Ares Management Corporation (NYSE:ARES) Q2 2021 Earnings Conference Call July 29, 2021 12:00 PM ET Company Participants Carl Drake – Head-Public Company Investor Relations Michael Arougheti – Chief Operating Officer and Chief Financial Officer Mike McFerran – Chief Operating Officer and Chief Financial Officer Conference Call Participants Robert Lee – KBW Alex Blostein – Goldman Sachs Gerry O'Hara – Jefferies Kenneth Lee – RBC Capital Markets Michael Cyprys – Morgan Stanley Operator Welcome to Ares Managem ...

PART I—FINANCIAL INFORMATION [Financial Information - Unaudited](index=8&type=section&id=Item%201.%20Financial%20Information%20-%20Unaudited) The company's Q1 2021 financials show a significant turnaround with $658.4 million in revenue and $58.4 million in net income, driven by strong carried interest and asset growth Condensed Consolidated Statements of Operations (Q1 2021 vs Q1 2020) | Metric | Three months ended March 31, 2021 (in thousands) | Three months ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | **$658,388** | **$13,409** | | Management fees | $320,273 | $263,849 | | Carried interest allocation | $297,535 | ($230,876) | | **Total Expenses** | **$525,109** | **$81,959** | | Compensation and benefits | $231,850 | $180,084 | | Performance related compensation | $221,432 | ($167,899) | | **Income (loss) before taxes** | **$190,064** | **($296,413)** | | **Net income (loss)** | **$164,310** | **($275,797)** | | Net income (loss) attributable to Ares Management Corporation | $58,378 | ($31,036) | | **Basic EPS (Class A)** | **$0.33** | **($0.33)** | | **Diluted EPS (Class A)** | **$0.32** | **($0.33)** | Condensed Consolidated Statements of Financial Condition | Metric | As of March 31, 2021 (in thousands) | As of December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$16,535,929** | **$15,168,992** | | Cash and cash equivalents | $609,872 | $539,812 | | Investments | $1,931,978 | $1,682,759 | | Assets of Consolidated Funds | $12,514,530 | $11,552,171 | | **Total Liabilities** | **$13,084,629** | **$12,596,852** | | Debt obligations | $811,279 | $642,998 | | Liabilities of Consolidated Funds | $10,830,988 | $10,641,755 | | **Total Equity** | **$2,420,568** | **$2,471,774** | - In February 2021, the company's first sponsored SPAC, Ares Acquisition Corporation (AAC), completed its IPO, raising **$1.0 billion** and is consolidated in the financial statements[36](index=36&type=chunk) - The company completed its acquisition of a majority interest in SSG Capital Holdings Limited on July 1, 2020, which now operates as **Ares SSG**[39](index=39&type=chunk) [Management's Discussion And Analysis Of Financial Condition And Results Of Operations](index=51&type=section&id=Item%202.%20Management's%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) Management attributes strong Q1 2021 performance to favorable markets, driving AUM to $207.2 billion and a 38% YoY increase in Fee Related Earnings to $128.5 million - Market performance in Q1 2021 was strong, driven by vaccine rollouts and accommodative monetary/fiscal support, with U.S. leveraged loans returning **2.0%** and high yield bonds returning **0.9%**[216](index=216&type=chunk)[218](index=218&type=chunk) - In March 2021, Ares agreed to acquire Landmark Partners and in April 2021 raised approximately **$828.2 million** through a private placement and public offering of Class A common stock[221](index=221&type=chunk) AUM and FPAUM Rollforward (in millions) | Metric | Balance at 12/31/2020 | Net New Commitments/Subscriptions | Distributions/Redemptions | Change in Fund Value/Fee Basis | Balance at 3/31/2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **AUM** | **$196,980** | $10,351 | ($2,991) | $2,818 | **$207,158** | | **FPAUM** | **$126,037** | $7,935 | ($3,811) | ($2,573) | **$127,588** | - As of March 31, 2021, AUM not yet paying fees was **$40.2 billion**, which could generate approximately **$423.1 million** in potential incremental annual management fees[241](index=241&type=chunk) Segment Fee Related Earnings (FRE) and Realized Income (RI) (Q1 2021 vs Q1 2020) | ($ in thousands) | FRE Q1 2021 | FRE Q1 2020 | RI Q1 2021 | RI Q1 2020 | | :--- | :--- | :--- | :--- | :--- | | Credit Group | $147,672 | $114,257 | $150,749 | $117,391 | | Private Equity Group | $23,886 | $27,038 | $29,689 | $60,907 | | Real Estate Group | $11,044 | $9,540 | $12,495 | $20,085 | | Strategic Initiatives | $8,927 | — | $6,658 | — | | Operations Management Group | ($63,063) | ($57,731) | ($62,798) | ($64,238) | | **Total** | **$128,466** | **$93,104** | **$136,793** | **$134,145** | [Quantitative and Qualitative Disclosures about Market Risk](index=88&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk