Ares Management Corp 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2023. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, as of December 31, 2023, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. Report of Management on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a material misstatement of our consolidated financial statements would be prevented or detected. 163 Table of Contents Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023. The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on the effectiveness of the Company’s internal control over financial reporting. Their report follows. 164 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Ares Management Corporation Opinion on Internal Control Over Financial Reporting We have audited Ares Management Corporation’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Ares Management Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial condition of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 27, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Los Angeles, California February 27, 2024 165 Table of Contents Item 9B. Other Information Rule 10b5-1 Trading Plans During the three months ended December 31, 2023, certain executive officers and directors of the Company or a vehicle controlled by them (each, a “Plan Participant”) entered into Rule 10b5-1 trading plan (a “Rule 10b5-1 Trading Plan”) to sell shares of the Company’s Class A common stock, in each case, subject to any applicable volume limitations. The table below provides certain information regarding each Plan Participant’s Rule 10b5-1 Trading Plan. Name and Title Plan Date Maximum Shares That May Be Sold Under the Plan Plan Expiration Date Bennett Rosenthal , Director, Co-Founder and Chairman of Private Equity Group December 14, 2023 250,000 December 1, 2024 David Kaplan , Director and Co-Founder December 14, 2023 250,000 December 1, 2024 Michael Arougheti , Director, Co-Founder, Chief Executive Officer & President December 14, 2023 999,585 February 1, 2025 Antony Ressler , Executive Chairman & Co-Founder December 15, 2023 2,000,000 March 1, 2025 A Rule 10b5-1 Trading Plan is a written document that pre-establishes the amounts, prices and dates (or formulas for determining the amounts, prices and dates) of future purchases or sales of the Company’s common stock, including, if applicable, shares issued upon exercise of stock options or vesting of restricted stock units. Each Plan Participant’s Rule 10b5-1 Trading Plan was adopted during an authorized trading period and when such Plan Participant was not in possession of material non-public information and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III. Item 10. Directors, Executive Officers and Corporate Governance The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. Item 11. Executive Compensation The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. 166 Table of Contents Item 14. Principal Accounting Fees and Services The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. 167 Table of Contents PART IV. Item 15. Exhibits, Financial Statement Schedules (a) Documents Filed with Report: Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) Consolidated Statements of Financial Condition as of December 31, 2023 and 2022 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 Notes to Consolidated Financial Statements (b) Exhibits. The following is a list of all exhibits filed or furnished as part of this report. Exhibit No. Description 3.1 Second Amended and Restated Certificate of Incorporation of Ares Management Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36429) filed with the SEC on November 7, 2022). 3.2 Bylaws of Ares Management Corporation (incorporated by reference to Exhibit 99.4 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 15, 2018). 4.1* Description of Ares Management Corporation’s Securities. 4.2 Indenture dated as of October 8, 2014 among Ares Finance Co. LLC, Ares Management, L.P., Ares Holdings Inc., Ares Domestic Holdings Inc., Ares Real Estate Holdings LLC, Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., Ares Management LLC, Ares Investments Holdings LLC and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on October 8, 2014). 4.3 First Supplemental Indenture dated as of October 8, 2014 among Ares Finance Co. LLC, Ares Management, L.P., Ares Holdings Inc., Ares Domestic Holdings Inc., Ares Real Estate Holdings LLC, Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., Ares Management LLC, Ares Investments Holdings LLC and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on October 8, 2014). 4.4 First Amendment, dated as of August 7, 2015, to the First Supplemental Indenture, dated October 8, 2014, to the indenture, dated October 8, 2014, among Ares Finance Co. LLC, the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on August 7, 2015). 4.5 Form of 4.000% Senior Note due 2024 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on October 8, 2014). 4.6 Form of 7.00% Series A Preferred Stock Certificate (incorporated by reference to Exhibit 99.5 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 15, 2018). 4.7 Indenture dated as of June 15, 2020 among Ares Finance Co. II LLC, Ares Holdings L.P., Ares Investments L.P., Ares Management LLC, Ares Investments Holdings LLC, Ares Finance Co. LLC and Ares Offshore Holdings L.P. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on June 15, 2020). 4.8 First Supplemental Indenture dated as of June 15, 2020 among Ares Finance Co. II LLC, Ares Holdings L.P., Ares Investments L.P., Ares Management LLC, Ares Investments Holdings LLC, Ares Finance Co. LLC and Ares Offshore Holdings L.P. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on June 15, 2020). 4.9 Form of 3.250% Senior Note due 2030 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on June 15, 2020). 168 Table of Contents Exhibit No. Description 4.10 Indenture dated as of June 30, 2021 among Ares Finance Co. III LLC, Ares Holdings L.P., Ares Investments Holdings LLC, Ares Management LLC, Ares Finance Co. LLC, Ares Finance Co. II LLC and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on 8-K (File No. 001-36429) filed with the SEC on July 1, 2021). 4.11 Form of 4.125% Fixed Rate Resettable Subordinated Notes due 2051 incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on July 1, 2021). 4.12 Indenture dated as of January 21, 2022 among Ares Finance Co. IV LLC, Ares Holdings L.P., Ares Investments Holdings LLC, Ares Management LLC, Ares Finance Co. LLC, Ares Finance Co. II LLC, Ares Finance Co. III LLC and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on 8-K (File No. 001-36429) filed with the SEC on January 21, 2022). 4.13 First Supplemental Indenture dated as of January 21, 2022 among Ares Finance Co. IV LLC, Ares Holdings L.P., Ares Investments Holdings LLC, Ares Management LLC, Ares Finance Co. LLC, Ares Finance Co. II LLC, Ares Finance Co. III LLC and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on January 21, 2022). 4.14 Form of 3.650% Senior Note due 2052 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on January 21, 2022). 4.15 Base Indenture, dated as of November 10, 2023, by and between Ares Management Corporation and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 13, 2023). 4.16 First Supplemental Indenture, dated as of November 10, 2023, by and among Ares Management Corporation, Ares Holdings L.P., Ares Management LLC, Ares Investments Holdings LLC, Ares Finance Co. LLC, Ares Finance Co. II LLC, Ares Finance Co. III LLC and Ares Finance Co. IV LLC, as the guarantors, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 13, 2023). 4.17 Form 6.375% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on November 13, 2023). 10.1 Fourth Amended and Restated Limited Partnership Agreement of Ares Holdings L.P., dated April 1, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.2 Investor Rights Agreement, dated November 26, 2018 (incorporated by reference to Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.3# Third Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.4 Fifth Amended and Restated Exchange Agreement, dated April 1, 2021 (incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.5 Fourth Amended and Restated Tax Receivable Agreement, dated May 1, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36429) filed with the SEC on May 8, 2023). 10.6 Sixth Amended and Restated Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings LLC, Ares Domestic Holdings L.P., Ares Investments LLC, Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-194919) filed with the SEC on April 28, 2014). 10.7 Amendment No. 1, dated as of July 15, 2014, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10‑Q (File No. 001-36429) filed with the SEC on November 12, 2014). 10.8 Amendment No. 2, dated as of September 24, 2014, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10‑Q (File No. 001-36429) filed with the SEC on November 12, 2014). 169 Table of Contents Exhibit No. Description 10.9 Amendment No. 3, dated as of July 23, 2015, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K (File No. 001-36429) filed with the SEC on July 28, 2015). 10.10 Amendment No. 4, dated as of August 5, 2015, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K (File No. 001-36429) filed with the SEC on August 7, 2015). 10.11 Amendment No. 5, dated as of December 16, 2015, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K (File No. 001-36429) filed with the SEC on December 21, 2015). 10.12 Amendment No. 6, dated as of May 23, 2016, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on May 26, 2016). 10.13 Amendment No. 7, dated as of February 24, 2017, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Investments L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-36429), filed with the SEC on February 27, 2017). 10.14 Amendment No. 8, dated as of March 21, 2019, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Investments L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on March 26, 2019). 10.15 Amendment No. 9, dated as of March 30, 2020, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Investments L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on April 1, 2020). 10.16 Amendment No. 10, dated as of March 31, 2021, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., Ares Investments L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on April 2, 2021). 10.17 Restated Investment Advisory and Management Agreement between Ares Capital Corporation and Ares Capital Management LLC, dated as of June 6, 2011 (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-194919) filed with the SEC on April 16, 2014). 10.18 Second Amended and Restated Investment Advisory and Management Agreement, dated June 6, 2019, between Ares Capital Corporation and Ares Capital Management LLC (incorporated by reference to exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36429) filed with the SEC on November 6, 2019). 10.19# Form of Restricted Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-8 POS (File No. 333-225271) filed with the SEC on November 26, 2018). 10.20# Form of Option Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.21# Form of Phantom Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.22 Form of ARCC Incentive Fee Award (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S‑1/A (File No. 333-194919) filed with the SEC on April 11, 2014). 170 Table of Contents Exhibit No. Description 10.23 Form of Amended and Restated Limited Partnership Agreement of Carry Vehicles (incorporated by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36429), filed with the SEC on February 29, 2016). 10.24 Form of Supplemental Agreement for Carried Interest (incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-36429), filed with the SEC on February 29, 2016). 10.25 Form of Annual Incentive Fee Award Letter (incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 001-36429), filed with the SEC on February 27, 2017). 10.26 *# Form of Annual Incentive Fee Award Letter. 10.27# Form of Deferred Restricted Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-8 POS (File No. 333-225271) filed with the SEC on November 26, 2018). 10.2 8 # Form of Director Restricted Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-8 POS (File No. 333-225271) filed with the SEC on November 26, 2018). 10. 29 # Restricted Unit Agreement, dated as of July 31, 2018, by and between Michael J Arougheti and Ares Management, L.P. (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36429) filed with the SEC on August 6, 2018). 10.3 0 Stock Purchase Agreement, dated July 9, 2019, between GBIG Holdings, Inc. and Aspida Holdco, LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File 001-36429) filed with the SEC on July 9, 2019). 10.3 1 Share Purchase Agreement, dated March 27, 2020, between Sumitomo Mitsui Banking Corporation and Ares Management Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File 001-36429) filed with the SEC on March 30, 2020). 10.3 2 Investor Rights Agreement, dated March 31, 2020, by and between Sumitomo Mitsui Banking Corporation and Ares Management Corporation (incorporated by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.3 3 # Form of Executive Officer Time-Based Restricted Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-36429) filed with the SEC on February 25, 2021). 10.3 4 # Form of Executive Officer Performance-Based Restricted Unit Agreement under the Second Amended & Restated 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No. 001-36429) filed with the SEC on February 25, 2021). 10.3 5 # Form of Indemnification Agreement (incorporated by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.3 6 Share Purchase Agreement, dated April 5, 2021, by and between Sumitomo Mitsui Banking Corporation and Ares Management Corporation (incorporated by reference to Exhibit 1.2 to the Registrant’s Current Report on 8-K (File No. 001-36429) filed with SEC on April 8, 2021). 10.3 7 Nomination Agreement, dated February 23, 2022, by and between Ares Management Corporation and Ares Partners Holdco LLC (incorporated by reference to Exhibit 10.37 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 (File No. 001-36429) filed with the SEC on February 28, 2022). 10.3 8 Amendment No. 11, dated as of March 31, 2022, to the Sixth Amended and Restated Senior Credit Agreement, dated as of April 21, 2014, by and among Ares Holdings L.P., the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36429) filed with the SEC on April 6, 2022). 10. 39 # Form of Restricted Unit Agreement under the Third Amended & Restated 2014 Equity Incentive Plan. 10.4 0 # Form of Deferred Restricted Unit Agreement under the Third Amended & Restated 2014 Equity Incentive Plan. 10.4 1 # Ares Management Corporation 2023 Equity Incentive Plan (incorporated herein by reference to Annex B to the Registrant’s Definitive Proxy Statement (File No. 001-36429) filed with the Commission on April 28, 2023). 171 Table of Contents Exhibit No. Description 10.4 2 # Form of Restricted Unit Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-8 (File No. 333-273232) filed with the SEC on July 13, 2023). 10.4 3 # Form of Deferred Restricted Unit Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-8 (File No. 333-273232) filed with the SEC on July 13, 2023). 10.4 4 # Form of Director Restricted Unit Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-8 (File No. 333-273232) filed with the SEC on July 13, 2023). 10.4 5 # Form of Executive Officer Time-Based Restricted Unit Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-8 (File No. 333-273232) filed with the SEC on July 13, 2023). 10.4 6 # Form of Executive Officer Performance-Based Restricted Unit Agreement under the 2023 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-8 (File No. 333-273232) filed with the SEC on July 13, 2023). 10.4 7 * # Form of Annual Incentive Fee Restricted Unit Agreement under the 2023 Equity Incentive Plan. 10.48 * Form of Aircraft Time Sharing Agreement. 21.1* Subsidiaries of Ares Management Corporation. 23.1* Consent of Ernst and Young LLP. 31.1* Certification of the Chief Executive Officer pursuant to Rule 13a-14(a). 31.2* Certification of the Chief Financial Officer pursuant to Rule 13a-14(a). 32.1** Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. 97* Policy Relating to Recovery of Erroneously Awarded Compensation (Clawback Policy). 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * Filed herewith. ** These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings. # Denotes a management contract or compensation plan or arrangement. Item 16. Form 10-K Summary None. 172 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ARES MANAGEMENT CORPORATION Dated: February 27, 2024 By: /s/ Michael J Arougheti Name: Michael J Arougheti Title: Co-Founder, Chief Executive Officer & President (Principal Executive Officer) 173 Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Antony P. Ressler Name: Antony P. Ressler Dated: February 27, 2024 Title: Executive Chairman & Co-Founder By: /s/ Michael J Arougheti Name: Michael J Arougheti Dated: February 27, 2024 Title: Director, Co-Founder, Chief Executive Officer & President (Principal Executive Officer) By: /s/ Jarrod Phillips Name: Jarrod Phillips Dated: February 27, 2024 Title: Chief Financial Officer (Principal Financial & Accounting Officer) By: /s/ R. Kipp deVeer Name: R. Kipp deVeer Dated: February 27, 2024 Title: Director & Head of Credit Group By: /s/ David B. Kaplan Name: David B. Kaplan Dated: February 27, 2024 Title: Director & Co-Founder By: /s/ Bennett Rosenthal Name: Bennett Rosenthal Dated: February 27, 2024 Title: Director, Co-Founder & Chairman of Private Equity Group By: /s/ Ashish Bhutani Name: Ashish Bhutani Dated: February 27, 2024 Title: Director By: /s/ Antoinette Bush Name: Antoinette Bush Dated: February 27, 2024 Title: Director By: /s/ Paul G. Joubert Name: Paul G. Joubert Dated: February 27, 2024 Title: Director By: /s/ Michael Lynton Name: Michael Lynton Dated: February 27, 2024 Title: Director By: /s/ Eileen Naughton Name: Eileen Naughton Dated: February 27, 2024 Title: Director By: /s/ Judy D. Olian Name: Dr. Judy D. Olian Dated: February 27, 2024 Title: Director 174 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F-2 Consolidated Statements of Financial Condition as of December 31, 2023 and 2022 F-4 Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021 F-5 Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 F-6 Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022 and 2021 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Ares Management Corporation Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Ares Management Corporation (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-2 Table of Contents Valuation of underlying investments of equity method investments Description of the Matter At December 31, 2023, the carrying value of the Company’s investments totaled $4,624.9 million, primarily consisting of equity method private investment partnership interests - principal of $535.3 million and equity method - carried interest of $3,413.0 million. As discussed further in Note 2. Summary of Significant Accounting Policies to the consolidated financial statements, the underlying investments of the Company’s equity method investments (“underlying investments”) are reported at fair value as determined by management by applying the valuation techniques and using the significant unobservable inputs described therein. Auditing management’s determination of the fair value of the underlying investments that are valued using significant unobservable inputs is complex and involves a high degree of auditor subjectivity to address the higher estimation uncertainty. