12. EARNINGS PER SHARE
The Company has Class A and non-voting common stock outstanding. The non-voting common stock has the same economic rights as the Class A common stock; therefore, earnings per share is presented on a combined basis. Income of the Company has been allocated on a proportionate basis to the two common stock classes.
Basic earnings per share of Class A and non-voting common stock is computed by using the two-class method. Diluted earnings per share of Class A and non-voting common stock is computed using the more dilutive method of either the two-class method or the treasury stock and if-converted methods.
For the years ended December 31, 2025 and 2024, the two-class method was the more dilutive method. For the year ended December 31, 2023, the treasury stock method was the more dilutive method.
The computation of diluted earnings per share excludes the following restricted units and AOG Units as their effect would have been anti-dilutive under the treasury stock method:
| | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, |
| | | | | 2025 | | 2024 | | 2023 |
| | | | | | | | | |
| Restricted units | | | | | N/A | | N/A | | 2,071 | |
| AOG Units | | | | | N/A | | N/A | | 118,804,252 | |
| | | | | | | | | |
The following table presents the computation of basic and diluted earnings per common share:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, |
| | | | | 2025 | | 2024 | | 2023 |
| Basic earnings per share of Class A and non-voting common stock | | | | | | | | | |
| Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | | | | | $ | 426,112 | | | $ | 440,961 | | | $ | 474,326 | |
| Dividends declared and paid on Class A and non-voting common stock | | | | | (985,543) | | | (742,970) | | | (571,923) | |
| Distributions on unvested restricted units | | | | | (42,570) | | | (30,766) | | | (21,303) | |
| | | | | | | | | |
| Dividends in excess of earnings available to Class A and non-voting common stockholders | | | | | $ | (602,001) | | | $ | (332,775) | | | $ | (118,900) | |
| Basic weighted-average shares of Class A and non-voting common stock | | | | | 217,361,945 | | | 198,054,451 | | | 184,523,524 | |
| Dividends in excess of earnings per share of Class A and non-voting common stock | | | | | $ | (2.77) | | | $ | (1.68) | | | $ | (0.64) | |
| Dividend declared and paid per Class A and non-voting common stock | | | | | 4.48 | | | 3.72 | | | 3.08 | |
| Basic earnings per share of Class A and non-voting common stock | | | | | $ | 1.71 | | | $ | 2.04 | | | $ | 2.44 | |
| | | | | | | | | |
| Diluted earnings per share of Class A and non-voting common stock | | | | | | | | | |
| Net income attributable to Ares Management Corporation Class A and non-voting common stockholders | | | | | $ | 426,112 | | | $ | 440,961 | | | $ | 474,326 | |
| Distributions on unvested restricted units | | | | | (42,570) | | | (30,766) | | | — | |
| | | | | | | | | |
| Net income available to Class A and non-voting common stockholders | | | | | $ | 383,542 | | | $ | 410,195 | | | $ | 474,326 | |
| Effect of dilutive shares: | | | | | | | | | |
| Restricted units | | | | | — | | | — | | | 9,347,318 | |
| Options | | | | | — | | | — | | | 1,902,584 | |
| | | | | | | | | |
| | | | | | | | | |
| Diluted weighted-average shares of Class A and non-voting common stock | | | | | 217,361,945 | | | 198,054,451 | | | 195,773,426 | |
| Diluted earnings per share of Class A and non-voting common stock | | | | | $ | 1.71 | | | $ | 2.04 | | | $ | 2.42 | |
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.