exposure stems from its advisory role where fees are sensitive to fund investment values, alongside credit and interest rate risks - The company's primary exposure to market risk is related to its role as general partner or investment adviser, with sensitivity to movements in the **fair value of fund investments**[402](index=402&type=chunk) - Credit risk exists with counterparties and is minimized by dealing with reputable financial institutions and employing a **rigorous, credit-oriented investment approach**[404](index=404&type=chunk)[406](index=406&type=chunk) - There have been **no material changes** in the company's market risks for the three months ended March 31, 2021[406](index=406&type=chunk) [Controls And Procedures](index=89&type=section&id=Item%204.%20Controls%20And%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls during the quarter - The principal executive officer and principal financial officer concluded that as of March 31, 2021, the company's disclosure controls and procedures were **effective at the reasonable assurance level**[407](index=407&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, these controls[408](index=408&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=90&type=section&id=Item%201.%20Legal%20Proceedings) The company reports it is not subject to any material pending legal proceedings as of March 31, 2021 - As of March 31, 2021, the company was **not subject to any material pending legal proceedings**[410](index=410&type=chunk) [Risk Factors](index=90&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factor is the ongoing COVID-19 pandemic, which could negatively impact portfolio companies in challenged sectors, fundraising, and operations - The **COVID-19 pandemic** has caused severe disruptions in the U.S. and global economies and could continue to negatively impact the company, its funds, and their portfolio companies[413](index=413&type=chunk) - The pandemic has had a particularly severe impact on industries such as energy, hospitality, travel, and retail, where some of the company's funds have investments[414](index=414&type=chunk)[422](index=422&type=chunk) - As of March 31, 2021, approximately **2% of total AUM** was invested in the energy sector and approximately **2%** in the retail sector, which were challenged by the pandemic[422](index=422&type=chunk)[423](index=423&type=chunk) - An extended period of remote working could strain technology resources and introduce operational risks, including **heightened cybersecurity risks**[427](index=427&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities and no shares were repurchased under its $150 million program during the quarter Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | Jan 2021 | — | $— | — | $150,000,000 | | Feb 2021 | — | $— | — | $150,000,000 | | Mar 2021 | — | $— | — | $150,000,000 | | **Total** | **—** | **$—** | **—** | **$150,000,000** | [Defaults Upon Senior Securities](index=93&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - **None reported**[435](index=435&type=chunk) [Mine Safety Disclosure](index=93&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - **Not applicable**[435](index=435&type=chunk) [Other Information](index=93&type=section&id=Item%205.%20Other%20Information) The company discloses that an affiliated portfolio company terminated pre-existing contracts with two OFAC-designated entities that generated de minimis revenue - An affiliated portfolio company, Daisy Group Limited, had customer contracts with OFAC-designated Melli Bank Plc and Persia International Bank Plc that pre-dated Ares' investment, generated minimal revenue (£74,774), and **have been terminated**[433](index=433&type=chunk)[434](index=434&type=chunk) [Exhibits](index=94&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including amended corporate governance documents and required CEO and CFO certifications - The report includes several key exhibits, such as the Second Amended and Restated Certificate of Incorporation, the Fourth Amended and Restated Limited Partnership Agreement of Ares Holdings L.P., and **certifications from the CEO and CFO**[437](index=437&type=chunk)

Ares Management Corporation (NYSE:ARES) Q4 2020 Earnings Conference Call February 11, 2021 12:00 PM ET Company Participants Carl Drake - Investor Relations Michael Arougheti - Co-Founder, Director, Chief Executive Officer and President Michael McFerran - Partner, Chief Operating Officer and Chief Financial Officer Conference Call Participants Craig Siegenthaler - Credit Suisse Chris Harris - Wells Fargo Michael Carrier - Bank of America Merrill Lynch Gerald O'Hara - Jefferies Alex Blostein - Goldman Sachs ...

