[July 30, 2015] |
|
Fortress Reports Second Quarter 2015 Results and Announces Dividend of $0.08 per Share
Fortress Investment Group LLC (NYSE:FIG) ("Fortress" or the "Company")
today reported its second quarter 2015 financial results.
FINANCIAL SUMMARY
-
Fortress declares a cash dividend of $0.08 per dividend paying share
for the second quarter of 2015
-
Management Fee Paying Assets Under Management ("AUM") of $72.0 billion
as of June 30, 2015, an increase of 3% from the previous quarter and
an increase of 13% from June 30, 2014
-
GAAP net income of $5 million, or $0.00 per diluted Class A share, for
the second quarter of 2015, compared to GAAP net income of $73
million, or $0.12 per diluted Class A share, for the second quarter of
2014
-
Pre-tax distributable earnings ("DE") of $137 million, or $0.30 per
dividend paying share, for the second quarter of 2015, compared to
pre-tax DE of $172 million, or $0.39 per dividend paying share for the
second quarter of 2014
-
Net cash and investments of $2.87 per dividend paying share as of June
30, 2015
-
$1.0 billion of gross embedded incentive income across funds and
permanent capital vehicles as of June 30, 2015, that has not been
recognized in DE
-
Total uncalled capital, or "dry powder," of $10.1 billion as of June
30, 2015, including $7.1 billion available for general investment
purposes
BUSINESS HIGHLIGHTS
-
Raised $3.2 billion of capital across alternative investment
businesses during the quarter and $8.6 billion in the first half of
2015
-
Recorded $1.1 billion of net client inflows for Logan Circle during
the quarter, bringing total net client inflows year-to-date through
June 30, 2015 to $1.6 billion
-
Investment performance summary as of June 30, 2015:
-
Second quarter 2015 net returns of 2.3% for Drawbridge Special
Opportunities Fund ("DBSO") LP and (6.2)% for Fortress Macro Fund
Ltd
-
Annualized inception-to-date net IRRs for FCO, FCO II and FCO III
of 25.1%, 17.7% and 12.0%, respectively
-
Private Equity fund valuations decreased 2.3% in the first half of
2015
-
13 out of 16 Logan Circle fixed income strategies outperformed
respective benchmarks for the quarter ended June 30, 2015 and 15
of 16 strategies have outperformed respective benchmarks since
inception
"We delivered strong financial performance in the second quarter and
carried great momentum into the second half of the year," said Fortress
Chief Executive Officer Randy Nardone. "Our results reflect continued
top-tier investment performance in our Credit funds and substantial
contributions from a Permanent Capital business that now accounts for
nearly 20% of total alternative AUM. Robust investor demand for
successor Credit PE funds and equity raised for our Permanent Capital
Vehicles led to our raising more capital in the first half of 2015 than
in any full year since 2008. With assets under management at an all-time
high of $72 billion, ample dry powder to deploy and substantial embedded
value to harvest, we have a very optimistic outlook for future earnings
growth and valuation upside."
SUMMARY FINANCIAL RESULTS
Fortress's business model is highly diversified, and management believes
that this positions the Company to capitalize on opportunities for
investing, capital formation and harvesting profits that can occur at
different points in any cycle for our individual businesses. Fortress's
business model generates stable and predictable management fees, which
is a function of the majority of Fortress's alternative AUM residing in
long-term investment structures. Fortress's alternative investment
businesses also generate variable incentive income based on performance,
and this incentive income can contribute meaningfully to financial
results. Balance sheet investments represent a third component of
Fortress's business model, and the Company has built substantial value
in these investments, which are made in Fortress funds alongside the
funds' limited partners.
The table below summarizes Fortress's operating results for the three
and six months ended June 30, 2015. The consolidated GAAP statement of
operations and balance sheet are presented on pages 12-13 of this press
release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q
|
|
1Q
|
|
2Q
|
|
% Change
|
|
1H
|
|
1H
|
|
% Change
|
|
|
|
2015
|
|
2015
|
|
2014
|
|
QoQ
|
|
YoY
|
|
2015
|
|
2014
|
|
YoY
|
(in millions, except per share amount)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
308
|
|
|
$
|
227
|
|
$
|
270
|
|
36
|
%
|
|
14
|
%
|
|
$
|
535
|
|
$
|
507
|
|
6
|
%
|
Expenses
|
|
|
|
258
|
|
|
|
329
|
|
|
216
|
|
(22
|
)%
|
|
19
|
%
|
|
|
587
|
|
|
447
|
|
31
|
%
|
Other Income
|
|
|
|
(51
|
)
|
|
|
208
|
|
|
27
|
|
N/A
|
|
|
N/A
|
|
|
|
157
|
|
|
36
|
|
336
|
%
|
Net income (loss)
|
|
|
|
5
|
|
|
|
87
|
|
|
73
|
|
(94
|
)%
|
|
(93
|
)%
|
|
|
92
|
|
|
83
|
|
11
|
%
|
Net income (loss) attributable to Class A Shareholders
|
|
|
|
3
|
|
|
|
35
|
|
|
31
|
|
(91
|
)%
|
|
(90
|
)%
|
|
|
38
|
|
|
34
|
|
12
|
%
|
Per diluted share
|
|
|
$
|
0.00
|
|
|
$
|
0.15
|
|
$
|
0.12
|
|
(100
|
)%
|
|
(99
|
)%
|
|
$
|
0.16
|
|
$
|
0.14
|
|
14
|
%
|
Weighted average Class A shares outstanding, diluted
|
|
|
|
449
|
|
|
|
222
|
|
|
445
|
|
|
|
|
|
|
|
222
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund management DE
|
|
|
$
|
133
|
|
|
$
|
51
|
|
$
|
76
|
|
161
|
%
|
|
75
|
%
|
|
$
|
184
|
|
$
|
163
|
|
13
|
%
|
Pre-tax DE
|
|
|
|
137
|
|
|
|
55
|
|
|
172
|
|
149
|
%
|
|
(20
|
)%
|
|
|
192
|
|
|
268
|
|
(28
|
)%
|
Per dividend paying share/unit
|
|
|
$
|
0.30
|
|
|
$
|
0.12
|
|
$
|
0.39
|
|
150
|
%
|
|
(23
|
)%
|
|
$
|
0.42
|
|
$
|
0.59
|
|
(29
|
)%
|
Weighted average dividend paying shares and units outstanding
|
|
|
|
454
|
|
|
|
450
|
|
|
442
|
|
|
|
|
|
|
452
|
|
|
455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Equity and Permanent Capital
|
|
|
$
|
16,535
|
|
|
$
|
14,801
|
|
$
|
13,831
|
|
12
|
%
|
|
20
|
%
|
|
$
|
16,535
|
|
$
|
13,831
|
|
20
|
%
|
Credit
|
|
|
|
14,491
|
|
|
|
13,834
|
|
|
12,982
|
|
5
|
%
|
|
12
|
%
|
|
|
14,491
|
|
|
12,982
|
|
12
|
%
|
Liquid Markets1
|
|
|
|
7,377
|
|
|
|
7,838
|
|
|
7,867
|
|
(6
|
)%
|
|
(6
|
)%
|
|
|
7,377
|
|
|
7,867
|
|
(6
|
)%
|
Logan Circle
|
|
|
|
33,564
|
|
|
|
33,416
|
|
|
29,133
|
|
0
|
%
|
|
15
|
%
|
|
|
33,564
|
|
|
29,133
|
|
15
|
%
|
Total Assets Under Management
|
|
|
$
|
71,967
|
|
|
$
|
69,889
|
|
$
|
63,813
|
|
3
|
%
|
|
13
|
%
|
|
$
|
71,967
|
|
$
|
63,813
|
|
13
|
%
|
__________________________________
|
1 The Assets Under Management presented for Liquid
Markets includes AUM related to Affiliated Managers in 2015, which
was $3,896 million as of 2Q 2015.
|
|
CONSOLIDATED GAAP RESULTS
Fortress recorded GAAP net income of $5 million, or $0.00 per diluted
Class A share, for the second quarter of 2015, compared to GAAP net
income of $73 million, or $0.12 per diluted Class A share, for the
second quarter of 2014. Our diluted earnings per share for all periods
presented includes the income tax effects to net income (loss)
attributable to Class A shareholders from the assumed conversion of
Fortress Operating Group units and fully vested restricted partnership
units to Class A shares.
The year-over-year decrease in Fortress's second quarter 2015 GAAP net
income was primarily driven by a $78 million decrease in other income
and a $42 million increase in expenses, partially offset by a $38
million increase in revenues. The decrease in other income was primarily
related to $36 million of losses from equity method investees while the
increase in expenses was primarily related to higher compensation and
benefits. The increase in revenues was primarily related to higher
management fees and incentive income from affiliates.
CONSOLIDATED SEGMENT RESULTS (NON-GAAP)
This section provides information about each of Fortress's businesses:
(i) Credit Hedge Funds and Credit PE Funds, (ii) Private Equity Funds
and Permanent Capital Vehicles, (iii) Liquid Hedge Funds, and (iv) Logan
Circle.
Fortress uses DE as the primary metric to manage its businesses and
gauge the Company's performance, and it uses DE exclusively to report
segment results. All DE figures are presented on a pre-tax basis.
Consolidated segment results are non-GAAP information and are not
presented as a substitute for Fortress's GAAP results. Fortress urges
you to read "Non-GAAP Information" below.
|
|
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|
|
|
As of June 30, 2015
|
|
|
|
|
|
|
Private Equity
|
|
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Liquid Hedge Funds
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management2
|
|
$
|
71,967
|
|
|
$
|
9,587
|
|
|
$
|
6,948
|
|
|
|
$
|
7,377
|
|
|
|
$
|
6,244
|
|
|
|
$
|
8,247
|
|
|
$
|
33,564
|
|
|
|
Dry Powder
|
|
$
|
10,127
|
|
|
$
|
1,674
|
|
|
$
|
-
|
|
|
|
|
N/A
|
|
|
|
$
|
356
|
|
|
|
$
|
8,097
|
|
|
|
N/A
|
|
|
|
Average Management Fee Rate3
|
|
|
|
|
1.2
|
%
|
|
|
1.5
|
%
|
|
|
|
1.7
|
%
|
|
|
|
2.0
|
%
|
|
|
|
1.4
|
%
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Eligible NAV Above Incentive Income Threshold4
|
|
$
|
21,229
|
|
|
$
|
1,238
|
|
|
$
|
3,457
|
|
|
|
$
|
-
|
|
|
|
$
|
5,530
|
|
|
|
$
|
10,947
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed Incentive Income: Unrecognized
|
|
$
|
1,018
|
|
|
$
|
30
|
|
|
$
|
44
|
|
|
|
$
|
6
|
|
|
|
$
|
64
|
|
|
|
$
|
874
|
|
|
$
|
-
|
|
|
|
Undistributed Incentive Income: Recognized
|
|
|
46
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
45
|
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
Undistributed Incentive Income5
|
|
$
|
1,064
|
|
|
$
|
30
|
|
|
$
|
45
|
|
|
|
$
|
6
|
|
|
|
$
|
109
|
|
|
|
$
|
874
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
Private Equity
|
|
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Liquid Hedge Funds
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
3,213
|
|
|
$
|
-
|
|
|
$
|
2,291
|
|
|
|
$
|
171
|
|
|
|
$
|
79
|
|
|
|
$
|
672
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
144
|
|
|
$
|
29
|
|
|
$
|
23
|
|
|
|
$
|
19
|
|
|
|
$
|
29
|
|
|
|
$
|
30
|
|
|
$
|
14
|
|
|
|
Incentive income
|
|
|
183
|
|
|
|
-
|
|
|
|
74
|
|
|
|
|
(1
|
)
|
|
|
|
50
|
|
|
|
|
60
|
|
|
|
-
|
|
|
|
Total
|
|
|
327
|
|
|
|
29
|
|
|
|
97
|
|
|
|
|
18
|
|
|
|
|
79
|
|
|
|
|
90
|
|
|
|
14
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(121
|
)
|
|
|
(15
|
)
|
|
|
(16
|
)
|
|
|
|
(27
|
)
|
|
|
|
(19
|
)
|
|
|
|
(30
|
)
|
|
|
(14
|
)
|
|
|
Profit sharing compensation expenses
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
|
3
|
|
|
|
|
(18
|
)
|
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
Total
|
|
|
(175
|
)
|
|
|
(15
|
)
|
|
|
(25
|
)
|
|
|
|
(24
|
)
|
|
|
|
(37
|
)
|
|
|
|
(60
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
(18
|
)
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
|
-
|
|
|
|
|
(6
|
)
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
133
|
|
|
$
|
14
|
|
|
$
|
61
|
|
|
|
$
|
(7
|
)
|
|
|
$
|
36
|
|
|
|
$
|
29
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income6
|
|
|
4
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
-
|
|
|
|
|
3
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
137
|
|
|
$
|
14
|
|
|
$
|
62
|
|
|
|
$
|
(6
|
)
|
|
|
$
|
36
|
|
|
|
$
|
32
|
|
|
$
|
-
|
|
__________________________________
|
2 The Assets Under Management presented for the Liquid
Hedge Funds includes $3,896 million related to Affiliated Managers.