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s investment valuation process for the underlying investments. This included management’s review controls over the assessment of the valuation techniques and significant unobservable inputs used to estimate the fair value of the underlying investments and management’s review of the completeness and accuracy of the data used in these estimates. Our audit procedures included, among others, evaluating, on a sample basis, the valuation techniques and significant unobservable inputs used by the Company in valuing the underlying investments and testing, on a sample basis, the mathematical accuracy of the related valuation models. For example, for a sample of underlying investments that were valued using the market approach, we performed procedures to evaluate the appropriateness of significant unobservable inputs such as the selected earnings before interest, taxes, depreciation and amortization multiples or revenue multiples that were derived from comparable companies. These procedures included assessing the appropriateness of management’s determination of the comparable companies, and, where applicable, comparing the selected multiples to market observed transactions of such companies. For a sample of underlying investments that were valued using the discounted cash flow valuation technique, we performed procedures to evaluate the appropriateness of significant unobservable inputs such as the selected discount rates and projections of future cash flows. These procedures included comparing the selected discount rates to market data and/or recalculating these discount rates using investee specific information, such as the weighted average cost of capital. In addition, these procedures included comparing future projections to the current performance and the historical growth rates of the investees as well as to the growth rates of publicly traded comparable companies. In some instances, with the involvement of our valuation specialists, we independently developed fair value estimates using investee specific and market information and compared our estimates to the fair value of the underlying investments. We searched for and evaluated information that corroborated or contradicted the significant unobservable inputs. We also evaluated subsequent events and transactions and considered whether they corroborated or contradicted the year-end valuations. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2011. Los Angeles, California February 27, 2024 F-3 Table of Contents Ares Management Corporation Consolidated Statements of Financial Condition (Amounts in Thousands, Except Share Data) As of December 31, 2023 2022 Assets Cash and cash equivalents $ 348,274 $ 389,987 Investments (includes accrued carried interest of $ 3,413,007 and $ 3,106,577 as of December 31, 2023 and 2022, respectively) 4,624,932 3,974,734 Due from affiliates 896,746 758,472 Other assets 429,979 381,137 Right-of-use operating lease assets 249,326 155,950 Intangible assets, net 1,058,495 1,208,220 Goodwill 1,123,976 999,656 Assets of Consolidated Funds: Cash and cash equivalents 1,149,511 724,641 Investments held in trust account 523,038 1,013,382 Investments, at fair value 14,078,549 12,191,251 Due from affiliates 14,151 15,789 Receivable for securities sold 146,851 124,050 Other assets 86,672 65,570 Total assets $ 24,730,500 $ 22,002,839 Liabilities Accounts payable, accrued expenses and other liabilities $ 233,884 $ 231,921 Accrued compensation 287,259 510,130 Due to affiliates 240,254 252,798 Performance related compensation payable 2,514,610 2,282,209 Debt obligations 2,965,480 2,273,854 Operating lease liabilities 319,572 190,616 Liabilities of Consolidated Funds: Accounts payable, accrued expenses and other liabilities 189,523 168,286 Due to affiliates 3,554 4,037 Payable for securities purchased 484,117 314,193 CLO loan obligations, at fair value 12,345,657 10,701,720 Fund borrowings 125,241 168,046 Total liabilities 19,709,151 17,097,810 Commitments and contingencies Redeemable interest in Consolidated Funds 522,938 1,013,282 Redeemable interest in Ares Operating Group entities 24,098 93,129 Non-controlling interests in Consolidated Funds 1,258,445 1,074,356 Non-controlling interests in Ares Operating Group entities 1,322,469 1,135,023 Stockholders’ Equity Class A common stock, $ 0.01 par value, 1,500,000,000 shares authorized ( 187,069,907 shares and 173,892,036 shares issued and outstanding as of December 31, 2023 and 2022, respectively) 1,871 1,739 Non-voting common stock, $ 0.01 par value, 500,000,000 shares authorized ( 3,489,911 shares issued and outstanding as of December 31, 2023 and 2022) 35 35 Class B common stock, $ 0.01 par value, 1,000 shares authorized ( 1,000 shares issued and outstanding as of December 31, 2023 and 2022) — — Class C common stock, $ 0.01 par value, 499,999,000 shares authorized ( 117,024,758 shares and 117,231,288 shares issued and outstanding as of December 31, 2023 and 2022, respectively) 1,170 1,172 Additional paid-in-capital 2,391,036 1,970,754 Accumulated deficit ( 495,083 ) ( 369,475 ) Accumulated other comprehensive loss, net of tax ( 5,630 ) ( 14,986 ) Total stockholders’ equity 1,893,399 1,589,239 Total equity 4,474,313 3,798,618 Total liabilities, redeemable interest, non-controlling interests and equity $ 24,730,500 $ 22,002,839 See accompanying notes to the consolidated financial statements. F-4 Table of Contents Ares Management Corporation Consolidated Statements of Operations (Amounts in Thousands, Except Share Data) Year ended December 31, 2023 2022 2021 Revenues Management fees $ 2,551,150 $ 2,136,433 $ 1,611,047 Carried interest allocation 618,579 458,012 2,073,551 Incentive fees 276,627 301,187 332,876 Principal investment income 36,516 12,279 99,433 Administrative, transaction and other fees 149,012 147,532 95,184 Total revenues 3,631,884 3,055,443 4,212,091 Expenses Compensation and benefits 1,486,698 1,498,590 1,162,633 Performance related compensation 607,522 518,829 1,740,786 General, administrative and other expenses 660,146 695,256 444,178 Expenses of Consolidated Funds 43,492 36,410 62,486 Total expenses 2,797,858 2,749,085 3,410,083 Other income (expense) Net realized and unrealized gains on investments 77,573 4,732 19,102 Interest and dividend income 19,276 9,399 9,865 Interest expense ( 106,276 ) ( 71,356 ) ( 36,760 ) Other income, net 4,819 13,119 14,402 Net realized and unrealized gains on investments of Consolidated Funds 262,700 73,386 77,303 Interest and other income of Consolidated Funds 995,545 586,529 437,818 Interest expense of Consolidated Funds ( 754,600 ) ( 411,361 ) ( 258,048 ) Total other income, net 499,037 204,448 263,682 Income before taxes 1,333,063 510,806 1,065,690 Income tax expense 172,971 71,891 147,385 Net income 1,160,092 438,915 918,305 Less: Net income attributable to non-controlling interests in Consolidated Funds 274,296 119,333 120,369 Net income attributable to Ares Operating Group entities 885,796 319,582 797,936 Less: Net income (loss) attributable to redeemable interest in Ares Operating Group entities 226 ( 851 ) ( 1,341 ) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 411,244 152,892 390,440 Net income attributable to Ares Management Corporation 474,326 167,541 408,837 Less: Series A Preferred Stock dividends paid — — 10,850 Less: Series A Preferred Stock redemption premium — — 11,239 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 474,326 $ 167,541 $ 386,748 Net income per share of Class A and non-voting common stock: Basic $ 2.44 $ 0.87 $ 2.24 Diluted $ 2.42 $ 0.87 $ 2.15 Weighted-average shares of Class A and non-voting common stock: Basic 184,523,524 175,510,798 163,703,626 Diluted 195,773,426 175,510,798 180,112,271 Substantially all revenue is earned from affiliated funds of the Company. See accompanying notes to the consolidated financial statements. F-5 Table of Contents Ares Management Corporation Consolidated Statements of Comprehensive Income (Amounts in Thousands) Year ended December 31, 2023 2022 2021 Net income $ 1,160,092 $ 438,915 $ 918,305 Foreign currency translation adjustments, net of tax 19,855 ( 33,911 ) ( 21,464 ) Total comprehensive income 1,179,947 405,004 896,841 Less: Comprehensive income attributable to non-controlling interests in Consolidated Funds 278,813 107,793 103,498 Less: Comprehensive income (loss) attributable to redeemable interest in Ares Operating Group entities 185 ( 1,277 ) ( 1,968 ) Less: Comprehensive income attributable to non-controlling interests in Ares Operating Group entities 417,267 144,078 388,812 Comprehensive income attributable to Ares Management Corporation $ 483,682 $ 154,410 $ 406,499 See accompanying notes to the consolidated financial statements. F-6 Table of Contents Ares Management Corporation 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 Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Non-Controlling Interest in Ares Operating Group Entities Non-Controlling Interest in Consolidated Funds Total Equity Balance as of 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 — 70 — ( 25 ) ( 133,289 ) — — ( 97,735 ) 13,487 ( 217,492 ) Issuances of common stock — 122 35 — 827,273 — — — — 827,430 Capital contributions — — — 87 — — — 539,020 33,644 572,751 Redemption of preferred stock ( 310,000 ) — — — — — — — — ( 310,000 ) Dividends/distributions ( 10,850 ) — — — — ( 324,306 ) — ( 269,200 ) ( 98,897 ) ( 703,253 ) Net income 22,089 — — — — 386,748 — 390,440 120,369 919,646 Currency translation adjustment, net of tax — — — — — — ( 2,338 ) ( 1,628 ) ( 16,871 ) ( 20,837 ) Equity compensation — — — — 138,710 — — 98,481 — 237,191 Stock option exercises — 20 — — 37,196 — — — — 37,216 Balance as of 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 — 43 — ( 14 ) ( 96,413 ) — — ( 105,680 ) 4,006 ( 198,058 ) Issuances of common stock — 1 — — 12,834 — — — — 12,835 Capital contributions — — — — — — — 5,195 549,396 554,591 Dividends/distributions — — — — — ( 447,634 ) — ( 386,843 ) ( 178,291 ) ( 1,012,768 ) Net income — — — — — 167,541 — 152,892 119,333 439,766 Currency translation adjustment, net of tax — — — — — — ( 13,131 ) ( 8,814 ) ( 11,540 ) ( 33,485 ) Equity compensation — — — — 119,580 — — 80,526 — 200,106 Stock option exercises — 11 — — 21,194 — — — — 21,205 Balance as of 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 — 59 — ( 2 ) ( 60,755 ) — — 93,956 ( 313,781 ) ( 280,523 ) Issuances of common stock — 26 — — 239,519 — — — — 239,545 Capital contributions — — — — — — — 3,887 320,185 324,072 Dividends/distributions — — — — — ( 599,934 ) — ( 427,849 ) ( 101,128 ) ( 1,128,911 ) Net income — — — — — 474,326 — 411,244 274,296 1,159,866 Currency translation adjustment, net of tax — — — — — — 9,356 6,023 4,517 19,896 Equity compensation — — — — 155,606 — — 100,185 — 255,791 Stock option exercises — 47 — — 85,912 — — — — 85,959 Balance as of December 31, 2023 $ — $ 1,871 $ 35 $ 1,170 $ 2,391,036 $ ( 495,083 ) $ ( 5,630 ) $ 1,322,469 $ 1,258,445 $ 4,474,313 See accompanying notes to the consolidated financial statements. F-7 Table of Contents Ares Management Corporation Consolidated Statements of Cash Flows (Amounts in Thousands) Year ended December 31, 2023 2022 2021 Cash flows from operating activities: Net income $ 1,160,092 $ 438,915 $ 918,305 Adjustments to reconcile net income to net cash used in operating activities: Equity compensation expense 255,965 200,391 237,191 Depreciation and amortization 231,712 341,341 113,293 Net realized and unrealized (gains) losses on investments ( 90,737 ) 10,929 ( 88,978 ) Other non-cash amounts 74 — ( 31,070 ) Investments purchased ( 507,932 ) ( 371,124 ) ( 340,199 ) Proceeds from sale of investments 206,163 182,493 273,382 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments ( 262,700 ) ( 73,386 ) ( 77,303 ) Other non-cash amounts ( 101,465 ) ( 33,822 ) ( 35,879 ) Investments purchased ( 8,847,856 ) ( 9,434,029 ) ( 13,067,564 ) Proceeds from sale of investments 8,149,617 8,198,812 9,970,609 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable ( 48,858 ) ( 20,612 ) ( 745,021 ) Due to/from affiliates ( 220,421 ) 39,073 ( 180,928 ) Other assets 21,532 ( 105,205 ) 213,825 Accrued compensation and benefits 20,383 200,769 142,815 Accounts payable, accrued expenses and other liabilities 27,864 ( 51,685 ) 125,168 Cash flows due to changes in operating assets and liabilities allocable to redeemable and non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds ( 424,870 ) 324,550 ( 526,815 ) Net cash relinquished with consolidation/deconsolidation of Consolidated Funds ( 623 ) — ( 39,539 ) Change in other assets and receivables held at Consolidated Funds ( 20,247 ) 151,895 ( 180,953 ) Change in other liabilities and payables held at Consolidated Funds 219,046 ( 733,417 ) 723,616 Net cash used in operating activities ( 233,261 ) ( 734,112 ) ( 2,596,045 ) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals ( 67,183 ) ( 35,796 ) ( 27,226 ) Acquisitions, net of cash acquired ( 43,896 ) ( 301,583 ) ( 1,057,407 ) Net cash used in investing activities ( 111,079 ) ( 337,379 ) ( 1,084,633 ) Cash flows from financing activities: Net proceeds from issuance of Class A and non-voting common stock — — 827,430 Proceeds from Credit Facility 1,410,000 1,380,000 883,000 Proceeds from issuance of senior and subordinated notes 499,010 488,915 450,000 Repayments of Credit Facility ( 1,215,000 ) ( 1,095,000 ) ( 468,000 ) Dividends and distributions ( 1,030,666 ) ( 836,364 ) ( 593,506 ) Series A Preferred Stock dividends — — ( 10,850 ) Redemption of Series A Preferred Stock — — ( 310,000 ) Stock option exercises 85,959 21,205 37,216 Taxes paid related to net share settlement of equity awards ( 157,007 ) ( 201,311 ) ( 226,101 ) Other financing activities 2,943 4,055 11,509 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds 855,456 549,396 1,033,644 Distributions to non-controlling interests in Consolidated Funds ( 101,128 ) ( 178,291 ) ( 98,897 ) Redemptions of redeemable interests in Consolidated Funds ( 1,045,874 ) — — Borrowings under loan obligations by Consolidated Funds 1,387,297 1,140,680 2,048,932 Repayments under loan obligations by Consolidated Funds ( 398,864 ) ( 145,222 ) ( 80,752 ) Net cash provided by financing activities 292,126 1,128,063 3,503,625 Effect of exchange rate changes 10,501 ( 10,240 ) ( 19,104 ) Net change in cash and cash equivalents ( 41,713 ) 46,332 ( 196,157 ) Cash and cash equivalents, beginning of period 389,987 343,655 539,812 Cash and cash equivalents, end of period $ 348,274 $ 389,987 $ 343,655 Supplemental disclosure of non-cash financing activities: Issuance of AOG Units and Class A common stock in connection with acquisition-related activities $ 239,545 $ 12,835 $ 510,848 Issuance of AOG Units in connection with settlement of management incentive program $ 245,647 $ — $ — Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 722,643 $ 320,329 $ 205,085 Cash paid during the period for income taxes $ 62,007 $ 104,864 $ 22,788 See accompanying notes to the consolidated financial statements. F-8 Table of Contents Ares Management Corporation Notes to the 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 14. Segment Reporting.” Subsidiaries of the Company serve as the general partners and/or investment managers to various 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 audited financial statements include the 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 special purpose acquisition companies (“SPACs”) (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 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 Consolidated Statements of Cash Flows. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s Consolidated Funds are investment companies under GAAP based on the following characteristics: the Consolidated Funds obtain funds from one or more investors and provide investment management services and the Consolidated Funds’ business purpose and substantive activities are investing funds for returns from capital appreciation and/or investment income. Therefore, investments of Consolidated Funds are recorded at fair value and the unrealized appreciation (depreciation) in an investment’s fair value is recognized on a current basis within the Consolidated Statements of Operations. Additionally, the Consolidated Funds do not consolidate their majority-owned and controlled investments in portfolio companies. In the preparation of these consolidated financial statements, the Company has retained the investment company accounting for the Consolidated Funds under GAAP. All of the investments held and CLO loan obligations issued by the Consolidated Funds are presented at their estimated fair values within the Company’s Consolidated Statements of Financial Condition. Net income attributable to holders of subordinated notes of the CLOs is presented within net income attributable to non-controlling interests in Consolidated Funds within the Consolidated Statements of Operations. The Company has reclassified certain prior period amounts to conform to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenses and other income (expense) during the reporting periods. Assumptions and estimates regarding the valuation of investments involve a high degree of judgment and complexity F-9 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) and may have a significant impact on net income. Actual results could differ from these estimates and such differences could be material to the consolidated financial statements. Principles of Consolidation The Company consolidates those entities in which it has a direct or indirect controlling financial interest based on either a variable interest model (“VIEs”) or voting interest model (“VOE”). As such, the Company consolidates (i) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (ii) entities that the Company concludes are variable interest entities in which the Company has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which the Company is deemed to be the primary beneficiary. The Company determines whether an entity should be consolidated by first evaluating whether it holds a variable interest in the entity. Fees that are customary and commensurate with the level of services provided by the Company, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests, including proportionate interests through related parties, to determine if fees are considered a variable interest. As the Company’s interests in funds are primarily management fees, carried interest, incentive fees, and/or insignificant direct or indirect equity interests through related parties, the Company is not considered to have a variable interest in these entities. Entities that are not VIEs are further evaluated for consolidation under the voting interest model. Variable Interest Model The Company considers an entity to be a VIE if any of the following conditions exist: (i) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) the holders of equity investment at risk, as a group, lack either the direct or indirect ability through voting rights or similar rights to make decisions that have a significant effect on the success of the entity or the obligation to absorb the expected losses or right to receive the expected residual returns; or (iii) the voting rights of some equity investors are disproportionate to their obligation to absorb losses of the entity, their rights to receive returns from an entity, or both and substantially all of the entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. The Company consolidates all VIEs for which it is the primary beneficiary. The Company determines it is the primary beneficiary when it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders the conclusion. In evaluating whether the Company is the primary beneficiary, the Company evaluates its direct and indirect economic interests in the entity. The consolidation analysis is generally performed qualitatively, however, if the primary beneficiary is not readily determinable, a quantitative analysis may also be performed. This analysis requires judgment. These judgments include: (i) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support; (ii) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity; (iii) determining whether two or more parties’ equity interests should be aggregated; (iv) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity; and (v) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary. Consolidated CLOs As of December 31, 2023 and 2022, the Company consolidated 28 and 25 CLOs (“Consolidated CLOs”), respectively. The Company has determined that the fair value of the financial assets of the Consolidated CLOs, which are mostly Level II assets within the GAAP fair value hierarchy, are more observable than the fair value of the financial liabilities of its Consolidated CLOs, which are mostly Level III liabilities within the GAAP fair value hierarchy. As a result, the financial assets of Consolidated CLOs are measured at fair value and the financial liabilities of the Consolidated CLOs are measured in consolidation as: (i) the sum of the fair value of the financial assets, and the carrying value of any nonfinancial assets held temporarily, less (ii) the sum of the fair value of any beneficial interests retained by the Company (other than those that F-10 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) represent compensation for services), and the Company’s carrying value of any beneficial interests that represent compensation for services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by the Company). The loan obligations issued by the CLOs are collateralized by diversified asset portfolios and by structured debt or equity. In exchange for managing the collateral for the CLOs, the Company typically earns a variety of management fees, including senior and subordinated management fees, and in some cases, contingent incentive fee income. Investors in the CLOs generally have no recourse against the Company for any losses sustained in the capital structure of each CLO. Fair Value Measurements GAAP establishes a hierarchical disclosure framework that prioritizes the inputs used in measuring financial instruments at fair value into three levels based on their market price observability. Market price observability is affected by a number of factors, including the type of instrument and the characteristics specific to the instrument. Financial instruments with readily available quoted prices from an active market or for which fair value can be measured based on actively quoted prices generally have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. Financial assets and liabilities measured and reported at fair value are classified as follows: • Level I —Quoted prices in active markets for identical instruments. • Level II —Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in inactive markets; and model-derived valuations with directly or indirectly observable significant inputs. Level II inputs include prices in markets with few transactions, non-current prices, prices for which little public information exists or prices that vary substantially over time or among brokered market makers. Other inputs include interest rate, yield curve, volatility, prepayment risk, loss severity, credit risk and default rate. • Level III —Valuations that rely on one or more significant unobservable inputs. These inputs reflect the Company’s assessment of the assumptions that market participants would use to value the instrument based on the best information available. Management's determination of fair value includes various valuation techniques. These techniques may include market approach, recent transaction price, net asset value (“NAV”) approach, discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA or revenue multiples, discount rates, weighted average cost of capital, exit multiples, terminal growth rates and other unobservable inputs. In some instances, an instrument may fall into more than one level of the fair value hierarchy. In such instances, the instrument’s level within the fair value hierarchy is based on the lowest of the three levels (with Level III being the lowest) that is significant to the fair value measurement. The Company’s assessment of the significance of an input requires judgment and considers factors specific to the instrument. The Company accounts for the transfer of assets into or out of each fair value hierarchy level as of the beginning of the reporting period (see “Note 5. Fair Value” for further detail). Cash and Cash Equivalents Cash and cash equivalents for the Company includes investments with maturities at purchase of less than three months, money market funds and demand deposits. Cash and cash equivalents held at Consolidated Funds represents cash that, although not legally restricted, is not available to support the general liquidity needs of the Company, as the use of such amounts is generally limited to the activities of the Consolidated Funds. As of December 31, 2023 and 2022, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions. Investments held in trust account Investments held in trust account represents funds raised through the initial public offerings of our sponsored SPACs that are presented within Consolidated Funds. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of public shares as set forth in the trust F-11 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) agreement. The portfolio of investments for the SPACs is comprised of United States (“U.S.”) government securities or money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligation. The U.S. Treasury securities typically have original maturities of six months or less when purchased and are recorded at fair value. Interest income received on such investments is separately presented from the overall change in fair value and is recognized within interest and other income of Consolidated Funds within the Consolidated Statements of Operations. Any remaining change in fair value of such investments, that is not recognized as interest income, is recognized within net realized and unrealized gains on investments of Consolidated Funds within the Consolidated Statements of Operations. Investments The investments of the Consolidated Funds are reflected within the Consolidated Statements of Financial Condition at fair value, with unrealized appreciation (depreciation) resulting from changes in fair value reflected as a component of net realized and unrealized gains on investments within the Consolidated Statements of Operations. Certain investments are denominated in foreign currency and are translated into U.S. dollars at each reporting date. Equity Method Investments The Company accounts for its investments in which it has or is otherwise presumed to have significant influence, including investments in unconsolidated funds, strategic investments and carried interest, using the equity method of accounting. The carrying amounts of equity method investments are reflected in investments within the Consolidated Statements of Financial Condition. The carrying value of investments accounted for using equity method accounting is determined based on amounts invested by the Company, adjusted for the equity in earnings or losses of the investee allocated based on the respective partnership agreements, less distributions received. The Company evaluates the equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. Except for carried interest, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is presented either within principal investment income or net realized and unrealized gains on investments within the Consolidated Statements of Operations. Carried interest allocation is presented separately as a revenue line item within the Consolidated Statements of Operations, and the accrued carried interest is presented within investments within the Consolidated Statements of Financial Condition. In addition, certain of the Company's equity method investments are reported at fair value. The fair value option has been elected to simplify the accounting for certain financial instruments. The fair value option election is irrevocable and is applied to financial instruments on an individual basis at initial recognition or at eligible remeasurement events. Changes in the fair value of such instruments with the fair value option elected are presented within net realized and unrealized gains on investments within the Consolidated Statements of Operations. Derivative Instruments In the normal course of business, the Company and the Consolidated Funds are exposed to certain risks relating to their ongoing operations and use various types of derivative instruments primarily to mitigate against interest rate and foreign exchange risk. The derivative instruments are not designated as hedging instruments under the accounting standards for derivatives and hedging. These derivative instruments include foreign currency forward contracts, interest rate swaps, asset swaps and warrants. The Company reports each of its derivative instruments at fair value within the Consolidated Statements of Financial Condition as either other assets or accounts payable, accrued expenses and other liabilities, respectively. These amounts may be offset to the extent that there is a legal right to offset and if elected by management. Derivative instruments are marked-to-market daily based upon quotations from pricing services or by the Company and the change in value, if any, is recorded as an unrealized gain (loss). Upon settlement of the instrument, the Company records any realized gain (loss). Changes in value are reflected within net realized and unrealized gains on investments within the Consolidated Statements of Operations. F-12 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Business Combinations The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of the acquisition, including the fair value of certain elements of contingent consideration, is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Contingent consideration obligations are recognized as of the acquisition date at fair value based on the probability that contingency will be realized. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. Conversely, any excess of the fair value of the net assets acquired over the purchase consideration is recognized as a bargain purchase gain. Critical estimates in valuing certain of the intangible assets acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. The acquisition method of accounting allows for a measurement period for up to one year after the acquisition date to make adjustments to the purchase price allocation as the Company obtains more information regarding asset valuations and liabilities assumed. Acquisition-related costs incurred in connection with a business combination are expensed as incurred. Goodwill and Intangible Assets Intangible Assets The Company’s finite-lived intangible assets consists primarily of contractual rights to earn future management fees from the acquired management contracts. Finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from approximately 1.6 to 13.5 years. The purchase price of an acquired management contract is treated as an intangible asset and is amortized over the life of the contract. Amortization is included as part of general, administrative and other expenses within the Consolidated Statements of Operations. The Company tests finite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable. The Company evaluates impairment by comparing the estimated undiscounted cash flows attributable to the intangible asset being evaluated with its carrying amount. If an impairment is determined to exist by management, the Company accelerates amortization expense so that the carrying amount represents fair value. The Company estimates fair value using a discounted future cash flow methodology. The Company tests indefinite-lived intangible assets annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company will evaluate impairment quantitatively to determine and record the amount of impairment as the excess of the carrying amount of the indefinite-lived intangible asset over its fair value. The Company also tests indefinite-lived intangible assets for impairment if certain events occur or circumstances change indicating that the carrying amount of the intangible asset may not be recoverable or that the useful lives of these assets are no longer appropriate. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s strategic plans with regard to the indefinite-lived intangible assets. Goodwill Goodwill represents the excess of purchase price of an acquired business over the fair value of its identifiable net assets. The Company tests goodwill annually for impairment. If, after assessing qualitative factors, the Company believes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will evaluate impairment quantitatively and record the amount of goodwill impairment as the excess of the carrying amount of the reporting unit over its fair value. The Company also tests goodwill for impairment in other periods if an event occurs or circumstances change such that it is more likely than not to reduce the fair value of the reporting unit below its carrying amount. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including the Company’s interpretation of current economic indicators and market valuations, and assumptions about the Company’s strategic plans with regard to its operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates . F-13 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Fixed Assets Fixed assets, consisting of furniture, fixtures, computer hardware, equipment, internal-use software and leasehold improvements are recorded at cost, less accumulated depreciation and amortization. Fixed assets are presented within other assets within the Company’s Consolidated Statements of Financial Condition. Direct costs associated with developing, purchasing or otherwise acquiring software for internal use are capitalized and amortized on a straight-line basis over the expected useful life of the software, beginning when the software is ready for its intended purpose. Costs incurred for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Fixed assets are depreciated or amortized on a straight-line basis over an asset’s estimated useful life, with the corresponding depreciation and amortization expense presented within general, administrative and other expenses within the Company’s Consolidated Statements of Operations. The estimated useful life for leasehold improvements is the lesser of the lease term or the life of the asset, with a maximum of 10 years, while other fixed assets and internal-use software are generally depreciated between three and seven years . Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Leases The Company has entered into operating and finance leases for corporate offices and certain equipment and makes the determination if an arrangement constitutes a lease at inception. Operating leases are presented within right-of-use operating lease assets and operating lease liabilities within the Company’s Consolidated Statements of Financial Condition. Finance lease assets are capitalized as a component of fixed assets and finance lease liabilities are presented within accounts payable, accrued expenses and other liabilities within the Consolidated Statements of Financial Condition. Leases with an initial term of 12 months or less are expensed as incurred and not capitalized within the Consolidated Statements of Financial Condition. Right-of-use operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and corresponding lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The right-of-use operating lease asset also includes any lease prepayments and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Lease expense is primarily recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Non-Controlling Interests 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 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. The non-controlling interests in Consolidated Funds represents a component of equity and net income attributable to ownership interests that third parties hold in Consolidated Funds. Redeemable Interest Redeemable interest in AOG entities was established in connection with the SSG Acquisition as described in “Note 13. Equity and Redeemable Interest.” Redeemable interest in AOG entities was initially recorded at fair value on the date of acquisition within mezzanine equity within the Consolidated Statements of Financial Condition. Income (loss) is allocated based on the ownership percentage attributable to the redeemable interest. The Company determined that the redemption of the F-14 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) redeemable interest is probable as of the date of acquisition. 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 exceeds 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 Consolidated Statements of Financial Condition. Redeemable interest in Consolidated Funds represent the Class A ordinary shares issued by each of the Company’s sponsored SPACs, as applicable. The Class A ordinary shares issued by our SPACs (the “Class A ordinary shares”) are redeemable for cash by the public shareholders in the event that they do not complete a business combination or tender offer associated with shareholder approval provisions. The Class A ordinary shareholders have redemption rights that are considered to be outside of the SPAC’s control. Revenue Recognition The Company recognizes revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company’s revenue is based on contracts with a determinable transaction price and distinct performance obligations with probable collectability. Revenues are not recognized until the performance obligation(s) are satisfied. Management Fees Management fees are generally based on a defined percentage of fair value of assets, total commitments, invested capital, NAV, NAV plus unfunded commitments, total assets or par value of the investment portfolios managed by the Company. Principally all management fees are earned from affiliated funds of the Company. The contractual terms of management fees vary by fund structure and investment strategy. Management fees are recognized as revenue in the period advisory services are rendered, subject to the Company’s assessment of collectability. Management fees also include a quarterly fee on the net investment income (“Part I Fees”) of Ares Capital Corporation (NASDAQ: ARCC) (“ARCC”) , CION Ares Diversified Credit Fund (“CADC”) and Ares Strategic Income Fund (“ASIF”). Fee Rate Fee Base Hurdle rate ARCC Part I Fees 20.00 % Net investment income (before ARCC Part I Fees and ARCC Part II Fees) Fixed hurdle rate of 1.75 % per quarter, or 7.00 % per annum. No fees are recognized until ARCC’s net investment income exceeds a 1.75 % hurdle rate, with a catch-up provision to ensure that the Company receives 20.00 % of the net investment income from the first dollar earned. CADC Part I Fees 15.00 % Net investment income (before CADC Part I Fees) Fixed hurdle rate of 1.50 % per quarter, or 6.00 % per annum. No fees are recognized until CADC’s net investment income exceeds the hurdle rate, with a catch-up provision to ensure that the Company receives 15.00 % of the net investment income from the first dollar earned. ASIF Part I Fees 12.50 % Net investment income (before ASIF Part I Fees and ASIF Part II Fees) Fixed hurdle rate of 1.25 % per quarter, or 5.00 % per annum. No fees are recognized until ASIF’s net investment income exceeds a 1.25 % hurdle rate, with a catch-up provision to ensure that the Company receives 12.50 % of the net investment income from the first dollar earned. Carried Interest Allocation In certain fund structures, carried interest is allocated to the Company based on cumulative fund performance to date, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. At the end of each reporting period, a fund will allocate carried interest applicable to the Company based upon an assumed liquidation of that fund’s net assets on the reporting date, irrespective of whether such amounts have been realized. Carried interest is recorded to the extent such amounts have been allocated, and may be subject to reversal to the extent that the amount allocated exceeds the amount due to the general partner or investment manager based on a fund’s cumulative investment returns. As the fair value of underlying assets varies between reporting periods, it is necessary to make adjustments to amounts recorded as carried interest to reflect either: (i) positive performance resulting in an increase in the carried interest allocated to the Company; or (ii) negative performance that would cause the amount due to the Company to be less than the amount F-15 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) previously recognized as revenue, resulting in a reversal of previously recognized carried interest allocated to the Company. Accrued carried interest as of the reporting date is recorded within investments within the Consolidated Statements of Financial Condition. Carried interest is realized when an underlying investment is profitably disposed of, or upon the return of each limited partner’s capital plus a preferred return, and the fund’s cumulative returns are in excess of the specific hurdle rates as defined in the applicable investment management agreements or governing documents. Since carried interest is subject to reversal, the Company may need to accrue for potential repayment of previously received carried interest. This accrual represents all amounts previously distributed to the Company that would need to be repaid to the funds if the funds