Ares Management Corp [ARES] Filings

10-Q 1 ares-20210930.htm 10-Q ares-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-36429

ARES MANAGEMENT CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware			80-0962035
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

2000 Avenue of the Stars, 12th Floor, Los Angeles, CA 90067

(Address of principal executive office) (Zip Code)

(310) 201-4100

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	ARES	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company.” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of October 29, 2021 there were 167,613,551 of the registrant’s shares of Class A common stock outstanding, 3,489,911 of the registrant’s shares of non-voting common stock outstanding, 1,000 shares of the registrant's Class B common stock outstanding, and 118,803,257 of the registrant's Class C common stock outstanding.

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						Page
PART I—FINANCIAL INFORMATION
Item 1. Financial Information - Unaudited						9
Condensed Consolidated Statements of Financial Condition as of September 30, 2021 and December 31, 2020						9
Condensed Consolidated Statements of Operations for the three and nine months ended S eptember 30, 2021 and 2020						10
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020						11
Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2021 and for the year ended December 31, 2020						12
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020						14
Notes to the Condensed Consolidated Financial Statements						15
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations						62
Item 3. Quantitative and Qualitative Disclosures about Market Risk						123
Item 4. Controls And Procedures						124
PART II—OTHER INFORMATION
Item 1. Legal Proceedings						125
Item 1A. Risk Factors						125
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						128
Item 3. Defaults Upon Senior Securities						128
Item 4. Mine Safety Disclosure						128
Item 5. Other Information						128
Item 6. Exhibits						129
Signatures						130

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Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which reflect our current views with respect to, among other things, future events, operations and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words, other comparable words or other statements that do not relate to historical or factual matters. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. Some of these factors are described in this report and in our Annual Report on Form 10-K for the year ended December 31, 2020, under the headings “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 1A. Risk Factors.” These factors should not be construed as exhaustive and should be read in conjunction with the risk factors and other cautionary statements that are included in this report and in our other periodic filings. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these forward-looking statements. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Therefore, you should not place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. For a discussion of risks resulting from the coronavirus (“COVID-19”) pandemic and the impact on the U.S. and global economy, see “Item 1A. Risk Factors” in this Quarterly Report on Form 10-Q.

References in this Quarterly Report on Form 10-Q to the “Ares Operating Group” refer to, collectively, Ares Holdings L.P. (“Ares Holdings”), Ares Offshore Holdings L.P. (“Ares Offshore”) and Ares Investments L.P. (“Ares Investments”). References in this Quarterly Report on Form 10-Q to an “Ares Operating Group Unit” or an “AOG Unit” refer to, collectively, a partnership unit in each of the Ares Operating Group entities. On April 1, 2021, Ares completed an internal reorganization (the “Reorganization”) that simplified the organizational structure and merged Ares Offshore and Ares Investments with Ares Holdings. As a result of the Reorganization, Ares Holdings became the sole entity in the Ares Operating Group.

The use of any defined term in this report to mean more than one entities, persons, securities or other items collectively is solely for convenience of reference and in no way implies that such entities, persons, securities or other items are one indistinguishable group. For example, notwithstanding the use of the defined terms “Ares,” “we” and “our” in this report to refer to Ares Management Corporation and its subsidiaries, each subsidiary of Ares Management Corporation is a standalone legal entity that is separate and distinct from Ares Management Corporation and any of its other subsidiaries.