The Assets Under Management presented for the Credit Hedge Funds
includes $156 million related to the third-party originated Value
Recovery Funds. Fortress earns fees from the Value Recovery Funds
based only on collections.
|
3 The Average Management Fee Rate presented for the
Liquid Hedge Funds excludes Affiliated Managers. The Average
Management Fee Rate presented for the Credit Hedge Funds excludes
the third-party originated Value Recovery Funds. See footnote (2)
above.
|
4 The Incentive Eligible NAV Above Incentive Income
Threshold presented for Liquid and Credit Hedge Funds excludes
sidepocket investments and for Liquid Hedge Funds, excludes
Affiliated Managers. The Incentive Eligible NAV Above Incentive
Income Threshold presented for Private Equity Funds and Credit PE
Funds (except for Fund V, Long Dated Value Fund I and Real Estate
Opportunities Fund II, of which a portion of the fund's capital was
above the incentive income threshold as of June 30, 2015),
represents total fund NAV. The Incentive Eligible NAV Above
Incentive Income Threshold presented for the Permanent Capital
Vehicles represents the equity basis that is used to calculate
incentive income.
|
5 The Undistributed Incentive Income presented for the
Liquid Hedge Funds excludes Affiliated Managers. Undistributed
Incentive Income includes the impact of sidepocket investments on
Liquid and Credit Hedge Funds. Undistributed Incentive Income for
Private Equity Funds, Credit PE Funds and Liquid and Credit Hedge
Fund sidepocket and redeeming capital account (RCA) investments has
not been recognized in Distributable Earnings and will be recognized
when realized; Undistributed Incentive Income for other Hedge Fund
investments was recognized in Distributable Earnings when earned.
Undistributed Incentive Income for Permanent Capital Vehicles
includes incentive income that would have been recorded in
Distributable Earnings if Fortress had (i) exercised all of its
in-the-money options it holds in the Permanent Capital Vehicles and
sold all of the resulting shares and (ii) sold all of its Permanent
Capital Vehicle common shares which it received as incentive income,
based on their June 30, 2015 closing price.
|
6 Net Investment Income includes Unallocated Expenses of
$1 million.
|
|
Pre-tax DE was $137 million in the second quarter of 2015, down from
$172 million in the second quarter of 2014. This year-over-year decrease
was primarily due to lower net investment income and management fees,
partially offset by higher incentive income.
Management fees were $144 million in the second quarter of 2015, down
from $152 million in the second quarter of 2014. Management fees for the
second quarter of 2014 included approximately $15 million attributable
to the former Fortress Asia Macro Funds ("FAMF"). With the transition of
FAMF to Graticule Asset Management Asia L.P. ("Graticule") in the first
quarter of 2015, Fortress no longer includes FAMF management fees in
revenue. Adjusting for this transition, Fortress management fees
increased by approximately $7 million year-over-year in the second
quarter of 2015. The increase was primarily due to higher management
fees from the Credit PE Funds, Permanent Capital Vehicles, Logan Circle
and Credit Hedge Funds, partially offset by lower management fees from
the Liquid Hedge Funds and Private Equity Funds.
Incentive income recorded in the second quarter of 2015 totaled $183
million, up from $78 million recorded in the second quarter of 2014,
primarily due to higher incentive income from the Credit PE Funds and
Permanent Capital Vehicles.
Earnings from Affiliated Managers were a loss of $1 million in the
second quarter of 2015, down from earnings of $9 million in the first
quarter of 2015, related to our interests in Graticule.
Additionally, Fortress had $1.0 billion in gross undistributed,
unrecognized incentive income based on investment valuations as of June
30, 2015. This includes $974 million from our funds, $38 million from
options in our permanent capital vehicles and $6 million in common
shares Fortress received in connection with the IPO of Fortress
Transportation and Infrastructure Investors LLC ("FTAI").
The Company's segment revenues and distributable earnings will
fluctuate materially depending upon the performance of its funds and the
realization events within its Private Equity businesses, as well as
other factors. Accordingly, the revenues and distributable
earnings in any particular period should not be expected to be
indicative of future results.
ASSETS UNDER MANAGEMENT
As of June 30, 2015, AUM totaled $72.0 billion, up from $69.9 billion as
of March 31, 2015. During the quarter, Fortress raised $3.0 billion of
capital and equity that was directly added to AUM, recorded $1.1 billion
of net client inflows for Logan Circle, and had a $0.8 billion increase
in invested capital. These increases to AUM were partially offset by (i)
$1.5 billion of market-driven valuation losses, (ii) $0.4 billion of
Liquid Hedge Fund redemptions, (iii) $0.3 billion of capital
distributions to investors, (iv) $0.2 billion of payments to Credit
Hedge Fund investors from redeeming capital accounts, and (v) a $0.2
billion capital reset adjustment.
As of June 30, 2015, the Credit Funds and Private Equity Funds had $8.5
billion and $1.7 billion of uncalled capital, respectively, that will
become AUM if deployed/called. Uncalled capital or dry powder - capital
committed to the funds but not invested and generating management fees -
includes $3.0 billion that is only available for follow-on investments,
management fees and other fund expenses. Notably, approximately 81% of
alternative AUM was in funds with long-term investment structures as of
June 30, 2015, which provides for a stable, predictable base of
management fees.
BUSINESS SEGMENT RESULTS
Below is a discussion of second quarter 2015 segment results and
business highlights.
Credit:
-
DBSO LP net returns of 2.3% for the second quarter of 2015
-
FCO, FCO II, FCO III, Japan Opportunity Fund ("FJOF") and FJOF II
(Yen) recorded annualized inception-to-date net IRRs of 25.1%, 17.7%,
12.0%, 31.7% and 24.2%, respectively, through June 30, 2015
-
Closed latest flagship Credit Real Estate fund, Fortress Real
Estate Opportunities Fund ("FROF") II, at its cap of $1.0 billion
-
Credit PE Funds invested $0.8 billion of capital in the first half
of 2015, compared to $0.3 billion invested in the first half of 2014
(See supplemental data on pages 19-20 for more detail on Credit
results)
The Credit business, which includes our Credit PE Funds and Credit Hedge
Funds, generated pre-tax DE of $68 million in the second quarter of
2015, up from $35 million in the second quarter of 2014. The 94%
year-over-year increase in DE was primarily driven by substantially
higher incentive income, partially offset by higher profit sharing and
operating expenses.
The Credit Hedge Funds generated pre-tax DE of $36 million in the
quarter, compared to $32 million in the second quarter of 2014,
primarily due to an $8 million increase in incentive income
year-over-year. DBSO LP, Fortress's flagship credit hedge fund, had net
returns of 2.3% in the second quarter following net returns of 2.2% in
the first quarter of 2015.
The Credit PE Funds generated pre-tax DE of $32 million in the quarter,
up significantly from $3 million in the second quarter of 2014, as
increased realization activity resulted in $60 million of incentive
income in the quarter, compared to $13 million of incentive income in
the second quarter of 2014. Gross unrecognized Credit PE incentive
income totaled $874 million at quarter end, up $38 million from June 30,
2014, despite $259 million of gross Credit PE incentive income
recognized in DE over the last twelve months.
The Credit PE Funds raised $0.7 billion of capital in the quarter,
including $0.4 billion for FROF II which closed at its cap of $1.0
billion. At quarter end, approximately 20% of the fund's capital has
already been committed or invested in the U.S. and Europe. FROF II is a
successor fund to FROF I and related funds, which launched in September
2011 with approximately $625 million in commitments.
Private Equity and Permanent Capital Vehicles:
-
AUM increased 20% year-over-year to all-time high of $16.5 billion
-
Raised $2.3 billion of permanent equity capital in the second
quarter, including $0.4 billion of capital raised in connection with
FTAI's IPO
-
Exercised and sold in-the-money New Residential Investment Corp.
("New Residential") options, resulting in gross incentive income of
$57 million recognized in DE in the second quarter
(See supplemental data on pages 17-18 for more detail on Private
Equity results)
The Private Equity business recorded pre-tax DE of $76 million in the
second quarter of 2015, including $62 million for the Permanent Capital
Vehicles and $14 million for the Private Equity Funds. Pre-tax DE
declined from $131 million in the second quarter of 2014, primarily due
to $91 million of Private Equity fund investment income that was
recorded in the second quarter of 2014, partially offset by $74 million
of Permanent Capital Vehicle incentive income in the second quarter of
2015.
The Permanent Capital Vehicles have raised $2.4 billion of capital
year-to-date through June 30, 2015, including $1.3 billion raised by New
Residential, $0.3 billion raised by Eurocastle Investment Limited
("Eurocastle"), $0.4 billion raised by FTAI, $0.3 billion raised by New
Senior Investment Group Inc. ("New Senior") and $0.2 billion raised by
New Media Investment Group Inc. ("New Media"). A portion of the capital
raised by New Residential was used to help fund New Residential's
acquisition of HLSS in April 2015.
In June 2015, Fortress sold 3.6 million shares acquired through the
exercise of outstanding in-the-money options it held in New Residential.
The transaction resulted in $57 million of gross incentive income
recognized in DE in the quarter.
Private Equity Fund valuations decreased 2.3% in the first half of 2015,
primarily due to depreciation of Nationstar Mortgage Holdings Inc.
(NYSE: NSM) and certain privately held portfolio company investments,
partially offset by appreciation of Springleaf Holdings, Inc. (NYSE:
LEAF).
Liquid Hedge Funds:
-
Raised $0.3 billion of capital year-to-date through June 30, 2015
(See supplemental data on page 21 for more detail on Liquid Hedge
Funds results)
The Liquid Hedge Funds recorded a pre-tax DE loss of $6 million in the
second quarter of 2015, compared to pre-tax DE of $7 million in the
second quarter of 2014, primarily due to lower management fees. Earnings
from Affiliated Managers were a loss of $1 million in the second quarter
of 2015, compared to earnings of $9 million in the first quarter of 2015.
Second quarter 2015 net returns for the Fortress Macro Funds, Fortress
Convex Asia Funds, Fortress Centaurus Global Funds and Fortress Partners
Funds were (6.2)%, (0.8)%, (4.1)% and (1.2)%, respectively. Net returns
year-to-date through July 24, 2015 for the Fortress Macro Funds,
Fortress Convex Asia Funds and Fortress Centaurus Global Funds were
(9.9)%, (1.8)% and (2.2)%, respectively.*
Liquid Hedge Funds ended the quarter with $7.4 billion of AUM, including
$3.9 billion related to Affiliated Managers. Liquid Hedge Fund AUM
declined slightly during the quarter primarily due to $0.4 billion of
redemptions, partially offset by $0.2 billion of capital raised. At
quarter end, there were $718 million of Liquid Hedge Fund redemption
notices outstanding, including $510 million to be paid primarily in the
third quarter of 2015.
__________________________________
|
* The net returns for the Fortress Convex Asia Funds
reflect returns for the Fortress Convex Asia Funds and Fortress
Convex Asia PF Funds collectively. The calculation of net returns
for the Fortress Convex Asia PF Funds reflect all expenses,
including management fees, accrued incentive allocation (if any),
and other expenses over the fund's Trading Level. "Trading Level"
is defined as the product of the fund's NAV multiplied by the
Funding Factor. The "Funding Factor" is 2x for Fortress Convex
Asia Fund PF Ltd and Fortress Convex Asia Fund PF LP. The net
returns for the Fortress Partners Funds represent the performance
of Fortress Partners Fund LP. Please see supplemental data on page
21 for more detail on the returns of each Fortress Partners Fund.
|
|
Logan Circle:
-
13 out of 16 Logan Circle fixed income investment strategies
outperformed their respective benchmarks in the quarter, and 15 of 16
strategies have outperformed respective benchmarks since inception
-
AUM totaled $33.6 billion at June 30, 2015, an increase of 15%
compared to June 30, 2014
-
Net client inflows totaled $1.1 billion in the quarter
(See supplemental data on page 22 for more detail on Logan Circle
results)
Logan Circle, our traditional asset management business, recorded
breakeven pre-tax DE in the quarter, compared to a pre-tax DE loss of $1
million in the second quarter of 2014, as higher management fees were
offset by higher operating expenses.
