[August 03, 2017] |
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Fortress Reports Second Quarter 2017 Results
Fortress Investment Group LLC (NYSE:FIG) ("Fortress" or the "Company")
today reported its second quarter 2017 financial results.
FINANCIAL SUMMARY
-
Management Fee Paying Assets Under Management ("AUM") of $72.4 billion
as of June 30, 2017, up 3% compared to the previous quarter
-
GAAP net income of $32 million, or $0.06 per diluted Class A share,
for the second quarter of 2017, compared to a GAAP net loss of $27
million, or a $0.07 loss per diluted Class A share, for the second
quarter of 2016
-
GAAP net income of $25 million, or $0.05 per diluted Class A share,
for the first half of 2017, compared to a GAAP net loss of $43
million, or a $0.11 loss per diluted Class A share, for the first half
of 2016
-
Pre-tax distributable earnings ("DE") of $86 million, or $0.22 per
dividend paying share, for the second quarter of 2017, compared to
pre-tax DE of $101 million, or $0.26 per dividend paying share, for
the second quarter of 2016
-
Pre-tax DE of $160 million, or $0.40 per dividend paying share, for
the first half of 2017, compared to pre-tax DE of $165 million, or
$0.42 per dividend paying share, for the first half of 2016
-
Net cash and investments of $1.0 billion, or $2.55 per dividend paying
share, as of June 30, 2017
-
$1.4 billion of gross embedded incentive income across funds and
permanent capital vehicles as of June 30, 2017, that has not yet been
recognized in DE
-
Total uncalled capital, or "dry powder," of $7.5 billion as of June
30, 2017, including $4.5 billion available for general investment
purposes
BUSINESS HIGHLIGHTS
-
Raised $1.6 billion of capital across alternative investment
businesses in the first half of 2017
-
Investment performance summary as of June 30, 2017:
-
Annualized inception-to-date net IRRs for Credit Opportunities
Fund ("FCO"), FCO II and FCO III of 23.1%, 15.9% and 10.5%,
respectively
-
Second quarter 2017 net returns of 1.2% for the Drawbridge Special
Opportunities Fund ("DBSO") LP
-
14 of 16 Logan Circle strategies outperformed respective
benchmarks in the second quarter of 2017
-
Post quarter end, Fortress announced that it had entered into a
definitive agreement pursuant to which it will sell Logan Circle
Partners, L.P. ("Logan Circle") to MetLife, Inc. (NYSE: MET)
("MetLife") for approximately $250 million
__________________________________
|
Note: This release contains certain Non-GAAP financial measures.
Fortress urges you to read the "Non-GAAP Information" section below
and to review the exhibits in this release for reconciliations of
these measures to the comparable GAAP measures.
|
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PROPOSED ACQUISITION BY SOFTBANK
On July 12, 2017, Fortress announced that, at its special meeting of
shareholders, the Company's shareholders had voted, among other things,
in favor of the proposal to adopt the previously announced merger
agreement pursuant to which certain subsidiaries of SoftBank Group Corp.
("SoftBank") will acquire Fortress for approximately $3.3 billion in
cash. Of the votes cast in respect of the proposal to adopt the merger
agreement, approximately 99.7% of shares voted in favor. The transaction
is anticipated to close in the second half of 2017, subject to certain
regulatory approvals and other customary closing conditions, after which
Fortress will operate as an independent business within SoftBank under
the continuing leadership of Fortress Principals Pete Briger, Wes Edens
and Randy Nardone.
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 months ended June 30, 2017. The condensed
consolidated GAAP statement of operations and balance sheet are
presented on pages 10-11 of this press release.