Under generally accepted accounting principles in the United States (“GAAP”), we are required to consolidate (a) entities other than limited partnerships and entities similar to limited partnerships in which we hold a majority voting interest or have majority ownership and control over the operational, financial and investing decisions of that entity, including Ares-affiliates and affiliated funds and co-investment entities, for which we are presumed to have controlling financial interests, and (b) entities that we concluded are variable interest entities (“VIEs”), including limited partnerships and collateralized loan obligations, for which we are deemed to be the primary beneficiary. When an entity is consolidated, we reflect the assets, liabilities, revenues, expenses and cash flows of the entity in our consolidated financial statements on a gross basis, subject to eliminations from consolidation, including the elimination of the management fees, performance income and other fees that we earn from the entity. However, the presentation of performance related compensation and other expenses associated with generating such revenues is not affected by the consolidation process. In addition, as a result of the consolidation process, the net income attributable to third-party investors in consolidated entities is presented as net income attributable to non-controlling interests in Consolidated Funds in our Condensed Consolidated Statements of Operations. We also consolidate joint ventures that we have established with third-party investors for strategic distribution and expansion purposes. The results of these entities are reflected on a gross basis in the consolidated financial statements, subject to eliminations from consolidation, and net income attributable to third-party investors in the consolidated joint ventures is included in net income attributable to redeemable interest and non-controlling interests in Ares Operating Group entities.

In this Quarterly Report on Form 10-Q, in addition to presenting our results on a consolidated basis in accordance with GAAP, we present revenues, expenses and other results on a (i) “segment basis,” which deconsolidates the consolidated funds and removes the proportional results attributable to third-party investors in the consolidated joint ventures, and therefore shows the results of our reportable segments without giving effect to the consolidation of these entities and (ii) “unconsolidated reporting basis,” which shows the results of our reportable segments on a combined segment basis together with our Operations

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Management Group. In addition to our reportable segments, we have an Operations Management Group (the “OMG”). The OMG consists of shared resource groups to support our reportable segments by providing infrastructure and administrative support in the areas of accounting/finance, operations, information technology, strategy and relationship management, legal, compliance and human resources. The OMG’s expenses are not allocated to our reportable segments but we consider the cost structure of the OMG when evaluating our financial performance. This information constitutes non-GAAP financial information within the meaning of Regulation G, as promulgated by the SEC. Our management uses this information to assess the performance of our reportable segments and the OMG, and we believe that this information enhances the ability of shareholders to analyze our performance. For more information, see “Note 15. Segment Reporting,” to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

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Glossary

When used in this report, unless the context otherwise requires:

•“American-style waterfall” generally refers to carried interest that the general partner is entitled to receive after a fund investment is realized and the investors in the fund have received distributions in excess of the capital contributed for that investment and all prior realized investments (including allocable expenses) plus a preferred return;

•“ARCC Part II Fees” refers to fees that are paid in arrears as of the end of each calendar year when the cumulative aggregate realized capital gains exceed the cumulative aggregate realized capital losses and aggregate unrealized capital depreciation, less the aggregate amount of ARCC Part II Fees paid in all prior years since inception;

•“Ares”, the “Company”, “we”, “us” and “our” refer to Ares Management Corporation and its subsidiaries;

•“Ares Operating Group Unit” or an “AOG Unit” refers to, collectively, a partnership unit in the Ares Operating Group entities including Ares Holdings and any future entity designated by our board of directors in its sole discretion as an Ares Operating Group entity;

•“assets under management” or “AUM” generally refers to the assets we manage. For our funds other than CLOs, our AUM represents the sum of the net asset value (“NAV”) of such funds, the drawn and undrawn debt (at the fund-level including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). NAV refers to the fair value of the assets of a fund less the fair value of the liabilities of the fund. For the CLOs we manage, our AUM is equal to initial principal amounts adjusted for paydowns. AUM also includes the proceeds raised in the initial public offering of a special purpose acquisition company (“SPAC”) sponsored by us;

•“AUM not yet paying fees” (also referred to as “shadow AUM”) refers to AUM that is not currently paying fees and is eligible to earn management fees upon deployment;

•“available capital” (also referred to as “dry powder”) is comprised of uncalled committed capital and undrawn amounts under credit facilities and may include AUM that may be canceled or not otherwise available to invest;

•“catch-up fees” refers to management fees that are one-time in nature and represents management fees charged to fund investors in subsequent closings of a fund that apply to the time period between the fee initiation date and the subsequent closing date;

•“Class B membership interests” refers to the interests that were retained by the former owners of Crestline Denali Capital LLC and represent the financial interests in the subordinated notes of the related CLOs;