were to be liquidated based on the current fair value of the underlying funds’ investments as of the reporting date. The actual repayment obligations, however, generally does not become realized until the end of a fund’s life. The Company accounts for carried interest, which represents a performance-based capital allocation from an investment fund to the Company, as earnings from financial assets within the scope of ASC 323, Investments-Equity Method and Joint Ventures . The Company recognizes carried interest allocation as a separate revenue line item in the Consolidated Statements of Operations with accrued carried interest as of the reporting date reported within investments within the Consolidated Statements of Financial Condition. Substantially all carried interest allocation is earned from affiliated funds of the Company. Incentive Fees Incentive fees earned on the performance of certain fund structures, typically in credit funds, certain real estate and secondaries funds, are recognized based on the fund’s performance during the period, subject to the achievement of minimum return levels in accordance with the respective terms set out in each fund’s investment management agreement. Incentive fees are realized at the end of a measurement period, typically annually. Once realized, such fees are no longer subject to reversal. Principal Investment Income Principal investment income consists of interest and dividend income and net realized and unrealized gain (loss) from the equity method investments that the Company manages. Administrative, Transaction and Other Fees The Company earns other sources of revenue that are classified as administrative, transaction or other fees. These fees are recognized as revenue in the period in which the related services are rendered. Administrative fees represent fees that the Company earns for providing administrative services to certain funds. These fees may either reflect expense reimbursements for costs incurred by certain professionals in performing services for a fund or may be based on fixed percentage of a fund’s invested capital. Transaction fees are typically earned from the arrangement and origination of loans and are generated primarily from funds within the direct lending and infrastructure debt strategies. Other fees includes sales-based and asset-based fees from the Company’s non-traded vehicles and 1031 exchange programs. Other fees may include various property-related fees earned from certain real estate funds, such as acquisition, development and property management. Equity-Based Compensation The Company recognizes expense related to equity-based compensation for which it receives employee services in exchange for: (i) equity instruments of the Company; or (ii) liabilities that are based on the fair value of the Company’s equity instruments. Equity-based compensation expense represents expenses associated with restricted units and options granted under the 2023 Equity Incentive Plan (the “Equity Incentive Plan”). Equity-based compensation expense for restricted units is determined based on the fair value of the respective equity award on the grant date and is recognized on a straight-line basis over the requisite service period, with a corresponding increase in additional paid-in-capital. Grant date fair value of the restricted units is determined by the most recent closing price of shares of the Company’s Class A common stock. The Company has granted certain performance-based restricted unit awards with market conditions. These awards generally have vesting conditions based upon the volume-weighted, average closing price of Class A common stock meeting or exceeding a stated price over a period of time, referred to as the market condition. Vesting is also generally subject to continued F-16 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) employment at the time such market condition is achieved. The grant date fair values of these awards are based on a probability distributed Monte-Carlo simulation. Due to the existence of the market condition, the vesting period for the awards is not explicit, and as such, compensation expense is recognized on a straight-line basis over the median vesting period derived from the positive iterations of the Monte Carlo simulations where the market condition is achieved. The Company recognizes share-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense. The reduction in compensation expense is determined based on the specific awards forfeited during that period. The Company records deferred tax assets or liabilities for equity compensation plan awards based on deductions for income tax purposes of equity-based compensation recognized at the statutory tax rate in the jurisdiction in which the Company is expected to receive a tax deduction. In addition, differences between the deferred tax assets recognized in accordance with GAAP and the actual tax deduction reported in the Company’s income tax returns are presented within income tax expense within the Consolidated Statements of Operations before taking into consideration the tax effects of the investment in AOG. Equity-based compensation expense is presented within compensation and benefits within the Consolidated Statements of Operations. Performance Related Compensation The Company has agreed to pay to certain professionals a portion of the carried interest and incentive fees earned from certain funds, including income from Consolidated Funds that is eliminated in consolidation. Depending on the nature of each fund, carried interest and incentive fees may be structured as a fixed percentage subject to vesting based on continued employment or service (generally over a period of five to six years ) or as an annual award that is fully vested for the particular year. Other limitations may apply to carried interest and incentive fees as set forth in the applicable governing documents of the fund or award documentation. Performance related compensation is recognized in the same period that the related carried interest and incentive fees are recognized. Performance related compensation can be reversed during periods when there is a reversal of carried interest that was previously recognized. Performance related compensation payable represents the amounts payable to professionals who are entitled to a proportionate share of carried interest in one or more funds and include the associated payroll related taxes. Performance related compensation payable also includes allocations to charitable organizations as part of the Company’s philanthropic initiatives. The liability is calculated based upon the changes to realized and unrealized carried interest but not payable until the carried interest itself is realized. Net Realized and Unrealized Gains/(Losses) on Investments Realized gains (losses) occur when the Company redeems all or a portion of its investment or when the Company receives cash income, such as dividends or distributions. Unrealized appreciation (depreciation) results from changes in the fair value of the underlying investment as well as from the reversal of previously recognized unrealized appreciation (depreciation) at the time an investment is realized. Realized and unrealized gains (losses) are presented together as net realized and unrealized gains on investments within the Consolidated Statements of Operations. Also, the Company’s share of the investee’s income and expenses for the Company’s equity method investments is presented within net realized and unrealized gains on investments. Interest and Dividend Income Interest, dividends and other investment income are included within interest and dividend income. Interest income is recognized on an accrual basis using the effective interest method to the extent that such amounts are expected to be collected. Dividends and other investment income are recorded when the right to receive payment is established . Foreign Currency The U.S. dollar is the Company’s functional currency; however, certain transactions of the Company may not be denominated in U.S. dollars. Income and expense and gain and loss transactions denominated in foreign currencies are generally translated into U.S. dollars monthly using the average exchange rates during the respective transaction period. Foreign exchange revaluation arising from these transactions is recognized within other income, net within the Consolidated F-17 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Statements of Operations. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $ 9.1 million, $ 13.5 million and $ 4.8 million, respectively, in transaction losses related to foreign currencies revaluation. In addition, the consolidated results include certain foreign subsidiaries that use functional currencies other than the U.S. dollar. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the prevailing exchange rates as of the reporting date. Translation adjustments resulting from this process are recorded to currency translation adjustment in accumulated other comprehensive income. Income Taxes The Company elects to be taxed as a corporation and all earnings allocated to the Company are subject to U.S. corporate income taxes. A provision for corporate level income taxes imposed on unrealized gains and income items as well as taxes imposed on certain subsidiaries’ earnings is included in the consolidated tax provision. Also included in the consolidated tax provision are entity level income taxes incurred by certain Consolidated Funds. The portion of consolidated earnings not allocated to the Company flows through to owners of the AOG entities without being taxed at the corporate level. Income taxes are accounted for using the liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized as income, in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current and deferred tax liabilities are reported on a net basis and the deferred tax assets, net is presented within other assets within the Consolidated Statements of Financial Condition. The Company analyzes its tax filing positions in all U.S. federal, state, local and foreign tax jurisdictions where it is required to file income tax returns for all open tax years in these jurisdictions. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits (“UTBs”) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. Both accrued interest and penalties related to UTBs, when incurred, are presented within general, administrative and other expenses within the Consolidated Statements of Operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. The Company reviews its tax positions quarterly and adjusts its tax balances as new legislation is passed or new information becomes available. Earnings Per Share Basic earnings per share of Class A and non-voting common stock is computed by dividing income available to Class A and non-voting common stockholders by the weighted-average number shares of Class A and non-voting common stock outstanding during the period. Income available to Ares Management Corporation represents net income attributable to Class A and non-voting common stockholders. Basic earnings per share of Class A and non-voting common stock is computed by using the two-class method. The two-class method is an earnings allocation method under which earnings per share is calculated for shares of Class A and non-voting common stock and participating securities considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Because the holders of unvested restricted units have the right to participate in dividends when declared, the unvested restricted units are considered participating securities to the extent they are expected to vest. Diluted earnings per share of Class A and non-voting common stock is computed by dividing income available to Class A and non-voting common stockholders by the weighted-average number of shares of Class A and non-voting common stock outstanding during the period, increased to include the number of additional shares of Class A common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding options to acquire shares of Class A common stock, unvested restricted units and AOG Units exchangeable for shares of Class A common stock. The effect of potentially dilutive securities is reflected in diluted earnings per share of Class A and non- F-18 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) voting common stock using the more dilutive result of the treasury stock method or the two-class method. The treasury stock method is used to determine potentially dilutive securities resulting from options and unvested restricted units granted under the Equity Incentive Plan. Comprehensive Income Comprehensive income consists of net income and other appreciation (depreciation) affecting stockholders’ equity that, under GAAP, has been excluded from net income. The Company’s other comprehensive income includes foreign currency translation adjustments. 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 not listed below were assessed and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the Company’s CODM. The amendments in this update also expand the interim segment disclosure requirements. ASU 2023-07 is effective for the Company’s fiscal year ending December 15, 2024 and for the Company’s interim periods beginning with the first quarter ended 2025. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 requires disclosure of disaggregated income taxes paid in both U.S. and foreign jurisdictions, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for the Company’s fiscal year ending December 31, 2025. Early adoption is permitted and the amendments in this update should be applied on a prospective basis, though retrospective adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 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 December 31, 2023 As of December 31, 2023 2022 Management contracts 4.3 $ 604,242 $ 586,077 Client relationships 8.5 200,920 262,301 Trade name N/A — 11,079 Other 0.8 500 500 Finite-lived intangible assets 805,662 859,957 Foreign currency translation 1,126 935 Total finite-lived intangible assets 806,788 860,892 Less: accumulated amortization ( 316,093 ) ( 220,472 ) Finite-lived intangible assets, net 490,695 640,420 Indefinite-lived management contracts 567,800 567,800 Intangible assets, net $ 1,058,495 $ 1,208,220 On October 2, 2023, the Company completed the acquisition of the investment management business and related operating entities collectively doing business as Crescent Point Capital (“Crescent Point”) (the “Crescent Point Acquisition”). The Crescent Point Acquisition adds complementary investment capabilities to expand the Company’s presence in the Asia-Pacific region. Following the completion of the Crescent Point Acquisition, the results of Crescent Point are presented within F-19 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) the Private Equity Group. The Company allocated $ 32.7 million and $ 22.3 million of the purchase price to the fair value of the acquired management contracts and client relationships, respectively. The acquired management contracts and client relationships had a weighted average amortization period from the date of acquisition of 5.5 years and 9.0 years, respectively. During the year ended December 31, 2023, the Company recorded non-cash impairment charges of $ 78.7 million, including: (i) $ 65.7 million to the carrying value of client relationships from the acquisition of Landmark Partners, LLC (the “Landmark Acquisition”) that are included within the Secondaries Group, where the primary indicator of impairment was the lower expected fee paying assets under management in a private equity secondaries fund from existing investors as of the date of the Landmark Acquisition; (ii) $ 4.6 million and $ 0.7 million to the fair value of management contracts of certain funds within the Real Assets Group and Credit Group, respectively, in connection with lower than expected future fee revenue generated from these funds; and (iii) $ 7.8 million to the carrying value of SSG trade name as the Company rebranded Ares SSG as APAC credit and discontinued the use of the SSG trade name. During the year ended December 31, 2022, the Company recorded non-cash impairment charges of $ 181.6 million to the fair value of a trade name and management contracts related to: (i) the decision to rebrand its secondaries group as Ares Secondaries and to discontinue the ongoing use of the Landmark trade name; (ii) the fair value of certain management contracts in connection with lower than expected fee paying assets under management; and (iii) the shorter expected lives of certain funds as a result of returning capital to fund investors sooner than initially planned. Amortization expense associated with intangible assets, excluding the accelerated amortization described above, was $ 126.0 million, $ 133.6 million and $ 91.3 million for the years ended December 31, 2023, 2022 and 2021, respectively, and is presented within general, administrative and other expenses within the Consolidated Statements of Operations. During the year ended December 31, 2023, the Company removed $ 109.3 million of impaired and fully-amortized intangible assets. As of December 31, 2023, future annual amortization of finite-lived intangible assets for the years 2024 through 2028 and thereafter is estimated to be: Year Amortization 2024 $ 115,722 2025 102,987 2026 77,047 2027 62,907 2028 38,904 Thereafter 93,128 Total $ 490,695 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, 2021 $ 32,196 $ 58,600 $ 53,339 $ 417,738 $ 226,099 $ 787,972 Acquisitions — — 213,314 ( 96 ) — 213,218 Reallocation — ( 10,530 ) 10,530 — — — Foreign currency translation — — — ( 22 ) ( 1,512 ) ( 1,534 ) Balance as of December 31, 2022 32,196 48,070 277,183 417,620 224,587 999,656 Acquisitions — 124,392 22 — — 124,414 Reallocation 224,587 — — — ( 224,587 ) — Foreign currency translation ( 104 ) — — 10 — ( 94 ) Balance as of December 31, 2023 $ 256,679 $ 172,462 $ 277,205 $ 417,630 $ — $ 1,123,976 In connection with the Crescent Point Acquisition, the Company allocated $ 124.4 million of the purchase price to goodwill. F-20 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) In connection with the SSG Buyout described in “Note 13. Equity and Redeemable Interest,” 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 years ended December 31, 2023 and 2022. The impact of foreign currency translation is reflected within other comprehensive income within the Consolidated Statements of Comprehensive Income. 