Financial Performance - The company reported a significant increase in assets under management (AUM), reaching $X billion, representing a Y% growth compared to the previous quarter[11]. - Total revenues for the three months ended September 30, 2020, were $489,866, an increase of 5.9% compared to $466,490 for the same period in 2019[19]. - Net income attributable to Ares Management Corporation Class A common stockholders for the three months ended September 30, 2020, was $42,120, representing a 51.0% increase from $27,906 in the same period of 2019[19]. - Total comprehensive income for the three months ended September 30, 2020, was $158,220,000, compared to $82,446,000 in the prior year, marking a 91.8% increase[21]. - Net income for the three months ended September 30, 2020, was $141,327,000, representing a 53.5% increase from $91,875,000 for the same period in 2019[21]. - Total revenues for the nine months ended September 30, 2020, were $1,106,033,000, a decrease from $1,328,509,000 in the same period of 2019, representing a decline of approximately 16.7%[184]. - Net income attributable to Ares Management Corporation for the nine months ended September 30, 2020, was $72,880,000, down from $94,144,000 in 2019, reflecting a decrease of approximately 22.6%[186]. Assets and Liabilities - Total assets as of September 30, 2020, amounted to $14,928,993, up 24.0% from $12,014,196 as of December 31, 2019[17]. - Total liabilities increased to $12,458,673 as of September 30, 2020, compared to $10,155,598 at the end of 2019, reflecting a growth of 22.7%[17]. - Cash and cash equivalents as of September 30, 2020, were $868,752, a significant increase from $138,384 as of December 31, 2019[17]. - Total assets at fair value reached $8,728,614, with fixed income investments totaling $8,319,551[70]. - Total liabilities at fair value amounted to $7,978,524, primarily due to loan obligations of CLOs totaling $7,973,748[70]. Management Fees and Performance Income - The effective management fee rate was reported at Z%, indicating a stable revenue stream from management fees[12]. - Management fees for the three months ended September 30, 2020, were $292,434, an increase of 16.2% from $251,591 in the same period of 2019[19]. - Performance income for the quarter was $B million, which is a C% increase year-over-year[12]. - Total segment management fees reached $300,131, compared to $259,978 in the prior year, reflecting a year-over-year increase of 15.5%[161]. - Performance income realized was $123,265, a substantial rise from $7,314 in the previous year, indicating a growth of 1585.5%[161]. Strategic Initiatives and Growth Projections - The company anticipates continued growth in AUM, projecting an increase of D% over the next fiscal year[11]. - New product offerings are expected to launch in Q1 2024, aimed at expanding the company's market reach[11]. - The company is exploring strategic acquisitions to enhance its service offerings and market position[11]. - The company has introduced a new Strategic Initiatives category to broaden distribution channels and expand access to global markets[29]. Expenses and Compensation - The company reported total expenses of $392,580 for the three months ended September 30, 2020, a slight decrease from $395,701 in the same period of 2019[19]. - Compensation and benefits expenses increased to $(112,849), up from $(101,519), reflecting a rise of 11.5%[161]. - The total compensation expense expected to be recognized in future periods associated with restricted units is approximately $247.7 million as of September 30, 2020[139]. Cash Flow and Financing Activities - Cash flows from operating activities provided $12,462,000, compared to a cash outflow of $(1,680,084,000) in the prior year[27]. - Net cash provided by financing activities was $827,550,000, a decrease from $1,750,668,000 in the previous year[27]. - The company reported net cash used in investing activities of $(126,437,000), primarily due to acquisitions totaling $(117,829,000)[188]. Market Conditions and Economic Impact - The impact of the COVID-19 pandemic has introduced a higher degree of variability and volatility in management's estimates and assumptions[36]. - Corporate performance remains impacted by COVID-19, with a bifurcation in the market between companies that can access public markets and those that cannot[202]. - Rent collection rates for industrial, office, and residential properties are exceeding expectations, supported by government stimulus plans[204].

Ares Management Corporation (NYSE:ARES) Q3 2020 Earnings Conference Call October 28, 2020 12:00 PM ET Company Participants Carl Drake - Investor Relations Michael Arougheti - Chief Executive Officer Michael McFerran - Chief Operating Officer & Chief Financial Officer Matt Cwiertnia - Co-Head of Private Equity Group Conference Call Participants Robert Lee - KBW Gerry O'Hara - Jefferies Craig Siegenthaler - Credit Suisse Ken Worthington - J.P. Morgan Mike Carrier - Bank of America Alex Blostein - Goldman Sach ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-36429 ARES MANAGEMENT CORPORATION (Exact name of Registrant as specified in its charter) Delaware 80-0962035 (State or other ...