•“CLOs” refers to “our funds” that are structured as collateralized loan obligations;

•“Consolidated Funds” refers collectively to certain Ares funds, co-investment entities, CLOs and SPACs that are required under GAAP to be consolidated in our consolidated financial statements;

•“Credit Facility” refers to the revolving credit facility of the Ares Operating Group;

•“effective management fee rate” represents the annualized fees divided by the average fee paying AUM for the period, excluding the impact of one-time catch-up fees;

•“European-style waterfall” generally refers to carried interest that the general partner is entitled to receive after the investors in a fund have received distributions in an amount equal to all prior capital contributions plus a preferred return;

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•“fee paying AUM” or “FPAUM” refers to the AUM from which we directly earn management fees. FPAUM is equal to the sum of all the individual fee bases of our funds that directly contribute to our management fees. For our funds other than CLOs, our FPAUM represents the amount of limited partner capital commitments for certain closed-end funds within the reinvestment period, the amount of limited partner invested capital for the aforementioned closed-end funds beyond the reinvestment period and the portfolio value, gross asset value or NAV. For the CLOs we manage, our FPAUM is equal to the gross amount of aggregate collateral balance, at par, adjusted for defaulted or discounted collateral;

•“fee related earnings” or “FRE”, a non-GAAP measure, is used to assess core operating performance by determining whether recurring revenue, primarily consisting of management fees, is sufficient to cover operating expenses and to generate profits. FRE differs from income before taxes computed in accordance with GAAP as it excludes performance income, performance related compensation, investment income from our Consolidated Funds and non-consolidated funds and certain other items that we believe are not indicative of our core operating performance;

•“GAAP” refers to accounting principles generally accepted in the United States of America;

•“Holdco Members” refers to Michael Arougheti, David Kaplan, Antony Ressler, Bennett Rosenthal, Ryan Berry and R. Kipp deVeer;

•“Incentive eligible AUM” or “IEAUM” generally refers to the AUM of our funds and other entities from which performance income may be generated, regardless of whether or not they are currently generating performance income. It generally represents the NAV plus uncalled equity or total assets plus uncalled debt, as applicable, of our funds for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income), as well as proceeds raised in the initial public offering of a SPAC sponsored by us. With respect to ARCC's AUM, only ARCC Part II Fees may be generated from IEAUM;

•“Incentive generating AUM” or “IGAUM” refers to the AUM of our funds and other entities that are currently generating performance income on a realized or unrealized basis. It generally represents the NAV or total assets of our funds, as applicable, for which we are entitled to receive performance income, excluding capital committed by us and our professionals (from which we generally do not earn performance income). ARCC is only included in IGAUM when ARCC Part II Fees are being generated;

•“management fees” refers to fees we earn for advisory services provided to our funds, which are generally based on a defined percentage of fair value of assets, total commitments, invested capital, net asset value, net investment income, total assets or par value of the investment portfolios managed by us. Management fees include Part I Fees, a quarterly fee based on the net investment income of certain funds, among others;

•“net inflows of capital” refers to net new commitments during the period, including equity and debt commitments and gross inflows into our open-ended managed accounts and sub-advised accounts, as well as new debt and equity issuances by our publicly traded vehicles minus redemptions from our open-ended funds, managed accounts and sub-advised accounts;

•“net performance income” refers to performance income net of performance related compensation. Performance related compensation is the portion of performance income that is typically payable to our professionals;

•“our funds” refers to the funds, alternative asset companies, co-investment vehicles and other entities and accounts that are managed or co-managed by the Ares Operating Group, and which are structured to pay fees. It also includes funds managed by Ivy Hill Asset Management, L.P., a wholly owned portfolio company of ARCC and an SEC-registered investment adviser;

•“Part I Fees” refers to a quarterly performance income on the net investment income of Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”) and CION Ares Diversified Credit Fund (“CADC”). Such fees are classified as

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management fees as they are predictable and recurring in nature, not subject to contingent repayment and generally cash-settled each quarter, unless subject to a payment deferral;