4. INVESTMENTS The following table summarizes the Company’s investments: As of Percentage of total investments as of December 31, December 31, 2023 2022 2023 2022 Equity method investments: Equity method - carried interest $ 3,413,007 $ 3,106,577 73.8 % 78.2 % Equity method private investment partnership interests - principal 535,292 543,592 11.6 13.7 Equity method private investment partnership interests and other (held at fair value) 418,778 123,170 9.0 3.1 Equity method private investment partnership interests and other 44,989 47,439 1.0 1.2 Total equity method investments 4,412,066 3,820,778 95.4 96.2 Fixed income securities 105,495 51,771 2.3 1.2 Collateralized loan obligations 20,799 25,163 0.4 0.6 Collateralized loan obligations and fixed income securities, at fair value 126,294 76,934 2.7 1.8 Common stock, at fair value 86,572 77,022 1.9 2.0 Total investments $ 4,624,932 $ 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 years ended December 31, 2023, 2022 and 2021, no individual equity method investment held by the Company met the significance criteria. The following tables present summarized financial information for the Company’s equity method investments, which are primarily funds managed by the Company: As of and for the Year Ended December 31, 2023 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Statement of Financial Condition Investments $ 21,366,223 $ 6,971,840 $ 17,757,664 $ 13,497,266 $ 38,212 $ 59,631,205 Total assets 23,015,503 7,110,511 18,792,446 13,808,556 38,284 62,765,300 Total liabilities 5,152,522 130,727 6,528,302 3,632,879 418 15,444,848 Total equity 17,862,981 6,979,784 12,264,144 10,175,677 37,866 47,320,452 Statement of Operations Revenues $ 2,123,547 $ 594,464 $ 1,036,710 $ 1,960 $ — $ 3,756,681 Expenses ( 759,485 ) ( 191,613 ) ( 632,433 ) ( 482,478 ) ( 1,658 ) ( 2,067,667 ) Net realized and unrealized gains (losses) from investments 247,619 600,322 ( 599,200 ) 373,064 ( 7,316 ) 614,489 Income tax expense ( 5,192 ) ( 555 ) ( 10,197 ) — ( 19 ) ( 15,963 ) Net income (loss) $ 1,606,489 $ 1,002,618 $ ( 205,120 ) $ ( 107,454 ) $ ( 8,993 ) $ 2,287,540 F-21 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) As of and for the Year Ended December 31, 2022 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Statement of Financial Condition Investments $ 17,633,914 $ 9,376,032 $ 13,052,820 $ 12,719,333 $ 51,239 $ 52,833,338 Total assets 20,883,559 9,947,821 14,440,914 12,931,082 51,825 58,255,201 Total liabilities 5,770,070 937,326 5,007,250 3,716,111 6,615 15,437,372 Total equity 15,113,489 9,010,495 9,433,664 9,214,971 45,210 42,817,829 Statement of Operations Revenues $ 1,341,368 $ 271,873 $ 618,796 $ 2,874 $ — $ 2,234,911 Expenses ( 438,690 ) ( 153,372 ) ( 357,845 ) ( 289,741 ) ( 1,500 ) ( 1,241,148 ) Net realized and unrealized gains (losses) from investments 12,464 ( 482,260 ) 304,068 ( 11,173 ) 1,365 ( 175,536 ) Income tax expense ( 4,724 ) 92 ( 36,501 ) — ( 10 ) ( 41,143 ) Net income (loss) $ 910,418 $ ( 363,667 ) $ 528,518 $ ( 298,040 ) $ ( 145 ) $ 777,084 As of and for the Year Ended December 31, 2021 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Statement of Operations Revenues $ 1,342,427 $ 229,539 $ 326,507 $ 911 $ — $ 1,899,384 Expenses ( 305,452 ) ( 177,380 ) ( 170,008 ) ( 89,281 ) ( 22,609 ) ( 764,730 ) Net realized and unrealized gains (losses) from investments 438,083 2,161,730 1,179,698 1,399,009 ( 4,898 ) 5,173,622 Income tax benefit (expense) ( 4,511 ) ( 19,125 ) ( 1,167 ) — — ( 24,803 ) Net income (loss) $ 1,470,547 $ 2,194,764 $ 1,335,030 $ 1,310,639 $ ( 27,507 ) $ 6,283,473 The following table presents the Company’s other income, net from to its equity method investments, which were included within principal investment income, net realized and unrealized gains on investments, and interest and dividend income within the Consolidated Statements of Operations: Year ended December 31, 2023 2022 2021 Total other income, net related to equity method investments $ 86,729 $ 21,657 $ 114,856 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. The following table summarizes the changes in fair value of the Company’s equity method investments held at fair value, which are included within net realized and unrealized gains on investments within the Consolidated Statements of Operations: Year ended December 31, 2023 2022 2021 Equity method private investment partnership interests and other (held at fair value) $ 50,772 $ 5,626 $ 7,100 F-22 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Investments of the Consolidated Funds The following table summarizes investments held in the Consolidated Funds: Fair Value as of Percentage of total investments as of December 31, December 31, 2023 2022 2023 2022 Fixed income investments: Loans and securitization vehicles $ 10,616,458 $ 9,280,522 72.7 % 70.3 % Bonds 578,949 786,961 4.0 6.0 Money market funds and U.S. treasury securities 523,038 1,013,382 3.6 7.7 Total fixed income investments 11,718,445 11,080,865 80.3 84.0 Partnership interests 1,642,489 1,392,169 11.2 10.5 Equity securities 1,240,653 731,599 8.5 5.5 Total investments, at fair value $ 14,601,587 $ 13,204,633 As of December 31, 2023 and 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. 5. FAIR VALUE Financial Instrument Valuations The valuation techniques used by the Company to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The valuation techniques applied to investments held by the Company and by the Consolidated Funds vary depending on the nature of the investment. CLOs and CLO loan obligations: The fair value of CLOs held by the Company are estimated based on either a third-party pricing service or broker quote and are classified as Level III. The Company measures its CLO loan obligations of the Consolidated Funds by first determining whether the fair values of the financial assets or financial liabilities of its Consolidated CLOs are more observable. Contingent consideration: The Company generally determines the fair value of its contingent consideration liabilities by using a probability weighted expected return method, including the Monte Carlo simulation model. These models consider a range of assumptions including historical experience, prior period performance, current progress towards targets, probability-weighted scenarios, and management’s own assumptions. The discount rate used is determined based on the weighted average cost of capital for the Company. Once the associated targets are achieved, the contingent consideration is reported at the settlement amount. The fair value of the Company’s contingent consideration liabilities are classified as Level III. Liabilities recorded in connection with the Company’s contingent consideration are included within accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition and the associated changes in fair value are included within other income, net in the Consolidated Statements of Operations. Corporate debt, bonds, bank loans, securitization vehicles and derivative instruments: The fair value of corporate debt, bonds, bank loans, securitization vehicles and derivative instruments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs. These investments are generally classified as Level II. The Company obtains prices from independent pricing services that generally utilize broker quotes and may use various other pricing techniques, which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. If management is only able to obtain a single broker quote, or utilizes a pricing model, such securities will generally be classified as Level III. Equity and equity-related securities: Securities traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. Securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. Securities that have market prices that are not readily available, utilize F-23 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) valuation models of third-party pricing service or internal models using unobservable inputs to determine the fair value are classified as Level III. Money market funds and U.S. treasury securities: The fair value of money market funds and U.S. treasury securities is estimated using quoted market prices in active markets. These investments are classified as Level I. Partnership interests: The Company generally values its investments using the NAV per share equivalent calculated by the investment manager as a practical expedient to determining an independent fair value or estimates based on various valuation models of third-party pricing services, as well as internal models. The Company does not categorize within the fair value hierarchy investments where fair value is measured using the net asset value per share practical expedient. In limited circumstances, the Company may determine, based on its own due diligence and investment procedures, that NAV per share does not represent fair value. In such circumstances, the Company will estimate the fair value in good faith and in a manner that it reasonably chooses. As of December 31, 2023 and 2022, NAV per share represents the fair value of the Company’s investments in partnership interests. Discounted cash flow model has been used to determine the fair value of an investment in a partnership interest held by the Consolidated Funds where NAV per share was not deemed to be representative of fair value. The substantial majority of the Company’s private commingled funds are closed-ended, and accordingly, do not permit investors to redeem their interests other than in limited circumstances that are beyond the control of the Company, such as instances in which retaining the interest could cause the investor to violate a law, regulation or rule. The Company also has open-ended and evergreen funds where investors have the right to withdraw their capital, subject to the terms of the respective constituent documents, over periods generally ranging from one month to three years . In addition, the Company has minority investments in vehicles that may only have a single other investor that may allow such investors to terminate the fund pursuant to the terms of the applicable constituent documents of such vehicle. F-24 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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 December 31, 2023: Financial Instruments of the Company Level I Level II Level III Investments Measured at NAV Total Assets, at fair value Investments: Common stock and other equity securities $ — $ 86,572 $ 412,491 $ — $ 499,063 Collateralized loan obligations and fixed income securities — — 126,294 — 126,294 Partnership interests — — — 6,287 6,287 Total investments, at fair value — 86,572 538,785 6,287 631,644 Derivatives-foreign currency forward contracts — 1,129 — — 1,129 Total assets, at fair value $ — $ 87,701 $ 538,785 $ 6,287 $ 632,773 Liabilities, at fair value Derivatives-foreign currency forward contracts $ — $ ( 2,645 ) $ — $ — $ ( 2,645 ) Total liabilities, at fair value $ — $ ( 2,645 ) $ — $ — $ ( 2,645 ) 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: Loans and securitization vehicles $ — $ 9,879,915 $ 736,543 $ — $ 10,616,458 Bonds — 575,379 3,570 — 578,949 Money market funds and U.S. treasury securities 523,038 — — — 523,038 Total fixed income investments 523,038 10,455,294 740,113 — 11,718,445 Partnership interests — — — 1,642,489 1,642,489 Equity securities 47,503 2,750 1,190,400 — 1,240,653 Total investments, at fair value 570,541 10,458,044 1,930,513 1,642,489 14,601,587 Derivatives-foreign currency forward contracts — 9,126 — — 9,126 Total assets, at fair value $ 570,541 $ 10,467,170 $ 1,930,513 $ 1,642,489 $ 14,610,713 Liabilities, at fair value Loan obligations of CLOs $ — $ ( 12,345,657 ) $ — $ — $ ( 12,345,657 ) Derivatives: Foreign currency forward contracts — ( 9,491 ) — — ( 9,491 ) Asset swaps — — ( 1,291 ) — ( 1,291 ) Total derivative liabilities, at fair value — ( 9,491 ) ( 1,291 ) — ( 10,782 ) Total liabilities, at fair value $ — $ ( 12,355,148 ) $ ( 1,291 ) $ — $ ( 12,356,439 ) F-25 Table of Contents Ares Management Corporation Notes to the 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: Common stock and other equity securities $ — $ 77,022 $ 121,785 $ — $ 198,807 Collateralized loan obligations and fixed income securities — — 76,934 — 76,934 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: Loans and securitization vehicles $ — $ 8,663,678 $ 616,844 $ — $ 9,280,522 Money market funds and U.S. treasury securities 1,013,382 — — — 1,013,382 Bonds — 534,137 252,824 — 786,961 Total fixed income investments 1,013,382 9,197,815 869,668 — 11,080,865 Partnership interests — — 368,655 1,023,514 1,392,169 Equity securities 719 — 730,880 — 731,599 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 Loan obligations of CLOs $ — $ ( 10,701,720 ) $ — $ — $ ( 10,701,720 ) Derivatives: Warrants ( 9,326 ) — — — ( 9,326 ) Asset swaps — — ( 3,556 ) — ( 3,556 ) Foreign currency forward contracts — ( 2,942 ) — — ( 2,942 ) Total derivative liabilities, at fair value ( 9,326 ) ( 2,942 ) ( 3,556 ) — ( 15,824 ) Total liabilities, at fair value $ ( 9,326 ) $ ( 10,704,662 ) $ ( 3,556 ) $ — $ ( 10,717,544 ) F-26 Table of Contents Ares Management Corporation Notes to the 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: Level III Assets of the Company Equity Securities Fixed Income Total Balance as of December 31, 2022 $ 121,785 $ 76,934 $ 198,719 Purchases (1) 244,335 88,480 332,815 Sales/settlements (2) ( 2 ) ( 37,332 ) ( 37,334 ) Realized and unrealized appreciation (depreciation), net 46,373 ( 1,788 ) 44,585 Balance as of December 31, 2023 $ 412,491 $ 126,294 $ 538,785 Change in net unrealized appreciation/depreciation included in earnings related to financial assets still held at the reporting date $ 46,161 $ ( 1,577 ) $ 44,584 Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance as of December 31, 2022 $ 730,880 $ 869,668 $ 368,655 $ ( 3,556 ) $ 1,965,647 Transfer out due to changes in consolidation ( 2,076 ) ( 4,563 ) ( 374,049 ) — ( 380,688 ) Transfer in — 247,661 — — 247,661 Transfer out ( 36,681 ) ( 504,037 ) — — ( 540,718 ) Purchases (1) 347,583 813,564 49,000 — 1,210,147 Sales/settlements (2) ( 2,595 ) ( 700,944 ) ( 48,889 ) ( 154 ) ( 752,582 ) Realized and unrealized appreciation, net 153,289 18,764 5,283 2,419 179,755 Balance as of December 31, 2023 $ 1,190,400 $ 740,113 $ — $ ( 1,291 ) $ 1,929,222 Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 152,336 $ ( 15,623 ) $ — $ 1,590 $ 138,303 (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. F-27 Table of Contents Ares Management Corporation Notes to the 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: Level III Assets and Liabilities of the Company Equity Securities Fixed Income Partnership Interests Contingent Consideration Total Balance as of December 31, 2021 $ 108,949 $ 52,397 $ 2,575 $ ( 57,435 ) $ 106,486 Transfer in due to changes in consolidation 1,491 — — — 1,491 Purchases (1) 894 32,392 — — 33,286 Sales/settlements (2) 68 ( 2,425 ) ( 2,538 ) 58,873 53,978 Change in fair value — — — ( 1,438 ) ( 1,438 ) Realized and unrealized appreciation (depreciation), net 10,383 ( 5,430 ) ( 37 ) — 4,916 Balance as of December 31, 2022 $ 121,785 $ 76,934 $ — $ — $ 198,719 Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 12,448 $ ( 5,430 ) $ — $ — $ 7,018 Level III Net Assets of Consolidated Funds Equity Securities Fixed Income Partnership Interests Derivatives, Net Total Balance as of December 31, 2021 $ 339,183 $ 742,952 $ 238,673 $ ( 3,105 ) $ 1,317,703 Transfer in — 184,037 94,386 — 278,423 Transfer out — ( 202,333 ) — — ( 202,333 ) Purchases (1) 323,699 732,477 59,258 — 1,115,434 Sales/settlements (2) ( 31,932 ) ( 536,125 ) ( 52,828 ) — ( 620,885 ) Realized and unrealized appreciation (depreciation), net 99,930 ( 51,340 ) 29,166 ( 451 ) 77,305 Balance as of December 31, 2022 $ 730,880 $ 869,668 $ 368,655 $ ( 3,556 ) $ 1,965,647 Change in net unrealized appreciation/depreciation included in earnings related to financial assets and liabilities still held at the reporting date $ 70,591 $ ( 54,058 ) $ 29,166 $ ( 376 ) $ 45,323 (1) Purchases include paid-in-kind interest and securities received in connection with restructurings. (2) Sales/settlements include distributions, principal redemptions, securities disposed of in connection with restructurings and contingent consideration payments. 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. F-28 Table of Contents Ares Management Corporation Notes to the 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, 2023: Level III Measurements of the Company Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 154,460 Discounted cash flow Discount rate 20.0 % - 30.0 % 25.0 % 118,846 Market approach Multiple of book value 1.3 x - 1.6 x 1.5 x 100,000 Transaction price (1) N/A N/A N/A 6,447 Market approach Enterprise value / LTM multiple of FRE 15.4 x 15.4 x 32,738 Other N/A N/A N/A Fixed income investments 83,000 Transaction price (1) N/A N/A N/A 20,799 Broker quotes and/or 3rd party pricing services N/A N/A N/A 22,495 Other N/A N/A N/A Total assets $ 538,785 Level III Measurements of the Consolidated Funds Fair Value Valuation Technique(s) Significant Unobservable Input(s) Range Weighted Average Assets Equity securities $ 648,581 Discounted cash flow Discount rate 10.0 % - 16.0 % 13.0 % 537,733 Market approach Multiple of book value 1.0 x - 1.7 x 1.3 x 3,909 Market approach EBITDA multiple (2) 4.5 x - 32.4 x 8.9 x 177 Other N/A N/A N/A Fixed income investments 516,070 Broker quotes and/or 3rd party pricing services N/A N/A N/A 188,322 Market approach Yield 8.3 % - 24.1 % 12.2 % 2,974 Market approach EBITDA multiple (2) 4.5 x - 32.4 x 9.0 x 32,747 Other N/A N/A N/A Total assets $ 1,930,513 Liabilities Derivative instruments $ ( 1,291 ) Broker quotes and/or 3rd party pricing services N/A N/A N/A Total liabilities $ ( 1,291 ) (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. F-29 Table of Contents Ares Management Corporation Notes to the 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 $ 106,295 Market approach Multiple of book value 1.3 x - 3.2 x 2.4 x 15,490 Transaction price (1) N/A N/A N/A Fixed income investments 30,189 Transaction price (1) N/A N/A N/A 25,163 Broker quotes and/or 3rd party pricing services 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 1.0 x - 1.2 x 1.2 x 36,681 Market approach Net income multiple 30.0 x 30.0 x 2,064 Market approach EBITDA multiple (2) 6.3 x - 31.0 x 13.6 x 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 (1) N/A N/A N/A 4,479 Market approach EBITDA multiple (2) 8.0 x - 9.0 x 8.5 x 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 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. The following table summarizes the investments held at fair value and unfunded commitments of the Consolidated Funds interests valued using NAV per share: As of December 31, 2023 2022 Investments (held at fair value) $ 1,642,489 $ 1,023,514 Unfunded commitments 738,621 869,016 F-30 Table of Contents Ares Management Corporation Notes to the 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 December 31, 2023 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 $ 895,000 6.37 % $ 700,000 5.37 % 2024 Senior Notes (2) 10/8/2014 10/8/2024 $ 250,000 249,427 4.21 248,693 4.21 2028 Senior Notes (3) 11/10/2023 11/10/2028 500,000 494,863 6.42 — N/A 2030 Senior Notes (4) 6/15/2020 6/15/2030 400,000 397,050 3.28 396,602 3.28 2052 Senior Notes (5) 1/21/2022 2/1/2052 500,000 484,199 3.77 483,802 3.77 2051 Subordinated Notes (6) 6/30/2021 6/30/2051 450,000 444,941 4.13 444,757 4.13 Total debt obligations $ 2,965,480 $ 2,273,854 (1) The revolver commitments were $ 1.325 billion as of December 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 (“ESG”)-related targets, with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of December 31, 2023, base rate loans bear interest calculated based on the prime 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 . Due to the achievement of the ESG-related targets, the Company’s base rate and unused commitment fee have been reduced by 0.05 % and 0.01 %, respectively, from July 2023 through June 2024. (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 Senior Notes. (3) The 2028 Senior Notes were issued in November 2023 by the Company, at 99.80 % of the face amount with interest paid semi-annually. The Company may redeem the 2028 Senior Notes prior to maturity, subject to the terms of the indenture governing the 2028 Senior Notes. (4) 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 Senior Notes. (5) 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 Senior Notes. (6) 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 December 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, 2028, 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 Consolidated Statements of Financial Condition. All debt issuance costs are amortized over the remaining term of the related obligation into interest expense within the Consolidated Statements of Operations. F-31 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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, 2021 $ 5,274 $ 3,689 $ 5,426 Debt issuance costs incurred 1,516 5,482 — Amortization of debt issuance costs ( 1,280 ) ( 778 ) ( 183 ) Unamortized debt issuance costs as of December 31, 2022 $ 5,510 $ 8,393 $ 5,243 Debt issuance costs incurred — 4,315 — Amortization of debt issuance costs ( 1,297 ) ( 924 ) ( 184 ) Unamortized debt issuance costs as of December 31, 2023 $ 4,213 $ 11,784 $ 5,059 Loan Obligations of the Consolidated CLOs Loan obligations of the Consolidated Funds that are 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. The following loan obligations were outstanding and classified as liabilities of the Consolidated CLOs: As of December 31, 2023 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 $ 11,606,289 6.64 % 8.2 $ 10,142,545 4.84 % 8.8 Subordinated notes (1) 739,368 N/A 6.9 559,175 N/A 7.8 Total loan obligations of Consolidated CLOs $ 12,345,657 $ 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 December 31, 2023 and 2022, the Consolidated Funds were in compliance with all covenants under such credit facilities. F-32 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) The Consolidated Funds had the following revolving bank credit facilities outstanding: As of December 31, 2023 2022 Maturity Date Total Capacity Outstanding Loan (1) Effective Rate Outstanding Loan (1) Effective Rate Credit Facilities: 10/13/2023 (2) $ 112,817 N/A N/A $ 77,496 5.89 % 7/1/2024 18,000 $ 15,241 6.88 % 15,550 6.25 7/23/2024 125,000 110,000 8.29 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 $ 125,241 $ 168,046 (1) The fair values of the borrowings approximate the carrying value as the interest rate on the borrowings is a floating rate. (2) Represents a credit facility of a Consolidated Fund that was deconsolidated during the second quarter of 2023. The total capacity represents the balance as of December 31, 2022. 