)						—						(538,985)
Borrowings under loan obligations by Consolidated Funds			—						2,914						—						2,914
Repayments under loan obligations by Consolidated Funds			—						(97,325)						—						(97,325)
Net cash used in financing activities			(260,400)						(558,478)						(2,266)						(821,144)
Effect of exchange rate changes			3,224						1,487						—						4,711
Net change in cash and cash equivalents			(117,738)						30,293						(30,293)						(117,738)
Cash and cash equivalents, beginning of period			389,987						724,641						(724,641)						389,987
Cash and cash equivalents, end of period			$	272,249					$	754,934					$	(754,934)					$	272,249
Supplemental disclosure of non-cash financing activities:
Issuance of Class A common stock in connection with acquisition-related activity			$	115,364					$	—					$	—					$	115,364
Issuance of AOG Units in connection with settlement of management incentive program			$	245,647					$	—					$	—					$	245,647

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

			Three months ended March 31, 2022
			Consolidated Company Entities						Consolidated Funds						Eliminations						Consolidated
Cash flows from operating activities:
Net income			$	93,516					$	50,746					$	(3,364)					$	140,898
Adjustments to reconcile net income to net cash provided by operating activities			43,970						—						9,503						53,473
Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds			—						(104,815)						7,043						(97,772)
Cash flows due to changes in operating assets and liabilities			125,246						—						7,100						132,346
Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds			—						(568,394)						563,599						(4,795)
Net cash provided by (used in) operating activities			262,732						(622,463)						583,881						224,150
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements, net of disposals			(8,524)						—						—						(8,524)
Acquisitions, net of cash acquired			(301,624)						—						—						(301,624)
Net cash used in investing activities			(310,148)						—						—						(310,148)
Cash flows from financing activities:
Proceeds from Credit Facility			860,000						—						—						860,000
Proceeds from senior notes			488,915						—						—						488,915
Repayments of Credit Facility			(905,000)						—						—						(905,000)
Dividends and distributions			(211,886)						—						—						(211,886)
Stock option exercises			3,347						—						—						3,347
Taxes paid related to net share settlement of equity awards			(183,027)						—						—						(183,027)
Other financing activities			856						—						—						856
Allocable to redeemable and non-controlling interests in Consolidated Funds:
Contributions from redeemable and non-controlling interests in Consolidated Funds			—						104,803						(21,873)						82,930
Distributions to non-controlling interests in Consolidated Funds			—						(38,931)						3,973						(34,958)
Borrowings under loan obligations by Consolidated Funds			—						49,317						—						49,317
Repayments under loan obligations by Consolidated Funds			—						(57,457)						—						(57,457)
Net cash provided by financing activities			53,205						57,732						(17,900)						93,037
Effect of exchange rate changes			(3,402)						(1,250)						—						(4,652)
Net change in cash and cash equivalents			2,387						(565,981)						565,981						2,387
Cash and cash equivalents, beginning of period			343,655						1,049,191						(1,049,191)						343,655
Cash and cash equivalents, end of period			$	346,042					$	483,210					$	(483,210)					$	346,042
Supplemental disclosure of non-cash financing activities:
Issuance of Class A common stock in connection with acquisition-related activity			$	12,835					$	—					$	—					$	—

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Ares Management Corporation

Notes to the Unaudited Condensed Consolidated Financial Statements (Continued)

(Dollars in Thousands, Except Share Data and As Otherwise Noted)

15. SUBSEQUENT EVENTS

The Company evaluated all events or transactions that occurred after March 31, 2023 through the date the unaudited condensed consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure:

In April 2023, the Company’s board of directors declared a quarterly dividend of $0.77 per share of Class A and non-voting common stock payable on June 30, 2023 to common stockholders of record at the close of business on June 16, 2023.

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