•“performance income” refers to income we earn based on the performance of a fund that is generally based on certain specific hurdle rates as defined in the fund’s investment management or partnership agreements and may be either an incentive fee or carried interest;

•“perpetual capital” refers to the AUM of (i) ARCC, Ares Commercial Real Estate Corporation (NYSE: ACRE) ("ACRE"), Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC) ("ARDC") and CADC, (ii) our non-traded REITs, (iii) Aspida Holdings Ltd. (together with its subsidiaries, "Aspida") and (iv) certain other commingled funds and managed accounts that have an indefinite term, are not in liquidation, and for which there is no immediate requirement to return invested capital to investors upon the realization of investments. Perpetual Capital - Commingled Funds refers to commingled funds that meet the Perpetual Capital criteria. Perpetual Capital - Managed Accounts refers to managed accounts for single investors primarily in illiquid strategies that meet the Perpetual Capital criteria. Perpetual Capital may be withdrawn by investors under certain conditions, including through an election to redeem an investor’s fund investment or to terminate the investment management agreement, which in certain cases may be terminated on 30 days’ prior written notice. In addition, the investment management or advisory agreements of certain of our publicly-traded and non-traded vehicles have one year terms, which are subject to annual renewal by such vehicles;

•“realized income” or “RI”, a non-GAAP measure, 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 losses, 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 (a) operating results of our Consolidated Funds, (b) depreciation and amortization expense, (c) the effects of changes arising from corporate actions, (d) unrealized gains and losses related to performance income and investment performance and (e) certain other items that we believe are not indicative of our 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;

•“SEC” refers to the Securities and Exchange Commission;

•“Series A Preferred Stock” refers to the preferred stock, $0.01 par value per share, of the Company designated as 7.00% Series A Preferred Stock;

•“2024 Senior Notes” refers to senior notes issued by a wholly owned subsidiary of Ares Holdings in October 2014 with a maturity in October 2024;

•“2030 Senior Notes” refers to senior notes issued by a wholly owned subsidiary of Ares Holdings in June 2020 with a maturity in June 2030; and

•“2051 Subordinated Notes” refers to subordinated notes issued by a wholly owned subsidiary of Ares Holdings in June 2021 with a maturity in June 2051.

Many of the terms used in this report, including AUM, FPAUM, FRE and RI, may not be comparable to similarly titled measures used by other companies. In addition, our definitions of AUM and FPAUM are not based on any definition of AUM or FPAUM that is set forth in the agreements governing the investment funds that we manage and may differ from definitions of AUM or FPAUM set forth in other agreements to which we are a party or definitions used by the SEC or other regulatory bodies. Further, FRE and RI are not measures of performance calculated in accordance with GAAP. We use FRE and RI as measures of operating performance, not as measures of liquidity. FRE and RI should not be considered in isolation or as substitutes for operating income, net income, operating cash flows, or other income or cash flow statement data prepared in accordance with GAAP. The use of FRE and RI without consideration of related GAAP measures is not adequate due to the adjustments described above. Our management compensates for these limitations by using FRE and RI as supplemental

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measures to our GAAP results. We present these measures to provide a more complete understanding of our performance as our management measures it. Amounts and percentages throughout this report may reflect rounding adjustments and consequently totals may not appear to sum.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Ares Management Corporation

Condensed Consolidated Statements of Financial Condition

(Amounts in Thousands, Except Share Data)


