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 Oaktree Announces Third Quarter 2017 Financial Results
   Thursday, October 26, 2017 8:30:03 AM ET

--GAAP net income attributable to Oaktree Capital Group, LLC ("OCG") decreased to $45.8 million ($0.71 per unit) for the quarter, from $58.3 million ($0.93 per unit) for the third quarter of 2016, and increased to $218.1 million ($3.41) for the nine-month period, from $135.4 million ($2.17) for the comparable 2016 period.

--Assets under management were $99.5 billion, up slightly for the quarter and down slightly over the last 12 months. Gross capital raised was $2.7 billion and $12.0 billion for the quarter and last 12 months, respectively. Uncalled capital commitments ("dry powder") were $21.2 billion, of which $12.4 billion were not yet generating management fees ("shadow AUM").

--Management fee-generating assets under management were $80.2 billion, up 1% for the quarter and up 2% over the last 12 months.



--Adjusted net income declined to $131.4 million ($0.67 per unit) for the quarter, from $161.7 million ($0.92 per unit) for the third quarter of 2016, on lower revenues. For the nine-month period, adjusted net income increased to $574.3 million ($3.26), from $402.0 million ($2.16) for the comparable 2016 period, driven by higher incentive income and investment income.

--Distributable earnings declined to $118.6 million ($0.74 per unit) for the quarter, from $140.6 million ($0.81 per unit) for the third quarter of 2016, primarily on lower incentive income. For the nine-month period, distributable earnings increased to $558.1 million ($3.22), from $385.9 million ($2.15) for the comparable 2016 period, driven by higher incentive income and investment income proceeds.

--A distribution was declared of $0.56 per unit, bringing aggregate distributions relating to the last 12 months to $3.21.

Oaktree Capital Group, LLC (OAK ) today reported its unaudited financial results for the third quarter ended September 30, 2017.

Jay Wintrob, Chief Executive Officer, said, "Oaktree’s continued strong investment performance was the highlight of the third quarter, driving 14% growth in net incentives created year-to-date. Additionally, adjusted net income growth of 43% and distributable earnings growth of 45% year-to-date demonstrate the power of our business model. At this point in the cycle, we continue to deploy capital across our strategies in a cautious and disciplined manner, and we continue to capitalize on the current market environment by actively harvesting investments, creating value for both our clients and our unitholders."

Distribution

The distribution of $0.56 per Class A unit attributable to the third quarter of 2017 will be paid on November 10, 2017 to Class A unitholders of record at the close of business on November 6, 2017.

Conference Call

Oaktree will host a conference call to discuss its third quarter 2017 results today at 11:00 a.m. Eastern Time / 8:00 a.m. Pacific Time. The conference call may be accessed by dialing (844) 824-3833 (U.S. callers) or +1 (412) 317-5102 (non-U.S. callers), participant password OAKTREE. Alternatively, a live webcast of the conference call can be accessed through the Unitholders - Investor Relations section of the Oaktree website, http://ir.oaktreecapital.com/ . For those individuals unable to listen to the live broadcast of the conference call, a replay will be available for 30 days on Oaktree’s website, or by dialing (877) 344-7529 (U.S. callers) or +1 (412) 317-0088 (non-U.S. callers), access code 10112877, beginning approximately one hour after the broadcast.

About Oaktree

Oaktree is a leader among global investment managers specializing in alternative investments, with $100 billion in assets under management as of September 30, 2017. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 900 employees and offices in 18 cities worldwide. For additional information, please visit Oaktree’s website at www.oaktreecapital.com.

The table below presents (a) GAAP results, (b) non-GAAP results for both the Operating Group and per Class A unit, and (c) assets under management and accrued incentives (fund level) data. Please refer to the Glossary for definitions.

                                                                                  As of or for the Three Months                           As of or for the Nine Months
                                                                                                          Ended September 30,                                                        Ended September 30,
                                                                                           ------------------------------------------                            -----------------------------------------------------
                                                                                                2017            2016                                2017                         2016
                                                                                           --------------                     --------------                     ----------------                     ----------------------
GAAP Results:                                                                                                               (in thousands, except per unit data or as otherwise indicated)
                                                                                                                                                                                  
Revenues                                                                                      $ 235,032                          $ 290,230                          $ 1,158,672                                $    827,436
Net income-OCG                                                                                   45,841                             58,297                              218,080                                     135,422
Net income per Class A unit                                                                        0.71                               0.93                                 3.41                                        2.17
                                                                                                                                                                                                       
Non-GAAP Results: (1)
Adjusted revenues                                                                             $ 304,756                          $ 365,008                          $ 1,400,305                                $  1,010,765
Adjusted net income                                                                             131,436                            161,651                              574,254                                     402,000
Adjusted net income-OCG                                                                          43,309                             57,710                              208,156                                     134,605
                                                                                                                                                                                                       
Distributable earnings revenues                                                                 282,426                            329,966                            1,351,048                                     960,965
Distributable earnings                                                                          118,589                            140,584                              558,118                                     385,901
Distributable earnings-OCG                                                                       47,717                             50,861                              205,401                                     134,399
                                                                                                                                                                                                       
Fee-related earnings revenues                                                                   186,615                            194,349                              558,494                                     593,069
Fee-related earnings                                                                             59,754                             66,708                              160,492                                     185,782
Fee-related earnings-OCG                                                                         22,694                             23,507                               60,099                                      67,196
                                                                                                                                                                                                       
Economic net income revenues                                                                    385,843                            687,962                            1,246,873                                   1,274,356
Economic net income                                                                             164,677                            263,114                              527,603                                     463,176
Economic net income-OCG                                                                          57,342                             95,485                              188,757                                     160,221
                                                                                                                                                                                                       
Per Class A Unit:
Adjusted net income                                                                           $    0.67                          $    0.92                          $      3.26                                $       2.16
Distributable earnings                                                                             0.74                               0.81                                 3.22                                        2.15
Fee-related earnings                                                                               0.35                               0.37                                 0.94                                        1.08
Economic net income                                                                                0.89                               1.52                                 2.96                                        2.57
                                                                                                                                                                                                       
Weighted average number of Operating Group units outstanding                                    156,258                            154,945                              155,625                                     154,605
Weighted average number of Class A units outstanding                                             64,394                             62,755                               63,875                                      62,424
                                                                                                                                                                                                       
Operating Metrics:
Assets under management (in millions):
  Assets under management                                                                     $  99,515                          $  99,834                          $    99,515                                $     99,834
  Management fee-generating assets under management                                              80,170                             78,700                               80,170                                      78,700
  Incentive-creating assets under management                                                     31,020                             32,440                               31,020                                      32,440
  Uncalled capital commitments (2)                                                               21,202                             22,663                               21,202                                      22,663
Accrued incentives (fund level):
  Incentives created (fund level)                                                               134,815                            422,685                              504,935                                     547,557
  Incentives created (fund level), net of associated incentive income                            60,607                            153,817                              242,236                                     212,609
  compensation expense
  Accrued incentives (fund level)                                                             1,860,665                          1,848,808                            1,860,665                                   1,848,808
  Accrued incentives (fund level), net of associated incentive income                           899,891                            872,716                              899,891                                     872,716
  compensation expense
 
---------------------------------------------------------------------

Note: Oaktree discloses in this earnings release certain revenues and financial measures, including measures that are calculated and presented on a basis other than generally accepted accounting principles in the United States ("non-GAAP") such as adjusted revenues, adjusted net income, adjusted net income per Class A unit, distributable earnings revenues, distributable earnings, distributable earnings per Class A unit, fee-related earnings revenues, fee-related earnings, fee-related earnings per Class A unit, economic net income revenues, economic net income and economic net income per Class A unit. These measures should be considered in addition to, and not as a substitute for or superior to, net income, net income per Class A unit or other financial measures calculated in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented at Exhibit A. All non-GAAP measures and all interim results presented in this release are unaudited.

(1)   Beginning with the second quarter of 2017, the definition of
                         adjusted net income was modified with respect to third-party
                         placement costs associated with closed-end funds and
                         liability-classified OCGH equity value units ("EVUs") to conform to
                         the GAAP treatment. Under GAAP, placement costs are expensed as
                         incurred and liability-classified EVUs are remeasured as of each
                         reporting date. Previously for adjusted net income, placement costs
                         were capitalized and amortized in proportion to the associated
                         management fee stream, and liability-classified EVUs were treated as
                         equity-classified awards. All prior periods have been recast for
                         these changes.
(2)                      Uncalled capital commitments represent undrawn capital commitments
                         by partners (including Oaktree as general partner) of our closed-end
                         funds through their investment periods and certain evergreen funds.
                         If a fund distributes capital during its investment period, that
                         capital is typically subject to possible recall, in which case it is
                         included in uncalled capital commitments.
                          

GAAP Results

Oaktree consolidates entities in which it has a direct or indirect controlling financial interest. Investment vehicles in which we have a significant investment, such as collateralized loan obligation vehicles ("CLOs") and certain Oaktree funds, are consolidated under GAAP. When a CLO or fund is consolidated, the assets, liabilities, revenues, expenses and cash flows of the consolidated funds are reflected on a gross basis, and the majority of the economic interests in those consolidated funds, which are held by third-party investors, are reflected as debt obligations of CLOs or non-controlling interests. All of the revenues earned by us as investment manager of the consolidated funds are eliminated in consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the consolidation of a fund does not impact net income or loss attributable to OCG.

Total revenues decreased $55.2 million, or 19.0%, to $235.0 million for the third quarter of 2017, from $290.2 million for the third quarter of 2016. The decrease reflected lower incentive income and management fees.

Total expenses decreased $32.5 million, or 16.1%, to $169.8 million for the third quarter of 2017, from $202.3 million for the third quarter of 2016. The decrease primarily reflected lower incentive income compensation and general and administrative expense.

Other income decreased $6.5 million, or 7.3%, to $83.0 million for the third quarter of 2017, from $89.5 million for the third quarter of 2016. The decrease primarily reflected lower overall returns on our funds’ investments.

Net income attributable to OCG decreased $12.5 million, or 21.4%, to $45.8 million for the third quarter of 2017, from $58.3 million for the third quarter of 2016, primarily reflecting lower operating profits.

Operating Metrics

Assets Under Management

Assets under management ("AUM") were $99.5 billion as of September 30, 2017, $99.3 billion as of June 30, 2017 and $99.8 billion as of September 30, 2016. The $0.2 billion increase since June 30, 2017 primarily reflected $1.7 billion in market-value gains, $1.3 billion in new capital commitments to closed-end and evergreen funds, and $0.5 billion of favorable foreign-currency translation, largely offset by $2.2 billion of distributions to closed-end fund investors and $0.8 billion of net outflows from open-end funds. Commitments to closed-end and evergreen funds included $0.4 billion for our Emerging Markets Debt strategy and $0.3 billion to our European Private Debt strategy.

The $0.3 billion decrease in AUM since September 30, 2016 primarily reflected $10.5 billion of distributions to closed-end fund investors, $1.4 billion of net outflows from open-end funds and $1.1 billion of uncalled capital commitments for closed-end funds that have entered liquidation, largely offset by $7.4 billion in market-value gains, $4.4 billion of capital commitments and fee-generating leverage to closed-end funds, and $0.8 billion in favorable foreign-currency translation. Commitments to closed-end funds included $1.0 billion for Oaktree Real Estate Debt Fund II, $0.6 billion for Oaktree Opportunities Fund Xb, $0.5 billion for Oaktree Real Estate Opportunities Fund VII ("ROF VII") and $0.4 billion for Oaktree European Capital Solutions Fund. Distributions to closed-end fund investors included $4.1 billion from Control Investing funds, $4.0 billion from Distressed Debt funds and $1.3 billion from Real Estate funds.

Management Fee-generating Assets Under Management

Management fee-generating assets under management ("management fee-generating AUM"), a forward-looking metric, were $80.2 billion as of September 30, 2017, $79.8 billion as of June 30, 2017 and $78.7 billion as of September 30, 2016. The $0.4 billion increase since June 30, 2017 primarily reflected an aggregate $1.4 billion increase from the start of the investment period for Oaktree European Principal Fund IV ("EPF IV") in July 2017 and capital drawn by funds that pay fees based on drawn capital, NAV or cost basis, and $0.9 billion in market-value gains. These increases were partially offset by $1.4 billion attributable to closed-end funds in liquidation and $0.8 billion of net outflows from open-end funds.

The $1.5 billion increase in management fee-generating AUM since September 30, 2016 primarily reflected $3.4 billion in market-value gains, an aggregate $2.6 billion increase from the start of the investment period for EPF IV, additional capital commitments to ROF VII and fee-generating leverage to closed-end funds, $1.7 billion from capital drawn by closed-end funds that pay fees based on drawn capital, NAV or cost basis, and $0.8 billion of favorable foreign-currency translation. These increases were partially offset by $4.4 billion attributable to closed-end funds in liquidation, $1.6 billion of net outflows from open-end funds and $0.9 billion of distributions by closed-end funds that pay fees based on NAV.

Incentive-creating Assets Under Management

Incentive-creating assets under management ("incentive-creating AUM") were $31.0 billion as of September 30, 2017, $30.8 billion as of June 30, 2017 and $32.4 billion as of September 30, 2016. The $0.2 billion increase since June 30, 2017 reflected an aggregate $2.2 billion in drawdowns or contributions by closed-end and evergreen funds and market-value gains, partially offset by an aggregate $2.0 billion decline primarily attributable to distributions by closed-end funds. The $1.4 billion decrease since September 30, 2016 reflected an aggregate decline of $9.9 billion primarily attributable to distributions by closed-end funds, partially offset by an aggregate $8.5 billion principally from drawdowns or contributions by closed-end and evergreen funds and market-value gains.

Of the $31.0 billion in incentive-creating AUM as of September 30, 2017, $20.5 billion (or 66%), was generating incentives at the fund level, as compared with $20.0 billion (62%), of the $32.4 billion of incentive-creating AUM as of September 30, 2016.

Accrued Incentives (Fund Level) and Incentives Created (Fund Level)

Accrued incentives (fund level) were $1.9 billion as of September 30, 2017, and $1.8 billion as of both June 30, 2017 and September 30, 2016. The third quarter of 2017 reflected $134.8 million of incentives created (fund level) and $53.7 million of incentive income recognized.

Accrued incentives (fund level), net of incentive income compensation expense ("net accrued incentives (fund level)"), were $899.9 million as of September 30, 2017, $866.7 million as of June 30, 2017, and $872.7 million as of September 30, 2016. The portion of net accrued incentives (fund level) represented by funds that were currently paying incentives as of September 30, 2017, June 30, 2017 and September 30, 2016, respectively, was $274.1 million (or 30%), $236.5 million (27%) and $224.9 million (26%), with the remainder arising from funds that as of that date were not at the stage of their cash distribution waterfall where Oaktree was entitled to receive incentives, other than possibly tax-related distributions.

Uncalled Capital Commitments

Uncalled capital commitments were $21.2 billion as of September 30, 2017, $21.5 billion as of June 30, 2017, and $22.7 billion as of September 30, 2016. Invested capital during the quarter and 12 months ended September 30, 2017 aggregated $1.9 billion and $7.4 billion, respectively, as compared with $2.2 billion and $8.1 billion for the comparable prior-year periods.

Non-GAAP Results

Adjusted Revenues

Adjusted revenues decreased $60.2 million, or 16.5%, to $304.8 million in the third quarter of 2017, from $365.0 million in the third quarter of 2016, reflecting declines of $46.0 million in incentive income, $7.7 million in management fees and $6.5 million in investment income.

Management Fees

Management fees decreased $7.7 million, or 4.0%, to $186.6 million in the third quarter of 2017, from $194.3 million in the third quarter of 2016. The decrease reflected an aggregate decline of $19.0 million primarily attributable to closed-end funds in liquidation, partially offset by an aggregate increase of $11.3 million principally from the start of the investment period for EPF IV, closed-end funds that pay management fees based on drawn capital, NAV or cost basis, and additional commitments to ROF VII.

Incentive Income

Incentive income decreased $46.0 million, or 46.1%, to $53.7 million in the third quarter of 2017, from $99.7 million in the third quarter of 2016. The third quarter of 2017 included $51.3 million from Oaktree Real Estate Opportunities Fund V.

Investment Income

Investment income decreased $6.5 million, or 9.2%, to $64.4 million in the third quarter of 2017, from $70.9 million in the third quarter of 2016. The decrease primarily reflected lower overall returns on our fund investments. Our one-fifth ownership stake in DoubleLine Capital LP and its affiliates (collectively, "DoubleLine") accounted for investment income of $17.6 million and $17.7 million in the third quarters of 2017 and 2016, respectively, of which performance fees accounted for $0.8 million and $1.9 million, respectively.

Adjusted Expenses

Compensation and Benefits

Compensation and benefits expense increased $1.1 million, or 1.2%, to $95.7 million in the third quarter of 2017, from $94.6 million in the third quarter of 2016.