Logan Circle ended the quarter with $33.6 billion in AUM, relatively
flat compared to the prior quarter and a 15% increase compared to the
second quarter of 2014. AUM was relatively flat quarter-over-quarter as
net inflows were largely offset by market-driven valuation losses.
For the year-to-date period through June 30, 2015, all 16 of Logan
Circle's fixed income strategies outperformed their respective
benchmarks. Since inception, 15 of 16 Logan Circle fixed income
strategies have outperformed their respective benchmarks and seven were
ranked in the top quartile of performance for their competitor universe.
LIQUIDITY & CAPITAL
As of June 30, 2015, Fortress had cash and cash equivalents of $234
million and debt obligations of $75 million.
As of June 30, 2015, Fortress had $1.2 billion of investments in
Fortress funds and options in publicly traded permanent capital
vehicles. As of June 30, 2015, Fortress had a total of $166 million of
outstanding commitments to its funds.
In addition, the NAV of Fortress's investments in its own funds exceeded
its segment cost basis by $538 million at quarter end, representing net
unrealized gains that have not yet been recognized for segment reporting
purposes.
DIVIDEND
Fortress's Board of Directors declared a second quarter 2015 cash
dividend of $0.08 per dividend paying share. The dividend is payable on
August 14, 2015 to Class A shareholders of record as of the close of
business on August 11, 2015.
The declaration and payment of any dividends are at the sole discretion
of the Board of Directors, which may decide to change its dividend
policy at any time. Please see below for information on the U.S. federal
income tax implications of the dividend.
NON-GAAP INFORMATION
DE is a primary metric used by management to measure Fortress's
operating performance. Consistent with GAAP, DE is the sole measure that
management uses to manage, and thus report on, Fortress's segments,
namely: Private Equity, Permanent Capital Vehicles, Credit Hedge Funds,
Credit PE Funds, Liquid Hedge Funds and Logan Circle. DE differs from
GAAP net income in a number of material ways. For a detailed description
of the calculation of pre-tax DE and fund management DE, see Exhibit 3
to this release and note 10 to the financial statements included in the
Company's most recent quarterly report on Form 10-Q.
Fortress aggregates its segment results to report consolidated segment
results, as shown in the table under "Summary Financial Results" and in
the "Total" column of the table under "Consolidated Segment Results
(Non-GAAP)." The consolidated segment results are non-GAAP financial
information. Management believes that consolidated segment results
provide a meaningful basis for comparison among present and future
periods. However, consolidated segment results should not be considered
a substitute for Fortress's consolidated GAAP results. The exhibits to
this release contain reconciliations of the components of Fortress's
consolidated segment results to the comparable GAAP measures, and
Fortress urges you to review these exhibits. Fortress also uses weighted
average dividend paying shares and units outstanding (used to calculate
pre-tax DE per dividend paying share) and net cash and investments. The
exhibits to this release contain reconciliations of these measures to
the comparable GAAP measures, and Fortress urges you to review these
exhibits.
CONFERENCE CALL
Management will host a conference call today, Thursday, July 30th
at 10:00 A.M. Eastern Time. A copy of the earnings release is posted to
the Investor Relations section of Fortress's website, www.fortress.com.
The conference call may be accessed by dialing 1-877-694-6694 (from
within the U.S.) or 1-970-315-0985 (from outside of the U.S.) ten
minutes prior to the scheduled start of the call; please reference
"Fortress Second Quarter Earnings Call." A simultaneous webcast of the
conference call will be available to the public on a listen-only basis
at www.fortress.com.
Please allow extra time prior to the call to visit the site and download
the necessary software required to listen to the internet broadcast. A
telephonic replay of the conference call will also be available by
dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from
outside of the U.S.); please reference access code "79002443."
ABOUT FORTRESS
Fortress Investment Group LLC (NYSE: FIG) is a leading, highly
diversified global investment management firm with $72.0 billion in
assets under management as of June 30, 2015. Fortress applies its deep
experience and specialized expertise across a range of investment
strategies - private equity, credit, liquid hedge funds and traditional
asset management - on behalf of over 1,600 institutional clients and
private investors worldwide. For more information regarding Fortress
Investment Group LLC or to be added to its e-mail distribution list,
please visit www.fortress.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding Fortress's sources of
management fees, incentive income and investment income (loss),
estimated fund performance and the amount and source of expected capital
commitments. These statements are not historical facts, but instead
represent only the Company's beliefs regarding future events, many of
which, by their nature, are inherently uncertain and outside of the
Company's control. It is possible that the sources and amounts of
management fees, incentive income and investment income, the amount and
source of expected capital commitments for any new fund or redemption
amounts may differ, possibly materially, from these forward-looking
statements, and any such differences could cause the Company's actual
results to differ materially from the results expressed or implied by
these forward-looking statements. For a discussion of some of the risks
and important factors that could affect such forward-looking statements,
see the sections entitled "Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the
Company's Quarterly Report on Form 10-Q, which is, or will be, available
on the Company's website (www.fortress.com).
In addition, new risks and uncertainties emerge from time to time, and
it is not possible for the Company to predict or assess the impact of
every factor that may cause its actual results to differ from those
contained in any forward-looking statements. Accordingly, you should not
place undue reliance on any forward-looking statements contained in this
press release. The Company can give no assurance that the expectations
of any forward-looking statement will be obtained. Such forward-looking
statements speak only as of the date of this press release. The Company
expressly disclaims any obligation to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect
any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any statement is
based.
U.S. FEDERAL INCOME TAX IMPLICATIONS OF DIVIDEND
This announcement is intended to be a qualified notice as provided in
the Internal Revenue Code (the "Code") and the Regulations thereunder.
For U.S. federal income tax purposes, the dividend declared in July 2015
will be treated as a partnership distribution. The per share
distribution components are as follows:
|
|
|
U.S. Long Term Capital Gain (1)
|
|
|
|
$0.0000
|
|
|
|
|
Non-U.S. Long Term Capital Gain
|
|
|
|
$0.0000
|
|
|
|
|
U.S. Portfolio Interest Income (2)
|
|
|
|
$0.0575
|
|
|
|
|
U.S. Dividend Income (3)
|
|
|
|
$0.0000
|
|
|
|
|
Other Income (4)
|
|
|
|
$0.0225
|
|
|
|
|
Return of Capital
|
|
|
|
$0.0000
|
|
|
|
|
Distribution Per Share
|
|
|
|
$0.0800
|
|
(1)
|
|
U.S. Long Term Capital Gain realized on the sale of a United States
Real Property Holding Corporation. As a result, the gain from the
sale will be treated as income that is effectively connected with a
U.S. trade or business.
|
|
|
|
(2)
|
|
Eligible for the U.S. portfolio interest exemption for any holder
not considered a 10-Percent shareholder under §871(h)(3)(B) of the
Code.
|
|
|
|
(3)
|
|
This income is subject to withholding under §1441 of the Code.
|
|
|
|
(4)
|
|
This income is not subject to withholding under §1441 or §1446 of
the Code.
|
|
|
|
|
Fortress Investment Group LLC
Consolidated Statements of Operations (Unaudited)
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Management fees: affiliates
|
|
|
$
|
150,936
|
|
|
$
|
136,045
|
|
|
|
$
|
278,643
|
|
|
$
|
265,755
|
|
Management fees: non-affiliates
|
|
|
|
14,966
|
|
|
|
17,716
|
|
|
|
|
30,257
|
|
|
|
35,338
|
|
Incentive income: affiliates
|
|
|
|
82,158
|
|
|
|
60,442
|
|
|
|
|
106,381
|
|
|
|
94,693
|
|
Incentive income: non-affiliates
|
|
|
|
296
|
|
|
|
44
|
|
|
|
|
296
|
|
|
|
687
|
|
Expense reimbursements: affiliates
|
|
|
|
53,991
|
|
|
|
51,662
|
|
|
|
|
108,556
|
|
|
|
102,848
|
|
Expense reimbursements: non-affiliates
|
|
|
|
3,568
|
|
|
|
2,614
|
|
|
|
|
6,816
|
|
|
|
5,062
|
|
Other revenues
|
|
|
|
2,573
|
|
|
|
1,821
|
|
|
|
|
4,228
|
|
|
|
3,071
|
|
Total Revenues
|
|
|
|
308,488
|
|
|
|
270,344
|
|
|
|
|
535,177
|
|
|
|
507,454
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
199,108
|
|
|
|
168,114
|
|
|
|
|
377,996
|
|
|
|
356,633
|
|
General, administrative and other
|
|
|
|
45,185
|
|
|
|
42,186
|
|
|
|
|
88,166
|
|
|
|
80,009
|
|
Depreciation and amortization
|
|
|
|
12,768
|
|
|
|
5,037
|
|
|
|
|
18,099
|
|
|
|
9,338
|
|
Interest expense
|
|
|
|
1,039
|
|
|
|
947
|
|
|
|
|
1,878
|
|
|
|
1,638
|
|
Transfer of interest in Graticule
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
101,000
|
|
|
|
-
|
|
Total Expenses
|
|
|
|
258,100
|
|
|
|
216,284
|
|
|
|
|
587,139
|
|
|
|
447,618
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Gains (losses)
|
|
|
|
(6,787
|
)
|
|
|
4,864
|
|
|
|
|
24,774
|
|
|
|
(6,191
|
)
|
Tax receivable agreement liability adjustment
|
|
|
|
(7,500
|
)
|
|
|
-
|
|
|
|
|
(7,500
|
)
|
|
|
-
|
|
Earnings (losses) from equity method investees
|
|
|
|
(36,321
|
)
|
|
|
22,448
|
|
|
|
|
5,387
|
|
|
|
42,822
|
|
Gain on transfer of Graticule
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