	As of September 30,		As of December 31,
	2021		2020
	(unaudited)
Assets
Cash and cash equivalents	$	295,704	$	539,812
Investments (includes accrued carried interest of $2,625,319 and $1,145,853 at September 30, 2021 and December 31, 2020, respectively)	3,322,665		1,682,759
Due from affiliates	493,411		405,887
Other assets	1,006,870		590,332
Intangible assets, net	1,452,690		222,087
Right-of-use operating lease assets	176,511		154,742
Assets of Consolidated Funds:
Cash and cash equivalents	1,581,433		522,377
U.S. Treasury securities, at fair value	1,000,165		—
Investments, at fair value	10,360,854		10,877,097
Due from affiliates	9,059		17,172
Receivable for securities sold	187,230		121,225
Other assets	47,806		35,502
Total assets	$	19,934,398	$	15,168,992
Liabilities
Accounts payable, accrued expenses and other liabilities	$	208,141	$	115,289
Accrued compensation	309,569		103,010
Due to affiliates	202,438		100,186
Performance related compensation payable	1,895,343		813,378
Debt obligations	1,238,325		642,998
Operating lease liabilities	214,681		180,236
Liabilities of Consolidated Funds:
Accounts payable, accrued expenses and other liabilities	89,685		46,824

Payable for securities purchased	863,007		514,946
CLO loan obligations, at fair value	10,174,794		9,958,076
Fund borrowings	99,240		121,909
Total liabilities	15,295,223		12,596,852
Commitments and contingencies
Redeemable interest in Consolidated Funds	1,000,000		—
Redeemable interest in Ares Operating Group entities	98,649		100,366
Non-controlling interests in Consolidated Funds	464,400		539,720
Non-controlling interests in Ares Operating Group entities	1,322,866		738,369
Stockholders' Equity
Series A Preferred Stock, $0.01 par value, 1,000,000,000 shares authorized (zero and 12,400,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	—		298,761
Class A common stock, $0.01 par value, 1,500,000,000 shares authorized (167,581,165 shares and 147,182,562 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	1,676		1,472
Non-voting common stock, $0.01 par value, 500,000,000 shares authorized (3,489,911 and zero shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	35		—
Class B common stock, $0.01 par value, 1,000 shares authorized (1,000 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	—		—
Class C common stock, $0.01 par value, 499,999,000 shares authorized (118,803,257 shares and 112,447,618 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively)	1,188		1,124
Additional paid-in-capital	1,881,913		1,043,669
Retained earnings	(128,981)		(151,824)
Accumulated other comprehensive income (loss), net of tax	(2,571)		483
Total stockholders' equity	1,753,260		1,193,685
Total equity	3,540,526		2,471,774
Total liabilities, redeemable interest, non-controlling interests and equity	$	19,934,398	$	15,168,992

See accompanying notes to the condensed consolidated financial statements.

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Ares Management Corporation

Condensed Consolidated Statements of Operations

(Amounts in Thousands, Except Share Data)

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Revenues
Management fees	$	448,262	$	292,434	$	1,135,821	$	823,150
Carried interest allocation	460,651		168,978		1,610,707		241,380
Incentive fees	696		7,194		19,420		4,276
Principal investment income	14,250		11,408		86,477		8,330
Administrative, transaction and other fees	24,860		9,852		49,501		28,897
Total revenues	948,719		489,866		2,901,926		1,106,033
Expenses
Compensation and benefits	335,569		194,267		837,108		559,482
Performance related compensation	331,141		122,356		1,208,954		191,565
General, administrative and other expenses	134,453		69,938		285,471		190,353

Expenses of Consolidated Funds	12,104		6,019		31,575		16,706
Total expenses	813,267		392,580		2,363,108		958,106
Other income (expense)
Net realized and unrealized gains (losses) on investments	8,334		(2,607)		18,744		(10,351)
Interest and dividend income	1,376		1,344		6,818		5,112
Interest expense	(11,523)		(6,815)		(25,125)		(18,203)
Other income, net	36,654		2,203		30,686		9,848
Net realized and unrealized gains (losses) on investments of Consolidated Funds	34,245		17,971		44,720		(153,268)
Interest and other income of Consolidated Funds	104,028		116,581		333,745		346,120
Interest expense of Consolidated Funds	(61,578)		(66,322)		(191,577)		(222,860)
Total other income (expense)	111,536		62,355		218,011		(43,602)
Income before taxes	246,988		159,641		756,829		104,325
Income tax expense	30,275		18,314		104,487		22,119
Net income	216,713		141,327		652,342		82,206