Equity-based Compensation

Equity-based compensation expense decreased $0.9 million, or 5.8%, to $14.7 million in the third quarter of 2017, from $15.6 million in the third quarter of 2016. The decrease reflected higher expense in the third quarter of 2016 related to accelerated vesting from employee departures.

Incentive Income Compensation

Incentive income compensation expense decreased $21.0 million, or 44.3%, to $26.4 million in the third quarter of 2017, from $47.4 million in the third quarter of 2016, reflecting the decline in incentive income.

General and Administrative

General and administrative expense decreased $1.1 million, or 3.6%, to $29.1 million in the third quarter of 2017, from $30.2 million in the third quarter of 2016.

Depreciation and Amortization

Depreciation and amortization expense decreased $0.9 million, or 31.0%, to $2.0 million in the third quarter of 2017, from $2.9 million in the third quarter of 2016, primarily reflecting the final amortization of certain leasehold improvements in the first quarter of 2017.

Interest Expense, Net

Interest expense, net decreased $1.5 million, or 19.2%, to $6.3 million in the third quarter of 2017, from $7.8 million in the third quarter of 2016, reflecting higher interest income and the maturity of $50.0 million in senior notes in the fourth quarter of 2016.

Other Income (Expense), Net

Other income (expense), net increased $5.8 million, to income of $0.9 million in the third quarter of 2017, from expense of $4.9 million in the third quarter 2016. The third quarter of 2016 included a $4.4 million impairment charge taken on our corporate aircraft.

Adjusted Net Income

ANI decreased $30.3 million, or 18.7%, to $131.4 million in the third quarter of 2017, from $161.7 million in the third quarter of 2016, reflecting decreases of $25.0 million in incentive income, net of incentive income compensation expense ("net incentive income"), $6.9 million in fee-related earnings and $6.5 million in investment income. The portion of ANI attributable to our Class A units was $43.3 million, or $0.67 per unit, and $57.7 million, or $0.92 per unit, for the third quarters of 2017 and 2016, respectively.

The effective tax rates applied to ANI in the third quarters of 2017 and 2016 were 20% and 12%, respectively, resulting from full-year effective rates of 12% and 17%, respectively. The rate used for interim fiscal quarters is based on an estimated full-year effective tax rate on income that can be reliably forecasted, combined with tax expense in the current period on incentive income and any other income that cannot be reliably estimated. We generally expect variability in tax rates between periods because the effective tax rate is a function of the mix of income and other factors, each of which can have a material impact on the particular period’s income tax expense and often vary significantly within or between years. In general, the annual effective tax rate increases as the proportion of ANI arising from fee-related earnings, DoubleLine-related investment income and certain incentive and investment income rises, and vice versa.

Distributable Earnings

Distributable earnings decreased $22.0 million, or 15.6%, to $118.6 million in the third quarter of 2017, from $140.6 million in the third quarter of 2016, reflecting decreases of $25.0 million in net incentive income and $6.9 million in fee-related earnings, partially offset by increases of $6.2 million in investment income proceeds and $5.8 million in other income (expense), net. For the third quarter of 2017, investment income proceeds totaled $42.1 million, including $24.9 million from fund distributions and $17.2 million from DoubleLine, as compared with total investment income proceeds in the prior-year quarter of $35.9 million, of which $18.0 million and $17.9 million was attributable to fund distributions and DoubleLine, respectively. The portion of distributable earnings attributable to our Class A units was $0.74 and $0.81 per unit for the third quarters of 2017 and 2016, respectively, reflecting distributable earnings per Operating Group unit of $0.76 and $0.91, respectively, less costs borne by Class A unitholders for professional fees and other expenses, cash taxes attributable to the Intermediate Holding Companies, and amounts payable pursuant to the tax receivable agreement.

Fee-related Earnings

Fee-related earnings decreased $6.9 million, or 10.3%, to $59.8 million in the third quarter of 2017, from $66.7 million in the third quarter of 2016, reflecting the decline in management fees. The portion of fee-related earnings attributable to our Class A units was $0.35 and $0.37 per unit for the third quarters of 2017 and 2016, respectively.

The effective tax rates applicable to fee-related earnings for the third quarters of 2017 and 2016 were 7% and 12%, respectively, resulting from full-year effective rates of 8% for both periods. The rate used for interim fiscal periods is based on the estimated full-year effective tax rate, which is subject to change as the year progresses. In general, the annual effective tax rate increases as annual fee-related earnings increase, and vice versa.

Capital and Liquidity

As of September 30, 2017, Oaktree had $1.0 billion of cash and U.S. Treasury and other securities, and $747 million of outstanding debt, which included no borrowings outstanding against its $500 million revolving credit facility. As of September 30, 2017, Oaktree’s investments in funds and companies had a carrying value of $1.6 billion, with the 20% investment in DoubleLine carried at $21 million based on cost, as adjusted under the equity method of accounting. Net accrued incentives (fund level) represented an additional $900 million as of that date.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which reflect the current views of Oaktree, with respect to, among other things, our future results of operations and financial performance. In some cases, you can identify forward-looking statements by words such as "anticipate," "approximately," "believe," "continue," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "seek," "should," "will" and "would" or the negative version of these words or other comparable or similar words. These statements identify prospective information. Important factors could cause actual results to differ, possibly materially, from those indicated in these statements. Forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Such forward-looking statements are subject to risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity, including, but not limited to, changes in our anticipated revenue and income, which are inherently volatile; changes in the value of our investments; the pace of our raising of new funds; changes in assets under management; the timing and receipt of, and impact of taxes on, carried interest; distributions from and liquidation of our existing funds; the amount and timing of distributions on our Class A units; changes in our operating or other expenses; the degree to which we encounter competition; and general political, economic and market conditions. The factors listed in the item captioned "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017, which is accessible on the SEC’s website at www.sec.gov, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations described in our forward-looking statements. Forward-looking statements speak only as of the date the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

This release and its contents do not constitute and should not be construed as (a) a recommendation to buy, (b) an offer to buy or solicitation of an offer to buy, (c) an offer to sell or (d) advice in relation to, any securities of OCG or securities of any Oaktree investment fund.

Investor Relations Website

Investors and others should note that Oaktree uses the Unitholders - Investor Relations section of its corporate website to announce material information to investors and the marketplace. While not all of the information that Oaktree posts on its corporate website is of a material nature, some information could be deemed to be material. Accordingly, Oaktree encourages investors, the media, and others interested in Oaktree to review the information that it shares on its corporate website at the Unitholders - Investor Relations section of the Oaktree website, http://ir.oaktreecapital.com/ . Information contained on, or available through, our website is not incorporated by reference into this document.

GAAP Consolidated Statements of Operations                                                                                                                                           
                                                                                                                                                                                                                             
                                                                                                                                                 Three Months Ended                                                                                             Nine Months Ended
                                                                                                                                                    September 30,                                                                                                 September 30,
                                                                                                              ----------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------
                                                                                                                             2017                                2016                                                   2017                                2016
                                                                                                              ----------------------------------                     ----------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                                               (in thousands, except per unit data)
Revenues:
  Management fees                                                                                                $ 181,312                                              $ 190,974                                              $ 542,268                                              $ 584,542
  Incentive income                                                                                                  53,720                              99,256                             616,404                             242,894  
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
    Total revenues                                                                                                 235,032                             290,230                           1,158,672                             827,436  
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Expenses:
  Compensation and benefits                                                                                        (98,224 )                                              (97,552 )                                             (304,713 )                                             (308,959 )
  Equity-based compensation                                                                                        (15,828 )                                              (19,838 )                                              (45,529 )                                              (48,460 )
  Incentive income compensation                                                                                    (26,362 )                                              (47,385 )                                             (327,526 )                                              (92,653 )
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
    Total compensation and benefits expense                                                                       (140,414 )                                             (164,775 )                                             (677,768 )                                             (450,072 )
  General and administrative                                                                                       (24,096 )                                              (32,252 )                                              (90,703 )                                             (113,032 )
  Depreciation and amortization                                                                                     (3,037 )                                               (3,867 )                                               (9,865 )                                              (12,076 )
  Consolidated fund expenses                                                                                        (2,226 )                                               (1,445 )                                               (7,425 )                                               (3,991 )
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
    Total expenses                                                                                                (169,773 )                                             (202,339 )                                             (785,761 )                                             (579,171 )
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Other income (loss):
  Interest expense                                                                                                 (35,776 )                                              (32,414 )                                             (128,797 )                                              (86,849 )
  Interest and dividend income                                                                                      55,218                                                 46,817                                                155,092                                                120,225
  Net realized gain (loss) on consolidated funds’ investments                             3,392                                                 (1,436 )                                                1,755                                                  8,647
  Net change in unrealized appreciation (depreciation) on consolidated                                               3,662                                                 10,231                                                 56,793                                                (15,742 )
  funds’ investments
  Investment income                                                                                                 51,061                                                 65,758                                                150,618                                                136,205
  Other income (expense), net                                                                                        5,418                                 543                              14,979                              11,892  
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
    Total other income                                                                                              82,975                              89,499                             250,440                             174,378  
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Income before income taxes                                                                                         148,234                                                177,390                                                623,351                                                422,643
  Income taxes                                                                                                     (13,857 )                                               (8,567 )                                              (31,700 )                                              (29,818 )
                                                                                                              ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Net income                                                                                                         134,377                                                168,823                                                591,651                                                392,825
Less:
  Net income attributable to non-controlling interests in consolidated                                              (9,990 )                                              (13,243 )                                              (23,543 )                                              (15,618 )
  funds
  Net income attributable to non-controlling interests in consolidated                                             (78,546 )                                              (97,283 )                                             (350,028 )                                             (241,785 )
  subsidiaries
                                                                                                              -----------  --------------------                      -----------  --------------------                      -----------  --------------------                      -----------  --------------------
Net income attributable to Oaktree Capital Group, LLC                                                            $  45,841                           $  58,297                           $ 218,080                           $ 135,422  
                                                                                                              ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Distributions declared per Class A unit                                                                          $    1.31                           $    0.58                           $    2.65                           $    1.60  
                                                                                                              ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Net income per unit (basic and diluted):
  Net income per Class A unit                                                                                    $    0.71                           $    0.93                           $    3.41                           $    2.17  
                                                                                                              ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
  Weighted average number of Class A units outstanding                                                              64,394                              62,755                              63,875                              62,424  
                                                                                                              =================================                      =================================                      =================================                      =================================
                                                                                                                                                                                                                                                                                                 

Operating Metrics

We monitor certain operating metrics that are either common to the alternative asset management industry or that we believe provide important data regarding our business. As described below, these operating metrics include AUM, management fee-generating AUM, incentive-creating AUM, incentives created (fund level), accrued incentives (fund level) and uncalled capital commitments.

Assets Under Management                                                                                                                                                        As of
                                                                                                                             -----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                       September 30,                        June 30,                          September 30,
                                                                                                                                           2017                                                  2017                                                   2016
                                                                                                                             ------------------------------                        -----------------------------                        ---------------------------------
                                                                                                                                                                                              (in millions)
Assets Under Management:
Closed-end funds                                                                                                                $ 57,769                                             $ 58,323                                                $  60,488
Open-end funds                                                                                                                    35,793                                               35,628                                                   34,197
Evergreen funds                                                                                                                    5,953                             5,309                                 5,149  
                                                                                                                             --------------------------------                      -------------------------------                      -----------------------------------
Total                                                                                                                           $ 99,515                          $ 99,260                             $  99,834  
                                                                                                                             ==== ====== ====================                      === ====== ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                         
                                                                                                                 Three Months Ended                                                                                   Twelve Months Ended
                                                                                                                    September 30,                                                                                        September 30,
                                                                                       ----------------------------------------------------------------                            ----------------------------------------------------------------------------------
                                                                                                       2017                                2016                                                  2017                                                   2016
                                                                                       ------------------------------------- ---------------------------------                     --------------------------------                     ------------------------------------
                                                                                                                                                                           (in millions)
Change in Assets Under Management:
Beginning balance                                                                            $  99,260                          $ 98,124                                             $ 99,834                                                $ 100,237
Closed-end funds:
  Capital commitments/other (1).                                                                   654                             1,182                                                3,729                                                    5,919
  Distributions for a realization event/other (2).                                              (2,160 )                          (2,028 )                                            (10,521 )                                                 (6,585 )
  Change in uncalled capital commitments for funds entering or in                                 (198 )                             (22 )                                             (1,126 )                                                     76
  liquidation (3)
  Foreign-currency translation                                                                     302                                91                                                  429                                                       50
  Change in market value (4).                                                                      829                             1,616                                                4,137                                                    1,926
  Change in applicable leverage                                                                     19                                73                                                  633                                                     (216 )
Open-end funds:
  Contributions                                                                                  1,427                               914                                                7,557                                                    3,380
  Redemptions                                                                                   (2,209 )                          (2,105 )                                             (8,997 )                                                 (8,228 )
  Foreign-currency translation                                                                     241                                65                                                  411                                                       80
  Change in market value (4).                                                                      706                             1,656                                                2,625                                                    3,051
Evergreen funds:
  Contributions or new capital commitments                                                         632                                91                                                  685                                                      300
  Redemptions or distributions/other                                                              (138 )                             (55 )                                               (479 )                                                   (511 )
  Foreign-currency translation                                                          --                                (1 )                                                  6                                                       (9 )
  Change in market value (4).                                                                      150            233                               592                                   364  
                                                                                       ------------------------------------  --------------------------------                      -------------------------------                      -----------------------------------
Ending balance                                                                               $  99,515       $ 99,834                          $ 99,515                             $  99,834  
                                                                                       ======= ======= ====================  ==== ====== ====================                      === ====== ====================                      ====== ======= ====================
 
-----------------------------------------------------------------
(1)   These amounts represent capital commitments, as well as the
                         aggregate par value of collateral assets and principal cash related
                         to new CLO formations.
(2)                      These amounts represent distributions for a realization event,
                         tax-related distributions, reductions in the par value of collateral
                         assets and principal cash resulting from the repayment of debt as
                         return of principal by CLOs, and recallable distributions at the end
                         of the investment period.
(3)                      The change in uncalled capital commitments reflects declines
                         attributable to funds entering their liquidation periods, as well as
                         capital contributions to funds in their liquidation periods for
                         deferred purchase obligations or other reasons.
(4)                      The change in market value reflects the change in NAV of our funds,
                         less management fees and other fund expenses, as well as changes in
                         the aggregate par value of collateral assets and principal cash held
                         by CLOs.
                          
Management Fee-generating AUM                                                                                                                                                                 As of
                                                                                                                                            ----------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                      September 30,                        June 30,                         September 30,
                                                                                                                                                          2017                                                  2017                                                  2016
                                                                                                                                            ------------------------------                        -----------------------------                        --------------------------------
Management Fee-generating Assets Under Management:                                                                                                                                                           (in millions)
Closed-end funds:
  Senior Loans                                                                                                                                 $  8,073                                             $  7,943                                                $  6,887
  Other closed-end funds                                                                                                                         31,953                                               32,048                                                  33,575
Open-end funds                                                                                                                                   35,570                                               35,429                                                  34,148
Evergreen funds                                                                                                                                   4,574                             4,387                                4,090  
                                                                                                                                            --------------------------------                      -------------------------------                      ----------------------------------
Total                                                                                                                                          $ 80,170                          $ 79,807                             $ 78,700  
                                                                                                                                            ==== ====== ====================                      === ====== ====================                      ====== ====== ====================
                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                        
                                                                                                                           Three Months Ended                                                                                        Twelve Months Ended
                                                                                                                              September 30,                                                                                             September 30,
                                                                                            --------------------------------------------------------------------------                            ---------------------------------------------------------------------------------
                                                                                          2017                                               2016                                          2017                                                  2016
                                                                       -------------------------------------------                     -----------------                     --------------------------------                     -----------------------------------
Change in Management Fee-generating Assets Under Management:                                                                                                                         (in millions)
                                                                                                                                                                                                                                   
Beginning balance                                                                                    $     79,807                              $ 79,516                                             $ 78,700                                                $ 76,489
Closed-end funds:
  Capital commitments to funds that pay fees based on committed                                               925                                   111                                                1,970                                                   7,253
  capital/other (1).
  Capital drawn by funds that pay fees based on drawn capital, NAV or                                         493                                   345                                                1,733                                                   1,247
  cost basis
  Change attributable to funds in liquidation (2).                                                         (1,350 )                              (1,462 )                                             (4,054 )                                                (4,230 )
  Change in uncalled capital commitments for funds entering or in                                  --                                  (512 )                                               (382 )                                                  (437 )
  liquidation that pay fees based on committed capital (3)
  Distributions by funds that pay fees based on NAV/other (4).                                               (333 )                                (283 )                                               (895 )                                                  (589 )
  Foreign-currency translation                                                                                236                                    75                                                  355                                                       1
  Change in market value (5).                                                                                  45                                   131                                                  256                                                     167
  Change in applicable leverage                                                                                19                                    52                                                  581                                                      23
Open-end funds:
  Contributions                                                                                             1,407                                   914                                                7,359                                                   3,382
  Redemptions                                                                                              (2,209 )                              (2,074 )                                             (8,990 )                                                (8,203 )
  Foreign-currency translation                                                                                241                                    65                                                  411                                                      80
  Change in market value                                                                                      702                                 1,646                                                2,642                                                   3,049
Evergreen funds:
  Contributions or capital drawn by funds that pay fees based on drawn                                        234                                    39                                                  478                                                     612
  capital or NAV
  Redemptions or distributions                                                                               (187 )                                 (97 )                                               (535 )                                                  (491 )
  Change in market value                                                                                      140                234                               541                                  347  
                                                                                            ------------------------------------------      --------------------------------                      -------------------------------                      ----------------------------------
Ending balance                                                                                       $     80,170           $ 78,700                          $ 80,170                             $ 78,700  
                                                                                            ========== ========== ====================      ==== ====== ====================                      === ====== ====================                      ====== ====== ====================
 
----------------------------------------------------------------------
(1)   These amounts represent capital commitments to funds that pay fees
                         based on committed capital, as well as the aggregate par value of
                         collateral assets and principal cash related to new CLO formations.
(2)                      These amounts represent the change for funds that pay fees based on
                         the lesser of funded capital or cost basis during the liquidation
                         period, as well as recallable distributions at the end of the
                         investment period. For most closed-end funds, management fees are
                         charged during the liquidation period on the lesser of (a) total
                         funded capital or (b) the cost basis of assets remaining in the
                         fund, with the cost basis of assets generally calculated by
                         excluding cash balances. Thus, changes in fee basis during the
                         liquidation period are not dependent on distributions made from the
                         fund; rather, they are tied to the cost basis of the fund’s
                         investments, which typically declines as the fund sells assets.
(3)                      The change in uncalled capital commitments reflects declines
                         attributable to funds entering their liquidation periods, as well as
                         capital contributions to funds in their liquidation periods for
                         deferred purchase obligations or other reasons.
(4)                      These amounts represent distributions by funds that pay fees based
                         on NAV, as well as reductions in the par value of collateral assets
                         and principal cash resulting from the repayment of debt as return of
                         principal by CLOs.
(5)                      The change in market value reflects certain funds that pay
                         management fees based on NAV and leverage, as applicable, as well as
                         changes in the aggregate par value of collateral assets and
                         principal cash held by CLOs.
                          