134,400
|
|
|
|
-
|
|
Total Other Income (Loss)
|
|
|
|
(50,608
|
)
|
|
|
27,312
|
|
|
|
|
157,061
|
|
|
|
36,631
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
(220
|
)
|
|
|
81,372
|
|
|
|
|
105,099
|
|
|
|
96,467
|
|
Income tax benefit (expense)
|
|
|
|
5,199
|
|
|
|
(7,916
|
)
|
|
|
|
(13,200
|
)
|
|
|
(13,910
|
)
|
Net Income (Loss)
|
|
|
$
|
4,979
|
|
|
$
|
73,456
|
|
|
|
$
|
91,899
|
|
|
$
|
82,557
|
|
Allocation of Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Principals' and Others' Interests in Income (Loss) of Consolidated
Subsidiaries
|
|
|
|
1,653
|
|
|
|
42,100
|
|
|
|
|
53,876
|
|
|
|
48,177
|
|
Redeemable Non-Controlling Interests in Income (Loss)
|
|
|
|
10
|
|
|
|
157
|
|
|
|
|
(6
|
)
|
|
|
157
|
|
Net Income (Loss) Attributable to Class A Shareholders
|
|
|
|
3,316
|
|
|
|
31,199
|
|
|
|
|
38,029
|
|
|
|
34,223
|
|
|
|
|
$
|
4,979
|
|
|
$
|
73,456
|
|
|
|
$
|
91,899
|
|
|
$
|
82,557
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Class A Share
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per Class A share, basic
|
|
|
$
|
0.01
|
|
|
$
|
0.15
|
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
Net income (loss) per Class A share, diluted
|
|
|
$
|
0.00
|
|
|
$
|
0.12
|
|
|
|
$
|
0.16
|
|
|
$
|
0.14
|
|
Weighted average number of Class A shares outstanding, basic
|
|
|
|
216,183,181
|
|
|
|
207,783,751
|
|
|
|
|
215,985,577
|
|
|
|
212,328,315
|
|
Weighted average number of Class A shares outstanding, diluted
|
|
|
|
449,210,362
|
|
|
|
444,566,847
|
|
|
|
|
222,210,732
|
|
|
|
459,673,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Consolidated Balance Sheets
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30, 2015
(Unaudited)
|
|
|
December 31, 2014
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
233,912
|
|
|
|
|
$
|
391,089
|
|
Due from affiliates
|
|
|
|
188,051
|
|
|
|
|
|
326,575
|
|
Investments
|
|
|
|
1,144,597
|
|
|
|
|
|
1,121,545
|
|
Investments in options
|
|
|
|
60,950
|
|
|
|
|
|
71,844
|
|
Deferred tax asset, net
|
|
|
|
415,915
|
|
|
|
|
|
417,623
|
|
Other assets
|
|
|
|
165,531
|
|
|
|
|
|
173,708
|
|
Total Assets
|
|
|
$
|
2,208,956
|
|
|
|
|
$
|
2,502,384
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Accrued compensation and benefits
|
|
|
$
|
181,967
|
|
|
|
|
$
|
374,709
|
|
Due to affiliates
|
|
|
|
372,660
|
|
|
|
|
|
375,424
|
|
Deferred incentive income
|
|
|
|
326,338
|
|
|
|
|
|
304,526
|
|
Debt obligations payable
|
|
|
|
75,000
|
|
|
|
|
|
75,000
|
|
Other liabilities
|
|
|
|
90,430
|
|
|
|
|
|
88,053
|
|
Total Liabilities
|
|
|
$
|
1,046,395
|
|
|
|
|
$
|
1,217,712
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Non-controlling Interests
|
|
|
|
19
|
|
|
|
|
|
1,717
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Class A shares, no par value, 1,000,000,000 shares authorized,
215,673,299
|
|
|
|
|
|
|
|
and 208,535,157 shares issued and outstanding at June 30, 2015 and
|
|
|
|
|
|
|
|
December 31, 2014, respectively
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Class B shares, no par value, 750,000,000 shares authorized,
226,331,513
|
|
|
|
|
|
|
|
shares issued and outstanding at June 30, 2015 and December 31, 2014,
|
|
|
|
|
|
|
|
respectively
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Paid-in capital
|
|
|
|
1,922,869
|
|
|
|
|
|
1,996,137
|
|
Retained earnings (accumulated deficit)
|
|
|
|
(1,312,093
|
)
|
|
|
|
|
(1,350,122
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
|
(2,409
|
)
|
|
|
|
|
(2,416
|
)
|
|
|
|
|
|
|
|
|
Total Fortress shareholders' equity
|
|
|
|
608,367
|
|
|
|
|
|
643,599
|
|
Principals' and others' interests in equity of consolidated
subsidiaries
|
|
|
|
554,175
|
|
|
|
|
|
639,356
|
|
Total Equity
|
|
|
|
1,162,542
|
|
|
|
|
|
1,282,955
|
|
|
|
|
$
|
2,208,956
|
|
|
|
|
$
|
2,502,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 1-a
Supplemental Data for the Three Months Ended June 30, 2015 and
2014
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
Private Equity
|
|
|
|
Credit Funds
|
|
|
(in millions)
|
|
|
Total
|
|
Funds
|
|
Permanent
Capital Vehicles
|
|
Liquid Hedge Funds
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - April 1, 2015
|
|
|
$
|
69,889
|
|
|
$
|
10,179
|
|
|
$
|
4,622
|
|
|
$
|
7,838
|
|
|
$
|
6,271
|
|
|
$
|
7,563
|
|
|
$
|
33,416
|
|
Capital raised
|
|
|
|
675
|
|
|
|
-
|
|
|
|
-
|
|
|
|
171
|
|
|
|
79
|
|
|
|
425
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
2,291
|
|
|
|
-
|
|
|
|
2,291
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
796
|
|
|
|
120
|
|
|
|
227
|
|
|
|
-
|
|
|
|
6
|
|
|
|
443
|
|
|
|
-
|
|
Redemptions
|
|
|
|
(375
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(375
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
RCA distributions7
|
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(200
|
)
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
(346
|
)
|
|
|
(183
|
)
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
(31
|
)
|
|
|
(112
|
)
|
|
|
-
|
|
Adjustment for capital reset
|
|
|
|
(168
|
)
|
|
|
-
|
|
|
|
(168
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers
|
|
|
|
(106
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(106
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
1,056
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,056
|
|
Income (loss) and foreign exchange
|
|
|
|
(1,524
|
)
|
|
|
(529
|
)
|
|
|
(24
|
)
|
|
|
(131
|
)
|
|
|
140
|
|
|
|
(72
|
)
|
|
|
(908
|
)
|
AUM - Ending Balance
|
|
|
$
|
71,967
|
|
|
$
|
9,587
|
|
|
$
|
6,948
|
|
|
$
|
7,377
|
|
|
$
|
6,244
|
|
|
$
|
8,247
|
|
|
$
|
33,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
3,213
|
|
|
$
|
-
|
|
|
$
|
2,291
|
|
|
$
|
171
|
|
|
$
|
79
|
|
|
$
|
672
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
144
|
|
|
$
|
29
|
|
|
$
|
23
|
|
|
$
|
19
|
|
|
$
|
29
|
|
|
$
|
30
|
|
|
$
|
14
|
|
Incentive income
|
|
|
|
183
|
|
|
|
-
|
|
|
|
74
|
|
|
|
(1
|
)
|
|
|
50
|
|
|
|
60
|
|
|
|
-
|
|
Total
|
|
|
|
327
|
|
|
|
29
|
|
|
|
97
|
|
|
|
18
|
|
|
|
79
|
|
|
|
90
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(121
|
)
|
|
|
(15
|
)
|
|
|
(16
|
)
|
|
|
(27
|
)
|
|
|
(19
|
)
|
|
|
(30
|
)
|
|
|
(14
|
)
|
Profit sharing compensation expenses
|
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
3
|
|
|
|
(18
|
)
|
|
|
(30
|
)
|
|
|
-
|
|
Total
|
|
|
|
(175
|
)
|
|
|
(15
|
)
|
|
|
(25
|
)
|
|
|
(24
|
)
|
|
|
(37
|
)
|
|
|
(60
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
151
|
|
|
|
14
|
|
|
|
72
|
|
|
|
(7
|
)
|
|
|
42
|
|
|
|
30
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(18
|
)
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
133
|
|
|
|
14
|
|
|
|
61
|
|
|
|
(7
|
)
|
|
|
36
|
|
|
|
29
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
5
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
Unallocated Investment Income
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
137
|
|
|
$
|
14
|
|
|
$
|
62
|
|
|
$
|
(6
|
)
|
|
$
|
36
|
|
|
$
|
32
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
|
|
Private Equity
|
|
|
|
Credit Funds
|
|
|
(in millions)
|
|
|
Total
|
|
Funds
|
|
Permanent
Capital Vehicles
|
|
Liquid Hedge
Funds
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - April 1, 2014
|
|
|
$
|
62,520
|
|
|
$
|
11,512
|
|
|
$
|
3,731
|
|
|
|
$
|
7,738
|
|
|
$
|
5,968
|
|
|
$
|
6,979
|
|
|
$
|
26,592
|
|
Capital raised
|
|
|
|
666
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
523
|
|
|
|
143
|
|
|
|
-
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
171
|
|
|
|
-
|
|
|
|
171
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
225
|
|
|
|
53
|
|
|
|
123
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
49
|
|
|
|
-
|
|
Redemptions
|
|
|
|
(319
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(319
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
RCA distributions7
|
|
|
|
(158
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(158
|
)
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
(2,086
|
)
|
|
|
(1,897
|
)
|
|
|
-
|
|
|
|
|
(13
|
)
|
|
|
(28
|
)
|
|
|
(148
|
)
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
1,730
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,730
|
|
Income (loss) and foreign exchange
|
|
|
|
1,080
|
|
|
|
142
|
|
|
|
(4
|
)
|
|
|
|
(62
|
)
|
|
|
175
|
|
|
|
18
|
|
|
|
811
|
|
AUM - Ending Balance
|
|
|
$
|
63,813
|
|
|
$
|
9,810
|
|
|
$
|
4,021
|
|
|
|
$
|
7,867
|
|
|
$
|
6,084
|
|
|
$
|
6,898
|
|
|
$
|
29,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
1,762
|
|
|
$
|
26
|
|
|
$
|
405
|
|
|
|
$
|
523
|
|
|
$
|
554
|
|
|
$
|
254
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
152
|
|
|
$
|
36
|
|
|
$
|
17
|
|
|
|
$
|
37
|
|
|
$
|
28
|
|
|
$
|
23
|
|
|
$
|
11
|
|
Incentive income
|
|
|
|
78
|
|
|
|
1
|
|
|
|
21
|
|
|
|
|
1
|
|
|
|
42
|
|
|
|
13
|
|
|
|
-
|
|
Total
|
|
|
|
230
|
|
|
|
37
|
|
|
|
38
|
|
|
|
|
38
|
|
|
|
70
|
|
|
|
36
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(109
|
)
|
|
|
(12
|
)
|
|
|
(17
|
)
|
|
|
|
(24
|
)
|
|
|
(17
|
)
|
|
|
(26
|
)
|
|
|
(13
|
)
|
Profit sharing compensation expenses
|
|
|
|
(39
|
)
|
|
|
1
|
|
|
|
(6
|
)
|
|
|
|
(7
|
)
|
|
|
(20
|
)
|
|
|
(7
|
)
|
|
|
-
|
|
Total
|
|
|
|
(148
|
)
|
|
|
(11
|
)
|
|
|
(23
|
)
|
|
|
|
(31
|
)
|
|
|
(37
|
)
|
|
|
(33
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
82
|
|
|
|
26
|
|
|
|
15
|
|
|
|
|
7
|
|
|
|
33
|
|
|
|
3
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(6
|
)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
76
|
|
|
|
26
|
|
|
|
13
|
|
|
|
|
6
|
|
|
|
30
|
|
|
|
3
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
96
|
|
|
|
91
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
2
|
|
|
|
-
|
|
|
|
1
|
|
Unallocated Investment Income
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
172
|
|
|
$
|
117
|
|
|
$
|
14
|
|
|
|
$
|
7
|
|
|
$
|
32
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
7 Represents distributions from (i) assets held by
redeeming capital accounts in the Drawbridge Special Opportunities
Funds, and (ii) the Value Recovery Funds.