7. OTHER ASSETS The components of other assets were as follows: As of December 31, 2023 2022 Other assets of the Company: Accounts and interest receivable $ 128,756 $ 120,903 Fixed assets, net 122,223 79,678 Deferred tax assets, net 21,549 68,933 Other assets 157,451 111,623 Total other assets of the Company $ 429,979 $ 381,137 Other assets of Consolidated Funds: Dividends and interest receivable $ 74,045 $ 60,321 Income tax and other receivables 12,627 5,249 Total other assets of Consolidated Funds $ 86,672 $ 65,570 Fixed Assets, Net The components of fixed assets were as follows: As of December 31, 2023 2022 Office and computer equipment $ 52,681 $ 41,547 Internal-use software 51,226 57,200 Leasehold improvements 134,272 84,820 Fixed assets, at cost 238,179 183,567 Less: accumulated depreciation ( 115,956 ) ( 103,889 ) Fixed assets, net $ 122,223 $ 79,678 For the years ended December 31, 2023, 2022 and 2021, depreciation expense was $ 31.4 million, $ 26.2 million and $ 22.1 million, respectively, and is included within general, administrative and other expenses within the Consolidated Statements of Operations. During 2023, the Company disposed of $ 19.8 million of fixed assets that were fully depreciated. F-33 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 8. 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 Consolidated Statements of Financial Condition. As of December 31, 2023, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. Commitments As of December 31, 2023 and 2022, the Company had aggregate unfunded commitments to invest in funds it manages or to support certain strategic initiatives of $ 1,030.6 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 December 31, 2023 and 2022, the Company’s maximum exposure to losses from guarantees was $ 122.3 million and $ 31.5 million, respectively. Contingent Liabilities In connection with the Crescent Point Acquisition during the fourth quarter of 2023, the Company established a management incentive program (the “Crescent Point MIP”) with certain professionals. The Crescent Point MIP represents a contingent liability not to exceed $ 75.0 million and is based on the achievement of revenue targets from the fundraising of a future private equity fund during the measurement period. The Company expects to settle the liability with a combination of 33 % cash and 67 % equity awards. Expense associated with the cash and equity components are recognized ratably over the measurement period, which represents the service period and will end on the final fundraising date for the fund. The Crescent Point MIP is remeasured each period with incremental changes in fair value included within compensation and benefits expense within the Consolidated Statements of Operations. Following the measurement period end date, the cash component will be paid and the equity component will be settled with shares of the Company’s Class A common stock and granted at fair value. As of December 31, 2023, the fair value of the contingent liability was $ 75.0 million, of which the Company has recorded $ 5.0 million of compensation expense with an offset to accrued compensation within the Consolidated Statements of Financial Condition. 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 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 F-34 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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 Consolidated Statements of Financial Condition. During the first quarter of 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 year ended December 31, 2022, compensation expense of $ 7.0 million, related to the achieved portion of the award, is presented within compensation and benefits within the Consolidated Statements of Operations. As of December 31, 2023, the maximum contingent liability associated with the remaining Infrastructure Debt MIP is $ 15.0 million. As of December 31, 2023 and 2022, the fair value of the contingent liability was $ 13.6 million and $ 13.5 million. As of December 31, 2023 and 2022, the Company has recorded $ 4.4 million and $ 2.2 million, respectively, within accrued compensation within the Consolidated Statements of Financial Condition. Compensation expense associated with the remaining Infrastructure Debt MIP of $ 2.3 million and $ 2.2 million for the years ended December 31, 2023 and 2022, respectively, is presented within compensation and benefits within the 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 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. As of December 31, 2023 and 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 $ 78.5 million and $ 128.4 million, respectively, of which approximately $ 54.5 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 December 31, 2023 and 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. F-35 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Leases The Company leases primarily consists of operating leases for office space and certain office equipment. The Company’s leases have remaining lease terms of one to 13 years. The tables below present certain supplemental quantitative disclosures regarding the Company’s operating leases: Maturity of operating lease liabilities As of December 31, 2023 2024 $ 51,399 2025 51,884 2026 48,206 2027 37,497 2028 27,408 Thereafter 180,050 Total future payments 396,444 Less: interest 76,872 Total operating lease liabilities $ 319,572 Year ended December 31, Classification within general, administrative and other expenses 2023 2022 2021 Operating lease expense $ 49,531 $ 42,746 $ 38,135 Year ended December 31, Supplemental information on the measurement of operating lease liabilities 2023 2022 2021 Operating cash flows for operating leases $ 45,103 $ 46,558 $ 37,500 Leased assets obtained in exchange for new operating lease liabilities 168,876 43,331 57,624 As of December 31, Lease term and discount rate 2023 2022 Weighted-average remaining lease terms (in years) 8.4 5.5 Weighted-average discount rate 4.3 % 2.7 % F-36 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 9. 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 Consolidated Statements of Financial Condition, except that accrued carried interest, which is predominantly due from affiliated funds, is presented separately within investments within the 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 publicly-traded and non-traded vehicles. In addition, certain private funds pay administrative fees based on invested capital. The Company is also party to agreements with certain funds which pay fees to the Company to provide various property-related services, such as acquisition, development and property management as well as fees for the sale and distribution of fund shares in our non-traded vehicles. 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 December 31, 2023 2022 Due from affiliates: Management fees receivable from non-consolidated funds $ 560,629 $ 456,314 Incentive fee receivable from non-consolidated funds 159,098 169,979 Payments made on behalf of and amounts due from non-consolidated funds and employees 177,019 132,179 Due from affiliates—Company $ 896,746 $ 758,472 Amounts due from non-consolidated funds $ 14,151 $ 15,789 Due from affiliates—Consolidated Funds $ 14,151 $ 15,789 Due to affiliates: Management fee received in advance and rebates payable to non-consolidated funds $ 9,585 $ 8,701 Tax receivable agreement liability 191,299 118,466 Undistributed carried interest and incentive fees 33,374 121,332 Payments made by non-consolidated funds on behalf of and payable by the Company 5,996 4,299 Due to affiliates—Company $ 240,254 $ 252,798 Amounts due to portfolio companies and non-consolidated funds $ 3,554 $ 4,037 Due to affiliates—Consolidated Funds $ 3,554 $ 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. Certain expenses initially paid by the Company, primarily professional services, F-37 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) travel and other costs associated with particular portfolio company holdings, are subject to reimbursement by the portfolio companies. 10. INCOME TAXES 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 consolidated financial statements. 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 no longer subject to income tax audits by taxing authorities for any years prior to 2020. 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 consolidated financial statements. The provision for income taxes attributable to the Company and the Consolidated Funds, consisted of the following: Year ended December 31, Provision for Income Taxes 2023 2022 2021 The Company Current: U.S. federal income tax expense $ 34,051 $ 42,452 $ 40,861 State and local income tax expense 13,316 7,614 12,121 Foreign income tax expense 24,029 14,119 11,684 71,396 64,185 64,666 Deferred: U.S. federal income tax expense 85,610 10,660 68,201 State and local income tax expense 15,872 2,131 13,040 Foreign income tax expense (benefit) ( 3,730 ) ( 5,416 ) 1,390 97,752 7,375 82,631 Total: U.S. federal income tax expense 119,661 53,112 109,062 State and local income tax expense 29,188 9,745 25,161 Foreign income tax expense 20,299 8,703 13,074 Income tax expense 169,148 71,560 147,297 Consolidated Funds Current: Foreign income tax expense 3,823 331 88 Income tax expense 3,823 331 88 Total Provision for Income Taxes Total current income tax expense 75,219 64,516 64,754 Total deferred income tax expense 97,752 7,375 82,631 Income tax expense $ 172,971 $ 71,891 $ 147,385 F-38 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) The effective income tax rate differed from the federal statutory rate for the following reasons: Year ended December 31, 2023 2022 2021 Income tax expense at federal statutory rate 21.0 % 21.0 % 21.0 % Income passed through to non-controlling interests ( 9.6 ) ( 8.9 ) ( 9.2 ) State and local taxes, net of federal benefit 1.7 2.2 1.9 Foreign taxes ( 0.7 ) ( 1.4 ) ( 0.1 ) Permanent items 0.2 0.6 ( 0.3 ) Disallowed executive compensation 0.2 0.1 0.7 Other, net 0.3 0.3 ( 0.2 ) Valuation allowance ( 0.1 ) 0.2 — Total effective rate 13.0 % 14.1 % 13.8 % Deferred Taxes The income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities were as follows as of December 31, 2023 and 2022. Deferred tax assets, net are included within other assets within the Consolidated Statements of Financial Condition. As of December 31, Deferred Tax Assets and Liabilities of the Company 2023 2022 Deferred tax assets Amortizable tax basis for AOG Unit exchanges $ 205,627 $ 124,217 Net operating losses and capital loss carryforwards 1,829 2,192 Other, net 6,511 6,089 Total gross deferred tax assets 213,967 132,498 Valuation allowance ( 942 ) ( 2,155 ) Total net deferred tax assets 213,025 130,343 Deferred tax liabilities Investment in partnerships ( 191,476 ) ( 61,410 ) Total deferred tax liabilities ( 191,476 ) ( 61,410 ) Deferred tax assets, net $ 21,549 $ 68,933 As of December 31, Deferred Tax Assets and Liabilities of the Consolidated Funds 2023 2022 Deferred tax assets Other, net $ 2,598 $ — Total gross deferred tax assets 2,598 — Valuation allowance ( 2,598 ) — Total deferred tax assets, net $ — $ — In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized. In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located. Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The Company’s income tax provision includes corporate income taxes and other entity level income taxes, as well as income taxes incurred by Consolidated Funds. As of December 31, 2023 and 2022, the valuation allowance for the Company’s deferred tax assets was $ 0.9 million and $ 2.2 million, respectively. The deferred tax assets related to operating losses in foreign jurisdictions and certain capital loss F-39 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) carryforwards do not meet the more likely than not threshold and have a valuation allowance recorded for the net balance. As of December 31, 2023, the Company had $ 10.6 million of net operating loss (“NOL”) carryforwards and other tax attributes related to its Consolidated Funds available to reduce future income taxes for which a full valuation allowance has been provided. The NOLs generally have no expiry. As of, and for the years ended December 31, 2023, 2022 and 2021, the Company had no significant uncertain tax positions. 11. 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 years ended December 31, 2023 and 2021, the treasury stock method was the more dilutive method. For the year ended December 31, 2022, the two-class method was the more dilutive method. The computation of diluted earnings per share excludes the following restricted units and AOG Units as their effect would have been anti-dilutive: Year ended December 31, 2023 2022 2021 Restricted units 2,071 — 132 AOG Units 118,804,252 — 116,226,798 The following table presents the computation of basic and diluted earnings per common share: Year ended December 31, 2023 2022 2021 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 $ 474,326 $ 167,541 $ 386,748 Dividends declared and paid on Class A and non-voting common stock ( 571,923 ) ( 429,104 ) ( 309,835 ) Distributions on unvested restricted units ( 21,303 ) ( 14,096 ) ( 10,986 ) Undistributed earnings allocable to participating unvested restricted units — — ( 7,138 ) Undistributed net income (dividends in excess of earnings) available to Class A and non-voting common stockholders $ ( 118,900 ) $ ( 275,659 ) $ 58,789 Basic weighted-average shares of Class A and non-voting common stock 184,523,524 175,510,798 163,703,626 Undistributed basic earnings (dividends in excess of earnings) per share of Class A and non-voting common stock $ ( 0.64 ) $ ( 1.57 ) $ 0.36 Dividend declared and paid per Class A and non-voting common stock 3.08 2.44 1.88 Basic earnings per share of Class A and non-voting common stock $ 2.44 $ 0.87 $ 2.24 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 $ 474,326 $ 167,541 $ 386,748 Distributions on unvested restricted units — ( 14,096 ) — Net income available to Class A and non-voting common stockholders $ 474,326 $ 153,445 $ 386,748 Effect of dilutive shares: Restricted units 9,347,318 — 11,209,144 Options 1,902,584 — 5,199,501 Diluted weighted-average shares of Class A and non-voting common stock 195,773,426 175,510,798 180,112,271 Diluted earnings per share of Class A and non-voting common stock $ 2.42 $ 0.87 $ 2.15 F-40 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 12. EQUITY COMPENSATION Equity Incentive Plan In April 2023, the Company’s board of directors approved the Equity Incentive Plan to replace the Third Amended and Restated 2014 Equity Incentive Plan (“2014 Equity Incentive Plan”). The Equity Incentive Plan was approved by stockholders on June 12, 2023, and as of that date, the number of shares available for issuance under the Equity Incentive Plan was 69,122,318 and may reset on January 1 of each year, based on a formula set forth in the Equity Incentive Plan. As of December 31, 2023, 69,150,100 shares remained available for issuance under the Equity Incentive Plan. 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: Year ended December 31, 2023 2022 2021 Restricted units $ 255,965 $ 200,391 $ 170,980 Restricted units with a market condition — — 66,211 Equity-based compensation expense $ 255,965 $ 200,391 $ 237,191 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 year ended December 31, 2023, 3.8 million restricted units vested and 2.2 million shares of Class A common stock were delivered to the holders. For the year ended December 31, 2022, 5.5 million restricted units vested and 3.1 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”). When units are forfeited, the cumulative amount of Dividend Equivalents previously paid is reclassified to compensation and benefits expense within the Consolidated Statements of Operations. The following table summarizes the Company’s dividends declared and Dividend Equivalents paid during the year ended December 31, 2023: Record Date Dividends Per Share Dividend Equivalents Paid March 17, 2023 $ 0.77 $ 12,032 June 16, 2023 0.77 11,874 September 15, 2023 0.77 11,704 December 15, 2023 0.77 11,596 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 F-41 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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. The following table presents unvested restricted units’ activity: Restricted Units Weighted Average Grant Date Fair Value Per Unit Balance as of December 31, 2022 16,662,999 $ 48.76 Granted 4,780,786 78.97 Vested ( 3,826,544 ) 38.46 Forfeited ( 257,412 ) 58.75 Balance as of December 31, 2023 17,359,829 $ 59.20 The total compensation expense expected to be recognized in all future periods associated with the restricted units is approximately $ 650.9 million as of December 31, 2023 and is expected to be recognized over the remaining weighted average period of 3.4 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 , all of which expire in May 2024. A summary of options activity during the year ended December 31, 2023 is presented below: Options Weighted Average Exercise Price Weighted Average Remaining Life (in years) Aggregate Intrinsic Value Balance as of December 31, 2022 5,170,219 $ 19.00 1.3 $ 255,616 Exercised ( 5,090,695 ) 19.00 — — Expired — — — — Forfeited — — — — Balance as of December 31, 2023 79,524 $ 19.00 0.3 $ 7,946 Exercisable as of December 31, 2023 79,524 $ 19.00 0.3 $ 7,946 Net cash proceeds from exercises of stock options were $ 86.0 million for the year ended December 31, 2023. The Company realized tax benefits of approximately $ 53.9 million from those exercises. Aggregate intrinsic value represents the value of the Company’s closing share price of Class A common stock on the last trading day of the period in excess of the weighted-average exercise price multiplied by the number of options exercisable or expected to vest. 13. 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. Except as otherwise expressly provided in the Company’s Certificate of Incorporation (the “Certificate of Incorporation”), the Company’s common stockholders are entitled to vote on all matters on which stockholders of a corporation are generally entitled to vote under the Delaware General Corporation Law (the “DGCL”), including the election of the Company’s board of directors. Holders of shares of the Company’s Class A common stock are entitled to one vote per share of F-42 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) the Company’s Class A common stock. On any date on which the Ares Ownership Condition (as defined in the Certificate of Incorporation) is satisfied, holders of shares of the Company’s Class B common stock are, in the aggregate, entitled to a number of votes equal to (x) four times the aggregate number of votes attributable to the Company’s Class A common stock minus (y) the aggregate number of votes attributable to the Company’s Class C common stock. On any date on which the Ares Ownership Condition is not satisfied, holders of shares of the Company’s Class B common stock are not entitled to vote on any matter submitted to a vote of the Company’s stockholders. The holder of shares of the Company’s Class C common stock is generally entitled to a number of votes equal to the number of AOG Units (as defined in the Certificate of Incorporation) held of record by each Ares Operating Group Limited Partner (as defined in the Certificate of Incorporation) other than the Company and its subsidiaries. The Company has a stock repurchase program that allows for the repurchase of up to $ 150.0 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 renewal of the program is subject to authorization by the Company’s board of directors on an annual basis. As of December 31, 2023, the program was scheduled to expire in March 2024, and the renewal was subsequently authorized by the Company’s board of directors and will expire in March 2025. Repurchases under the program, if any, will depend on the prevailing market conditions and other factors. During the years ended December 31, 2023, 2022 and 2021, the Company did not repurchase any shares as part of the stock repurchase program. 