                                                                                                                                                                      As of
                                                                                                                     --------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                               September 30,                        June 30,                        September 30,
                                                                                                                                   2017                                                  2017                                                 2016
                                                                                                                     ------------------------------                        -----------------------------                        ------------------------------
Reconciliation of Assets Under Management to Management                                                                                                                              (in millions)
Fee-generating Assets Under Management:
Assets under management                                                                                                 $ 99,515                                             $ 99,260                                              $ 99,834
  Difference between assets under management and committed capital or                                                     (2,920 )                                             (2,585 )                                              (4,449 )
  the lesser of funded capital or cost basis for applicable closed-end
  funds (1).
  Undrawn capital commitments to closed-end funds that have not yet                                                       (8,675 )                                             (9,560 )                                              (9,552 )
  commenced their investment periods
  Undrawn capital commitments to funds for which management fees are                                                      (3,714 )                                             (3,242 )                                              (3,720 )
  based on drawn capital, NAV or cost basis
  Oaktree’s general partner investments in management fee-generating                           (1,883 )                                             (1,948 )                                              (1,987 )
  funds
  Funds that are no longer paying management fees and co-investments                                                      (2,153 )                                             (2,118 )                                              (1,426 )
  that pay no management fees (2)
                                                                                                                     ----------  --------------------                      ---------  --------------------                      ----------  --------------------
Management fee-generating assets under management                                                                       $ 80,170                          $ 79,807                           $ 78,700  
                                                                                                                     ==== ====== ====================                      === ====== ====================                      ==== ====== ====================
 
-----------------------------------------------------------------------------------------------
(1)   This difference is not applicable to closed-end funds that pay
                         management fees based on NAV or leverage.
(2)                      This includes certain accounts that pay administrative fees intended
                         to offset Oaktree’s costs related to the accounts.
                          

The period-end weighted average annual management fee rates applicable to the respective management fee-generating AUM balances above are set forth below.

                                                                                             As of
                                                                   ----------------------------------------------------------------------------------------------
Weighted Average Annual Management Fee Rates:                       September 30,   June 30,           September 30,
                                                                        2017                             2017                                    2016
                                                                   ------------                       --------                       --------------------------
Closed-end funds:
   Senior Loans                                                      0.50 %                           0.50 %                           0.50 %
   Other closed-end funds                                            1.49                             1.49                             1.51
Open-end funds                                                       0.46                             0.46                             0.46
Evergreen funds                                                      1.17                             1.21                             1.22
Overall                                                              0.91                             0.92                             0.95
                                                                                                                                             
Incentive-creating AUM                       
                                                                                                                                  As of
                                                                 --------------------------------------------------------------------------------------------------------------------------------------
                                                                           September 30,                       June 30,                      September 30,
                                                                               2017                                                 2017                                               2016
                                                                 ------------------------------                        ----------------------------                        --------------------------
Incentive-creating Assets Under Management:                                                                                   (in millions)
Closed-end funds                                                    $ 27,555                                            $ 27,450                                                $               29,241
Evergreen funds                                                        3,465                            3,376                                              3,199
                                                                 --------------------------------                      ------------------------------                      ----------------------------
Total                                                               $ 31,020                         $ 30,826                             $               32,440
                                                                 ==== ====== ====================                      == ====== ====================                      ====== ====================
                                                                                                                                                                                   
Accrued Incentives (Fund Level) and Incentives Created (Fund                                                                                                        
Level)
                                                                                                                         As of or for the Three Months                                                                                     As of or for the Nine Months
                                                                                                                              Ended September 30,                                                                                               Ended September 30,
                                                                                         --------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------
                                                                                                         2017                                  2016                                                     2017                                  2016
                                                                                         ------------------------------------                     ------------------------------------                     ------------------------------------                     ------------------------------------
Accrued Incentives (Fund Level):                                                                                                                                                         (in thousands)
Beginning balance                                                                           $ 1,779,578                           $ 1,525,854                           $ 2,014,097                           $ 1,585,217  
                                                                                         ---- --------- --------------------                      ---- --------- --------------------                      ---- --------- --------------------                      ---- --------- --------------------
Incentives created (fund level):
  Closed-end funds                                                                              122,273                                                  402,842                                                  471,501                                                  522,847
  Evergreen funds                                                                                12,542                                19,843                                33,434                                24,710  
                                                                                         -----------------------------------                      -----------------------------------                      -----------------------------------                      -----------------------------------
    Total incentives created (fund level)                                                       134,815                               422,685                               504,935                               547,557  
                                                                                         -----------------------------------                      -----------------------------------                      -----------------------------------                      -----------------------------------
Less: incentive income recognized by us                                                         (53,728 )                                                (99,731 )                                               (658,367 )                                               (283,966 )
                                                                                         -----------------------------------                      -----------------------------------                      -----------------------------------                      -----------------------------------
Ending balance                                                                              $ 1,860,665                           $ 1,848,808                           $ 1,860,665                           $ 1,848,808  
                                                                                         ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================
Accrued incentives (fund level), net of associated incentive income                         $   899,891                           $   872,716                           $   899,891                           $   872,716  
compensation expense
                                                                                         ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================
                                                                                                                                                                                                                                                                                    

Non-GAAP Results

Our business is comprised of one segment, our investment management business, which consists of the investment management services that we provide to our clients. Management makes operating decisions and assesses the performance of our business based on financial data that are presented without the consolidation of our funds. The data most important to management in assessing our performance are adjusted net income, adjusted net income-OCG, distributable earnings, distributable earnings-OCG, fee-related earnings and fee-related earnings-OCG. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented at Exhibit A.

Adjusted Net Income

Beginning with the second quarter of 2017, the definition of adjusted net income was modified with respect to third-party placement costs associated with closed-end funds and liability-classified EVUs to conform to the GAAP treatment. Under GAAP, placement costs are expensed as incurred and liability-classified EVUs are remeasured as of each reporting date. Previously for adjusted net income, placement costs were capitalized and amortized in proportion to the associated management fee stream, and liability-classified EVUs were treated as equity-classified awards. All prior periods have been recast for these changes.

The following schedules set forth the components of adjusted net income and adjusted net income-OCG, as well as per unit data:

Adjusted Revenues                                                                                                       
---------------------------
                                                                                                                                                                
                                                                             Three Months Ended September 30,                                                                             Nine Months Ended September 30,
                                                 -----------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------
                                                                2017                                2016                                                    2017                              2016
                                                 ----------------------------------                     ----------------------------------                     -------------------------------------                     ---------------------------
                                                                                                                                           (in thousands)
Revenues:
  Management fees                                   $ 186,615                                              $ 194,349                                               $   558,494                                               $              593,069
  Incentive income                                     53,728                                                 99,731                                                   658,367                                                              283,966
  Investment income                                    64,413                              70,928                                183,444                                           133,730
                                                 ---------------------------------                      ---------------------------------                      ------------------------------------                      ---------------------------
    Total adjusted revenues                         $ 304,756                           $ 365,008                            $ 1,400,305                            $            1,010,765
                                                 ==== ======= ====================                      ==== ======= ====================                      ===== ========= ====================                      ===== ====================
                                                                                                                                                                                                                                
Management Fees                                     Three Months Ended September 30,                                                         Nine Months Ended September 30,
                                           -----------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------
                                                          2017                                2016                                                   2017                             2016
                                           ----------------------------------                     ----------------------------------                     -----------------------------------                     ---------------------------
                                                                                                                                    (in thousands)
Management fees:
   Closed-end funds                           $ 131,612                                              $ 141,513                                               $ 395,215                                               $              435,717
   Open-end funds                                40,882                                                 39,828                                                 121,507                                                              117,017
   Evergreen funds                               14,121                              13,008                               41,772                                            40,335
                                           ---------------------------------                      ---------------------------------                      ----------------------------------                      ---------------------------
Total management fees                         $ 186,615                           $ 194,349                            $ 558,494                            $              593,069
                                           ==== ======= ====================                      ==== ======= ====================                      ===== ======= ====================                      ===== ====================
                                                                                                                                                                                                                        
Investment Income                                                     Three Months Ended September 30,                                                           Nine Months Ended September 30,
                                                              ---------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                            2017                               2016                                                   2017                                2016
                                                              ---------------------------------                     ---------------------------------                     ----------------------------------                     ----------------------------------
Income (loss) from investments in funds:                                                                                                                 (in thousands)
  Oaktree funds:
    Corporate Debt                                               $ 10,409                                              $ 15,932                                              $  28,242                                              $  15,026
    Convertible Securities                                            535                                                    77                                                  1,398                                                   (819 )
    Distressed Debt                                                15,255                                                15,295                                                 46,905                                                 34,462
    Control Investing                                               3,985                                                19,702                                                 15,055                                                 19,535
    Real Estate                                                     6,063                                                 3,791                                                 14,519                                                  8,353
    Listed Equities                                                 8,312                                                (2,802 )                                               18,738                                                  2,956
  Non-Oaktree funds                                                 2,413                                                 1,166                                                  6,423                                                  4,661
Income from investments in companies                               17,441                             17,767                              52,164                              49,556  
                                                              --------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Total investment income                                          $ 64,413                           $ 70,928                           $ 183,444                           $ 133,730  
                                                              ==== ====== ====================                      ==== ====== ====================                      ==== ======= ====================                      ==== ======= ====================
                                                                                                                                                                                                                                               
Adjusted Expenses                                                                             
-------------------------------
                                                                                                                                      
                                                                  Three Months Ended September 30,                                                         Nine Months Ended September 30,
                                                     -----------------------------------------------------------                     ---------------------------------------------------------------------------
                                                            2017                 2016                                    2017                         2016
                                                     -------------------                     -------------------                     -------------------                     -----------------------------------
                                                                                                                           (in thousands)
Expenses:
  Compensation and benefits                             $  (95,691 )                            $  (94,624 )                            $ (297,097 )                            $ (298,067 )
  Equity-based compensation                                (14,691 )                               (15,637 )                               (40,971 )                               (38,192 )
  Incentive income compensation                            (26,362 )                               (47,378 )                              (369,480 )                              (132,534 )
  General and administrative                               (29,134 )                               (30,151 )                               (94,042 )                              (100,146 )
  Depreciation and amortization                             (2,036 )                                (2,866 )                                (6,863 )                                (9,074 )
                                                     ------------------                      ------------------                      ------------------                      ----------------------------------
    Total adjusted expenses                             $ (167,914 )                            $ (190,656 )                            $ (808,453 )                            $ (578,013 )
                                                     ==== ======== ====                      ==== ======== ====                      ==== ======== ====                      ==== ======== ====================
                                                                                                                                                                                            
Adjusted Interest and Other Income                                                  
(Expense), Net
--------------------------------------------
                                                                                                                                               
                                                                             Three Months Ended September 30,                                              Nine Months Ended September 30,
                                                                  -------------------------------------------------------                     ---------------------------------------------------------
                                                                        2017               2016                                   2017                2016
                                                                  -----------------                     -----------------                     ------------------                     ------------------
                                                                                                                             (in thousands)
Interest expense, net of interest income (1)                         $ (6,280 )                            $ (7,799 )                            $ (19,795 )                            $ (24,458 )
Other income (expense), net                                               874                                (4,902 )                                2,197                                 (6,294 )
 
--------------------------------------------
(1)   Interest income was $2.7 million and $6.8 million for the three and
                         nine months ended September 30, 2017, respectively, and $1.7 million
                         and $4.6 million for the three and nine months ended September 30,
                         2016, respectively.
                          
Adjusted Net Income                                                                                                                                             
-------------------------------------------------------------------
                                                                                                                                                                                                        
                                                                                                                     Three Months Ended September 30,                                                                               Nine Months Ended September 30,
                                                                                         -----------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                                        2017                                2016                                                   2017                                2016
                                                                                         ----------------------------------                     ----------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                          (in thousands, except per unit data)
Adjusted net income                                                                         $ 131,436                                              $ 161,651                                              $ 574,254                                              $ 402,000
  Adjusted net income attributable to OCGH non-controlling interest                           (77,271 )                                              (96,180 )                                             (338,471 )                                             (239,607 )
  Non-Operating Group expenses                                                                    (62 )                                                 (182 )                                                 (549 )                                                 (647 )
                                                                                         ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Adjusted net income-OCG before income taxes                                                    54,103                                                 65,289                                                235,234                                                161,746
  Income taxes-OCG                                                                            (10,794 )                                               (7,579 )                                              (27,078 )                                              (27,141 )
                                                                                         ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Adjusted net income-OCG                                                                     $  43,309                           $  57,710                           $ 208,156                           $ 134,605  
                                                                                         ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Adjusted net income per Class A unit                                                        $    0.67                           $    0.92                           $    3.26                           $    2.16  
                                                                                         ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Weighted average number of Class A units outstanding                                           64,394                              62,755                              63,875                              62,424  
                                                                                         =================================                      =================================                      =================================                      =================================
                                                                                                                                                                                                                                                                            

Distributable Earnings and Distribution Calculation

Distributable earnings and the calculation of distributions are set forth below:

                                                                                        Three Months Ended September 30,                                                              Nine Months Ended September 30,
                                                                             --------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------
                                                                                             2017                                  2016                                                   2017                                 2016
                                                                             -------------------------------------                     ----------------------------------                     ----------------------------------                     ------------------------------------
Distributable Earnings:                                                                                                                                          (in thousands, except per unit data)
                                                                                                                                                                                                                                                      
Adjusted net income                                                                $ 131,436                                              $ 161,651                                              $ 574,254                                                $ 402,000
  Investment income                                                                  (64,413 )                                              (70,928 )                                             (183,444 )                                               (133,730 )
  Receipts of investment income from funds (1)                                        24,919                                                 18,020                                                 91,264                                                   41,637
  Receipts of investment income from companies                                        17,164                                                 17,866                                                 42,923                                                   42,293
  Equity-based compensation                                                           14,691                                                 15,637                                                 40,971                                                   38,192
  Operating Group income taxes                                                        (5,208 )                                               (1,662 )                                               (7,850 )                                                 (4,491 )
                                                                             ------------------------------------                      ---------------------------------                      ---------------------------------                      -----------------------------------
Distributable earnings                                                             $ 118,589                           $ 140,584                           $ 558,118                             $ 385,901  
                                                                             ======= ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                      
Distribution Calculation:
Operating Group distribution with respect to the period                            $ 101,586                                              $ 119,314                                              $ 474,832                                                $ 336,319
Distribution per Operating Group unit                                              $    0.65                                              $    0.77                                              $    3.04                                                $    2.17
Adjustments per Class A unit:
  Distributable earnings-OCG income tax expense                                        (0.01 )                                                (0.03 )                                                (0.20 )                                                  (0.12 )
  Tax receivable agreement                                                             (0.08 )                                                (0.08 )                                                (0.24 )                                                  (0.24 )
  Non-Operating Group expenses                                                --                               (0.01 )                                                (0.02 )                                                  (0.03 )
                                                                             ------------------------------------                      ---------------------------------                      ---------------------------------                      -----------------------------------
Distribution per Class A unit (2)                                                  $    0.56                           $    0.65                           $    2.58                             $    1.78  
                                                                             ======= ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ====== ======= ====================
 
-------------------------------------------------------
(1)   This adjustment characterizes a portion of the distributions
                         received from funds as receipts of investment income or loss. In
                         general, the income or loss component of a fund distribution is
                         calculated by multiplying the amount of the distribution by the
                         ratio of our investment’s undistributed income or loss to our
                         remaining investment balance. In addition, if the distribution is
                         made during the investment period, it is generally not reflected in
                         distributable earnings until after the investment period ends.
                         Additionally, any impairment charges on our CLO investments included
                         in ANI are, for distributable earnings purposes, amortized over the
                         remaining investment period of the respective CLO to align with the
                         timing of expected cash flows.
(2)                      With respect to the quarter ended September 30, 2017, a distribution
                         was announced on October 26, 2017 and is payable on November 10,
                         2017.
                          