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2Q
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1Q
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2Q
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% Change
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1H
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1H
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% Change
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2017
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2017
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2016
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QoQ
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YoY
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2017
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2016
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QoQ
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(in millions, except per share amount)
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GAAP
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Revenues
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$
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247
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$
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232
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$
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232
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6%
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6%
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$
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479
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$
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464
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3%
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Expenses
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210
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241
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238
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(13)%
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(12)%
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451
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445
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1%
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Other Income (loss)
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8
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1
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(17
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)
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N/A
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N/A
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9
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(57
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)
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N/A
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Net income (loss)
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32
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(7
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)
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(27
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)
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N/A
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N/A
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25
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(43
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)
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N/A
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Net income (loss) attributable to Class A Shareholders
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15
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(3
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)
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(14
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)
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N/A
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N/A
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11
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(23
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)
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N/A
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Per diluted share
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$
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0.06
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$
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(0.02
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)
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$
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(0.07
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)
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N/A
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N/A
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$
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0.05
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$
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(0.11
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)
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N/A
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Weighted average Class A shares outstanding, diluted
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395
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220
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217
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394
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219
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Distributable Earnings
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Fund management DE
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$
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82
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$
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61
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$
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98
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34%
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(16)%
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$
|
143
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$
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161
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(11)%
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Pre-tax DE
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86
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74
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|
|
101
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16%
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(15)%
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|
|
160
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|
|
165
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(3)%
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Per dividend paying share/unit
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$
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0.22
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$
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0.19
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$
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0.26
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16%
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(15)%
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$
|
0.40
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$
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0.42
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(5)%
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Weighted average dividend paying shares and units outstanding
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397
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|
397
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394
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|
|
397
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|
|
396
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Assets Under Management
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Private Equity and Permanent Capital
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$
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14,682
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$
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14,511
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|
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$
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13,284
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1%
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11%
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$
|
14,682
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$
|
13,284
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11%
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Credit1
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17,708
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17,731
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18,209
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0%
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(3)%
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17,708
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18,209
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(3)%
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Liquid Markets2
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4,558
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|
4,198
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4,622
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9%
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(1)%
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|
4,558
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4,622
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(1)%
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Logan Circle
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|
35,483
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33,719
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|
|
|
34,080
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5%
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4%
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|
|
35,483
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|
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34,080
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4%
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Total Assets Under Management
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$
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72,431
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$
|
70,159
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|
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$
|
70,195
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3%
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3%
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$
|
72,431
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$
|
70,195
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3%
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__________________________________
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1
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The Assets Under Management presented for Credit includes $1,433
million of AUM related to co-managed funds as of 2Q 2017.
|
2
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The Assets Under Management presented for Liquid Markets includes
$4,516 million of AUM related to the Affiliated Manager as of 2Q
2017.
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GAAP RESULTS
Fortress recorded GAAP net income of $32 million, or $0.06 per diluted
Class A share, for the second quarter of 2017, compared to a GAAP net
loss of $27 million, or a $0.07 loss per diluted Class A share, for the
second quarter of 2016. Our diluted earnings per share includes the
income tax effects to net income (loss) attributable to Class A
shareholders from the assumed conversion of Fortress Operating Group
units to Class A shares in periods when the effect is dilutive.
The year-over-year change in Fortress's second quarter 2017 GAAP net
income was primarily driven by a $29 million decrease in expenses, a $25
million increase in other income and a $14 million increase in revenues.
The $29 million decrease in expenses was primarily related to lower
compensation and benefits expense.
The $25 million increase in other income was primarily due to higher net
earnings from equity method investees, primarily with respect to
investments in our private equity funds. These increases in other income
were partially offset by net realized and unrealized losses in the fair
value of our direct investments, including options and common stock held
in our publicly traded private equity portfolio companies in the second
quarter of 2017.
The $14 million increase in revenues was primarily related to higher
incentive income from affiliates, partially offset by lower management
fees from affiliates and incentive income from non-affiliates.
SEGMENT RESULTS (NON-GAAP)
This section provides information about each of Fortress's businesses:
(i) Credit Hedge Funds and Credit PE Funds, (ii) Private Equity Funds
and Permanent Capital Vehicles, (iii) Liquid Hedge Funds, and (iv) Logan
Circle. Fortress uses DE as the primary metric to manage its businesses
and gauge the Company's performance, and it uses DE exclusively to
report segment results. All DE figures are presented on a pre-tax basis.
Consolidated segment results are non-GAAP information and are not
presented as a substitute for Fortress's GAAP results. Fortress urges
you to read "Non-GAAP Information" below.