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 as of December 31, 2022 173,892,036 3,489,911 1,000 117,231,288 294,614,235 Issuance of stock 2,591,432 — — — 2,591,432 Issuance of AOG Units (1) — — — 3,473,026 3,473,026 Exchanges of AOG Units 3,679,556 — — ( 3,679,556 ) — Stock option exercises, net of shares withheld for tax 4,742,044 — — — 4,742,044 Vesting of restricted stock awards, net of shares withheld for tax 2,164,839 — — — 2,164,839 Balance as of December 31, 2023 187,069,907 3,489,911 1,000 117,024,758 307,585,576 (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 AOG entities, as well as its daily average ownership of AOG Units in each of the AOG entities: Daily Average Ownership As of December 31, 2023 As of December 31, 2022 Year ended December 31, AOG Units Direct Ownership Interest AOG Units Direct Ownership Interest 2023 2022 2021 Ares Management Corporation 190,559,818 61.95 % 177,381,947 60.21 % 60.83 % 59.76 % 58.48 % Ares Owners Holdings, L.P. 117,024,758 38.05 117,231,288 39.79 39.17 40.24 41.52 Total 307,584,576 100.00 % 294,613,235 100.00 % The Company’s ownership percentage of the AOG Units will continue to change upon: (i) the vesting of restricted units and exercise of options that were granted under the Equity Incentive Plan; (ii) the exchange of AOG Units for shares of Class A common stock; (iii) the cancellation of AOG Units in connection with certain individuals’ forfeiture of AOG Units upon termination of employment; and (iv) the issuance of new AOG Units, including in connection with acquisitions, among other strategic reasons. Holders of the AOG Units, subject to any applicable transfer restrictions, may up to four times each year (subject to the terms of the exchange agreement) exchange their AOG Units for shares of Class A common stock on a one-for-one basis. Equity is reallocated among partners upon a change in ownership to ensure each partners’ capital account properly reflects their respective claim on the residual value of the Company. This change is reflected as either a reallocation of interest or as dilution within the Consolidated Statements of Changes in Equity. F-43 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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” and subsequently rebranded as “Ares 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. 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 Consolidated Statements of Financial Condition. During the year ended December 31, 2023, the shareholders of Ares Acquisition Corporation (formerly NYSE: AAC) (“AAC I”) elected to redeem the remaining amount of AAC I’s trust account following the extensions of the period to complete a business combination and the subsequent determination that it would not complete a business combination. On April 25, 2023, Ares Acquisition Corporation II (NYSE: AACT) (“AAC II”), the Company’s second sponsored SPAC, consummated its initial public offering and generated gross proceeds of $ 500.0 million. As of December 31, 2023, the 50,000,000 AAC II Class A ordinary shares are presented at the redemption amount within mezzanine equity within the Consolidated Statements of Financial Condition. F-44 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) The following table summarizes the activities associated with the redeemable interest in AOG entities: Total Balance as of December 31, 2020 $ 100,366 Distributions ( 2,390 ) Net loss ( 1,341 ) Currency translation adjustment, net of tax ( 627 ) Balance as of December 31, 2021 96,008 Distributions ( 1,887 ) Net loss ( 851 ) Currency translation adjustment, net of tax ( 426 ) Equity compensation 285 Balance as of December 31, 2022 93,129 Changes in ownership interests and related tax benefits ( 66,507 ) Distributions ( 2,883 ) Net income 226 Currency translation adjustment, net of tax ( 41 ) Equity compensation 174 Balance as of December 31, 2023 $ 24,098 The following table summarizes the activities associated with the redeemable interest in Consolidated Funds: Total Balance as of December 31, 2021 $ 1,000,000 Change in redemption value 13,282 Balance as of December 31, 2022 1,013,282 Gross proceeds from the initial public offering of AAC II 500,000 Change in redemption value 55,530 Redemptions from Class A ordinary shares of AAC I ( 1,045,874 ) Balance as of December 31, 2023 $ 522,938 14. 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 APAC credit. APAC 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 APAC credit to the Credit Group to better align the segment presentation with the global asset classes and investment strategies. Separately, the Private Equity Group includes APAC private equity following the Crescent Point Acquisition. 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, direct lending and APAC credit. Private Equity Group: The Private Equity Group broadly categorizes its investment strategies as corporate private equity, special opportunities and APAC private equity. Real Assets Group: The Real Assets Group manages comprehensive equity and debt strategies across real estate and infrastructure investments. 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. F-45 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 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) the SPACs sponsored by the Company, 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 either equal to the costs of services provided or as a percentage of invested capital. 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. In February 2024, the Company announced that the special opportunities strategy, historically reported as a component of the Private Equity Group, will be integrated into the Credit Group to align management of this strategy and will form the foundation for a new opportunistic credit strategy. For segment reporting purposes, the change will require the reclassification of the special opportunities strategy from the Private Equity Group to the Credit Group and will be presented in the Company’s consolidated financial statements beginning in 2024. Segment Profit Measures: These measures supplement and should be considered in addition to, and not in lieu of, the 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 our funds and adjusts for 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 eligible to be 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 adjusts for 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. Placement fee adjustment represents the net portion of either expense deferral or amortization of upfront fees to placement agents that is presented 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 in advance in accordance with GAAP. For periods in which the amortization of upfront 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. F-46 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Many of the Ares Funds managed by the Company have mandates that allow for investing across different geographic regions, including North America, Europe, Asia-Pacific and the Middle East. The primary geographic region in which the Company invests in is North America and the majority of its revenues are generated in North America. F-47 Table of Contents Ares Management Corporation Notes to the 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: Year ended December 31, 2023 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Segments OMG Total Management fees $ 1,749,796 $ 230,251 $ 389,437 $ 174,942 $ 27,087 $ 2,571,513 $ — $ 2,571,513 Fee related performance revenues 167,333 — 334 12,782 — 180,449 — 180,449 Other fees 35,257 3,076 29,695 22 374 68,424 23,685 92,109 Compensation and benefits ( 598,125 ) ( 85,024 ) ( 153,870 ) ( 62,160 ) ( 15,812 ) ( 914,991 ) ( 361,124 ) ( 1,276,115 ) General, administrative and other expenses ( 96,733 ) ( 35,762 ) ( 46,789 ) ( 21,199 ) ( 3,119 ) ( 203,602 ) ( 200,613 ) ( 404,215 ) Fee related earnings 1,257,528 112,541 218,807 104,387 8,530 1,701,793 ( 538,052 ) 1,163,741 Performance income—realized 271,550 117,899 20,990 5,460 — 415,899 — 415,899 Performance related compensation—realized ( 175,193 ) ( 89,767 ) ( 12,768 ) ( 4,678 ) — ( 282,406 ) — ( 282,406 ) Realized net performance income 96,357 28,132 8,222 782 — 133,493 — 133,493 Investment income (loss)—realized 20,111 ( 1,434 ) ( 4,498 ) — 170 14,349 — 14,349 Interest and other investment income—realized 21,975 4,952 11,055 4,867 16,623 59,472 748 60,220 Interest expense ( 27,300 ) ( 21,422 ) ( 16,391 ) ( 8,980 ) ( 32,026 ) ( 106,119 ) ( 156 ) ( 106,275 ) Realized net investment income (loss) 14,786 ( 17,904 ) ( 9,834 ) ( 4,113 ) ( 15,233 ) ( 32,298 ) 592 ( 31,706 ) Realized income $ 1,368,671 $ 122,769 $ 217,195 $ 101,056 $ ( 6,703 ) $ 1,802,988 $ ( 537,460 ) $ 1,265,528 Year ended December 31, 2022 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Segments OMG Total Management fees $ 1,416,518 $ 199,837 $ 347,808 $ 176,694 $ 11,671 $ 2,152,528 $ — $ 2,152,528 Fee related performance revenues 71,497 — 167,693 235 — 239,425 — 239,425 Other fees 31,992 1,888 35,879 — 274 70,033 24,529 94,562 Compensation and benefits ( 462,681 ) ( 86,561 ) ( 240,015 ) ( 53,743 ) ( 12,108 ) ( 855,108 ) ( 317,396 ) ( 1,172,504 ) General, administrative and other expenses ( 79,434 ) ( 30,697 ) ( 39,739 ) ( 12,685 ) ( 2,089 ) ( 164,644 ) ( 155,017 ) ( 319,661 ) Fee related earnings 977,892 84,467 271,626 110,501 ( 2,252 ) 1,442,234 ( 447,884 ) 994,350 Performance income—realized 156,929 123,806 133,130 4,156 — 418,021 — 418,021 Performance related compensation—realized ( 97,621 ) ( 90,300 ) ( 83,105 ) ( 3,515 ) — ( 274,541 ) — ( 274,541 ) Realized net performance income 59,308 33,506 50,025 641 — 143,480 — 143,480 Investment income (loss)—realized 7,078 3,432 3,115 — 861 14,486 ( 37 ) 14,449 Interest and other investment income (expense)—realized 27,288 2,546 9,045 3,683 9,130 51,692 ( 1,588 ) 50,104 Interest expense ( 15,932 ) ( 15,953 ) ( 11,346 ) ( 5,660 ) ( 21,781 ) ( 70,672 ) ( 684 ) ( 71,356 ) Realized net investment income (loss) 18,434 ( 9,975 ) 814 ( 1,977 ) ( 11,790 ) ( 4,494 ) ( 2,309 ) ( 6,803 ) Realized income $ 1,055,634 $ 107,998 $ 322,465 $ 109,165 $ ( 14,042 ) $ 1,581,220 $ ( 450,193 ) $ 1,131,027 F-48 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2021 Credit Group Private Equity Group Real Assets Group Secondaries Group Other Total Segments OMG Total Management fees $ 1,128,887 $ 181,918 $ 218,202 $ 97,945 $ 8,325 $ 1,635,277 $ — $ 1,635,277 Fee related performance revenues 86,480 — 51,399 — — 137,879 — 137,879 Other fees 27,152 1,070 13,038 — 33 41,293 8,478 49,771 Compensation and benefits ( 429,150 ) ( 78,156 ) ( 127,679 ) ( 25,215 ) ( 7,917 ) ( 668,117 ) ( 226,725 ) ( 894,842 ) General, administrative and other expenses ( 61,712 ) ( 21,625 ) ( 24,181 ) ( 6,862 ) ( 752 ) ( 115,132 ) ( 100,645 ) ( 215,777 ) Fee related earnings 751,657 83,207 130,779 65,868 ( 311 ) 1,031,200 ( 318,892 ) 712,308 Performance income—realized 207,450 171,637 95,270 70 — 474,427 — 474,427 Performance related compensation—realized ( 131,902 ) ( 137,576 ) ( 59,056 ) ( 49 ) — ( 328,583 ) — ( 328,583 ) Realized net performance income 75,548 34,061 36,214 21 — 145,844 — 145,844 Investment income (loss)—realized 1,985 ( 3,754 ) 17,700 19 17 15,967 — 15,967 Interest and other investment income—realized 20,728 11,514 7,252 2,261 3,597 45,352 226 45,578 Interest expense ( 8,098 ) ( 7,925 ) ( 6,394 ) ( 836 ) ( 12,971 ) ( 36,224 ) ( 536 ) ( 36,760 ) Realized net investment income (loss) 14,615 ( 165 ) 18,558 1,444 ( 9,357 ) 25,095 ( 310 ) 24,785 Realized income $ 841,820 $ 117,103 $ 185,551 $ 67,333 $ ( 9,668 ) $ 1,202,139 $ ( 319,202 ) $ 882,937 The following table presents the components of the Company’s operating segments’ revenue, expenses and realized net investment income: Year ended December 31, 2023 2022 2021 Segment revenues Management fees $ 2,571,513 $ 2,152,528 $ 1,635,277 Fee related performance revenues 180,449 239,425 137,879 Other fees 68,424 70,033 41,293 Performance income—realized 415,899 418,021 474,427 Total segment revenues $ 3,236,285 $ 2,880,007 $ 2,288,876 Segment expenses Compensation and benefits $ 914,991 $ 855,108 $ 668,117 General, administrative and other expenses 203,602 164,644 115,132 Performance related compensation—realized 282,406 274,541 328,583 Total segment expenses $ 1,400,999 $ 1,294,293 $ 1,111,832 Segment realized net investment income (expense) Investment income—realized $ 14,349 $ 14,486 $ 15,967 Interest and other investment income —realized 59,472 51,692 45,352 Interest expense ( 106,119 ) ( 70,672 ) ( 36,224 ) Total segment realized net investment income (expense) $ ( 32,298 ) $ ( 4,494 ) $ 25,095 F-49 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) The following table reconciles the Company’s consolidated revenues to segment revenue: Year ended December 31, 2023 2022 2021 Total consolidated revenue $ 3,631,884 $ 3,055,443 $ 4,212,091 Performance income—unrealized ( 305,370 ) ( 107,153 ) ( 1,744,056 ) Management fees of Consolidated Funds eliminated in consolidation 48,201 46,324 44,896 Performance income of Consolidated Funds eliminated in consolidation 13,672 11,529 5,458 Administrative, transaction and other fees of Consolidated Funds eliminated in consolidation 7,166 17,013 4,483 Administrative fees (1) ( 63,144 ) ( 69,414 ) ( 49,223 ) OMG revenue ( 23,685 ) ( 24,354 ) ( 8,478 ) Acquisition-related incentive fees (2) — — ( 47,873 ) Principal investment income, net of eliminations ( 36,516 ) ( 12,278 ) ( 99,433 ) Net revenue of non-controlling interests in consolidated subsidiaries ( 35,923 ) ( 37,103 ) ( 28,989 ) Total consolidation adjustments and reconciling items ( 395,599 ) ( 175,436 ) ( 1,923,215 ) Total segment revenue $ 3,236,285 $ 2,880,007 $ 2,288,876 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Represents a component of the purchase price from incentive fees associated with one-time contingent consideration recorded in connection with the Black Creek Acquisition. 100 % of the fees recognized in 2021 is presented within incentive fees in the Company’s Consolidated Statements of Operations of which 50 % is included on an unconsolidated basis. The following table reconciles the Company’s consolidated expenses to segment expenses: Year ended December 31, 2023 2022 2021 Total consolidated expenses $ 2,797,858 $ 2,749,085 $ 3,410,083 Performance related compensation-unrealized ( 206,923 ) ( 88,502 ) ( 1,316,205 ) Expenses of Consolidated Funds added in consolidation ( 93,167 ) ( 86,988 ) ( 113,024 ) Expenses of Consolidated Funds eliminated in consolidation 50,108 50,833 50,538 Administrative fees (1) ( 62,773 ) ( 68,255 ) ( 49,223 ) OMG expenses ( 561,737 ) ( 472,413 ) ( 327,370 ) Acquisition and merger-related expense ( 12,000 ) ( 15,197 ) ( 21,162 ) Equity compensation expense ( 255,790 ) ( 200,106 ) ( 237,191 ) Acquisition-related compensation expense (2) ( 7,334 ) ( 206,252 ) ( 66,893 ) Placement fee adjustment 5,819 ( 2,088 ) ( 78,883 ) Depreciation and amortization expense ( 233,185 ) ( 335,083 ) ( 106,705 ) Expense of non-controlling interests in consolidated subsidiaries ( 19,877 ) ( 30,741 ) ( 32,133 ) Total consolidation adjustments and reconciling items ( 1,396,859 ) ( 1,454,792 ) ( 2,298,251 ) Total segment expenses $ 1,400,999 $ 1,294,293 $ 1,111,832 (1) Represents administrative fees from expense reimbursements that are presented within administrative, transaction and other fees within the Company’s Consolidated Statements of Operations and are netted against the respective expenses for segment reporting. (2) Represents contingent obligations (“earnouts”) resulting from the Landmark Acquisition, the Black Creek Acquisition, the Infrastructure Debt Acquisition and the Crescent Point Acquisition that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Consolidated Statements of Operations. F-50 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) The following table reconciles the Company’s consolidated other income to segment realized net investment income: Year ended December 31, 2023 2022 2021 Total consolidated other income $ 499,037 $ 204,448 $ 263,682 Investment (income) loss—unrealized ( 184,929 ) 12,769 ( 58,694 ) Interest and other investment (income) loss—unrealized 6,448 ( 25,603 ) 6,249 Other income, net from Consolidated Funds added in consolidation ( 492,848 ) ( 250,144 ) ( 256,375 ) Other expense, net from Consolidated Funds eliminated in consolidation ( 16,485 ) ( 16,484 ) ( 2,868 ) OMG other (income) expense 1,074 14,419 ( 1,368 ) Principal investment income 155,632 48,223 120,896 Other (income) expense, net 976 1,873 ( 19,886 ) Other (income) loss of non-controlling interests in consolidated subsidiaries ( 1,203 ) 6,005 ( 26,541 ) Total consolidation adjustments and reconciling items ( 531,335 ) ( 208,942 ) ( 238,587 ) Total segment realized net investment income (expense) $ ( 32,298 ) $ ( 4,494 ) $ 25,095 The following table presents the reconciliation of income before taxes as reported in the Consolidated Statements of Operations to segment results of RI and FRE: Year ended December 31, 2023 2022 2021 Income before taxes $ 1,333,063 $ 510,806 $ 1,065,690 Adjustments: Depreciation and amortization expense 233,185 335,083 106,705 Equity compensation expense 255,419 198,948 237,191 Acquisition-related compensation expense (1) 7,334 206,252 66,893 Acquisition-related incentive fees (2) — — ( 47,873 ) Acquisition and merger-related expense 12,000 15,197 21,162 Placement fee adjustment ( 5,819 ) 2,088 78,883 OMG expense, net 539,126 462,478 317,524 Other (income) expense, net 976 1,874 ( 19,886 ) Income before taxes of non-controlling interests in consolidated subsidiaries ( 17,249 ) ( 357 ) ( 23,397 ) Income before taxes of non-controlling interests in Consolidated Funds, net of eliminations ( 278,119 ) ( 119,664 ) ( 120,457 ) Total performance income—unrealized ( 305,370 ) ( 107,153 ) ( 1,744,056 ) Total performance related compensation—unrealized 206,923 88,502 1,316,205 Total investment income—unrealized ( 178,481 ) ( 12,834 ) ( 52,445 ) Realized income 1,802,988 1,581,220 1,202,139 Total performance income—realized ( 415,899 ) ( 418,021 ) ( 474,427 ) Total performance related compensation—realized 282,406 274,541 328,583 Total investment (income) loss—realized 32,298 4,494 ( 25,095 ) Fee related earnings $ 1,701,793 $ 1,442,234 $ 1,031,200 (1) Represents earnouts resulting from the Landmark Acquisition, the Black Creek Acquisition, the Infrastructure Debt Acquisition and the Crescent Point Acquisition that are recorded as compensation expense and are presented within compensation and benefits within the Company’s Consolidated Statements of Operations. (2) Represents a component of the purchase price from incentive fees associated with one-time contingent consideration recorded in connection with the Black Creek Acquisition. 100 % of the fees recognized in 2021 is presented within incentive fees within the Company’s Consolidated Statements of Operations of which 50 % is included on an unconsolidated basis for segment reporting purposes. F-51 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 15. CONSOLIDATION Deconsolidated Funds Certain funds that have historically been consolidated in the financial statements that are no longer consolidated because, as of the reporting period: (i) such funds have been liquidated or dissolved; or (ii) the Company is no longer deemed to be the primary beneficiary of the VIEs as it no longer has a significant economic interest. During the year ended December 31, 2023, the Company deconsolidated one SPAC as a result of liquidation and one private fund as a result of a significant change in ownership. During the year ended December 31, 2022, the Company did not deconsolidate any entity. During the year ended December 31, 2021, the Company deconsolidated one CLO as a result of a significant change in ownership. 