Units Outstanding                                                                                                                
                                                                                                                                                                         
                                                                                           Three Months Ended September 30,                                                                 Nine Months Ended September 30,
                                                                    -------------------------------------------------------------------------------                     -----------------------------------------------------------------------
                                                                                2017                           2016                                              2017                       2016
                                                                    -----------------------------                     -----------------------------                     -----------------------------                     --------------------
                                                                                                                                                  (in thousands)
Weighted Average Units:
OCGH                                                                 91,864                                            92,190                                            91,750                                                         92,181
Class A                                                              64,394                         62,755                         63,875                                      62,424
                                                                    ------- --------------------                      ------- --------------------                      ------- --------------------                      --------------------
Total                                                               156,258                        154,945                        155,625                                     154,605
                                                                    ======= ====================                      ======= ====================                      ======= ====================                      ====================
Units Eligible for Fiscal Period Distribution:
OCGH                                                                 91,682                                            92,039
Class A                                                              64,604                         62,914  
                                                                    ------- --------------------                      ------- --------------------
Total                                                               156,286                        154,953  
                                                                    ======= ====================                      ======= ====================
                                                                                                                                                                                                                           
GAAP Statement of Financial Condition (Unaudited)                      
                                                                                            
                                                                                                                                                                                    As of September 30, 2017
                                                                                           ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Oaktree and                                Consolidated                          Eliminations                  Consolidated
                                                                                                          Operating                                                        Funds
                                                                                                        Subsidiaries
                                                                                           ------------------------------------                        -----------------------------------------                        -------------------------                        --------------------------
                                                                                                                                                                                         (in thousands)
Assets:
Cash and cash-equivalents                                                                        $   705,121                                                 $ --                                                 $ --                                $              705,121
U.S. Treasury and other securities                                                                   324,478                                                   --                                                   --                                               324,478
Corporate investments                                                                              1,608,082                                                   --                                                         (553,095 )                                           1,054,987
Deferred tax assets                                                                                  405,042                                                   --                                                   --                                               405,042
Receivables and other assets                                                                         401,868                                                   --                                                           (2,812 )                                             399,056
Assets of consolidated funds                                                                  --                                     5,979,078                                          (863 )                                           5,978,215
                                                                                           --------------------------------------                      -------------------------------------------                      ---------------------------                      ----------------------------
Total assets                                                                                     $ 3,444,591                              $      5,979,078                              $       (556,770 )                              $            8,866,899
                                                                                           ======= ========= ====================                      ======= ============== ====================                      ======= ============== ====                      ====== ====================
Liabilities and Capital:
Liabilities:
  Accounts payable and accrued expenses                                                          $   375,444                                                 $ --                                                 $          4,952                                $              380,396
  Due to affiliates                                                                                  342,226                                                   --                                                   --                                               342,226
  Debt obligations                                                                                   746,556                                                   --                                                   --                                               746,556
  Liabilities of consolidated funds                                                           --                                     4,795,301                                       (16,203 )                                           4,779,098
                                                                                           --------------------------------------                      -------------------------------------------                      ---------------------------                      ----------------------------
    Total liabilities                                                                              1,464,226                                     4,795,301                                       (11,251 )                                           6,248,276
                                                                                           --------------------------------------                      -------------------------------------------                      ---------------------------                      ----------------------------
Non-controlling redeemable interests in consolidated funds                                    --                                                   --                                                          609,354                                               609,354
Capital:
  Unitholders’ capital attributable to OCG                                875,444                                                          225,517                                                         (225,517 )                                             875,444
  Non-controlling interest in consolidated subsidiaries                                            1,104,921                                                          320,002                                                         (320,002 )                                           1,104,921
  Non-controlling interest in consolidated funds                                              --                                       638,258                                      (609,354 )                                              28,904
                                                                                           --------------------------------------                      -------------------------------------------                      ---------------------------                      ----------------------------
    Total capital                                                                                  1,980,365                                     1,183,777                                    (1,154,873 )                                           2,009,269
                                                                                           --------------------------------------                      -------------------------------------------                      ---------------------------                      ----------------------------
    Total liabilities and capital                                                                $ 3,444,591                              $      5,979,078                              $       (556,770 )                              $            8,866,899
                                                                                           ======= ========= ====================                      ======= ============== ====================                      ======= ============== ====                      ====== ====================
                                                                                                                                                                                                                                                                                 
Corporate Investments                                                          
                                                                                                    
                                                                                                                                                                            As of
                                                                                                   ------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               September 30,                           June 30,                            September 30,
                                                                                                                   2017                                                     2017                                                     2016
                                                                                                   ---------------------------------                        ---------------------------------                        ---------------------------------
Investments in funds:                                                                                                                                                  (in thousands)
  Oaktree funds:
    Corporate Debt                                                                                    $   550,888                                              $   518,813                                              $   421,466
    Convertible Securities                                                                                 28,134                                                   27,599                                                    1,704
    Distressed Debt                                                                                       370,152                                                  396,077                                                  396,173
    Control Investing                                                                                     250,244                                                  236,099                                                  263,882
    Real Estate                                                                                           133,129                                                  135,751                                                  117,822
    Listed Equities                                                                                       139,628                                                  132,113                                                   92,962
  Non-Oaktree funds                                                                                        94,262                                                   72,326                                                   69,651
Investments in companies                                                                                   24,242                                25,188                                19,952  
                                                                                                   -----------------------------------                      -----------------------------------                      -----------------------------------
Total corporate investments - Non-GAAP                                                     1,590,679                                                1,543,966                                                1,383,612
  Adjustments (1)                                                                                          17,403                                19,031                               (30,838 )
                                                                                                   -----------------------------------                      -----------------------------------                      -----------------------------------
Total corporate investments - Oaktree and operating subsidiaries                           1,608,082                                                1,562,997                                                1,352,774
  Eliminations                                                                                           (553,095 )                                               (546,919 )                                               (311,780 )
                                                                                                   -----------------------------------                      -----------------------------------                      -----------------------------------
Total corporate investments - Consolidated                                               $ 1,054,987                           $ 1,016,078                           $ 1,040,994  
                                                                                                   ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================
 
-----------------------------------------------------------------------------
(1)   This adjusts CLO investments carried at amortized cost to fair value
                         for GAAP reporting.
                          

Fund Data

Information regarding our closed-end, open-end and evergreen funds, together with benchmark data where applicable, is set forth below. For our closed-end and evergreen funds, no benchmarks are presented in the tables as there are no known comparable benchmarks for these funds’ investment philosophy, strategy and implementation.