|
|
Fortress Investment Group LLC
Exhibit 1-b
Supplemental Data for the Six Months Ended June 30, 2015 and
2014
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
Private Equity
|
|
|
|
Credit Funds
|
|
|
(in millions)
|
|
|
Total
|
|
Funds
|
|
Permanent Capital
Vehicles
|
|
Liquid Hedge Funds
|
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2015
|
|
|
$
|
67,531
|
|
|
$
|
9,366
|
|
|
$
|
4,567
|
|
|
$
|
8,128
|
|
|
|
$
|
6,173
|
|
|
|
$
|
6,955
|
|
|
$
|
32,342
|
|
Capital raised
|
|
|
|
1,170
|
|
|
|
-
|
|
|
|
-
|
|
|
|
257
|
|
|
|
|
254
|
|
|
|
|
659
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
2,441
|
|
|
|
-
|
|
|
|
2,441
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
1,514
|
|
|
|
181
|
|
|
|
287
|
|
|
|
-
|
|
|
|
|
21
|
|
|
|
|
1,025
|
|
|
|
-
|
|
Redemptions
|
|
|
|
(1,160
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,108
|
)
|
|
|
|
(52
|
)
|
|
|
|
-
|
|
|
|
-
|
|
RCA distributions8
|
|
|
|
(266
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(266
|
)
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
(870
|
)
|
|
|
(278
|
)
|
|
|
(99
|
)
|
|
|
(62
|
)
|
|
|
|
(31
|
)
|
|
|
|
(400
|
)
|
|
|
-
|
|
Adjustment for reset date
|
|
|
|
(168
|
)
|
|
|
-
|
|
|
|
(168
|
)
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
(116
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(116
|
)
|
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers
|
|
|
|
388
|
|
|
|
-
|
|
|
|
-
|
|
|
|
388
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
1,645
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
1,645
|
|
Income (loss) and foreign exchange
|
|
|
|
(142
|
)
|
|
|
318
|
|
|
|
(80
|
)
|
|
|
(226
|
)
|
|
|
|
261
|
|
|
|
|
8
|
|
|
|
(423
|
)
|
AUM - Ending Balance
|
|
|
$
|
71,967
|
|
|
$
|
9,587
|
|
|
$
|
6,948
|
|
|
$
|
7,377
|
|
|
|
$
|
6,244
|
|
|
|
$
|
8,247
|
|
|
$
|
33,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
8,573
|
|
|
$
|
-
|
|
|
$
|
2,441
|
|
|
$
|
257
|
|
|
|
$
|
254
|
|
|
|
$
|
5,621
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
283
|
|
|
$
|
58
|
|
|
$
|
42
|
|
|
$
|
40
|
|
|
|
$
|
59
|
|
|
|
$
|
57
|
|
|
$
|
27
|
|
Incentive income
|
|
|
|
234
|
|
|
|
-
|
|
|
|
77
|
|
|
|
-
|
|
|
|
|
73
|
|
|
|
|
84
|
|
|
|
-
|
|
Total
|
|
|
|
517
|
|
|
|
58
|
|
|
|
119
|
|
|
|
40
|
|
|
|
|
132
|
|
|
|
|
141
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(236
|
)
|
|
|
(29
|
)
|
|
|
(34
|
)
|
|
|
(48
|
)
|
|
|
|
(37
|
)
|
|
|
|
(60
|
)
|
|
|
(28
|
)
|
Profit sharing compensation expenses
|
|
|
|
(84
|
)
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
(1
|
)
|
|
|
|
(30
|
)
|
|
|
|
(44
|
)
|
|
|
-
|
|
Total
|
|
|
|
(320
|
)
|
|
|
(29
|
)
|
|
|
(43
|
)
|
|
|
(49
|
)
|
|
|
|
(67
|
)
|
|
|
|
(104
|
)
|
|
|
(28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
205
|
|
|
|
29
|
|
|
|
76
|
|
|
|
(1
|
)
|
|
|
|
65
|
|
|
|
|
37
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
|
(8
|
)
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
184
|
|
|
|
29
|
|
|
|
65
|
|
|
|
(1
|
)
|
|
|
|
57
|
|
|
|
|
35
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
10
|
|
|
|
-
|
|
|
|
1
|
|
|
|
4
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
-
|
|
Unallocated Investment Income
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
192
|
|
|
$
|
29
|
|
|
$
|
66
|
|
|
$
|
3
|
|
|
|
$
|
58
|
|
|
|
$
|
39
|
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
Private Equity
|
|
|
Credit Funds
|
|
|
|
(in millions)
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Liquid Hedge Funds
|
|
Hedge Funds
|
|
PE Funds
|
|
Logan Circle
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2014
|
|
|
$
|
61,750
|
|
|
$
|
11,861
|
|
|
$
|
3,722
|
|
|
$
|
7,398
|
|
|
$
|
5,856
|
|
|
$
|
7,527
|
|
|
$
|
25,386
|
|
|
Capital raised
|
|
|
|
2,182
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,825
|
|
|
|
357
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
171
|
|
|
|
-
|
|
|
|
171
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Increase in invested capital
|
|
|
|
588
|
|
|
|
60
|
|
|
|
215
|
|
|
|
-
|
|
|
|
15
|
|
|
|
298
|
|
|
|
-
|
|
|
Redemptions
|
|
|
|
(912
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(876
|
)
|
|
|
(36
|
)
|
|
|
-
|
|
|
|
-
|
|
|
RCA distributions8
|
|
|
|
(307
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(307
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Return of capital distributions
|
|
|
|
(3,287
|
)
|
|
|
(2,154
|
)
|
|
|
(84
|
)
|
|
|
(37
|
)
|
|
|
(28
|
)
|
|
|
(984
|
)
|
|
|
-
|
|
|
Crystallized Incentive Income
|
|
|
|
(289
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(129
|
)
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Net Client Flows
|
|
|
|
2,207
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,207
|
|
|
Income (loss) and foreign exchange
|
|
|
|
1,710
|
|
|
|
43
|
|
|
|
(3
|
)
|
|
|
(314
|
)
|
|
|
387
|
|
|
|
57
|
|
|
|
1,540
|
|
|
AUM - Ending Balance
|
|
|
$
|
63,813
|
|
|
$
|
9,810
|
|
|
$
|
4,021
|
|
|
$
|
7,867
|
|
|
$
|
6,084
|
|
|
$
|
6,898
|
|
|
$
|
29,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
3,371
|
|
|
$
|
105
|
|
|
$
|
405
|
|
|
$
|
1,825
|
|
|
$
|
782
|
|
|
$
|
254
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
299
|
|
|
$
|
71
|
|
|
$
|
33
|
|
|
$
|
70
|
|
|
$
|
55
|
|
|
$
|
48
|
|
|
$
|
22
|
|
|
Incentive income
|
|
|
|
182
|
|
|
|
3
|
|
|
|
25
|
|
|
|
1
|
|
|
|
74
|
|
|
|
79
|
|
|
|
-
|
|
|
Total
|
|
|
|
481
|
|
|
|
74
|
|
|
|
58
|
|
|
|
71
|
|
|
|
129
|
|
|
|
127
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(213
|
)
|
|
|
(23
|
)
|
|
|
(31
|
)
|
|
|
(47
|
)
|
|
|
(34
|
)
|
|
|
(52
|
)
|
|
|
(26
|
)
|
|
Profit sharing compensation expenses
|
|
|
|
(92
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(9
|
)
|
|
|
(35
|
)
|
|
|
(42
|
)
|
|
|
-
|
|
|
Total
|
|
|
|
(305
|
)
|
|
|
(23
|
)
|
|
|
(37
|
)
|
|
|
(56
|
)
|
|
|
(69
|
)
|
|
|
(94
|
)
|
|
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
176
|
|
|
|
51
|
|
|
|
21
|
|
|
|
15
|
|
|
|
60
|
|
|
|
33
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(8
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
163
|
|
|
|
51
|
|
|
|
18
|
|
|
|
14
|
|
|
|
52
|
|
|
|
32
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
106
|
|
|
|
95
|
|
|
|
1
|
|
|
|
2
|
|
|
|
3
|
|
|
|
4
|
|
|
|
1
|
|
|
Unallocated Investment Income
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
268
|
|
|
$
|
146
|
|
|
$
|
19
|
|
|
$
|
16
|
|
|
$
|
55
|
|
|
$
|
36
|
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
8 Represents distributions from (i) assets held by
redeeming capital accounts in the Drawbridge Special Opportunities
Funds, and (ii) the Value Recovery Funds.
|
|
|
Fortress Investment Group LLC
Exhibit 2-a
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
Fortress
|
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Equity Funds
|
|
|
$
|
11,512
|
|
|
$
|
9,810
|
|
|
$
|
9,787
|
|
|
$
|
9,366
|
|
|
$
|
9,366
|
|
|
$
|
10,179
|
|
|
$
|
9,587
|
|
Permanent Capital Vehicles
|
|
|
|
3,731
|
|
|
|
4,021
|
|
|
|
4,411
|
|
|
|
4,567
|
|
|
|
4,567
|
|
|
|
4,622
|
|
|
|
6,948
|
|
Liquid Hedge Funds9
|
|
|
|
7,738
|
|
|
|
7,867
|
|
|
|
7,529
|
|
|
|
8,128
|
|
|
|
8,128
|
|
|
|
7,838
|
|
|
|
7,377
|
|
Credit Hedge Funds
|
|
|
|
5,968
|
|
|
|
6,084
|
|
|
|
6,140
|
|
|
|
6,173
|
|
|
|
6,173
|
|
|
|
6,271
|
|
|
|
6,244
|
|
Credit Private Equity Funds
|
|
|
|
6,979
|
|
|
|
6,898
|
|
|
|
7,083
|
|
|
|
6,955
|
|
|
|
6,955
|
|
|
|
7,563
|
|
|
|
8,247
|
|
Logan Circle
|
|
|
|
26,592
|
|
|
|
29,133
|
|
|
|
31,096
|
|
|
|
32,342
|
|
|
|
32,342
|
|
|
|
33,416
|
|
|
|
33,564
|
|
AUM - Ending Balance
|
|
|
$
|
62,520
|
|
|
$
|
63,813
|
|
|
$
|
66,046
|
|
|
$
|
67,531
|
|
|
$
|
67,531
|
|
|
$
|
69,889
|
|
|
$
|
71,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
$
|
1,609
|
|
|
$
|
1,762
|
|
|
$
|
1,216
|
|
|
$
|
1,692
|
|
|
$
|
6,279
|
|
|
$
|
5,360
|
|
|
$
|
3,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
$
|
147
|
|
|
$
|
152
|
|
|
$
|
149
|
|
|
$
|
153
|
|
|
$
|
601
|
|
|
$
|
139
|
|
|
$
|
144
|
|
Incentive income
|
|
|
|
104
|
|
|
|
78
|
|
|
|
88
|
|
|
|
191
|
|
|
|
461
|
|
|
|
51
|
|
|
|
183
|
|
Total
|
|
|
|
251
|
|
|
|
230
|
|
|
|
237
|
|
|
|
344
|
|
|
|
1,062
|
|
|
|
190
|
|
|
|
327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
(104
|
)
|
|
|
(109
|
)
|
|
|
(112
|
)
|
|
|
(126
|
)
|
|
|
(451
|
)
|
|
|
(115
|
)
|
|
|
(121
|
)
|
Profit sharing compensation expenses
|
|
|
|
(53
|
)
|
|
|
(39
|
)
|
|
|
(54
|
)
|
|
|
(96
|
)
|
|
|
(242
|
)
|
|
|
(30
|
)
|
|
|
(54
|
)
|
Total
|
|
|
|
(157
|
)
|
|
|
(148
|
)
|
|
|
(166
|
)
|
|
|
(222
|
)
|
|
|
(693
|
)
|
|
|
(145
|
)
|
|
|
(175
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
94
|
|
|
|
82
|
|
|
|
71
|
|
|
|
122
|
|
|
|
369
|
|
|
|
54
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
(7
|
)
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
(29
|
)
|
|
|
(3
|
)
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
$
|
87
|
|
|
$
|
76
|
|
|
$
|
67
|
|
|
$
|
110
|
|
|
$
|
340
|
|
|
$
|
51
|
|
|
$
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
10
|
|
|
|
96
|
|
|
|
(12
|
)
|
|
|
13
|
|
|
|
106
|
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
$
|
97
|
|
|
$
|
172
|
|
|
$
|
55
|
|
|
$
|
123
|
|
|
$
|
446
|
|
|
$
|
55
|
|
|
$
|
137
|
|
__________________________________
|
9 The Assets Under Management presented for the Liquid
Hedge Funds includes $3,896 million related to Affiliated Managers
as of June 30, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-b
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
Private Equity Funds
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main Funds10
|
|
$
|
7,787
|
|
|
$
|
7,053
|
|
|
$
|
7,347
|
|
|
$
|
6,934
|
|
|
$
|
6,934
|
|
|
$
|
7,726
|
|
|
$
|
7,128
|
|
|
Coinvestment Funds11
|
|
|
3,393
|
|
|
|
2,401
|
|
|
|
2,088
|
|
|
|
2,006
|
|
|
|
2,006
|
|
|
|
1,994
|
|
|
|
1,902
|
|
|
MSR Opportunities Funds12
|
|
|
332
|
|
|
|
344
|
|
|
|
341
|
|
|
|
326
|
|
|
|
326
|
|
|
|
336
|
|
|
|
417
|
|
|
Italian NPL Opportunities Fund
|
|
|
-
|
|
|
|
12
|
|
|
|
11
|
|
|
|
25
|
|
|
|
25
|
|
|
|
19
|
|
|
|
20
|
|
|
Fortress Equity Partners
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
75
|
|
|
|
75
|
|
|
|
104
|
|
|
|
120
|
|
|
AUM - Ending Balance
|
|
$
|
11,512
|
|
|
$
|
9,810
|
|
|
$
|
9,787
|
|
|
$
|
9,366
|
|
|
$
|
9,366
|
|
|
$
|
10,179
|
|
|
$
|
9,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
79
|
|
|
$
|
26
|
|
|
$
|
101
|
|
|
$
|
-
|
|
|
$
|
206
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
35
|
|
|
$
|
36
|
|
|
$
|
33
|
|
|
$
|
32
|
|
|
$
|
136
|
|
|
$
|
29
|
|
|
$
|
29
|
|
|
Incentive income
|
|
|
2
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
|
37
|
|
|
|
37
|
|
|
|
33
|
|
|
|
32
|
|
|
|
139
|
|
|
|
29
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
|
(51
|
)
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
Profit sharing compensation expenses
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Total
|
|
|
(12
|
)
|
|
|
(11
|
)
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
|
(51
|
)
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
25
|
|
|
|
26
|
|
|
|
18
|
|
|
|
19
|
|
|
|
88
|
|
|
|
15
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
25
|
|
|
$
|
26
|
|
|
$
|
18
|
|
|
$
|
19
|
|
|
$
|
88
|
|
|
$
|
15
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
4
|
|
|
|
91
|
|
|
|
-
|
|
|
|
-
|
|
|
|
95
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
29
|
|
|
$
|
117
|
|
|
$
|
18
|
|
|
$
|
19
|
|
|
$
|
183
|
|
|
$
|
15
|
|
|
$
|
14
|
|
|
__________________________________
|
10 Combined AUM for Fund III, Fund IV and Fund V.
|
11 Combined AUM for Fund III Coinvestment, Fund IV
Coinvestment, Fund V Coinvestment, FRID, FRIC, FICO, FHIF, FECI
and MAPS. FRID and FRIC were closed in the fourth quarter of 2014.
|
12 Combined AUM for MSR Opportunities Fund I A, MSR
Opportunities Fund I B, MSR Opportunities Fund II A, MSR
Opportunities Fund II B and MSR Opportunities Fund MA I.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-c
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
Permanent Capital Vehicles
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newcastle Investment Corp.
|
|
$
|
1,321
|
|
|
$
|
1,381
|
|
|
$
|
1,579
|
|
|
$
|
768
|
|
|
$
|
768
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
New Residential Investment Corp.
|
|
|
1,196
|
|
|
|
1,367
|
|
|
|
1,366
|
|
|
|
1,367
|
|
|
|
1,367
|
|
|
|
1,367
|
|
|
|
2,725
|
|
|
Eurocastle Investment Limited
|
|
|
556
|
|
|
|
553
|
|
|
|
510
|
|
|
|
488
|
|
|
|
488
|
|
|
|
432
|
|
|
|
626
|
|
|
New Media Investment Group Inc.
|
|
|
391
|
|
|
|
390
|
|
|
|
505
|
|
|
|
487
|
|
|
|
487
|
|
|
|
637
|
|
|
|
637
|
|
|
New Senior Investment Group Inc.