Less: Net income (loss) attributable to non-controlling interests in Consolidated Funds	47,370		42,627		102,255		(38,593)
Net income attributable to Ares Operating Group entities	169,343		98,700		550,087		120,799
Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities	324		(1,007)		693		(1,007)
Less: Net income attributable to non-controlling interests in Ares Operating Group entities	84,293		52,162		264,646		48,926
Net income attributable to Ares Management Corporation	84,726		47,545		284,748		72,880
Less: Series A Preferred Stock dividends paid	—		5,425		10,850		16,275
Less: Series A Preferred Stock redemption premium	—		—		11,239		—
Net income attributable to Ares Management Corporation Class A and non-voting common stockholders	$	84,726	$	42,120	$	262,659	$	56,605
Net income per share of Class A and non-voting common stock:
Basic	$	0.49	$	0.27	$	1.55	$	0.37
Diluted	$	0.45	$	0.27	$	1.48	$	0.37
Weighted-average shares of Class A and non-voting common stock:
Basic	168,931,621		143,466,209		161,071,151		131,866,471
Diluted	186,522,157		158,122,563		177,143,438		131,866,471

Substantially all revenue is earned from affiliated funds of the Company. See accompanying notes to the condensed consolidated financial statements.

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Ares Management Corporation

Condensed Consolidated Statements of Comprehensive Income

(Amounts in Thousands)

(unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Net income	$	216,713	$	141,327	$	652,342	$	82,206
Other comprehensive income:
Foreign currency translation adjustments, net of tax	(11,324)		16,893		(18,439)		5,372
Total comprehensive income	205,389		158,220		633,903		87,578

Less: Comprehensive income (loss) attributable to non-controlling interests in Consolidated Funds	42,015		50,300		89,784		(32,478)
Less: Comprehensive loss attributable to redeemable interest in Ares Operating Group entities	(32)		(365)		(67)		(365)
Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities	81,947		56,290		262,492		48,281
Comprehensive income attributable to Ares Management Corporation	$	81,459	$	51,995	$	281,694	$	72,140

See accompanying notes to the condensed consolidated financial statements.

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Ares Management Corporation

Condensed Consolidated Statements of Changes in Equity

(Amounts in Thousands)


	Series A Preferred Stock		Class A Common Stock		Non- voting Common Stock		Class C Common Stock		Additional Paid-in-Capital		Retained Earnings		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, 2020	$	298,761	$	1,472	$	—	$	1,124	$	1,043,669	$	(151,824)	$	483	$	738,369	$	539,720	$	2,471,774

Changes in ownership interests and related tax benefits	—		26		—		(2)		(41,686)		—		—		(44,477)		—		(86,139)

Capital contributions	—		—		—		—		—		—		—		—		11,011		11,011
Dividends/Distributions	(5,425)		—		—		—		—		(74,684)		—		(67,084)		(38,829)		(186,022)
Net income	5,425		—		—		—		—		52,953		—		56,042		49,858		164,278
Currency translation adjustment, net of tax	—		—		—		—		—		—		(545)		(366)		(9,072)		(9,983)
Equity compensation	—		—		—		—

Ares Management Corp [ARES] Filings
10-Q	[2021-11-05]
10-Q	[2021-08-09]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-06]
10-Q	[2020-08-07]
10-Q	[2020-05-08]
10-K	[2020-02-28]
10-Q	[2019-11-06]
10-Q	[2019-08-01]
10-Q	[2019-05-06]
10-K	[2019-02-26]
10-Q	[2018-11-05]
10-Q	[2018-08-06]
10-Q	[2018-05-07]
10-K	[2018-03-01]
10-Q	[2017-11-06]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-02-27]
10-Q	[2016-11-07]
10-Q	[2016-08-09]
10-Q	[2016-05-10]
10-K	[2016-02-29]
10-Q	[2015-11-10]
10-Q	[2015-08-11]
10-Q	[2015-05-12]
10-K	[2015-03-20]
10-Q	[2014-11-12]
10-Q	[2014-08-13]
10-Q	[2014-06-10]
S-1	[2014-03-31]