Closed-end Funds

                                                                                                                                                                                                                                                                                                                      As of September 30, 2017
                                                                                                                       ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Investment Period                                             Total                   %                 %                     Fund Net                         Distri-                          Net                          Manage-                       Incentive                       Accrued                                Unreturned                                            IRR Since                              Multiple
                                                                                                                              Committed                              Invested (1)                           Drawn (2)                                     Income                                             butions                                            Asset                                           ment Fee-                                          Income                                          Incentives                                                     Drawn                                                               Inception (5)                                               of Drawn
                                                                                                                               Capital                                                                                                                     Since                                              Since                                             Value                                            gener-                                            Recog-                                             (Fund                                                   Capital Plus                                                                                                                       Capital (6)
                                                                                                                                                                                                                                                         Inception                                          Inception                                                                                             ating                                             nized                                          Level) (3)                                                    Accrued
                                                                                                                                                                                                                                                                                                                                                                                                                   AUM                                              (Non-                                                                                                       Preferred
                                                                                                                                                                                                                                                                                                                                                                                                                                                                    GAAP)                                                                                                      Return (4)
                                                   --------------------------------------------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   ------------------------------------------------
                                                   Start Date                         End Date
                                                   ----------                      --------------                      --------------------                        ---------------                      ---------------                      -----------------------------                        --------------------------                        --------------------------                        --------------------------                        --------------------------                        --------------------------                        ----------------------------------------------                                                                                                  --------------------
                                                                                                                                                                                                                                                                                        (in millions)
Distressed Debt
Oaktree Opportunities Fund Xb (7)                      TBD                         --                            $      8,872                           --%                      --%                           $      --                                $      --                             $      --                             $      --                             $      --                             $      --                             $      --                                                       n/a                        n/a                                         n/a
Oaktree Opportunities Fund X (7)                    Jan. 2016                         Jan. 2019                                     3,603                                 76                                   44                                                    629                                                   80                                             2,135                                             3,404                                    --                                               122                                             1,648                                           46.5           %           28.5           %                                       1.5x
Oaktree Opportunities Fund IX                       Jan. 2014                         Jan. 2017                                     5,066                                 nm                                   100                                                   519                                                1,165                                             4,419                                             4,358                                    --                                    --                                             5,398                                            5.6                        3.0                                                    1.2
Oaktree Opportunities Fund VIIIb                    Aug. 2011                         Aug. 2014                                     2,692                                 nm                                   100                                                   675                                                1,809                                             1,558                                             1,704                                                52                                    --                                             2,005                                            7.9                        5.0                                                    1.4
Special Account B                                   Nov. 2009                         Nov. 2012                                     1,031                                 nm                                   100                                                   578                                                1,352                                               331                                               321                                                16                                    --                                               249                                           13.5                       11.1                                                    1.6
Oaktree Opportunities Fund VIII                     Oct. 2009                         Oct. 2012                                     4,507                                 nm                                   100                                                 2,408                                                5,541                                             1,375                                             1,236                                               165                                               303                                               828                                           12.8                        8.9                                                    1.6
Special Account A                                   Nov. 2008                         Oct. 2012                                       253                                 nm                                   100                                                   307                                                  507                                                52                                                49                                                50                                                10                                    --                                           28.0                       22.7                                                    2.3
OCM Opportunities Fund VIIb                         May 2008                          May 2011                                     10,940                                 nm                                   90                                                  8,972                                               17,744                                             1,072                                               866                                             1,534                                               209                                    --                                           21.9                       16.6                                                    2.0
OCM Opportunities Fund VII                          Mar. 2007                         Mar. 2010                                     3,598                                 nm                                   100                                                 1,479                                                4,742                                               335                                               590                                                85                                    --                                               481                                           10.3                        7.5                                                    1.5
Legacy funds (8).                                    Various                           Various                                     12,495                                 nm                                   100                                                10,456                                               22,912                                                39                                    --                                             1,555                                                 9                                    --                                           23.6    18.5                                 1.9
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  ---- --------------------  ---- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  22.0 %                     16.2 %
Real Estate Opportunities
Oaktree Real Estate Opportunities Fund VII (9)(10)  Jan. 2016                         Jan. 2020                              $      2,921                                 58%                                  10%                                 $                 127                                $                 199                             $                 220                             $               2,566                             $      --                             $                  24                             $                 109                                                       nm                         nm                                         1.8x
Oaktree Real Estate Opportunities Fund VI           Aug. 2012                         Aug. 2016                                     2,677                                 nm                                   100                                                 1,259                                                1,425                                             2,511                                             1,876                                                22                                               222                                             2,011                                           16.0 %                     10.8 %                                                  1.6
Oaktree Real Estate Opportunities Fund V            Mar. 2011                         Mar. 2015                                     1,283                                 nm                                   100                                                   978                                                1,838                                               423                                               215                                               124                                                62                                    --                                           17.5                       12.9                                                    1.9
Special Account D                                   Nov. 2009                         Nov. 2012                                       256                                 nm                                   100                                                   199                                                  350                                               113                                                33                                                 4                                                16                                                42                                           14.8                       12.8                                                    1.8
Oaktree Real Estate Opportunities Fund IV           Dec. 2007                         Dec. 2011                                       450                                 nm                                   100                                                   395                                                  753                                                92                                                63                                                57                                                18                                    --                                           16.0                       10.9                                                    2.0
Legacy funds (8).                                    Various                           Various                                      2,341                                 nm                                   99                                                  2,010                                                4,316                                                11                                    --                                               231                                                 2                                    --                                           15.2    11.9                                 1.9
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  ---- --------------------  ---- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  15.5 %                     11.9 %
Real Estate Debt
Oaktree Real Estate Debt Fund II (9)(11)            Mar. 2017                         Mar. 2020                              $      1,017                                 49%                                  9%                                  $      --                                $                   5                             $                  84                             $                 482                             $      --                             $      --                             $                  85                                    nm                         nm                                         1.1x
Oaktree Real Estate Debt Fund                       Sep. 2013                         Oct. 2016                                     1,112                                 nm                                   61                                                    149                                                  495                                               328                                               594                                                 6                                                16                                               213                                           26.2 %                     19.8 %                                                  1.4
Oaktree PPIP Fund (12).                             Dec. 2009                         Dec. 2012                                     2,322                                 nm                                   48                                                    457                                                1,570                                    --                                    --                                                47                                    --                                    --                                           28.2                                   n/a                                         1.4
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
Real Estate Income (13)
Special Account G (9)(11)                           Oct. 2016                         Oct. 2020                              $        615                                 48%                                  48%                                 $                  36                                $                  26                             $                 305                             $                 241                             $      --                             $                   7                             $                 284                                                       nm                         nm                                         1.1x
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
European Principal (14)
Oaktree European Principal Fund IV (7)(9)           Jul. 2017                         Jul. 2022                        EUR 1,119                                 43%                                  20%                           EUR            (13 )                        EUR --                       EUR            209                       EUR          1,089                       EUR --                       EUR --                       EUR            225                                                       nm                         nm                                         1.0x
Oaktree European Principal Fund III                 Nov. 2011                         Nov. 2016                        EUR 3,164                                 nm                                   85                            EUR          2,017                          EUR            873                       EUR          3,893                       EUR          2,682                       EUR --                       EUR            392                       EUR          2,783                                           19.3           %           13.0           %                                        1.9
OCM European Principal Opportunities Fund II        Dec. 2007                         Dec. 2012                        EUR 1,759                                 nm                                   100                           EUR            400                          EUR          1,867                       EUR            264                       EUR            799                       EUR             29                       EUR --                       EUR            702                                            8.4                        4.4                                                    1.4
OCM European Principal Opportunities Fund           Mar. 2006                         Mar. 2009                              $        495                                 nm                                   96                                  $                 454                                $            927                                  $      --                             $      --                             $                  87                             $      --                             $      --                                           11.7     8.9                                 2.1
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  ---- --------------------  ---- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  13.5 %                      8.9 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                        As of September 30, 2017                                                                                                                                                                                                                                     
                                                                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ -------------------- ------------------------------------------
                                                                                  Investment Period                                          Total                 %             %         Fund Net Income           Distri-                  Net                             Manage-                             Incentive                                 Accrued                             Unreturned                                       IRR Since                                      Multiple
                                                                                                                                           Committed                            Invested (1)                       Drawn (2)                             Since                                   butions                                    Asset                                              ment Fee-                                                Income                                                    Incentives                                                  Drawn                                                          Inception (5)                                                       of Drawn
                                                                                                                                            Capital                                                                                                    Inception                                  Since                                     Value                                               gener-                                                  Recog-                                                       (Fund                                                Capital Plus                                                                                                                          Capital (6)
                                                                                                                                                                                                                                                                                                Inception                                                                                        ating                                                   nized                                                    Level) (3)                                                 Accrued
                                                                                                                                                                                                                                                                                                                                                                                                  AUM                                                 (Non-GAAP)                                                                                                            Preferred
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Return (4)
                                                                     ---------------------------------------                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    -----------------------------------------------------------------
                                                                     Start Date                       End Date
                                                                     ----------                      ---------
                                                                                                                                                                                                                                                                                                          (in millions)
European Private Debt (14)
Oaktree European Capital Solutions Fund (7)(11)                       Dec. 2015                       Dec. 2018                     EUR   703                               69%                              49%                        EUR    14                       EUR   110                       EUR     234                       EUR     247                                           EUR --                       EUR              1                                           EUR     233                        9.6%                                 6.1%                   1.1x
Oaktree European Dislocation Fund                                     Oct. 2013                       Oct. 2016                     EUR   294                               nm                               57                         EUR    39                       EUR   167                       EUR      54                       EUR      54                                           EUR              2                       EUR              4                                           EUR      32                        21.1                                                    15.1                                       1.3
Special Account E                                                     Oct. 2013                       Apr. 2015                     EUR   379                               nm                               69                         EUR    63                       EUR   269                       EUR      55                       EUR      54                                           EUR              4                       EUR              6                                           EUR      32                        14.4                                                    11.2                                       1.3
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                -----                                            --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 15.3%                                                   11.2%
Special Situations (15)
Oaktree Special Situations Fund (7)                                   Nov. 2015                       Nov. 2018                           $      1,377                               82%                              41%                                   $   176                             $        158                             $          589                             $        1,256                                                      $ --                             $                  34                                                 $          448                        51.6%                                                   29.4%                                     1.4x
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                -----                                            --------------------
Other funds:
Oaktree Principal Fund V                                              Feb. 2009                       Feb. 2015                           $      2,827                               nm                               91%                                   $   456                             $      1,642                             $        1,400                             $        1,658                                                      $             50                             $      --                                                 $        2,093                        7.6%                                                    3.4%                                      1.3x
Special Account C                                                     Dec. 2008                       Feb. 2014                                    505                               nm                               91                                        203                                      413                                        250                                        282                                                                    21                                    --                                                            263                        10.8                                                     7.6                                       1.6
OCM Principal Opportunities Fund IV                                   Oct. 2006                       Oct. 2011                                  3,328                               nm                               100                                     3,132                                    5,887                                        573                                        111                                                                   450                                               161                                                 --                        12.7                                                     9.3                                       2.1
Legacy funds (8).                                                      Various                         Various                                   3,701                               nm                               100                                     2,716                                    6,401                                         15                             --                                                                   404                                                 3                                                 --                        14.4                                                    11.1                                       1.8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                -----                                            --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 13.2%                                                   9.5%
Power Opportunities
Oaktree Power Opportunities Fund IV                                   Nov. 2015                       Nov. 2020                           $      1,106                               65%                              65%                                   $    25                             $          1                             $          741                             $        1,078                                                      $ --                             $      --                                                 $          762                        11.6%                                                   4.3%                                      1.1x
Oaktree Power Opportunities Fund III                                  Apr. 2010                       Apr. 2015                                  1,062                               nm                               66                                        409                                      583                                        524                                        405                                                                    24                                                55                                                            323                        20.8                                                    12.9                                       1.7
Legacy funds (8).                                                      Various                         Various                                   1,470                               nm                               63                                      1,690                                    2,616                             --                             --                                                                   123                                    --                                                 --                        35.1                                                    27.4                                       2.8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                -----                                            --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 34.5%                                                   26.2%
Infrastructure Investing
Highstar Capital IV (16).                                             Nov. 2010                       Nov. 2016                           $      2,000                               nm                              100%                                   $   456                             $        664                             $        1,792                             $        1,321                                                      $ --                             $                   3                                                 $        1,935                        12.2%                                                   7.9%                                      1.4x
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
U.S. Private Debt (17)
Oaktree Mezzanine Fund IV (11)                                        Oct. 2014                       Oct. 2019                           $        852                               60%                              60%                                   $    67                             $         79                             $          495                             $          472                                                      $ --                             $                  10                                                 $          481                        12.2%                                                   8.6%                                      1.2x
Oaktree Mezzanine Fund III (18).                                      Dec. 2009                       Dec. 2014                                  1,592                               nm                               89                                        421                                    1,507                                        337                                        339                                                                    15                                                25                                                            303                        14.9                              10.4 / 8.4                                    1.4
OCM Mezzanine Fund II                                                 Jun. 2005                       Jun. 2010                                  1,251                               nm                               88                                        486                                    1,504                                         90                             --                                                        --                                    --                                                            164                        10.9                                                     7.4                                       1.5
OCM Mezzanine Fund (19).                                              Oct. 2001                       Oct. 2006                                    808                               nm                               96                                        302                                    1,075                             --                             --                                                                    38                                    --                                                 --                        15.4                                                 10.8 / 10.5                                   1.5
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                -----
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 13.0%                                                   8.7%
Emerging Markets Opportunities
Oaktree Emerging Market Opportunities Fund                            Sep. 2013                       Sep. 2017                           $        384                               nm                               78%                                   $   100                             $        103                             $          295                             $          198                                                      $ --                             $                  18                                                 $          256                        15.8%                                                   10.5%                                     1.4x
Special Account F                                                     Jan. 2014                       Sep. 2017                                    253                               nm                               96                                         66                                      155                                        152                                        151                                     --                                                13                                         125                        15.4                                                    10.8                                       1.3
                                                                                                                                                                                                                                                                                                                                                                              -----------------------------------------                                                                        ------------------------------------------------                                                                 -----                                            --------------------
                                                                                                                                                                                                                                                                                                                                                                                            31,692                      (14)                                                                                         1,818                      (14)                                                             15.6%                                                   10.6%
                                                                                                                                                                                                                                                                                                                                              Other (20)                                     8,120                                                                                                    6  
                                                                                                                                                                                                                                                                                                                                                                              -----------------------------------------                                                                        ------------------------------------------------
                                                                                                                                                                                                                                                                                                                           Total (21)                            $       39,812                                                                                $           1,824      
-----------------------------------------------                                                                                                                                                                                                                                                                                                                               ============ ======= ====================                                                                        ============ ============== ====================
(1)  For our incentive-creating closed-end funds in their investment
     periods, this percentage equals invested capital divided by
     committed capital. Invested capital for this purpose is the sum of
     capital drawn from fund investors plus net borrowings, if any,
     outstanding, under a fund-level credit facility where such
     borrowings were made in lieu of drawing capital from fund investors.
(2)  Represents capital drawn from fund investors, net of distributions
     to such investors of uninvested capital, divided by committed
     capital. The aggregate change in drawn capital for the three months
     ended September 30, 2017 was $1.2 billion.
(3)  Accrued incentives (fund level) exclude non-GAAP incentive income
     previously recognized.
(4)  Unreturned drawn capital plus accrued preferred return reflects the
     amount the fund needs to distribute to its investors as a return of
     capital and a preferred return (as applicable) before Oaktree is
     entitled to receive incentive income (other than tax distributions)
     from the fund.
(5)  The internal rate of return ("IRR") is the annualized implied
     discount rate calculated from a series of cash flows. It is the
     return that equates the present value of all capital invested in an
     investment to the present value of all returns of capital, or the
     discount rate that will provide a net present value of all cash
     flows equal to zero. Fund-level IRRs are calculated based upon the
     actual timing of cash contributions/distributions to investors and
     the residual value of such investor’s capital accounts at the end of
     the applicable period being measured. Gross IRRs reflect returns
     before allocation of management fees, expenses and any incentive
     allocation to the fund’s general partner. To the extent material,
     gross returns include certain transaction, advisory, directors or
     other ancillary fees ("fee income") paid directly to us in
     connection with our funds’ activities (we credit all such fee income
     back to the respective fund(s) so that our funds’ investors share
     pro rata in the fee income’s economic benefit). Net IRRs reflect
     returns to non-affiliated investors after allocation of management
     fees, expenses and any incentive allocation to the fund’s general
     partner.
(6)  Multiple of drawn capital is calculated as drawn capital plus gross
     income and, if applicable, fee income before fees and expenses
     divided by drawn capital.
(7)  Fund data include the performance of the main fund and any
     associated fund-of-one accounts, except the gross and net IRRs
     presented reflect only the performance of the main fund. Certain
     fund-of-one accounts pay management fees based on cost basis, rather
     than committed capital.
(8)  Legacy funds represent certain predecessor funds within the relevant
     strategy that have substantially or completely liquidated their
     assets, including funds managed by certain Oaktree investment
     professionals while employed at the Trust Company of the West prior
     to Oaktree’s founding in 1995. When these employees joined Oaktree
     upon, or shortly after, its founding, they continued to manage the
     fund through the end of its term pursuant to a sub-advisory
     relationship between the Trust Company of the West and Oaktree.
(9)  The IRR is not considered meaningful ("nm") as the period from the
     initial capital contribution through September 30, 2017 was less
     than 18 months.
(10)  A portion of this fund pays management fees based on drawn, rather
      than committed, capital.
(11)  Management fees during the investment period are calculated on drawn
      capital or cost basis, rather than committed capital. As a result,
      as of September 30, 2017 management fee-generating AUM included only
      that portion of committed capital that had been drawn.
(12)  Due to differences in the allocation of income and expenses to this
      fund’s two primary limited partners, the U.S. Treasury and Oaktree
      PPIP Private Fund, a combined net IRR is not presented. Of the
      $2,322 million in capital commitments, $1,161 million related to the
      Oaktree PPIP Private Fund, whose gross and net IRR were 24.7% and
      18.6%, respectively.
(13)  Effective August 2017, the Real Estate Value-Add strategy was
      renamed Real Estate Income.
(14)  Aggregate IRRs or totals are based on the conversion of cash flows
      or amounts, respectively, from euros to USD using the September 30,
      2017 spot rate of $1.18.
(15)  Effective November 2016, the Global Principal strategy was renamed
      Special Situations. The aggregate gross and net IRRs presented for
      this strategy exclude the performance of Oaktree Special Situations
      Fund.
(16)  The fund follows the American-style distribution waterfall, whereby
      the general partner may receive an incentive allocation as soon as
      it has returned the drawn capital and paid a preferred return on the
      fund’s realized investments (i.e., on a deal-by-deal basis).
      However, such cash distributions of incentives may be subject to
      repayment, or clawback. As of September 30, 2017, Oaktree had not
      recognized any incentive income from this fund. The accrued
      incentives (fund level) amount shown for this fund represents
      Oaktree’s effective 8% of the potential incentives generated by this
      fund in accordance with the terms of the Highstar acquisition.
(17)  Effective April 2017, the Mezzanine Finance strategy was renamed
      U.S. Private Debt, and includes our Mezzanine Finance and Direct
      Lending funds.
(18)  The fund’s partnership interests are divided into Class A and Class
      B interests, with the Class A interests having priority with respect
      to the distribution of current income and disposition proceeds. The
      net IRR for Class A interests was 10.4% and Class B interests was
      8.4%. The combined net IRR for Class A and Class B interests was
      9.5%.
(19)  The fund’s partnership interests are divided into Class A and Class
      B interests, with the Class A interests having priority with respect
      to the distribution of current income and disposition proceeds. The
      net IRR for Class A interests was 10.8% and Class B interests was
      10.5%. The combined net IRR for the Class A and Class B interests
      was 10.6%.
(20)  This includes our closed-end Senior Loan funds, CLOs, a non-Oaktree
      fund and certain separate accounts and co-investments.
(21)  The total excludes one closed-end fund with management
      fee-generating AUM aggregating $214 million as of September 30,
      2017, which has been included as part of the Strategic Credit
      strategy within the evergreen funds table.
      
Open-end Funds                                                                                                                                 
-------------------------
                                                                                                                                                                                                          
                                                                                            Manage-                                                Twelve Months Ended                                                                    Since Inception through September 30, 2017
                                                                                        ment Fee-gener-                                            September 30, 2017
                                                                                           ating AUM
                                                                                             as of
                                                                                        Sept. 30, 2017
                                                                                                                                     ---------------------------------------                             -------------------------------------------------------------------------------------------------
                                                Strategy                                                                                                                                           Annualized Rates of Return (1)                          Sharpe Ratio
                                                Inception
                                               ---------                            ------------------------------------------------------------------------------         ----------------------------------------------------------------------                             ----------
                                                                            Oaktree                                   Rele-                  Oaktree                   Rele-     Oaktree Gross          Rele-
                                                                                                                                      vant Bench-                                                         vant Bench-                                         vant Bench-
                                                                                                                                         mark                                                                mark                                                mark
                                               ------------------------------------------------------------                          ----------   -----------------------------                          ----------   -------------                      --------------------
                                                            Gross                                                                           Gross    Net
                                               --------------------------------------------------------------                              -------                     ----
                                                                                         (in millions)
                                                                                                                                                                                                                                                                                                  
U.S. High Yield Bonds                             1986                            $ 16,853                                             7.4 %                       6.9 %    8.3 %                          9.3 %                8.8 %                                          8.4 %       0.82          0.58
Global High Yield Bonds                           2010                               4,563                                             8.6                         8.1      9.1                            7.6                  7.1                                            7.2         1.19          1.16
European High Yield Bonds                         1999                               1,075                                             8.5                         8.0      9.6                            8.2                  7.6                                            6.5         0.73          0.47
U.S. Convertibles                                 1987                               2,906                                             7.6                         7.1     14.3                            9.4                  8.8                                            8.3         0.50          0.38
Non-U.S. Convertibles                             1994                               1,520                                             7.9                         7.3      5.4                            8.4                  7.8                                            5.6         0.80          0.41
High Income Convertibles                          1989                               1,076                                             7.9                         7.1      8.5                           11.3                 10.5                                            8.2         1.07          0.61
U.S. Senior Loans                                 2008                               1,354                                             6.4                         5.9      5.4                            6.1                  5.5                                            5.2         1.11          0.66
European Senior Loans                             2009                               1,695                                             4.0                         3.5      4.2                            8.0                  7.5                                            8.7         1.70          1.71
Emerging Markets Equities                         2011                               3,717                                            26.5                        25.6     22.5                            2.5                  1.7                                            1.6         0.13          0.08
Multi-Strategy Credit (2)                         2017                                 525                                                nm                 nm               nm                              nm                      nm                                          nm        nm            nm
Other                                                                                  286  
                                                                              ---------------------------------
                                                   Total                          $ 35,570  
                                                                              ===== ====== ====================
 
---------------------------------------------------------
(1)   Returns represent time-weighted rates of return, including
                         reinvestment of income, net of commissions and transaction costs.
                         The returns for Relevant Benchmarks are presented on a gross basis.
(2)                      Performance is not considered meaningful ("nm") as the period from
                         the initial capital contribution through September 30, 2017 was less
                         than 18 months. As a result, returns for the relevant benchmark and
                         the Sharpe Ratio have been excluded.
                          
Evergreen Funds                                                                                                                                                                                              
-------------------------
                                                                                                                                                                                                                                                                                           
                                                                                                                                       As of September 30, 2017                                                                                   Twelve Months Ended                          Since Inception through
                                                                                                                                                                                                                                                  September 30, 2017                             September 30, 2017
                                                                              --------------------------------------------------------------------------------------------------------------------------------
                                                                                  AUM                    Manage-                                   Accrued Incen-
                                                                                                                             ment                                                      tives (Fund Level)
                                                                                                                          Fee-gener-
                                                                                                                           ating AUM
                                                                              -------                        ----------------------------------                        -----------------------------------------------
                                                Strategy                                                                             Rates of Return (1)                                                               Annualized Rates
                                                Inception                                                                                                                                                                of Return (1)
                                               ---------                                                     -------------------------------------------------------------                          --------------------------------------------------
                                                                                  Gross          Net                                       Gross                         Net
                                                                                 -------                     ----------------                     -----------------------------                     -------------------------
                                                                                                                                             (in millions)
                                                                                                                                                                                                                                                                                                      
Strategic Credit (2).                             2012                         $ 3,074                             $   2,580                                                 $                   14                                               13.4 %    10.4 %                         9.3 %            6.8 %
Value Opportunities                               2007                           1,150                                 1,081                                                         --                      (3)   11.9      10.3                           9.3              5.5
Emerging Markets Debt (4)                         2015                             935                                   450                                                                      7                                               18.6      14.5                          16.5             12.9
Value Equities (5)                                2012                             421                                   395                                                   8                            32.5      24.6                          20.3             14.7
                                                                                                             ------------------------------------                      -------------------------------------------------
                                                                                                                       4,506                                                                     29
                                                                              Other (6)                                  282                                                                      3
                                                                     Restructured funds                       --                                                   5  
                                                                                                             ------------------------------------                      -------------------------------------------------
                                                                              Total (2)                            $   4,788                              $                   37  
                                                                                                             ======= ======= ====================                      ======= ==================== ====================
 
----------------------------------------------------------------------------------------
(1)   Returns represent time-weighted rates of return.
(2)                      Includes one closed-end fund with $184 million and $214 million of
                         AUM and management fee-generating AUM, respectively.
(3)                      As of September 30, 2017, the aggregate depreciation below
                         high-water marks previously established for individual investors in
                         the fund totaled approximately $18 million.
(4)                      Includes the Emerging Markets Debt Total Return and Emerging Markets
                         Opportunities strategies. The rates of return reflect the
                         performance of a composite of accounts for the Emerging Markets Debt
                         Total Return strategy, including a single account with a December
                         2014 inception date.
(5)                      Includes performance of a proprietary fund with an initial capital
                         commitment of $25 million since its inception in May 2012.
(6)                      Includes the Emerging Markets Absolute Return strategy and evergreen
                         separate accounts in the Real Estate Debt strategy.
                          