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
812
|
|
|
|
812
|
|
|
|
813
|
|
|
|
1,089
|
|
|
Fortress Transportation and Infrastructure Investors LLC13
|
|
|
267
|
|
|
|
330
|
|
|
|
451
|
|
|
|
645
|
|
|
|
645
|
|
|
|
693
|
|
|
|
1,191
|
|
|
AUM - Ending Balance
|
|
$
|
3,731
|
|
|
$
|
4,021
|
|
|
$
|
4,411
|
|
|
$
|
4,567
|
|
|
$
|
4,567
|
|
|
$
|
4,622
|
|
|
$
|
6,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
-
|
|
|
$
|
405
|
|
|
$
|
673
|
|
|
$
|
-
|
|
|
$
|
1,078
|
|
|
$
|
150
|
|
|
$
|
2,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
19
|
|
|
$
|
69
|
|
|
$
|
19
|
|
|
$
|
23
|
|
|
Incentive income
|
|
|
4
|
|
|
|
21
|
|
|
|
16
|
|
|
|
25
|
|
|
|
66
|
|
|
|
3
|
|
|
|
74
|
|
|
Total
|
|
|
20
|
|
|
|
38
|
|
|
|
33
|
|
|
|
44
|
|
|
|
135
|
|
|
|
22
|
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(14
|
)
|
|
|
(17
|
)
|
|
|
(18
|
)
|
|
|
(20
|
)
|
|
|
(69
|
)
|
|
|
(18
|
)
|
|
|
(16
|
)
|
|
Profit sharing compensation expenses
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(9
|
)
|
|
|
(6
|
)
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(9
|
)
|
|
Total
|
|
|
(14
|
)
|
|
|
(23
|
)
|
|
|
(27
|
)
|
|
|
(26
|
)
|
|
|
(90
|
)
|
|
|
(18
|
)
|
|
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
6
|
|
|
|
15
|
|
|
|
6
|
|
|
|
18
|
|
|
|
45
|
|
|
|
4
|
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(6
|
)
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
5
|
|
|
$
|
13
|
|
|
$
|
6
|
|
|
$
|
15
|
|
|
$
|
39
|
|
|
$
|
4
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
5
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
$
|
15
|
|
|
$
|
41
|
|
|
$
|
4
|
|
|
$
|
62
|
|
|
__________________________________
|
13 All of the capital of Worldwide Transportation and
Infrastructure Investors ("WWTAI"), a private fund managed by
Fortress, was contributed to FTAI which completed its initial public
offering in 2Q 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 2-d
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
Credit Hedge Funds
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Funds14
|
|
$
|
5,616
|
|
|
$
|
5,745
|
|
|
$
|
5,817
|
|
|
$
|
5,929
|
|
|
$
|
5,929
|
|
|
$
|
6,023
|
|
|
$
|
6,021
|
|
|
Value Recovery Funds15
|
|
|
338
|
|
|
|
324
|
|
|
|
309
|
|
|
|
200
|
|
|
|
200
|
|
|
|
189
|
|
|
|
156
|
|
|
Japan Income Fund
|
|
|
14
|
|
|
|
15
|
|
|
|
14
|
|
|
|
44
|
|
|
|
44
|
|
|
|
59
|
|
|
|
67
|
|
|
AUM - Ending Balance
|
|
$
|
5,968
|
|
|
$
|
6,084
|
|
|
$
|
6,140
|
|
|
$
|
6,173
|
|
|
$
|
6,173
|
|
|
$
|
6,271
|
|
|
$
|
6,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
228
|
|
|
$
|
554
|
|
|
$
|
165
|
|
|
$
|
48
|
|
|
$
|
995
|
|
|
$
|
175
|
|
|
$
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
29
|
|
|
$
|
30
|
|
|
$
|
114
|
|
|
$
|
30
|
|
|
$
|
29
|
|
|
Incentive income
|
|
|
32
|
|
|
|
42
|
|
|
|
29
|
|
|
|
19
|
|
|
|
122
|
|
|
|
23
|
|
|
|
50
|
|
|
Total
|
|
|
59
|
|
|
|
70
|
|
|
|
58
|
|
|
|
49
|
|
|
|
236
|
|
|
|
53
|
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|
|
(17
|
)
|
|
|
(19
|
)
|
|
|
(70
|
)
|
|
|
(18
|
)
|
|
|
(19
|
)
|
|
Profit sharing compensation expenses
|
|
|
(15
|
)
|
|
|
(20
|
)
|
|
|
(14
|
)
|
|
|
(10
|
)
|
|
|
(59
|
)
|
|
|
(12
|
)
|
|
|
(18
|
)
|
|
Total
|
|
|
(32
|
)
|
|
|
(37
|
)
|
|
|
(31
|
)
|
|
|
(29
|
)
|
|
|
(129
|
)
|
|
|
(30
|
)
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
27
|
|
|
|
33
|
|
|
|
27
|
|
|
|
20
|
|
|
|
107
|
|
|
|
23
|
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
|
(8
|
)
|
|
|
(20
|
)
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
22
|
|
|
$
|
30
|
|
|
$
|
23
|
|
|
$
|
12
|
|
|
$
|
87
|
|
|
$
|
21
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
1
|
|
|
|
2
|
|
|
|
(5
|
)
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
23
|
|
|
$
|
32
|
|
|
$
|
18
|
|
|
$
|
13
|
|
|
$
|
86
|
|
|
$
|
22
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Fund LP
|
|
|
3.2
|
%
|
|
|
2.6
|
%
|
|
|
1.9
|
%
|
|
|
2.1
|
%
|
|
|
10.0
|
%
|
|
|
2.2
|
%
|
|
|
2.3
|
%
|
|
Drawbridge Special Opportunities Fund Ltd
|
|
|
2.2
|
%
|
|
|
1.7
|
%
|
|
|
1.7
|
%
|
|
|
0.2
|
%
|
|
|
6.0
|
%
|
|
|
1.1
|
%
|
|
|
0.4
|
%
|
|
__________________________________
|
14 Combined AUM for Drawbridge Special Opportunities Fund
LP, Drawbridge Special Opportunities Fund Ltd, Drawbridge Special
Opportunities Fund managed accounts, Worden Fund LP and Worden Fund
II LP.
|
15 Fortress will receive management fees from these
funds equal to 1% of cash receipts and may receive limited
incentive income if aggregate realizations exceed an agreed
threshold.
|
16 The performance data contained herein reflects returns
for a "new issue eligible," single investor class as of the close of
business on the last day of the relevant period. Net returns reflect
performance data after taking into account management fees borne by
the Fund and incentive allocations. The returns for the Drawbridge
Special Opportunities Funds reflect the performance of each fund
excluding special investments and the performance of the redeeming
capital accounts which relate to December 31, 2009, December 31,
2010, December 31, 2011, December 31, 2012, December 31, 2013 and
December 31, 2014 redemptions.
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-e
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
Credit Private Equity Funds
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Dated Value Funds17
|
|
$
|
395
|
|
|
$
|
375
|
|
|
$
|
361
|
|
|
$
|
361
|
|
|
$
|
361
|
|
|
$
|
352
|
|
|
$
|
315
|
|
|
Real Assets Funds
|
|
|
78
|
|
|
|
70
|
|
|
|
64
|
|
|
|
66
|
|
|
|
66
|
|
|
|
52
|
|
|
|
40
|
|
|
Fortress Credit Opportunities Funds18
|
|
|
4,712
|
|
|
|
4,649
|
|
|
|
4,960
|
|
|
|
5,465
|
|
|
|
5,465
|
|
|
|
6,029
|
|
|
|
6,802
|
|
|
Japan Opportunity Funds19
|
|
|
1,794
|
|
|
|
1,804
|
|
|
|
1,698
|
|
|
|
1,063
|
|
|
|
1,063
|
|
|
|
1,130
|
|
|
|
1,090
|
|
|
AUM - Ending Balance
|
|
$
|
6,979
|
|
|
$
|
6,898
|
|
|
$
|
7,083
|
|
|
$
|
6,955
|
|
|
$
|
6,955
|
|
|
$
|
7,563
|
|
|
$
|
8,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
-
|
|
|
$
|
254
|
|
|
$
|
30
|
|
|
$
|
899
|
|
|
$
|
1,183
|
|
|
$
|
4,949
|
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
25
|
|
|
$
|
97
|
|
|
$
|
27
|
|
|
$
|
30
|
|
|
Incentive income
|
|
|
66
|
|
|
|
13
|
|
|
|
41
|
|
|
|
134
|
|
|
|
254
|
|
|
|
24
|
|
|
|
60
|
|
|
Total
|
|
|
91
|
|
|
|
36
|
|
|
|
65
|
|
|
|
159
|
|
|
|
351
|
|
|
|
51
|
|
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(26
|
)
|
|
|
(26
|
)
|
|
|
(27
|
)
|
|
|
(29
|
)
|
|
|
(108
|
)
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
Profit sharing compensation expenses
|
|
|
(35
|
)
|
|
|
(7
|
)
|
|
|
(22
|
)
|
|
|
(68
|
)
|
|
|
(132
|
)
|
|
|
(14
|
)
|
|
|
(30
|
)
|
|
Total
|
|
|
(61
|
)
|
|
|
(33
|
)
|
|
|
(49
|
)
|
|
|
(97
|
)
|
|
|
(240
|
)
|
|
|
(44
|
)
|
|
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
30
|
|
|
|
3
|
|
|
|
16
|
|
|
|
62
|
|
|
|
111
|
|
|
|
7
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
29
|
|
|
$
|
3
|
|
|
$
|
16
|
|
|
$
|
61
|
|
|
$
|
109
|
|
|
$
|
6
|
|
|
$
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
4
|
|
|
|
-
|
|
|
|
2
|
|
|
|
7
|
|
|
|
13
|
|
|
|
1
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
33
|
|
|
$
|
3
|
|
|
$
|
18
|
|
|
$
|
68
|
|
|
$
|
122
|
|
|
$
|
7
|
|
|
$
|
32
|
|
|
__________________________________
|
17 Combined AUM for Long Dated Value Fund I, Long Dated
Value Fund II, Long Dated Value Fund III and LDVF Patent Fund.
|
18 Combined AUM for Credit Opportunities Fund, Credit
Opportunities Fund II, Credit Opportunities Fund III, Credit
Opportunities Fund IV, FCO Managed Accounts, Net Lease Fund I,
Global Opportunities Fund, Life Settlements Fund, Life Settlements
Fund MA, SIP managed account, Real Estate Opportunities Fund, Real
Estate Opportunities Fund II and Real Estate Opportunities REOC
Fund.
|
19 Combined AUM for Japan Opportunity Fund, Japan
Opportunity Fund II (Dollar), Japan Opportunity Fund II (Yen) and
Japan Opportunity Fund III (Yen).