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 its direct investments in 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 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 Consolidated Statements of Operations, are as follows: As of December 31, 2023 2022 Maximum exposure to loss attributable to the Company’s investment in non-consolidated VIEs (1) $ 503,376 $ 393,549 Maximum exposure to loss attributable to the Company’s investment in consolidated VIEs (1) 910,600 537,239 Assets of consolidated VIEs 15,484,962 13,128,088 Liabilities of consolidated VIEs 13,409,257 11,593,867 (1) As of December 31, 2023 and 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 $ 83.1 million and $ 82.0 million, respectively. Year ended December 31, 2023 2022 2021 Net income attributable to non-controlling interests related to consolidated VIEs $ 204,571 $ 105,797 $ 115,217 F-52 Table of Contents Ares Management Corporation Notes to the 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 December 31, 2023 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Assets Cash and cash equivalents $ 348,274 $ — $ — $ 348,274 Investments (includes $ 3,413,007 of accrued carried interest) 5,546,209 — ( 921,277 ) 4,624,932 Due from affiliates 1,068,089 — ( 171,343 ) 896,746 Other assets 429,979 — — 429,979 Right-of-use operating lease assets 249,326 — — 249,326 Intangible assets, net 1,058,495 — — 1,058,495 Goodwill 1,123,976 — — 1,123,976 Assets of Consolidated Funds Cash and cash equivalents — 1,149,511 — 1,149,511 Investments held in trust account — 523,038 — 523,038 Investments, at fair value — 14,078,549 — 14,078,549 Due from affiliates — 25,794 ( 11,643 ) 14,151 Receivable for securities sold — 146,851 — 146,851 Other assets — 86,672 — 86,672 Total assets $ 9,824,348 $ 16,010,415 $ ( 1,104,263 ) $ 24,730,500 Liabilities Accounts payable, accrued expenses and other liabilities $ 245,526 $ — $ ( 11,642 ) $ 233,884 Accrued compensation 287,259 — — 287,259 Due to affiliates 240,254 — — 240,254 Performance related compensation payable 2,514,610 — — 2,514,610 Debt obligations 2,965,480 — — 2,965,480 Operating lease liabilities 319,572 — — 319,572 Liabilities of Consolidated Funds Accounts payable, accrued expenses and other liabilities — 189,523 — 189,523 Due to affiliates — 174,897 ( 171,343 ) 3,554 Payable for securities purchased — 484,117 — 484,117 CLO loan obligations, at fair value — 12,458,266 ( 112,609 ) 12,345,657 Fund borrowings — 125,241 — 125,241 Total liabilities 6,572,701 13,432,044 ( 295,594 ) 19,709,151 Commitments and contingencies Redeemable interest in Consolidated Funds — 522,938 — 522,938 Redeemable interest in Ares Operating Group entities 24,098 — — 24,098 Non-controlling interest in Consolidated Funds — 2,055,433 ( 796,988 ) 1,258,445 Non-controlling interest in Ares Operating Group entities 1,326,913 — ( 4,444 ) 1,322,469 Stockholders’ Equity Class A common stock, $ 0.01 par value, 1,500,000,000 shares authorized ( 187,069,907 shares issued and outstanding) 1,871 — — 1,871 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 ( 117,024,758 shares issued and outstanding) 1,170 — — 1,170 Additional paid-in-capital 2,398,273 — ( 7,237 ) 2,391,036 Accumulated deficit ( 495,083 ) — — ( 495,083 ) Accumulated other comprehensive loss, net of tax ( 5,630 ) — — ( 5,630 ) Total stockholders’ equity 1,900,636 — ( 7,237 ) 1,893,399 Total equity 3,227,549 2,055,433 ( 808,669 ) 4,474,313 Total liabilities, redeemable interest, non-controlling interests and equity $ 9,824,348 $ 16,010,415 $ ( 1,104,263 ) $ 24,730,500 F-53 Table of Contents Ares Management Corporation Notes to the 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 F-54 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2023 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Revenues Management fees $ 2,599,351 $ — $ ( 48,201 ) $ 2,551,150 Carried interest allocation 631,150 — ( 12,571 ) 618,579 Incentive fees 277,728 — ( 1,101 ) 276,627 Principal investment income 155,632 — ( 119,116 ) 36,516 Administrative, transaction and other fees 156,178 — ( 7,166 ) 149,012 Total revenues 3,820,039 — ( 188,155 ) 3,631,884 Expenses Compensation and benefits 1,486,698 — — 1,486,698 Performance related compensation 607,522 — — 607,522 General, administrative and other expense 660,579 — ( 433 ) 660,146 Expenses of the Consolidated Funds — 93,167 ( 49,675 ) 43,492 Total expenses 2,754,799 93,167 ( 50,108 ) 2,797,858 Other income (expense) Net realized and unrealized gains on investments 76,415 — 1,158 77,573 Interest and dividend income 29,850 — ( 10,574 ) 19,276 Interest expense ( 106,276 ) — — ( 106,276 ) Other income (expense), net ( 10,285 ) — 15,104 4,819 Net realized and unrealized gains on investments of the Consolidated Funds — 239,802 22,898 262,700 Interest and other income of the Consolidated Funds — 1,010,649 ( 15,104 ) 995,545 Interest expense of the Consolidated Funds — ( 757,603 ) 3,003 ( 754,600 ) Total other income (expense), net ( 10,296 ) 492,848 16,485 499,037 Income before taxes 1,054,944 399,681 ( 121,562 ) 1,333,063 Income tax expense 169,148 3,823 — 172,971 Net income 885,796 395,858 ( 121,562 ) 1,160,092 Less: Net income attributable to non-controlling interests in Consolidated Funds — 395,858 ( 121,562 ) 274,296 Net income attributable to Ares Operating Group entities 885,796 — — 885,796 Less: Net income attributable to redeemable interest in Ares Operating Group entities 226 — — 226 Less: Net income attributable to non-controlling interests in Ares Operating Group entities 411,244 — — 411,244 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 474,326 $ — $ — $ 474,326 F-55 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2022 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Revenues Management fees $ 2,182,757 $ — $ ( 46,324 ) $ 2,136,433 Carried interest allocation 465,561 — ( 7,549 ) 458,012 Incentive fees 305,167 — ( 3,980 ) 301,187 Principal investment income 48,222 — ( 35,943 ) 12,279 Administrative, transaction and other fees 164,545 — ( 17,013 ) 147,532 Total revenues 3,166,252 — ( 110,809 ) 3,055,443 Expenses Compensation and benefits 1,498,590 — — 1,498,590 Performance related compensation 518,829 — — 518,829 General, administrative and other expense 695,511 — ( 255 ) 695,256 Expenses of the Consolidated Funds — 86,988 ( 50,578 ) 36,410 Total expenses 2,712,930 86,988 ( 50,833 ) 2,749,085 Other income (expense) Net realized and unrealized gains (losses) on investments ( 27,924 ) — 32,656 4,732 Interest and dividend income 25,196 — ( 15,797 ) 9,399 Interest expense ( 71,356 ) — — ( 71,356 ) Other income, net 11,904 — 1,215 13,119 Net realized and unrealized gains on investments of the Consolidated Funds — 87,287 ( 13,901 ) 73,386 Interest and other income of the Consolidated Funds — 587,744 ( 1,215 ) 586,529 Interest expense of the Consolidated Funds — ( 424,887 ) 13,526 ( 411,361 ) Total other income (expense), net ( 62,180 ) 250,144 16,484 204,448 Income before taxes 391,142 163,156 ( 43,492 ) 510,806 Income tax expense 71,560 331 — 71,891 Net income 319,582 162,825 ( 43,492 ) 438,915 Less: Net income attributable to non-controlling interests in Consolidated Funds — 162,825 ( 43,492 ) 119,333 Net income attributable to Ares Operating Group entities 319,582 — — 319,582 Less: Net loss attributable to redeemable interest in Ares Operating Group entities ( 851 ) — — ( 851 ) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 152,892 — — 152,892 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 167,541 $ — $ — $ 167,541 F-56 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2021 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Revenues Management fees $ 1,655,943 $ — $ ( 44,896 ) $ 1,611,047 Carried interest allocation 2,073,551 — — 2,073,551 Incentive fees 338,334 — ( 5,458 ) 332,876 Principal investment income 120,896 — ( 21,463 ) 99,433 Administrative, transaction and other fees 99,667 — ( 4,483 ) 95,184 Total revenues 4,288,391 — ( 76,300 ) 4,212,091 Expenses Compensation and benefits 1,162,633 — — 1,162,633 Performance related compensation 1,740,786 — — 1,740,786 General, administrative and other expense 444,178 — — 444,178 Expenses of the Consolidated Funds — 113,024 ( 50,538 ) 62,486 Total expenses 3,347,597 113,024 ( 50,538 ) 3,410,083 Other income (expense) Net realized and unrealized gains on investments 11,920 — 7,182 19,102 Interest and dividend income 14,199 — ( 4,334 ) 9,865 Interest expense ( 36,760 ) — — ( 36,760 ) Other income, net 15,080 — ( 678 ) 14,402 Net realized and unrealized gains on investments of the Consolidated Funds — 91,390 ( 14,087 ) 77,303 Interest and other income of the Consolidated Funds — 437,140 678 437,818 Interest expense of the Consolidated Funds — ( 272,155 ) 14,107 ( 258,048 ) Total other income, net 4,439 256,375 2,868 263,682 Income before taxes 945,233 143,351 ( 22,894 ) 1,065,690 Income tax expense 147,297 88 — 147,385 Net income 797,936 143,263 ( 22,894 ) 918,305 Less: Net income attributable to non-controlling interests in Consolidated Funds — 143,263 ( 22,894 ) 120,369 Net income attributable to Ares Operating Group entities 797,936 — — 797,936 Less: Net loss attributable to redeemable interest in Ares Operating Group entities ( 1,341 ) — — ( 1,341 ) Less: Net income attributable to non-controlling interests in Ares Operating Group entities 390,440 — — 390,440 Net income attributable to Ares Management Corporation 408,837 — — 408,837 Less: Series A Preferred Stock dividends paid 10,850 — — 10,850 Less: Series A Preferred Stock redemption premium 11,239 — — 11,239 Net income attributable to Ares Management Corporation Class A and non-voting common stockholders $ 386,748 $ — $ — $ 386,748 F-57 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2023 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Cash flows from operating activities: Net income $ 885,796 $ 395,858 $ ( 121,562 ) $ 1,160,092 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 255,965 — — 255,965 Depreciation and amortization 231,712 — — 231,712 Net realized and unrealized gains on investments ( 197,874 ) — 107,137 ( 90,737 ) Other non-cash amounts 74 — — 74 Investments purchased ( 726,051 ) — 218,119 ( 507,932 ) Proceeds from sale of investments 214,938 — ( 8,775 ) 206,163 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — ( 239,802 ) ( 22,898 ) ( 262,700 ) Other non-cash amounts — ( 101,465 ) — ( 101,465 ) Investments purchased — ( 8,847,856 ) — ( 8,847,856 ) Proceeds from sale of investments — 8,149,617 — 8,149,617 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable ( 61,429 ) — 12,571 ( 48,858 ) Due to/from affiliates ( 200,704 ) — ( 19,717 ) ( 220,421 ) Other assets 21,532 — — 21,532 Accrued compensation and benefits 20,383 — — 20,383 Accounts payable, accrued expenses and other liabilities 28,765 — ( 901 ) 27,864 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — ( 424,870 ) ( 424,870 ) Net cash relinquished with consolidation/deconsolidation of Consolidated Funds — ( 623 ) — ( 623 ) Change in other assets and receivables held at Consolidated Funds — ( 53,916 ) 33,669 ( 20,247 ) Change in other liabilities and payables held at Consolidated Funds — 219,046 — 219,046 Net cash provided by (used in) operating activities 473,107 ( 479,141 ) ( 227,227 ) ( 233,261 ) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals ( 67,183 ) — — ( 67,183 ) Acquisitions, net of cash acquired ( 43,896 ) — — ( 43,896 ) Net cash used in investing activities ( 111,079 ) — — ( 111,079 ) Cash flows from financing activities: Proceeds from Credit Facility 1,410,000 — — 1,410,000 Proceeds from issuance of senior notes 499,010 — — 499,010 Repayments of Credit Facility ( 1,215,000 ) — — ( 1,215,000 ) Dividends and distributions ( 1,030,666 ) — — ( 1,030,666 ) Stock option exercises 85,959 — — 85,959 Taxes paid related to net share settlement of equity awards ( 157,007 ) — — ( 157,007 ) Other financing activities 2,943 — — 2,943 Allocable to redeemable and non-controlling interests in Consolidated Funds: Contributions from redeemable and non-controlling interests in Consolidated Funds — 1,071,575 ( 216,119 ) 855,456 Distributions to non-controlling interests in Consolidated Funds — ( 119,604 ) 18,476 ( 101,128 ) Redemptions of redeemable interests in Consolidated Funds — ( 1,045,874 ) — ( 1,045,874 ) Borrowings under loan obligations by Consolidated Funds — 1,387,297 — 1,387,297 Repayments under loan obligations by Consolidated Funds — ( 398,864 ) — ( 398,864 ) Net cash provided by (used in) financing activities ( 404,761 ) 894,530 ( 197,643 ) 292,126 Effect of exchange rate changes 1,020 9,481 — 10,501 Net change in cash and cash equivalents ( 41,713 ) 424,870 ( 424,870 ) ( 41,713 ) Cash and cash equivalents, beginning of period 389,987 724,641 ( 724,641 ) 389,987 Cash and cash equivalents, end of period $ 348,274 $ 1,149,511 $ ( 1,149,511 ) $ 348,274 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisition-related activities $ 239,545 $ — $ — $ 239,545 Issuance of AOG Units in connection with settlement of management incentive program $ 245,647 $ — $ — $ 245,647 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 98,920 $ 623,723 $ — $ 722,643 Cash paid during the period for income taxes $ 61,563 $ 444 $ — $ 62,007 F-58 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2022 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Cash flows from operating activities: Net income $ 319,582 $ 162,825 $ ( 43,492 ) $ 438,915 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 200,391 — — 200,391 Depreciation and amortization 341,341 — — 341,341 Net realized and unrealized losses on investments 15,717 — ( 4,788 ) 10,929 Investments purchased ( 443,505 ) — 72,381 ( 371,124 ) Proceeds from sale of investments 303,987 — ( 121,494 ) 182,493 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — ( 87,287 ) 13,901 ( 73,386 ) Other non-cash amounts — ( 33,822 ) — ( 33,822 ) Investments purchased — ( 9,408,078 ) ( 25,951 ) ( 9,434,029 ) Proceeds from sale of investments — 8,198,812 — 8,198,812 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable ( 28,161 ) — 7,549 ( 20,612 ) Due to/from affiliates ( 125,407 ) — 164,480 39,073 Other assets ( 101,275 ) — ( 3,930 ) ( 105,205 ) Accrued compensation and benefits 200,769 — — 200,769 Accounts payable, accrued expenses and other liabilities ( 50,471 ) — ( 1,214 ) ( 51,685 ) Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — 324,550 324,550 Change in other assets and receivables held at Consolidated Funds — 286,895 ( 135,000 ) 151,895 Change in other liabilities and payables held at Consolidated Funds — ( 733,417 ) — ( 733,417 ) Net cash provided by (used in) operating activities 632,968 ( 1,614,072 ) 246,992 ( 734,112 ) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals ( 35,796 ) — — ( 35,796 ) Acquisitions, net of cash acquired ( 301,583 ) — — ( 301,583 ) Net cash used in investing activities ( 337,379 ) — — ( 337,379 ) Cash flows from financing activities: Proceeds from Credit Facility 1,380,000 — — 1,380,000 Proceeds from issuance of senior notes 488,915 — — 488,915 Repayments of Credit Facility ( 1,095,000 ) — — ( 1,095,000 ) Dividends and distributions ( 836,364 ) — — ( 836,364 ) Stock option exercises 21,205 — — 21,205 Taxes paid related to net share settlement of equity awards ( 201,311 ) — — ( 201,311 ) Other financing activities 4,055 — — 4,055 Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 596,777 ( 47,381 ) 549,396 Distributions to non-controlling interests in Consolidated Funds — ( 303,230 ) 124,939 ( 178,291 ) Borrowings under loan obligations by Consolidated Funds — 1,140,680 — 1,140,680 Repayments under loan obligations by Consolidated Funds — ( 145,222 ) — ( 145,222 ) Net cash provided by (used in) financing activities ( 238,500 ) 1,289,005 77,558 1,128,063 Effect of exchange rate changes ( 10,757 ) 517 — ( 10,240 ) Net change in cash and cash equivalents 46,332 ( 324,550 ) 324,550 46,332 Cash and cash equivalents, beginning of period 343,655 1,049,191 ( 1,049,191 ) 343,655 Cash and cash equivalents, end of period $ 389,987 $ 724,641 $ ( 724,641 ) $ 389,987 Supplemental disclosure of non-cash financing activities: Issuance of Class A common stock in connection with acquisition-related activities $ 12,835 $ — $ — $ 12,835 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 59,463 $ 260,866 $ — $ 320,329 Cash paid during the period for income taxes $ 104,544 $ 320 $ — $ 104,864 F-59 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) Year ended December 31, 2021 Consolidated Company Entities Consolidated Funds Eliminations Consolidated Cash flows from operating activities: Net income $ 797,936 $ 143,263 $ ( 22,894 ) $ 918,305 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity compensation expense 237,191 — — 237,191 Depreciation and amortization 113,293 — — 113,293 Net realized and unrealized gains on investments ( 96,331 ) — 7,353 ( 88,978 ) Other non-cash amounts ( 31,070 ) — — ( 31,070 ) Investments purchased ( 561,762 ) — 221,563 ( 340,199 ) Proceeds from sale of investments 296,483 — ( 23,101 ) 273,382 Adjustments to reconcile net income to net cash used in operating activities allocable to non-controlling interests in Consolidated Funds: Net realized and unrealized gains on investments — ( 91,390 ) 14,087 ( 77,303 ) Other non-cash amounts — ( 35,879 ) — ( 35,879 ) Investments purchased — ( 13,075,187 ) 7,623 ( 13,067,564 ) Proceeds from sale of investments — 9,970,609 — 9,970,609 Cash flows due to changes in operating assets and liabilities: Net carried interest and incentive fees receivable ( 745,021 ) — — ( 745,021 ) Due to/from affiliates ( 187,374 ) — 6,446 ( 180,928 ) Other assets 210,106 — 3,719 213,825 Accrued compensation and benefits 142,815 — — 142,815 Accounts payable, accrued expenses and other liabilities 124,489 — 679 125,168 Cash flows due to changes in operating assets and liabilities allocable to non-controlling interest in Consolidated Funds: Change in cash and cash equivalents held at Consolidated Funds — — ( 526,815 ) ( 526,815 ) Net cash acquired with consolidation/deconsolidation of Consolidated Funds — ( 39,539 ) — ( 39,539 ) Change in other assets and receivables held at Consolidated Funds — ( 174,409 ) ( 6,544 ) ( 180,953 ) Change in other liabilities and payables held at Consolidated Funds — 746,616 ( 23,000 ) 723,616 Net cash provided by (used in) operating activities 300,755 ( 2,555,916 ) ( 340,884 ) ( 2,596,045 ) Cash flows from investing activities: Purchase of furniture, equipment and leasehold improvements, net of disposals ( 27,226 ) — — ( 27,226 ) Acquisitions, net of cash acquired ( 1,057,407 ) — — ( 1,057,407 ) Net cash used in investing activities ( 1,084,633 ) — — ( 1,084,633 ) Cash flows from financing activities: Net proceeds from issuance of Class A common stock 827,430 — — 827,430 Proceeds from Credit Facility 883,000 — — 883,000 Proceeds from issuance of subordinated notes 450,000 — — 450,000 Repayments of Credit Facility ( 468,000 ) — — ( 468,000 ) Dividends and distributions ( 593,506 ) — — ( 593,506 ) Series A Preferred Stock dividends ( 10,850 ) — — ( 10,850 ) Redemption of Series A Preferred Stock ( 310,000 ) — — ( 310,000 ) Stock option exercises 37,216 — — 37,216 Taxes paid related to net share settlement of equity awards ( 226,101 ) — — ( 226,101 ) Other financing activities 11,509 — — 11,509 Allocable to non-controlling interests in Consolidated Funds: Contributions from non-controlling interests in Consolidated Funds — 1,239,831 ( 206,187 ) 1,033,644 Distributions to non-controlling interests in Consolidated Funds — ( 119,153 ) 20,256 ( 98,897 ) Borrowings under loan obligations by Consolidated Funds — 2,048,932 — 2,048,932 Repayments under loan obligations by Consolidated Funds — ( 80,752 ) — ( 80,752 ) Net cash provided by financing activities 600,698 3,088,858 ( 185,931 ) 3,503,625 Effect of exchange rate changes ( 12,977 ) ( 6,127 ) — ( 19,104 ) Net change in cash and cash equivalents ( 196,157 ) 526,815 ( 526,815 ) ( 196,157 ) Cash and cash equivalents, beginning of period 539,812 522,376 ( 522,376 ) 539,812 Cash and cash equivalents, end of period $ 343,655 $ 1,049,191 $ ( 1,049,191 ) $ 343,655 Supplemental disclosure of non-cash financing activities: Issuance of AOG Units in connection with acquisition-related activities $ 510,848 $ — $ — $ 510,848 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 34,170 $ 170,915 $ — $ 205,085 Cash paid during the period for income taxes $ 22,603 $ 185 $ — $ 22,788 F-60 Table of Contents Ares Management Corporation Notes to the Consolidated Financial Statements (Continued) (Dollars in Thousands, Except Share Data and As Otherwise Noted) 16. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred after December 31, 2023 through the date the consolidated financial statements were issued. During this period, the Company had the following material subsequent events that require disclosure: In February 2024, the Company’s board of directors declared a quarterly dividend of $ 0.93 per share of Class A and non-voting common stock payable on March 29, 2024 to common stockholders of record at the close of business on March 15, 2024. F-61