GLOSSARY

Accrued incentives (fund level) represents the incentive income that would be paid to us if the funds were liquidated at their reported values as of the date of the financial statements. Incentives created (fund level) refers to the gross amount of potential incentives generated by the funds during the period. We refer to the amount of accrued incentives recognized as revenue by us as incentive income. Amounts recognized by us as incentive income are no longer included in accrued incentives (fund level), the term we use for remaining fund-level accruals. Incentives created (fund level), incentive income and accrued incentives (fund level) are presented gross, without deduction for direct compensation expense that is owed to our investment professionals associated with the particular fund when we earn the incentive income. We call that charge "incentive income compensation expense." Incentive income compensation expense varies by the investment strategy and vintage of the particular fund, among many factors.

Adjusted net income ("ANI") is a measure of profitability for our investment management business. The components of revenues ("adjusted revenues") and expenses ("adjusted expenses") used in the determination of ANI do not give effect to the consolidation of the funds that we manage. Adjusted revenues include investment income (loss) that is classified in other income (loss) in the GAAP statements of operations. Adjusted revenues and expenses also reflect Oaktree’s proportionate economic interest in Highstar, whereby amounts received for contractually reimbursable costs are classified for ANI as expenses and under GAAP as other income. In addition, ANI excludes the effect of (a) non-cash equity-based compensation expense related to unit grants made before our initial public offering, (b) acquisition-related items, including amortization of intangibles and changes in the contingent consideration liability, (c) income taxes, (d) other income or expenses applicable to OCG or its Intermediate Holding Companies, and (e) the adjustment for non-controlling interests. Moreover, gains and losses resulting from foreign-currency transactions and hedging activities under GAAP are recognized as general and administrative expense whether realized or unrealized in the current period, but for ANI, unrealized gains and losses from foreign-currency hedging activities are deferred until realized, at which time they are included in the same revenue or expense line item as the underlying exposure that was hedged. Additionally, for ANI, foreign-currency transaction gains and losses are included in other income (expense), net. Incentive income and incentive income compensation expense are included in ANI when the underlying fund distributions are known or knowable as of the respective quarter end, which may be later than the time at which the same revenue or expense is included in the GAAP statements of operations, for which the revenue standard is fixed or determinable and the expense standard is probable and reasonably estimable. CLO investments are carried at fair value for GAAP reporting, whereas for ANI, they are carried at amortized cost, subject to any impairment charges. Investment income on CLO investments is recognized in ANI when cash distributions are received. Cash distributions are allocated between income and return of capital based on the effective yield method. ANI is calculated at the Operating Group level.

Beginning with the second quarter of 2017, the definition of ANI was modified with respect to third-party placement costs associated with closed-end funds and liability-classified EVUs to conform to the GAAP treatment. Under GAAP, placement costs are expensed as incurred and liability-classified EVUs are remeasured as of each reporting date. Previously for ANI, placement costs were capitalized and amortized in proportion to the associated management fee stream, and liability-classified EVUs were treated as equity-classified awards. All prior periods have been recast for these changes.

Adjusted net income-OCG, or adjusted net income per Class A unit, a non-GAAP performance measure, is calculated to provide Class A unitholders with a measure that shows the portion of ANI attributable to their ownership. Adjusted net income-OCG represents ANI including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG. Two of our Intermediate Holding Companies incur federal and state income taxes for their shares of Operating Group income. Generally, those two corporate entities hold an interest in the Operating Group’s management fee-generating assets and a small portion of its incentive and investment income-generating assets. As a result, historically our fee-related earnings and investment income arising from our one-fifth ownership stake in DoubleLine generally have been subject to corporate-level taxation, and most of our incentive income and other investment income generally has not been subject to corporate-level taxation. Thus, the blended effective income tax rate has generally tended to be higher to the extent that fee-related earnings and DoubleLine-related investment income represented a larger proportion of our ANI. Myriad other factors affect income tax expense and the effective income tax rate, and there can be no assurance that this historical relationship will continue going forward.

Assets under management ("AUM") generally refers to the assets we manage and equals the NAV of the assets we manage, the leverage on which management fees are charged, the undrawn capital that we are entitled to call from investors in our funds pursuant to their capital commitments and the aggregate par value of collateral assets and principal cash held by our CLOs. Our AUM includes amounts for which we charge no management fees.

-- Management fee-generating assets under management ("management fee-generating AUM") is a forward-looking metric and reflects the beginning AUM on which we will earn management fees in the following quarter. Our closed-end funds typically pay management fees based on committed capital, drawn capital or cost basis during the investment period, without regard to changes in NAV, and during the liquidation period on the lesser of (a) total funded capital or (b) the cost basis of assets remaining in the fund. The annual management fee rate generally remains unchanged from the investment period through the liquidation period. Our open-end and evergreen funds typically pay management fees based on their NAV, and our CLOs pay management fees based on the aggregate par value of collateral assets and principal cash held by them, as defined in the applicable CLO indentures. As compared with AUM, management fee-generating AUM generally excludes the following: -- Differences between AUM and either committed capital or cost basis for most closed-end funds, other than for closed-end funds that pay management fees based on NAV and leverage, as applicable;

-- Undrawn capital commitments to closed-end funds that have not yet commenced their investment periods;

-- Undrawn capital commitments to funds for which management fees are based on drawn capital, NAV or cost basis;

-- Oaktree’s general partner investments in management fee-generating funds; and

-- Funds that are no longer paying management fees and co-investments that pay no management fees.

-- Incentive-creating assets under management ("incentive-creating AUM") refers to the AUM that may eventually produce incentive income. It represents the NAV of our funds for which we are entitled to receive an incentive allocation, excluding CLOs and investments made by us and our employees and directors (which are not subject to an incentive allocation). All funds for which we are entitled to receive an incentive allocation are included in incentive-creating AUM, regardless of whether or not they are currently generating incentives. Incentive-creating AUM does not include undrawn capital commitments.

Consolidated funds refers to the funds and CLOs that Oaktree is required to consolidate as of the respective reporting date.

Distributable earnings is a non-GAAP performance measure derived from our non-GAAP results that we use to measure our earnings at the Operating Group level without the effects of the consolidated funds for the purpose of, among other things, assisting in the determination of equity distributions from the Operating Group. However, the declaration, payment and determination of the amount of equity distributions, if any, is at the sole discretion of our board of directors, which may change our distribution policy at any time.

Distributable earnings and distributable earnings revenues differ from ANI in that they exclude investment income or loss and include the receipt of investment income or loss from distributions by our investments in funds and companies. Additionally, any impairment charges on our CLO investments included in ANI are, for distributable earnings purposes, amortized over the remaining investment period of the respective CLO, in order to align with the timing of expected cash flows. In addition, distributable earnings differs from ANI in that it is net of Operating Group income taxes and excludes non-cash equity-based compensation expense.

Distributable earnings-OCG, or distributable earnings per Class A unit, a non-GAAP performance measure, is calculated to provide Class A unitholders with a measure that shows the portion of distributable earnings attributable to their ownership. Distributable earnings-OCG represents distributable earnings, including the effect of (a) the OCGH non-controlling interest, (b) expenses, such as current income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) amounts payable under a tax receivable agreement. The income tax expense included in distributable earnings-OCG represents the implied current provision for income taxes calculated using an approach similar to that which is used in calculating the income tax provision for adjusted net income-OCG.

Economic net income ("ENI") is a non-GAAP performance measure that we use to evaluate the financial performance of our business by applying the "Method 2," instead of the "Method 1," revenue recognition approach to accounting for incentive income. ANI follows Method 1, except incentive income is recognized when the underlying fund distributions are known or knowable as of the respective quarter end, as opposed to the fixed or determinable standard of Method 1. The Method 2 approach followed by ENI recognizes incentive income as if the funds were liquidated at their reported values as of the date of the financial statements. ENI is computed by adjusting ANI for the change in accrued incentives (fund level), net of associated incentive income compensation expense, during the period.

Economic net income revenues is a non-GAAP measure applying the Method 2, instead of the Method 1, approach to accounting for incentive income, and reflects the adjustments described above and under the definition of ANI.

Economic net income-OCG, or economic net income per Class A unit, a non-GAAP performance measure, is calculated to provide Class A unitholders with a measure that shows the portion of ENI attributable to their ownership. Economic net income-OCG represents ENI, including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG. The income tax expense included in economic net income-OCG represents the implied provision for income taxes calculated using an approach similar to that which is used in calculating the income tax provision for adjusted net income-OCG.

Equity value units ("EVUs") represent special limited partnership units in Oaktree Capital Group Holdings, L.P. ("OCGH") that entitle the holder the right to receive a one-time special distribution that will be settled in OCGH units based on value created during a specified period ("Term") in excess of a fixed "Base Value." The Base Value will be reduced by certain distributions and profit sharing payments received by the holder and the full value of certain OCGH units granted. The value created will be measured on a per unit basis, based on Class A unit trading prices and certain components of quarterly distributions with respect to the period during the Term. EVUs also give the holder the right, subject to service vesting and Oaktree performance relative to the accreting Base Value, to receive certain quarterly distributions from OCGH. EVUs do not entitle the holder to any voting rights.

Fee-related earnings ("FRE") is a non-GAAP performance measure that we use to monitor the baseline earnings of our business. FRE is derived from our non-GAAP results and is comprised of management fees ("fee-related earnings revenues") less operating expenses other than incentive income compensation expense and non-cash equity-based compensation expense. FRE is considered baseline because it excludes all non-management fee revenue sources (such as earnings from our minority equity interest in DoubleLine) and applies all cash compensation and benefits other than incentive income compensation expense, as well as all general and administrative expenses, to management fees, even though those expenses also support the generation of incentive and investment income. FRE is presented before income taxes.

Fee-related earnings-OCG, or fee-related earnings per Class A unit, is a non-GAAP performance measure calculated to provide Class A unitholders with a measure that shows the portion of FRE attributable to their ownership. Fee-related earnings-OCG represents FRE including the effect of (a) the OCGH non-controlling interest, (b) other income or expenses, such as income tax expense, applicable to OCG or its Intermediate Holding Companies and (c) any Operating Group income taxes attributable to OCG. Fee-related earnings-OCG income taxes is calculated excluding any incentive income or investment income (loss).

Intermediate Holding Companies collectively refers to the subsidiaries wholly owned by us.

Invested capital reflects deployed capital, whether involving drawn or recycled equity capital, or borrowings from fund-level credit facilities. This metric is used in connection with incentive-creating closed-end funds and certain evergreen funds.

Net asset value ("NAV") refers to the value of all the assets of a fund (including cash and accrued interest and dividends) less all liabilities of the fund (including accrued expenses and any reserves established by us, in our discretion, for contingent liabilities) without reduction for accrued incentives (fund level) because they are reflected in the partners’ capital of the fund.

Oaktree, OCG, we, us, our or the Company refers to Oaktree Capital Group, LLC and, where applicable, its subsidiaries and affiliates.

Oaktree Operating Group ("Operating Group") refers collectively to the entities in which we have a minority economic interest and indirect control that either (i) act as or control the general partners and investment advisers of our funds or (ii) hold interests in other entities or investments generating income for us.

Relevant Benchmark refers, with respect to:

-- our U.S. High Yield Bond strategy, to the Citigroup U.S. High Yield Cash-Pay Capped Index;

-- our Global High Yield Bond strategy, to an Oaktree custom global high yield index that represents 60% BofA Merrill Lynch High Yield Master II Constrained Index and 40% BofA Merrill Lynch Global Non-Financial High Yield European Issuers 3% Constrained, ex-Russia Index - USD Hedged from inception through December 31, 2012, and the BofA Merrill Lynch Non-Financial Developed Markets High Yield Constrained Index - USD Hedged thereafter;

-- our European High Yield Bond strategy, to the BofA Merrill Lynch Global Non-Financial High Yield European Issuers excluding Russia 3% Constrained Index (USD Hedged);

-- our U.S. Senior Loan strategy (with the exception of the closed-end funds), to the Credit Suisse Leveraged Loan Index;

-- our European Senior Loan strategy, to the Credit Suisse Western European Leveraged Loan Index (EUR Hedged);

-- our U.S. Convertible Securities strategy, to an Oaktree custom convertible index that represents the Credit Suisse Convertible Securities Index from inception through December 31, 1999, the Goldman Sachs/Bloomberg Convertible 100 Index from January 1, 2000 through June 30, 2004, and the BofA Merrill Lynch All U.S. Convertibles Index thereafter;

-- our non-U.S. Convertible Securities strategy, to an Oaktree custom non-U.S. convertible index that represents the JACI Global ex-U.S. (Local) Index from inception through December 31, 2014 and the Thomson Reuters Global Focus ex-U.S. (USD hedged) Index thereafter;

-- our High Income Convertible Securities strategy, to the Citigroup U.S. High Yield Market Index; and

-- our Emerging Markets Equities strategy, to the Morgan Stanley Capital International Emerging Markets Index (Net).

Sharpe Ratio refers to a metric used to calculate risk-adjusted return. The Sharpe Ratio is the ratio of excess return to volatility, with excess return defined as the return above that of a riskless asset (based on the three-month U.S. Treasury bill, or for our European senior loan strategy, the Euro Overnight Index Average) divided by the standard deviation of such return. A higher Sharpe Ratio indicates a return that is higher than would be expected for the level of risk compared to the risk-free rate.

EXHIBIT A

Use of Non-GAAP Financial Information

Oaktree discloses certain non-GAAP financial measures in this earnings release. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are presented below. Management makes operating decisions and assesses the performance of Oaktree’s business based on these non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, net income, net income per Class A unit or other financial measures presented in accordance with GAAP.

Reconciliation of GAAP to Non-GAAP Results

The following table reconciles net income attributable to Oaktree Capital Group, LLC to adjusted net income, fee-related earnings and distributable earnings.

                                                                                      Three Months Ended September 30,                                                             Nine Months Ended September 30,
                                                                           --------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                           2017                                  2016                                                   2017                                2016
                                                                           -------------------------------------                     ----------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                         (in thousands)
Net income attributable to Oaktree Capital Group, LLC                            $  45,841                                              $  58,297                                              $ 218,080                                              $ 135,422
  Incentive income (1)                                                      --                                                     (7 )                                               41,954                                                 39,881
  Incentive income compensation (1)                                         --                                                      7                                                (41,954 )                                              (39,881 )
  Investment income (2)                                                             (1,983 )                                               (6,155 )                                              (24,630 )                                              (19,733 )
  Equity-based compensation (3)                                                      1,137                                                  4,202                                                  4,558                                                 10,268
  Foreign-currency hedging (4)                                                        (833 )                                                1,306                                                   (960 )                                               10,837
  Acquisition-related items (5)                                                     (3,919 )                                                 (253 )                                               (1,456 )                                               (1,751 )
  Income taxes (6)                                                                  13,857                                                  8,567                                                 31,700                                                 29,818
  Non-Operating Group expenses (7)                                                      62                                                    182                                                    549                                                    647
  Non-controlling interests (7)                                                     77,274                              95,505                             346,413                             236,492  
                                                                           ------------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Adjusted net income                                                                131,436                                                161,651                                                574,254                                                402,000
  Incentive income                                                                 (53,728 )                                              (99,731 )                                             (658,367 )                                             (283,966 )
  Incentive income compensation                                                     26,362                                                 47,378                                                369,480                                                132,534
  Investment income                                                                (64,413 )                                              (70,928 )                                             (183,444 )                                             (133,730 )
  Equity-based compensation (8)                                                     14,691                                                 15,637                                                 40,971                                                 38,192
  Interest expense, net of interest income                                           6,280                                                  7,799                                                 19,795                                                 24,458
  Other (income) expense, net                                                         (874 )                                                4,902                              (2,197 )                                                6,294  
                                                                           ------------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Fee-related earnings                                                                59,754                                                 66,708                                                160,492                                                185,782
  Incentive income                                                                  53,728                                                 99,731                                                658,367                                                283,966
  Incentive income compensation                                                    (26,362 )                                              (47,378 )                                             (369,480 )                                             (132,534 )
  Receipts of investment income from funds (9)                                      24,919                                                 18,020                                                 91,264                                                 41,637
  Receipts of investment income from companies                                      17,164                                                 17,866                                                 42,923                                                 42,293
  Interest expense, net of interest income                                          (6,280 )                                               (7,799 )                                              (19,795 )                                              (24,458 )
  Other (income) expense, net                                                          874                                                 (4,902 )                                                2,197                                                 (6,294 )
  Operating Group income taxes                                                      (5,208 )                                               (1,662 )                                               (7,850 )                                               (4,491 )
                                                                           ------------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Distributable earnings                                                           $ 118,589                           $ 140,584                           $ 558,118                           $ 385,901  
                                                                           ======= ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
 
-----------------------------------------------------
(1)   This adjustment adds back the effect of timing differences
                         associated with the recognition of incentive income and incentive
                         income compensation expense between adjusted net income and net
                         income attributable to OCG.
(2)                      This adjustment adds back the effect of differences in the
                         recognition of investment income related to corporate investments in
                         CLOs which under GAAP are marked-to-market but for ANI are accounted
                         for at amortized cost, subject to impairment.
(3)                      This adjustment adds back the effect of equity-based compensation
                         expense related to unit grants made before our initial public
                         offering, which is excluded from adjusted net income and fee-related
                         earnings because it is a non-cash charge that does not affect our
                         financial position.
(4)                      This adjustment adds back the effect of timing differences
                         associated with the recognition of unrealized gains and losses
                         related to foreign-currency hedging between adjusted net income and
                         net income attributable to OCG.
(5)                      This adjustment adds back the effect of acquisition-related items
                         associated with the amortization of intangibles and changes in the
                         contingent consideration liability, which are excluded from adjusted
                         net income.
(6)                      Because adjusted net income and fee-related earnings are pre-tax
                         measures, this adjustment adds back the effect of income tax expense.
(7)                      Because adjusted net income and fee-related earnings are calculated
                         at the Operating Group level, this adjustment adds back the effect
                         of items applicable to OCG, its Intermediate Holding Companies or
                         non-controlling interests.
(8)                      This adjustment adds back the effect of equity-based compensation
                         expense related to unit grants made after our initial public
                         offering, which is excluded from fee-related earnings because it is
                         non-cash in nature and does not impact our ability to fund our
                         operations.
(9)                      This adjustment reflects the portion of distributions received from
                         funds characterized as receipts of investment income or loss. In
                         general, the income or loss component of a distribution from a fund
                         is calculated by multiplying the amount of the distribution by the
                         ratio of our investment’s undistributed income or loss to our
                         remaining investment balance. In addition, if the distribution is
                         made during the investment period, it is generally not reflected in
                         distributable earnings until after the investment period ends.
                          