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 2-f
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
|
|
Liquid Hedge Funds
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Macro Funds20
|
|
$
|
3,503
|
|
|
$
|
3,391
|
|
|
$
|
3,083
|
|
|
$
|
3,249
|
|
|
$
|
3,249
|
|
|
$
|
2,779
|
|
|
$
|
2,326
|
|
|
|
|
Drawbridge Global Macro Funds21
|
|
|
286
|
|
|
|
261
|
|
|
|
223
|
|
|
|
229
|
|
|
|
229
|
|
|
|
227
|
|
|
|
210
|
|
|
|
|
Fortress Convex Asia Funds22
|
|
|
130
|
|
|
|
136
|
|
|
|
189
|
|
|
|
197
|
|
|
|
197
|
|
|
|
226
|
|
|
|
220
|
|
|
|
|
Fortress Centaurus Global Funds23
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
33
|
|
|
|
33
|
|
|
|
64
|
|
|
|
191
|
|
|
|
|
Fortress Partners Funds24
|
|
|
952
|
|
|
|
965
|
|
|
|
935
|
|
|
|
913
|
|
|
|
913
|
|
|
|
541
|
|
|
|
534
|
|
|
|
|
Fortress Asia Macro Funds25
|
|
|
2,867
|
|
|
|
3,114
|
|
|
|
3,099
|
|
|
|
3,507
|
|
|
|
3,507
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
Affiliated Managers25
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,001
|
|
|
|
3,896
|
|
|
|
|
AUM - Ending Balance
|
|
$
|
7,738
|
|
|
$
|
7,867
|
|
|
$
|
7,529
|
|
|
$
|
8,128
|
|
|
$
|
8,128
|
|
|
$
|
7,838
|
|
|
$
|
7,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
$
|
1,302
|
|
|
$
|
523
|
|
|
$
|
247
|
|
|
$
|
745
|
|
|
$
|
2,817
|
|
|
$
|
86
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
33
|
|
|
$
|
37
|
|
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
138
|
|
|
$
|
21
|
|
|
$
|
19
|
|
|
|
|
Incentive income
|
|
|
-
|
|
|
|
1
|
|
|
|
2
|
|
|
|
13
|
|
|
|
16
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
|
Total
|
|
|
33
|
|
|
|
38
|
|
|
|
35
|
|
|
|
48
|
|
|
|
154
|
|
|
|
22
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(23
|
)
|
|
|
(24
|
)
|
|
|
(21
|
)
|
|
|
(31
|
)
|
|
|
(99
|
)
|
|
|
(21
|
)
|
|
|
(27
|
)
|
|
|
|
Profit sharing compensation expenses
|
|
|
(2
|
)
|
|
|
(7
|
)
|
|
|
(9
|
)
|
|
|
(12
|
)
|
|
|
(30
|
)
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
|
Total
|
|
|
(25
|
)
|
|
|
(31
|
)
|
|
|
(30
|
)
|
|
|
(43
|
)
|
|
|
(129
|
)
|
|
|
(25
|
)
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
8
|
|
|
|
7
|
|
|
|
5
|
|
|
|
5
|
|
|
|
25
|
|
|
|
6
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
24
|
|
|
$
|
6
|
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
1
|
|
|
|
1
|
|
|
|
(9
|
)
|
|
|
5
|
|
|
|
(2
|
)
|
|
|
3
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
(4
|
)
|
|
$
|
10
|
|
|
$
|
22
|
|
|
$
|
9
|
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Macro Fund Ltd
|
|
|
(5.5
|
%)
|
|
|
(0.4
|
%)
|
|
|
1.1
|
%
|
|
|
3.4
|
%
|
|
|
(1.6
|
%)
|
|
|
(4.7
|
%)
|
|
|
(6.5
|
%)
|
|
|
|
Drawbridge Global Macro Fund Ltd
|
|
|
(5.5
|
%)
|
|
|
(0.6
|
%)
|
|
|
0.7
|
%
|
|
|
3.3
|
%
|
|
|
(2.2
|
%)
|
|
|
(4.9
|
%)
|
|
|
(6.6
|
%)
|
|
|
|
Fortress Convex Asia Fund Ltd
|
|
|
(1.1
|
%)
|
|
|
(2.6
|
%)
|
|
|
(0.6
|
%)
|
|
|
(0.6
|
%)
|
|
|
(4.9
|
%)
|
|
|
(0.6
|
%)
|
|
|
(0.8
|
%)
|
|
|
|
Fortress Centaurus Global Fund Ltd
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
3.9
|
%
|
|
|
(4.1
|
%)
|
|
|
|
Fortress Partners Fund LP27
|
|
|
1.1
|
%
|
|
|
2.1
|
%
|
|
|
(1.4
|
%)
|
|
|
(1.8
|
%)
|
|
|
(0.1
|
%)
|
|
|
1.2
|
%
|
|
|
(1.2
|
%)
|
|
|
|
Fortress Partners Offshore Fund LP27
|
|
|
0.9
|
%
|
|
|
2.2
|
%
|
|
|
(1.4
|
%)
|
|
|
(1.3
|
%)
|
|
|
0.4
|
%
|
|
|
0.3
|
%
|
|
|
(2.5
|
%)
|
|
|
|
Fortress Asia Macro Fund Ltd25
|
|
|
(3.6
|
%)
|
|
|
(1.9
|
%)
|
|
|
1.4
|
%
|
|
|
3.1
|
%
|
|
|
(1.2
|
%)
|
|
|
n/a
|
|
|
|
n/a
|
|
|
__________________________________
|
20 Combined AUM for Fortress Macro Onshore Fund LP,
Fortress Macro Fund Ltd, Fortress Macro MA1, Fortress Redwood Fund
Ltd and Fortress Macro managed accounts.
|
21 Combined AUM for Drawbridge Global Macro Fund LP and
Drawbridge Global Macro Intermediate Fund LP.
|
22 Combined AUM for Fortress Convex Asia Fund LP,
Fortress Convex Asia Fund Ltd, Fortress Convex Asia Fund PF LP and
Fortress Convex Asia Fund PF Ltd.
|
23 Combined AUM for Fortress Centaurus Global Fund LP and
Fortress Centaurus Global Fund Ltd.
|
24 Combined AUM for Fortress Partners Fund LP and
Fortress Partners Offshore Fund LP.
|
25 Combined AUM for Fortress Asia Macro Fund Ltd,
Fortress Asia Macro Fund LP and Fortress Asia Macro managed
accounts. In January 2015, the Fortress Asia Macro Funds and related
managed accounts transitioned to Graticule Asset Management on
Fortress's affiliated manager platform.
|
26 The performance data contained herein reflects returns
for a "new issue eligible," single investor class as of the close of
business on the last day of the relevant period. Net returns reflect
performance data after taking into account management fees borne by
the Fund and incentive allocations.
|
27 The returns for the Fortress Partners Funds include
gains and losses from Special Investments. Investors' specific
performance may vary dependent upon their ownership in one or more
Special Investments.
|
|
|
Fortress Investment Group LLC
Exhibit 2-g
Assets Under Management and Fund Management DE
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
Logan Circle
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - Ending Balance
|
|
$
|
26,592
|
|
|
$
|
29,133
|
|
|
$
|
31,096
|
|
|
$
|
32,342
|
|
|
$
|
32,342
|
|
|
$
|
33,416
|
|
|
$
|
33,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Client Flows
|
|
$
|
477
|
|
|
$
|
1,730
|
|
|
$
|
2,178
|
|
|
$
|
1,035
|
|
|
$
|
5,420
|
|
|
$
|
589
|
|
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
47
|
|
|
$
|
13
|
|
|
$
|
14
|
|
Incentive income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
11
|
|
|
|
11
|
|
|
|
13
|
|
|
|
12
|
|
|
|
47
|
|
|
|
13
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
(54
|
)
|
|
|
(14
|
)
|
|
|
(14
|
)
|
Profit sharing compensation expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
Total
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
(54
|
)
|
|
|
(14
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
-
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
-
|
|
|
$
|
(5
|
)
|
|
$
|
(1
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 3
Reconciliation of GAAP Net Income (Loss) to Pre-tax
Distributable Earnings and Fund Management DE,
Reconciliation of GAAP Revenues to Segment Revenues and
Reconciliation of GAAP Expenses to Segment Expenses
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
Six Months
Ended
June 30, 2015
|
|
|
|
|
March 31,
2014
|
|
June 30,
2014
|
|
September 30,
2014
|
|
December 31,
2014
|
|
Full Year
2014
|
|
March 31,
2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss)
|
|
$
|
9
|
|
|
$
|
73
|
|
|
$
|
17
|
|
|
$
|
141
|
|
|
$
|
240
|
|
|
$
|
87
|
|
|
$
|
5
|
|
|
$
|
92
|
|
|
Principals' and Others' Interests in (Income) Loss of Consolidated
Subsidiaries
|
|
|
(6
|
)
|
|
|
(42
|
)
|
|
|
(13
|
)
|
|
|
(79
|
)
|
|
|
(140
|
)
|
|
|
(52
|
)
|
|
|
(2
|
)
|
|
|
(54
|
)
|
|
Redeemable non-controlling interests in Income (Loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
GAAP Net Income (Loss) Attributable to Class A Shareholders
|
|
$
|
3
|
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
61
|
|
|
$
|
101
|
|
|
$
|
35
|
|
|
$
|
3
|
|
|
$
|
38
|
|
|
Private Equity incentive income (including private permanent capital
vehicle)
|
|
|
37
|
|
|
|
(8
|
)
|
|
|
36
|
|
|
|
29
|
|
|
|
94
|
|
|
|
3
|
|
|
|
19
|
|
|
|
22
|
|
|
Hedge Fund, PCV and Logan Circle incentive income
|
|
|
30
|
|
|
|
26
|
|
|
|
21
|
|
|
|
(77
|
)
|
|
|
-
|
|
|
|
23
|
|
|
|
80
|
|
|
|
103
|
|
|
Reserve for clawback
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Distributions of earnings from equity method investees
|
|
|
9
|
|
|
|
47
|
|
|
|
6
|
|
|
|
10
|
|
|
|
72
|
|
|
|
4
|
|
|
|
9
|
|
|
|
13
|
|
|
Losses (earnings) from equity method investees
|
|
|
(17
|
)
|
|
|
(20
|
)
|
|
|
(38
|
)
|
|
|
7
|
|
|
|
(68
|
)
|
|
|
(27
|
)
|
|
|
33
|
|
|
|
6
|
|
|
Losses (gains) on options
|
|
|
5
|
|
|
|
1
|
|
|
|
23
|
|
|
|
1
|
|
|
|
30
|
|
|
|
(32
|
)
|
|
|
9
|
|
|
|
(23
|
)
|
|
Losses (gains) on other Investments
|
|
|
5
|
|
|
|
42
|
|
|
|
(16
|
)
|
|
|
(17
|
)
|
|
|
14
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
Impairment of investments
|
|
|
-
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
Adjust income from the receipt of options
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(21
|
)
|
|
|
(25
|
)
|
|
Gain on transfer of Graticule
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(134
|
)
|
|
|
-
|
|
|
|
(134
|
)
|
|
Amortization of intangible assets and impairment of goodwill
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Employee, Principal and director compensation
|
|
|
12
|
|
|
|
6
|
|
|
|
6
|
|
|
|
12
|
|
|
|
36
|
|
|
|
20
|
|
|
|
6
|
|
|
|
26
|
|
|
Adjust non-controlling interests related to Fortress Operating Group
units
|
|
|
5
|
|
|
|
40
|
|
|
|
11
|
|
|
|
78
|
|
|
|
134
|
|
|
|
52
|
|
|
|
1
|
|
|
|
53
|
|
|
Tax receivable agreement liability reduction
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
29
|
|
|
|
33
|
|
|
|
-
|
|
|
|
8
|
|
|
|
8
|
|
|
Adjust income taxes
|
|
|
6
|
|
|
|
8
|
|
|
|
3
|
|
|
|
(10
|
)
|
|
|
7
|
|
|
|
18
|
|
|
|
(5
|
)
|
|
|
13
|
|
|
Adjust transfer of interest in Graticule
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
101
|
|
|
|
-
|
|
|
|
101
|
|
|
Pre-tax Distributable Earnings
|
|
$
|
97
|
|
|
$
|
172
|
|
|
$
|
55
|
|
|
$
|
123
|
|
|
$
|
446
|
|
|
$
|
55
|
|
|
$
|
137
|
|
|
$
|
192
|
|
|
Investment Loss (income)
|
|
|
(10
|
)
|
|
|
(97
|
)
|
|
|
11
|
|
|
|
(14
|
)
|
|
|
(109
|
)
|
|
|
(5
|
)
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
Interest Expense
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
Fund Management DE
|
|
$
|
87
|
|
|
$
|
76
|
|
|
$
|
67
|
|
|
$
|
110
|
|
|
$
|
340
|
|
|
$
|
51
|
|
|
$
|
133
|
|
|
$
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenues
|
|
$
|
237
|
|
|
$
|
270
|
|
|
$
|
243
|
|
|
$
|
455
|
|
|
$
|
1,205
|
|
|
$
|
227
|
|
|
$
|
308
|
|
|
$
|
535
|
|
|
Adjust management fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
-
|
|
|
Adjust incentive income
|
|
|
69
|
|
|
|
17
|
|
|
|
57
|
|
|
|
(47
|
)
|
|
|
96
|
|
|
|
27
|
|
|
|
100
|
|
|
|
127
|
|
|
Adjust income from the receipt of options
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(21
|
)
|
|
|
(25
|
)
|
|
Other revenues
|
|
|
(55
|
)
|
|
|
(56
|
)
|
|
|
(57
|
)
|
|
|
(65
|
)
|
|
|
(233
|
)
|
|
|
(59
|
)
|
|
|
(61
|
)
|
|
|
(120
|
)
|
|
Segment Revenues
|
|
$
|
251
|
|
|
$
|
230
|
|
|
$
|
238
|
|
|
$
|
343
|
|
|
$
|
1,062
|
|
|
$
|
190
|
|
|
$
|
327
|
|
|
$
|
517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Expenses
|
|
$
|
231
|
|
|
$
|
216
|
|
|
$
|
235
|
|
|
$
|
310
|
|
|
$
|
992
|
|
|
$
|
329
|
|
|
$
|
258
|
|
|
$
|
587
|
|
|
Adjust interest expense
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
Adjust employee, Principal and director compensation
|
|
|
(12
|
)
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(24
|
)
|
|
|
(18
|
)
|
|
|
(2
|
)
|
|
|
(20
|
)
|
|
Adjust amortization of intangible assets and impairment of goodwill
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Adjust expense reimbursements from affiliates and non-affiliates
|
|
|
(54
|
)
|
|
|
(52
|
)
|
|
|
(55
|
)
|
|
|
(70
|
)
|
|
|
(231
|
)
|
|
|
(59
|
)
|
|
|
(61
|
)
|
|
|
(120
|
)
|
|
Adjust Principal Performance Payments
|
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
(15
|
)
|
|
|
(42
|
)
|
|
|
(5
|
)
|
|
|
(20
|
)
|
|
|
(25
|
)
|
|
Adjust transfer of interest in Graticule
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(101
|
)
|
|
|
-
|
|
|
|
(101
|
)
|
|
Other
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Segment Expenses
|
|
$
|
157
|
|
|
$
|
148
|
|
|
$
|
166
|
|
|
$
|
221
|
|
|
$
|
692
|
|
|
$
|
145
|
|
|
$
|
175
|
|
|
$
|
320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
''Distributable earnings'' is Fortress's supplemental measure of
operating performance used by management in analyzing segment and
overall results. It reflects the value created which management
considers available for distribution during any period. As compared to
generally accepted accounting principles (''GAAP'') net income,
distributable earnings excludes the effects of unrealized gains (or
losses) on illiquid investments, reflects contingent revenue which has
been received as income to the extent it is not expected to be reversed,
and disregards expenses which do not require an outlay of assets,
whether currently or on an accrued basis. Distributable earnings is
reflected on an unconsolidated and pre-tax basis, and, therefore, the
interests in consolidated subsidiaries related to Fortress Operating
Group units (held by the principals) and income tax expense are added
back in its calculation. Distributable earnings is not a measure of cash
generated by operations which is available for distribution nor should
it be considered in isolation or as an alternative to cash flow or net
income in accordance with GAAP and it is not necessarily indicative of
liquidity or cash available to fund the Company's operations. For a
complete discussion of distributable earnings and its reconciliation to
GAAP, as well as an explanation of the calculation of distributable
earnings impairment, see note 10 to the financial statements included in
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 2015.