The following table reconciles net income attributable to Oaktree Capital Group, LLC to adjusted net income-OCG, fee-related earnings-OCG and distributable earnings-OCG.

                                                                                                  Three Months Ended September 30,                                                             Nine Months Ended September 30,
                                                                                        -------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                                        2017                                 2016                                                   2017                                2016
                                                                                        -------------------------------------                     ---------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                                     (in thousands)
Net income attributable to Oaktree Capital Group, LLC                                         $  45,841                                              $ 58,297                                              $ 218,080                                              $ 135,422
  Incentive income attributable to OCG (1)                                               --                                                    (3 )                                               17,109                                                 16,048
  Incentive income compensation attributable to OCG (1)                                  --                                                     3                                                (17,109 )                                              (16,048 )
  Investment income attributable to OCG (2)                                                        (817 )                                              (2,493 )                                              (10,121 )                                               (7,961 )
  Equity-based compensation attributable to OCG (3)                                                 469                                                 1,702                                                  1,867                                                  4,147
  Foreign-currency hedging attributable to OCG (4)                                                 (342 )                                                 529                                                   (385 )                                                4,369
  Acquisition-related items attributable to OCG (5)                                              (1,616 )                                                (103 )                                                 (610 )                                                 (708 )
  Non-controlling interests attributable to OCG (5)                                                (226 )                                                (222 )                                                 (675 )                                                 (664 )
                                                                                        ------------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Adjusted net income-OCG (6)                                                                      43,309                                                57,710                                                208,156                                                134,605
  Incentive income attributable to OCG                                                          (22,141 )                                             (40,393 )                                             (270,435 )                                             (114,656 )
  Incentive income compensation attributable to OCG                                              10,864                                                19,189                                                151,808                                                 53,507
  Investment income attributable to OCG                                                         (26,545 )                                             (28,726 )                                              (75,302 )                                              (54,067 )
  Equity-based compensation attributable to OCG (7)                                               6,054                                                 6,333                                                 16,823                                                 15,426
  Interest expense, net of interest income attributable to OCG                                    2,441                                                 3,112                                                  7,786                                                  9,756
  Other (income) expense attributable to OCG                                                       (360 )                                               1,985                                                   (904 )                                                2,547
  Non-fee-related earnings income taxes attributable to OCG (8)                                   9,072                              4,297                              22,167                              20,078  
                                                                                        ------------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Fee-related earnings-OCG (6)                                                                     22,694                                                23,507                                                 60,099                                                 67,196
  Incentive income attributable to OCG                                                           22,141                                                40,393                                                270,435                                                114,656
  Incentive income compensation attributable to OCG                                             (10,864 )                                             (19,189 )                                             (151,808 )                                              (53,507 )
  Receipts of investment income from funds attributable to OCG                                   10,269                                                 7,298                                                 37,459                                                 16,817
  Receipts of investment income from companies attributable to OCG                                7,073                                                 7,236                                                 17,620                                                 17,081
  Interest expense, net of interest income attributable to OCG                                   (2,441 )                                              (3,112 )                                               (7,786 )                                               (9,756 )
  Other (income) expense attributable to OCG                                                        360                                                (1,985 )                                                  904                                                 (2,547 )
  Non-fee-related earnings income taxes attributable to OCG (8)                                  (9,072 )                                              (4,297 )                                              (22,167 )                                              (20,078 )
  Distributable earnings-OCG income taxes                                                         4,323                                                  (789 )                                               (7,012 )                                               (5,472 )
  Tax receivable agreement                                                                       (5,415 )                                              (5,106 )                                              (16,193 )                                              (15,318 )
  Income taxes of Intermediate Holding Companies                                                  8,649                              6,905                              23,850                              25,327  
                                                                                        ------------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Distributable earnings-OCG (6)                                                                $  47,717                           $ 50,861                           $ 205,401                           $ 134,399  
                                                                                        ======= ======= ====================                      ==== ====== ====================                      ==== ======= ====================                      ==== ======= ====================
 
------------------------------------------------------------------
(1)   This adjustment adds back the effect of timing differences
                         associated with the recognition of incentive income and incentive
                         income compensation expense between adjusted net income-OCG and net
                         income attributable to OCG.
(2)                      This adjustment adds back the effect of differences in the
                         recognition of investment income related to corporate investments in
                         CLOs which under GAAP are marked-to-market but for ANI are accounted
                         for at amortized cost, subject to impairment.
(3)                      This adjustment adds back the effect of equity-based compensation
                         expense attributable to OCG related to unit grants made before our
                         initial public offering, which is excluded from adjusted net
                         income-OCG and fee-related earnings-OCG because it is a non-cash
                         charge that does not affect our financial position.
(4)                      This adjustment adds back the effect of timing differences
                         associated with the recognition of unrealized gains and losses
                         related to foreign-currency hedging between adjusted net income-OCG
                         and net income attributable to OCG.
(5)                      This adjustment adds back the effect of (a) acquisition-related
                         items associated with the amortization of intangibles and changes in
                         the contingent consideration liability and (b) non-controlling
                         interests, which are both excluded from ANI.
(6)                      Adjusted net income-OCG, fee-related earnings-OCG and distributable
                         earnings-OCG are calculated to evaluate the portion of adjusted net
                         income, fee-related earnings and distributable earnings attributable
                         to Class A unitholders. These measures are net of income taxes and
                         other income or expenses applicable to OCG or its Intermediate
                         Holding Companies. Reconciliations of fee-related earnings to
                         fee-related earnings-OCG and distributable earnings to distributable
                         earnings-OCG are presented below.
                          
                                                                                                   Three Months Ended September 30,                                                           Nine Months Ended September 30,
                                                                                           ---------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                                         2017                               2016                                                   2017                                2016
                                                                                           ---------------------------------                     ---------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                           (in thousands, except per unit data)
Fee-related earnings                                                                          $ 59,754                                              $ 66,708                                              $ 160,492                                              $ 185,782
   Fee-related earnings attributable to OCGH non-controlling interest                          (35,129 )                                             (39,690 )                                              (94,596 )                                             (110,758 )
   Non-Operating Group expenses                                                                   (209 )                                                (229 )                                                 (886 )                                                 (765 )
   Fee-related earnings-OCG income taxes                                                        (1,722 )                                              (3,282 )                                               (4,911 )                                               (7,063 )
                                                                                           --------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Fee-related earnings-OCG                                                                      $ 22,694                           $ 23,507                           $  60,099                           $  67,196  
                                                                                           ==== ====== ====================                      ==== ====== ====================                      ==== ======= ====================                      ==== ======= ====================
Fee-related earnings per Class A unit                                                         $   0.35                           $   0.37                           $    0.94                           $    1.08  
                                                                                           ==== ====== ====================                      ==== ====== ====================                      ==== ======= ====================                      ==== ======= ====================
Weighted average number of Class A units outstanding                                            64,394                             62,755                              63,875                              62,424  
                                                                                           ================================                      ================================                      =================================                      =================================
                                                                                                                                                                                                                                                                            
                                                                                                     Three Months Ended September 30,                                                            Nine Months Ended September 30,
                                                                                            -----------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                                           2017                                2016                                                   2017                                2016
                                                                                            ----------------------------------                     ----------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                             (in thousands, except per unit data)
Distributable earnings                                                                         $ 118,589                                              $ 140,584                                              $ 558,118                                              $ 385,901
  Distributable earnings attributable to OCGH non-controlling interest                           (69,718 )                                              (83,646 )                                             (328,963 )                                             (230,065 )
  Non-Operating Group expenses                                                                       (62 )                                                 (182 )                                                 (549 )                                                 (647 )
  Distributable earnings-OCG income taxes                                                          4,323                                                   (789 )                                               (7,012 )                                               (5,472 )
  Tax receivable agreement                                                                        (5,415 )                                               (5,106 )                                              (16,193 )                                              (15,318 )
                                                                                            ---------------------------------                      ---------------------------------                      ---------------------------------                      ---------------------------------
Distributable earnings-OCG                                                                     $  47,717                           $  50,861                           $ 205,401                           $ 134,399  
                                                                                            ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Distributable earnings per Class A unit                                                        $    0.74                           $    0.81                           $    3.22                           $    2.15  
                                                                                            ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================                      ==== ======= ====================
Weighted average number of Class A units outstanding                                              64,394                              62,755                              63,875                              62,424  
                                                                                            =================================                      =================================                      =================================                      =================================
(7)   This adjustment adds back the effect of equity-based compensation
                         expense attributable to OCG related to unit grants made after our
                         initial public offering, which is excluded from fee-related
                         earnings-OCG, because it is non-cash in nature and does not impact
                         our ability to fund our operations.
(8)                      This adjustment adds back income taxes associated with incentive
                         income, incentive income compensation expense or investment income
                         or loss, which are not included in the calculation of fee-related
                         earnings-OCG.
                          

The following table reconciles GAAP revenues to adjusted revenues, fee-related earnings revenues and distributable earnings revenues.

                                                                               Three Months Ended September 30,                                                              Nine Months Ended September 30,
                                                                    --------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------
                                                                                    2017                                  2016                                                    2017                                 2016
                                                                    -------------------------------------                     ----------------------------------                     ------------------------------------                     ----------------------------------
                                                                                                                                                                   (in thousands)
GAAP revenues                                                             $ 235,032                                              $ 290,230                                              $ 1,158,672                                              $ 827,436
  Consolidated funds (1)                                                     20,646                                                 15,182                                                   73,691                                                 26,976
  Incentive income (2)                                               --                                                     (7 )                                                 41,954                                                 39,881
  Investment income (3)                                                      49,078                              59,603                               125,988                             116,472  
                                                                    ------------------------------------                      ---------------------------------                      -----------------------------------                      ---------------------------------
Adjusted revenues                                                           304,756                                                365,008                                                1,400,305                                              1,010,765
  Incentive income                                                          (53,728 )                                              (99,731 )                                               (658,367 )                                             (283,966 )
  Investment income                                                         (64,413 )                                              (70,928 )                                               (183,444 )                                             (133,730 )
                                                                    ------------------------------------                      ---------------------------------                      -----------------------------------                      ---------------------------------
Fee-related earnings revenues                                               186,615                                                194,349                                                  558,494                                                593,069
  Incentive income                                                           53,728                                                 99,731                                                  658,367                                                283,966
  Receipts of investment income from funds                                   24,919                                                 18,020                                                   91,264                                                 41,637
  Receipts of investment income from companies                               17,164                              17,866                                42,923                              42,293  
                                                                    ------------------------------------                      ---------------------------------                      -----------------------------------                      ---------------------------------
Distributable earnings revenues                                           $ 282,426                           $ 329,966                           $ 1,351,048                           $ 960,965  
                                                                    ======= ======= ====================                      ==== ======= ====================                      ==== ========= ====================                      ==== ======= ====================
 
----------------------------------------------
(1)   This adjustment adds back the amounts attributable to the
                         consolidated funds that were eliminated in consolidation, the
                         reclassification of gains and losses related to foreign-currency
                         hedging activities from general and administrative expense to
                         revenues, and the elimination of non-controlling interests from
                         adjusted revenues.
(2)                      This adjustment adds back the effect of timing differences
                         associated with the recognition of incentive income between adjusted
                         revenues and GAAP revenues.
(3)                      This adjustment reclassifies consolidated investment income from
                         other income (loss) to revenues and adds back the effect of
                         differences in the recognition of investment income related to
                         corporate investments in CLOs between adjusted revenues and GAAP
                         revenues.
                          

The following table reconciles net income attributable to Oaktree Capital Group, LLC to adjusted net income and economic net income.

                                                                                              Three Months Ended September 30,                                                   Nine Months Ended September 30,
                                                                                     -----------------------------------------------------------------------------------------                     ----------------------------------------------------------------------
                                                                                                    2017                                2016                                                   2017                       2016
                                                                                     ----------------------------------                     ----------------------------------                     -----------------------------------                     --------------
                                                                                                                                                                        (in thousands)
Net income attributable to Oaktree Capital Group, LLC                                   $  45,841                                              $  58,297                                               $ 218,080                                               $ 135,422
   Reconciling adjustments (1)                                                             85,595                             103,354                              356,174                              266,578
                                                                                     ---------------------------------                      ---------------------------------                      ----------------------------------                      --------------
Adjusted net income                                                                       131,436                                                161,651                                                 574,254                                                 402,000
   Change in accrued incentives (fund level), net of associated                            33,241                             101,463                              (46,651 )                                                61,176
   incentive income compensation (2).
                                                                                     -----------  --------------------                      -----------  --------------------                      ------------  --------------------                      ------------
Economic net income (3)                                                                 $ 164,677                           $ 263,114                            $ 527,603                            $ 463,176
                                                                                     ==== ======= ====================                      ==== ======= ====================                      ===== ======= ====================                      ===== =======
 
---------------------------------------------------------------
(1)   Please refer to the table on page 26 for a detailed reconciliation
                         of net income attributable to Oaktree Capital Group, LLC to adjusted
                         net income.
(2)                      The change in accrued incentives (fund level), net of associated
                         incentive income compensation expense, represents the difference
                         between (a) our recognition of net incentive income and (b) the
                         incentive income generated by the funds during the period that would
                         be due to us if the funds were liquidated at their reported values
                         as of that date, net of associated incentive income compensation
                         expense.
(3)                      Please see Glossary for the definition of economic net income.
                          

The following table reconciles net income attributable to Oaktree Capital Group, LLC to adjusted net income-OCG and economic net income-OCG.

                                                                                            Three Months Ended September 30,                                                           Nine Months Ended September 30,
                                                                                    ---------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
                                                                                                  2017                               2016                                                   2017                                2016
                                                                                    ---------------------------------                     ---------------------------------                     ----------------------------------                     ----------------------------------
                                                                                                                                                                               (in thousands)
Net income attributable to Oaktree Capital Group, LLC                                  $ 45,841                                              $ 58,297                                              $ 218,080                                              $ 135,422
  Reconciling adjustments (1)                                                            (2,532 )                                                (587 )                                               (9,924 )                                                 (817 )
                                                                                    --------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Adjusted net income-OCG (2)                                                              43,309                                                57,710                                                208,156                                                134,605
  Change in accrued incentives (fund level), net of associated                           13,698                                                41,094                                                (19,285 )                                               24,915
  incentive income compensation attributable to OCG
  Economic net income-OCG income taxes                                                  (10,459 )                                             (10,898 )                                              (27,192 )                                              (26,440 )
  Income taxes-OCG                                                                       10,794                              7,579                              27,078                              27,141  
                                                                                    --------------------------------                      --------------------------------                      ---------------------------------                      ---------------------------------
Economic net income-OCG (2)                                                            $ 57,342                           $ 95,485                           $ 188,757                           $ 160,221  
                                                                                    ==== ====== ====================                      ==== ====== ====================                      ==== ======= ====================                      ==== ======= ====================
 
--------------------------------------------------------------
(1)   Please refer to the table on page 27 for a detailed reconciliation
                         of net income attributable to Oaktree Capital Group, LLC to adjusted
                         net income-OCG.
(2)                      Adjusted net income-OCG and economic net income-OCG are calculated
                         to evaluate the portion of adjusted net income and economic net
                         income attributable to Class A unitholders. These measures are net
                         of income taxes and other income or expenses applicable to OCG or
                         its Intermediate Holding Companies. A reconciliation of economic net
                         income to economic net income-OCG is presented below.
                          