Fortress's management uses distributable earnings:
-
in its determination of periodic distributions to equity holders;
-
in making operating decisions and assessing the performance of each of
the Company's core businesses;
-
for planning purposes, including the preparation of annual operating
budgets; and
-
as a valuation measure in strategic analyses in connection with the
performance of its funds and the performance of its employees.
Growing distributable earnings is a key component to the Company's
business strategy and distributable earnings is the supplemental measure
used by management to evaluate the economic profitability of each of the
Company's businesses and total operations. Therefore, Fortress believes
that it provides useful information to investors in evaluating its
operating performance. Fortress's definition of distributable earnings
is not based on any definition contained in its amended and restated
operating agreement.
"Fund management DE" is equal to pre-tax distributable earnings
excluding our direct investment-related results. Fund management DE is
comprised of "Pre-tax Distributable Earnings" excluding "Investment Loss
(Income)" and "Interest Expense." Fund management DE and its components
are used by management to analyze and measure the performance of our
investment management business on a stand-alone basis. Fortress defines
segment operating margin to be equal to fund management DE divided by
segment revenues. The Company believes that it is useful to provide
investors with the opportunity to review our investment management
business using the same metrics. Fund management DE and its components
are subject to the same limitations as pre-tax distributable earnings,
as described above.
|
|
|
|
Fortress Investment Group LLC
Exhibit 4
Reconciliation of Weighted Average Class A Shares Outstanding
(Used for Basic EPS) to Weighted Average Dividend Paying Shares
and Units Outstanding (Used for DEPS)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for Basic EPS)
|
|
|
216,183,181
|
|
|
207,783,751
|
|
|
215,985,577
|
|
|
212,328,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average fully vested restricted Class A share units with
dividend equivalent rights
|
|
|
(3,717,045
|
)
|
|
(1,431,885
|
)
|
|
(5,464,698
|
)
|
|
(2,653,378
|
)
|
|
Weighted average fully vested restricted Class A shares
|
|
|
(780,497
|
)
|
|
(1,000,310
|
)
|
|
(810,412
|
)
|
|
(986,867
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding
|
|
|
211,685,639
|
|
|
205,351,556
|
|
|
209,710,467
|
|
|
208,688,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average restricted Class A shares28
|
|
|
780,497
|
|
|
1,000,310
|
|
|
810,412
|
|
|
986,867
|
|
|
Weighted average fully vested restricted Class A share units which
are entitled to dividend equivalent payments
|
|
|
3,717,045
|
|
|
1,431,885
|
|
|
5,464,698
|
|
|
2,653,378
|
|
|
Weighted average unvested restricted Class A share units which are
entitled to dividend equivalent payments
|
|
|
11,159,183
|
|
|
7,513,984
|
|
|
9,761,060
|
|
|
6,763,630
|
|
|
Weighted average Fortress Operating Group units
|
|
|
226,331,513
|
|
|
226,331,513
|
|
|
226,331,513
|
|
|
236,074,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for DEPS)
|
|
|
453,673,877
|
|
|
441,629,248
|
|
|
452,078,150
|
|
|
455,166,095
|
|
|
Weighted average vested and unvested restricted Class A share units
which are not entitled to dividend equivalent payments
|
|
|
13,416,141
|
|
|
13,418,337
|
|
|
12,564,428
|
|
|
12,932,088
|
|
|
Weighted Average Fully Diluted Shares and Units Outstanding
(Used for Diluted DEPS)
|
|
|
467,090,018
|
|
|
455,047,585
|
|
|
464,642,578
|
|
|
468,098,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"Dividend paying shares and units" represents the number of shares and
units outstanding at the end of the period which were entitled to
receive dividends or related distributions. The Company believes it is
useful for investors in computing the aggregate amount of cash required
to make a current per share distribution of a given amount per share. It
excludes certain potentially dilutive equity instruments, primarily
non-dividend paying restricted Class A share units, and, therefore, is
limited in its usefulness in computing per share amounts. Accordingly,
dividend paying shares and units should be considered only as a
supplement and not an alternative to GAAP basic and diluted shares
outstanding. The Company's calculation of dividend paying shares and
units may be different from the calculation used by other companies and,
therefore, comparability may be limited.
__________________________________
|
28 Includes both fully vested and unvested restricted
Class A shares.
|
|
|
|
|
Fortress Investment Group LLC
Exhibit 5
Reconciliation of GAAP Book Value Per Share to Net Cash and
Investments Per Share
(dollars and shares in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2015
|
|
|
As of December 31, 2014
|
|
|
|
|
GAAP
Book Value
|
|
Net Cash and
Investments
|
|
|
GAAP
Book Value
|
|
Net Cash and
Investments
|
|
Cash and Cash equivalents
|
|
|
$
|
233,912
|
|
$
|
233,912
|
|
|
$
|
391,089
|
|
$
|
391,089
|
|
Investments
|
|
|
|
1,144,597
|
|
|
1,144,597
|
|
|
|
1,121,545
|
|
|
1,121,545
|
|
Investments in options29
|
|
|
|
60,950
|
|
|
-
|
|
|
|
71,844
|
|
|
-
|
|
Due from Affiliates
|
|
|
|
188,051
|
|
|
-
|
|
|
|
326,575
|
|
|
-
|
|
Deferred Tax Asset, net
|
|
|
|
415,915
|
|
|
-
|
|
|
|
417,623
|
|
|
-
|
|
Other Assets
|
|
|
|
165,531
|
|
|
-
|
|
|
|
173,708
|
|
|
-
|
|
Total Assets
|
|
|
|
2,208,956
|
|
|
1,378,509
|
|
|
|
2,502,384
|
|
|
1,512,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Obligations Payable
|
|
|
|
75,000
|
|
|
75,000
|
|
|
$
|
75,000
|
|
|
75,000
|
|
Accrued Compensation and Benefits
|
|
|
|
181,967
|
|
|
-
|
|
|
|
374,709
|
|
|
-
|
|
Due to Affiliates
|
|
|
|
372,660
|
|
|
-
|
|
|
|
375,424
|
|
|
-
|
|
Deferred Incentive Income
|
|
|
|
326,338
|
|
|
-
|
|
|
|
304,526
|
|
|
-
|
|
Other Liabilities
|
|
|
|
90,430
|
|
|
-
|
|
|
|
88,053
|
|
|
-
|
|
Total Liabilities
|
|
|
|
1,046,395
|
|
|
75,000
|
|
|
|
1,217,712
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Redeemable Non-controlling Interests
|
|
|
|
19
|
|
|
-
|
|
|
|
1,717
|
|
|
-
|
|
Net
|
|
|
$
|
1,162,542
|
|
$
|
1,303,509
|
|
|
$
|
1,282,955
|
|
$
|
1,437,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
Dividend Paying
Shares and Units
Outstanding
|
|
|
Shares
Outstanding
|
|
Dividend Paying
Shares and Units
Outstanding
|
|
Class A Shares
|
|
|
|
214,985
|
|
|
214,985
|
|
|
|
207,490
|
|
|
207,490
|
|
Restricted Class A Shares
|
|
|
|
688
|
|
|
688
|
|
|
|
1,045
|
|
|
1,045
|
|
Fortress Operating Group Units
|
|
|
|
226,332
|
|
|
226,332
|
|
|
|
226,332
|
|
|
226,332
|
|
Fully Vested Class A Shares - Dividend Paying
|
|
|
|
-
|
|
|
554
|
|
|
|
-
|
|
|
194
|
|
Unvested Class A Shares - Dividend Paying
|
|
|
|
-
|
|
|
11,159
|
|
|
|
-
|
|
|
7,002
|
|
Shares Outstanding
|
|
|
|
442,005
|
|
|
453,718
|
|
|
|
434,867
|
|
|
442,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
$
|
2.63
|
|
$
|
2.87
|
|
|
$
|
2.95
|
|
$
|
3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and investments represents cash and cash equivalents plus
investments less debt outstanding. The Company believes that net cash
and investments is a useful supplemental measure because it provides
investors with information regarding the Company's net investment
assets. Net cash and investments excludes certain assets (investments in
options, due from affiliates, deferred tax asset, other assets) and
liabilities (due to affiliates, accrued compensation and benefits,
deferred incentive income and other liabilities) and its utility as a
measure of financial position is limited. Accordingly, net cash and
investments should be considered only as a supplement and not an
alternative to GAAP book value as a measure of the Company's financial
position. The Company's calculation of net cash and investments may be
different from the calculation used by other companies and, therefore,
comparability may be limited.
__________________________________
|
29 The intrinsic value of options in equity method
investees totaled $38 million at quarter end and is included in our
undistributed, unrecognized incentive income. This value represents
incentive income that would have been recorded in Distributable
Earnings if Fortress had exercised all of its in-the-money options
it holds in the permanent capital vehicles and sold all of the
resulting shares at their June 30, 2015 closing price and differs
from the fair value derived from option pricing models included in
the table above.
|
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