                                                                                                   Three Months Ended September 30,                                                              Nine Months Ended September 30,
                                                                                         -------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------
                                                                                                        2017                                 2016                                                    2017                                 2016
                                                                                         -----------------------------------                     -----------------------------------                     -----------------------------------                     -----------------------------------
                                                                                                                    (in thousands, except per unit data)                                                                            (in thousands, except per unit data)
Economic net income                                                                          $ 164,677                                               $ 263,114                                               $ 527,603                                               $ 463,176
  Economic net income attributable to OCGH non-controlling interest                            (96,814 )                                              (156,549 )                                              (311,105 )                                              (275,868 )
  Non-Operating Group expenses                                                                     (62 )                                                  (182 )                                                  (549 )                                                  (647 )
  Economic net income-OCG income taxes                                                         (10,459 )                                               (10,898 )                                               (27,192 )                                               (26,440 )
                                                                                         ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
  Economic net income-OCG                                                                    $  57,342                            $  95,485                            $ 188,757                            $ 160,221  
                                                                                         ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================
Economic net income per Class A unit                                                         $    0.89                            $    1.52                            $    2.96                            $    2.57  
                                                                                         ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================
Weighted average number of Class A units outstanding                                            64,394                               62,755                               63,875                               62,424  
                                                                                         ==================================                      ==================================                      ==================================                      ==================================
                                                                                                                                                                                                                                                                                

The following table reconciles GAAP revenues to adjusted revenues and economic net income revenues.

                                                             Three Months Ended September 30,                                                               Nine Months Ended September 30,
                                                  --------------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------------
                                                                  2017                                  2016                                                    2017                                                 2016
                                                  -------------------------------------                     ----------------------------------                     ------------------------------------                     ------------------------------------
                                                                                                                                                  (in thousands)
GAAP revenues                                           $ 235,032                                              $ 290,230                                              $ 1,158,672                                              $   827,436
  Consolidated funds (1)                                   20,646                                                 15,182                                                   73,691                                                   26,976
  Incentive income (2)                             --                                                     (7 )                                                 41,954                                                   39,881
  Investment income (3)                                    49,078                              59,603                               125,988                               116,472  
                                                  ------------------------------------                      ---------------------------------                      -----------------------------------                      -----------------------------------
Adjusted revenues                                         304,756                                                365,008                                                1,400,305                                                1,010,765
  Incentives created                                      134,815                                                422,685                                                  504,935                                                  547,557
  Incentive income                                        (53,728 )                                              (99,731 )                                               (658,367 )                                               (283,966 )
                                                  ------------------------------------                      ---------------------------------                      -----------------------------------                      -----------------------------------
Economic net income revenues                            $ 385,843                           $ 687,962                           $ 1,246,873                           $ 1,274,356  
                                                  ======= ======= ====================                      ==== ======= ====================                      ==== ========= ====================                      ==== ========= ====================
 
----------------------------
(1)    This adjustment adds back the amounts attributable to the
                          consolidated funds that were eliminated in consolidation, the
                          reclassification of gains and losses related to foreign-currency
                          hedging activities from general and administrative expense to
                          revenues, and the elimination of non-controlling interests from
                          adjusted revenues.
(2)                       This adjustment adds back the effect of timing differences
                          associated with the recognition of incentive income between adjusted
                          revenues and GAAP revenues.
(3)                       This adjustment reclassifies consolidated investment income from
                          other income (loss) to revenues and adds back the effect of
                          differences in the recognition of investment income related to
                          corporate investments in CLOs between adjusted revenues and GAAP
                          revenues.
                          

The following tables reconcile GAAP consolidated financial data to non-GAAP data:

                                                                                                                     As of or for the Three Months Ended September 30, 2017
                                                                                          --------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Consolidated                        Adjustments                              ANI
                                                                                          ----------------------------------                     ---------------------------------                     -------------------------------------
                                                                                                                                                            (in thousands)
Management fees (1)                                                                          $ 181,312                                              $  5,303                                                 $ 186,615
Incentive income (1)                                                                            53,720                                                     8                                                    53,728
Investment income (1)                                                                           51,061                                                13,352                                                    64,413
Total expenses (2)                                                                            (169,773 )                                               1,859                                                  (167,914 )
Interest expense, net (3)                                                                      (35,776 )                                              29,496                                                    (6,280 )
Other income (expense), net (4)                                                                  5,418                                                (4,544 )                                                     874
Other income of consolidated funds (5)                                                          62,272                                               (62,272 )                                          --
Income taxes                                                                                   (13,857 )                                              13,857                                            --
Net income attributable to non-controlling interests in consolidated                            (9,990 )                                               9,990                                            --
funds
Net income attributable to non-controlling interests in consolidated                           (78,546 )                                              78,546                         --  
subsidiaries
                                                                                          -----------  --------------------                      ----------  --------------------                      --------------  --------------------
Net income attributable to Oaktree Capital Group, LLC/Adjusted net                           $  45,841                           $ 85,595                              $ 131,436  
income
                                                                                          ==== ======= ====================                      ==== ====== ====================                      ======= ======= ====================
 
--------------------------------------------------------------------
(1)   The adjustment (a) adds back amounts earned from the consolidated
                         funds, (b) for management fees, reclassifies $199 of net gains
                         related to foreign-currency hedging activities from general and
                         administrative expense, and (c) for investment income, includes
                         $1,983 related to corporate investments in CLOs, which under GAAP
                         are marked-to-market but for ANI accounted for at amortized cost,
                         subject to impairment.
(2)                      The expense adjustment consists of (a) equity-based compensation
                         expense of $1,137 related to unit grants made before our initial
                         public offering, (b) consolidated fund expenses of $950, (c)
                         expenses incurred by the Intermediate Holding Companies of $209, (d)
                         acquisition-related items of $3,919, (e) adjustments of $4,357
                         related to amounts received for contractually reimbursable costs
                         that are classified as other income under GAAP and as expenses for
                         ANI, and (f) $870 of net gains related to foreign-currency hedging
                         activities.
(3)                      The interest expense adjustment removes interest expense of the
                         consolidated funds and reclassifies interest income from other
                         income of consolidated funds.
(4)                      The adjustment to other income (expense), net represents adjustments
                         related to (a) amounts received for contractually reimbursable costs
                         of $4,357 that are classified as other income under GAAP and as
                         expenses for ANI, and (b) the reclassification of $187 in net losses
                         related to foreign-currency hedging activities from general and
                         administrative expense.
(5)                      The adjustment to other income of consolidated funds removes
                         interest, dividend and other investment income attributable to
                         third-party investors in our consolidated funds, and reclassifies
                         investment income to revenues and interest income to interest
                         expense, net.
                          
                                                                                                                     As of or for the Three Months Ended September 30, 2016
                                                                                          ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Consolidated                         Adjustments                              ANI
                                                                                          ----------------------------------                     ----------------------------------                     -------------------------------------
                                                                                                                                                            (in thousands)
Management fees (1)                                                                          $ 190,974                                              $   3,375                                                 $ 194,349
Incentive income (1)                                                                            99,256                                                    475                                                    99,731
Investment income (1)                                                                           65,758                                                  5,170                                                    70,928
Total expenses (2)                                                                            (202,339 )                                               11,683                                                  (190,656 )
Interest expense, net (3)                                                                      (32,414 )                                               24,615                                                    (7,799 )
Other income (expense), net (4)                                                                    543                                                 (5,445 )                                                  (4,902 )
Other income of consolidated funds (5)                                                          55,612                                                (55,612 )                                          --
Income taxes                                                                                    (8,567 )                                                8,567                                            --
Net income attributable to non-controlling interests in consolidated                           (13,243 )                                               13,243                                            --
funds
Net income attributable to non-controlling interests in consolidated                           (97,283 )                                               97,283                         --  
subsidiaries
                                                                                          -----------  --------------------                      -----------  --------------------                      --------------  --------------------
Net income attributable to Oaktree Capital Group, LLC/Adjusted net                           $  58,297                           $ 103,354                              $ 161,651  
income
                                                                                          ==== ======= ====================                      ==== ======= ====================                      ======= ======= ====================
 
--------------------------------------------------------------------
(1)   The adjustment (a) adds back amounts earned from the consolidated
                         funds, (b) for management fees, reclassifies $397 of net gains
                         related to foreign-currency hedging activities from general and
                         administrative expense, (c) for incentive income, includes $7
                         related to timing differences in the recognition of incentive income
                         between net income attributable to OCG and adjusted net income, and
                         (d) for investment income, includes $6,155 related to corporate
                         investments in CLOs, which under GAAP are marked-to-market but for
                         ANI accounted for at amortized cost, subject to impairment.
(2)                      The expense adjustment consists of (a) equity-based compensation
                         expense of $4,203 related to unit grants made before our initial
                         public offering, (b) consolidated fund expenses of $1,143, (c)
                         expenses incurred by the Intermediate Holding Companies of $229, (d)
                         the effect of timing differences in the recognition of incentive
                         income compensation expense between net income attributable to OCG
                         and adjusted net income of $7, (e) acquisition-related items of
                         $253, (f) adjustments of $4,941 related to amounts received for
                         contractually reimbursable costs that are classified as other income
                         under GAAP and as expenses for ANI, and (g) $1,413 of net losses
                         related to foreign-currency hedging activities.
(3)                      The interest expense adjustment removes interest expense of the
                         consolidated funds and reclassifies interest income from other
                         income of consolidated funds.
(4)                      The adjustment to other income (expense), net represents adjustments
                         related to (a) amounts received for contractually reimbursable costs
                         of $4,941 that are classified as other income under GAAP and as
                         expenses for ANI, and (b) the reclassification of $504 in net losses
                         related to foreign-currency hedging activities from general and
                         administrative expense.
(5)                      The adjustment to other income of consolidated funds removes
                         interest, dividend and other investment income attributable to
                         third-party investors in our consolidated funds, and reclassifies
                         investment income to revenues and interest income to interest
                         expense, net.
                          
                                                                                                                      As of or for the Nine Months Ended September 30, 2017
                                                                                          ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Consolidated                         Adjustments                              ANI
                                                                                          ----------------------------------                     ----------------------------------                     -------------------------------------
                                                                                                                                                            (in thousands)
Management fees (1)                                                                          $ 542,268                                              $  16,226                                                 $ 558,494
Incentive income (1)                                                                           616,404                                                 41,963                                                   658,367
Investment income (1)                                                                          150,618                                                 32,826                                                   183,444
Total expenses (2)                                                                            (785,761 )                                              (22,692 )                                                (808,453 )
Interest expense, net (3)                                                                     (128,797 )                                              109,002                                                   (19,795 )
Other income (expense), net (4)                                                                 14,979                                                (12,782 )                                                   2,197
Other income of consolidated funds (5)                                                         213,640                                               (213,640 )                                          --
Income taxes                                                                                   (31,700 )                                               31,700                                            --
Net income attributable to non-controlling interests in consolidated                           (23,543 )                                               23,543                                            --
funds
Net income attributable to non-controlling interests in consolidated                          (350,028 )                                              350,028                         --  
subsidiaries
                                                                                          -----------  --------------------                      -----------  --------------------                      --------------  --------------------
Net income attributable to Oaktree Capital Group, LLC/Adjusted net                           $ 218,080                           $ 356,174                              $ 574,254  
income
                                                                                          ==== ======= ====================                      ==== ======= ====================                      ======= ======= ====================
 
--------------------------------------------------------------------
(1)   The adjustment (a) adds back amounts earned from the consolidated
                         funds, (b) for management fees, reclassifies $2,298 of net gains
                         related to foreign-currency hedging activities from general and
                         administrative expense, (c) for incentive income, includes $41,954
                         related to timing differences in the recognition of incentive income
                         between net income attributable to OCG and adjusted net income, and
                         (d) for investment income, includes $24,630 related to corporate
                         investments in CLOs, which under GAAP are marked-to-market but for
                         ANI accounted for at amortized cost, subject to impairment.
(2)                      The expense adjustment consists of (a) equity-based compensation
                         expense of $4,558 related to unit grants made before our initial
                         public offering, (b) consolidated fund expenses of $5,782, (c)
                         expenses incurred by the Intermediate Holding Companies of $886, (d)
                         the effect of timing differences in the recognition of incentive
                         income compensation expense between net income attributable to OCG
                         and adjusted net income of $41,954, (e) acquisition-related items of
                         $1,456, (f) adjustments of $13,747 related to amounts received for
                         contractually reimbursable costs that are classified as other income
                         under GAAP and as expenses for ANI, and (g) $4,250 of net gains
                         related to foreign-currency hedging activities.
(3)                      The interest expense adjustment removes interest expense of the
                         consolidated funds and reclassifies interest income from other
                         income of consolidated funds.
(4)                      The adjustment to other income (expense), net represents adjustments
                         related to (a) amounts received for contractually reimbursable costs
                         of $13,747 that are classified as other income under GAAP and as
                         expenses for ANI, and (b) the reclassification of $967 in net gains
                         related to foreign-currency hedging activities from general and
                         administrative expense.
(5)                      The adjustment to other income of consolidated funds removes
                         interest, dividend and other investment income attributable to
                         third-party investors in our consolidated funds, and reclassifies
                         investment income to revenues and interest income to interest
                         expense, net.
                          
                                                                                                                      As of or for the Nine Months Ended September 30, 2016
                                                                                          ---------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Consolidated                         Adjustments                              ANI
                                                                                          ----------------------------------                     ----------------------------------                     -------------------------------------
                                                                                                                                                            (in thousands)
Management fees (1)                                                                          $ 584,542                                              $   8,527                                                 $ 593,069
Incentive income (1)                                                                           242,894                                                 41,072                                                   283,966
Investment income (1)                                                                          136,205                                                 (2,475 )                                                 133,730
Total expenses (2)                                                                            (579,171 )                                                1,158                                                  (578,013 )
Interest expense, net (3)                                                                      (86,849 )                                               62,391                                                   (24,458 )
Other income (expense), net (4)                                                                 11,892                                                (18,186 )                                                  (6,294 )
Other income of consolidated funds (5)                                                         113,130                                               (113,130 )                                          --
Income taxes                                                                                   (29,818 )                                               29,818                                            --
Net income attributable to non-controlling interests in consolidated                           (15,618 )                                               15,618                                            --
funds
Net income attributable to non-controlling interests in consolidated                          (241,785 )                                              241,785                         --  
subsidiaries
                                                                                          -----------  --------------------                      -----------  --------------------                      --------------  --------------------
Net income attributable to Oaktree Capital Group, LLC/Adjusted net                           $ 135,422                           $ 266,578                              $ 402,000  
income
                                                                                          ==== ======= ====================                      ==== ======= ====================                      ======= ======= ====================
 
--------------------------------------------------------------------
(1)   The adjustment (a) adds back amounts earned from the consolidated
                         funds, (b) for management fees, reclassifies $1,086 of net gains
                         related to foreign-currency hedging activities from general and
                         administrative expense, (c) for incentive income, includes $39,881
                         related to timing differences in the recognition of incentive income
                         between net income attributable to OCG and adjusted net income, and
                         (d) for investment income, includes $19,733 related to corporate
                         investments in CLOs, which under GAAP are marked-to-market but for
                         ANI accounted for at amortized cost, subject to impairment.
(2)                      The expense adjustment consists of (a) equity-based compensation
                         expense of $10,269 related to unit grants made before our initial
                         public offering, (b) consolidated fund expenses of $3,819, (c)
                         expenses incurred by the Intermediate Holding Companies of $765, (d)
                         the effect of timing differences in the recognition of incentive
                         income compensation expense between net income attributable to OCG
                         and adjusted net income of $39,881, (e) acquisition-related items of
                         $1,751, (f) adjustments of $16,287 related to amounts received for
                         contractually reimbursable costs that are classified as other income
                         under GAAP and as expenses for ANI, and (g) $11,650 of net losses
                         related to foreign-currency hedging activities.
(3)                      The interest expense adjustment removes interest expense of the
                         consolidated funds and reclassifies interest income from other
                         income of consolidated funds.
(4)                      The adjustment to other income (expense), net represents adjustments
                         related to (a) amounts received for contractually reimbursable costs
                         of $16,287 that are classified as other income under GAAP and as
                         expenses for ANI, and (b) the reclassification of $1,899 in net
                         losses related to foreign-currency hedging activities from general
                         and administrative expense.
(5)                      The adjustment to other income of consolidated funds removes
                         interest, dividend and other investment income attributable to
                         third-party investors in our consolidated funds, and reclassifies
                         investment income to revenues and interest income to interest
                         expense, net.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20171026005474r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171026005474/en/

SOURCE: Oaktree Capital Group, LLC"> <Property FormalName="PrimaryTwitterHandle" Value="@oaktree

Investor Relations: 
Oaktree Capital Group, LLC 
Andrea D. Williams, (213) 830-6483 
investorrelations@oaktreecapital.com 
or 
Press Relations: 
Sard Verbinnen & Co 
John Christiansen, (415) 618-8750 
jchristiansen@sardverb.com 
or 
Sard Verbinnen & Co 
Alyssa Linn,(310) 201-2040 
alinn@sardverb.com


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