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As of June 30, 2017
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Private Equity
|
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Credit Funds
|
|
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(in millions)
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Total
|
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Funds
|
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Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
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Assets Under Management3
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$
|
72,431
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|
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$
|
6,850
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|
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$
|
7,832
|
|
|
$
|
8,310
|
|
|
$
|
9,398
|
|
|
$
|
4,558
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|
|
$
|
35,483
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|
Dry Powder
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|
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|
$
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7,491
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|
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$
|
677
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|
|
$
|
-
|
|
|
$
|
322
|
|
|
$
|
6,492
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|
|
|
N/A
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|
|
|
N/A
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Average Management Fee Rate4
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|
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|
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|
1.2
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%
|
|
|
1.5
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%
|
|
|
2.0
|
%
|
|
|
1.3
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%
|
|
|
1.1
|
%
|
|
|
0.2
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%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Incentive Eligible NAV Above Incentive Income Threshold5
|
|
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|
$
|
24,641
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|
|
$
|
2,042
|
|
|
$
|
5,903
|
|
|
$
|
5,927
|
|
|
$
|
10,225
|
|
|
$
|
-
|
|
|
$
|
544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Undistributed Incentive Income: Unrecognized
|
|
|
|
$
|
1,385
|
|
|
$
|
254
|
|
|
$
|
37
|
|
|
$
|
67
|
|
|
$
|
1,026
|
|
|
$
|
1
|
|
|
$
|
-
|
|
Undistributed Incentive Income: Recognized
|
|
|
|
$
|
46
|
|
|
|
-
|
|
|
|
7
|
|
|
|
39
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Undistributed Incentive Income6
|
|
|
|
$
|
1,431
|
|
|
$
|
254
|
|
|
$
|
44
|
|
|
$
|
106
|
|
|
$
|
1,026
|
|
|
$
|
1
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
Private Equity
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle Partners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
54
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
54
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
134
|
|
|
$
|
20
|
|
|
$
|
30
|
|
|
$
|
38
|
|
|
$
|
30
|
|
|
$
|
1
|
|
|
$
|
15
|
|
Incentive income
|
|
|
|
|
84
|
|
|
|
1
|
|
|
|
48
|
|
|
|
15
|
|
|
|
20
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
218
|
|
|
|
21
|
|
|
|
78
|
|
|
|
53
|
|
|
|
50
|
|
|
|
1
|
|
|
|
15
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses7
|
|
|
|
|
(116
|
)
|
|
|
(7
|
)
|
|
|
(29
|
)
|
|
|
(28
|
)
|
|
|
(32
|
)
|
|
|
(3
|
)
|
|
|
(15
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(133
|
)
|
|
|
(7
|
)
|
|
|
(29
|
)
|
|
|
(34
|
)
|
|
|
(43
|
)
|
|
|
(3
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Manager
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE7
|
|
|
|
$
|
82
|
|
|
$
|
14
|
|
|
$
|
43
|
|
|
$
|
16
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income8
|
|
|
|
|
4
|
|
|
|
-
|
|
|
|
1
|
|
|
|
2
|
|
|
|
1
|
|
|
|
2
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings7,8
|
|
|
|
$
|
86
|
|
|
$
|
14
|
|
|
$
|
44
|
|
|
$
|
18
|
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
3
|
The Assets Under Management presented for the Credit Hedge Funds
includes $1,433 million related to co-managed funds and $706 million
related to the third party originated JP Funds and Value Recovery
Funds. The Assets Under Management presented for the Liquid Hedge
Funds includes $4,516 million related to the Affiliated Manager.
|
4
|
The Average Management Fee Rate presented for the Credit Hedge Funds
excludes the co-managed funds and third-party originated JP Funds
and Value Recovery Funds (see footnote 3 above). The Average
Management Fee Rate presented for the Liquid Hedge Funds excludes
the Affiliated Manager.
|
5
|
The Incentive Eligible NAV Above Incentive Income Threshold
presented for Credit Hedge Funds excludes co-managed funds, certain
third party originated funds and sidepocket investments and for
Liquid Hedge Funds, excludes the Affiliated Manager and sidepocket
investments. The Incentive Eligible NAV Above Incentive Income
Threshold presented for Private Equity Funds and Credit PE Funds
(except for a portion of MSR Opportunities Fund II A, Long Dated
Value Fund I and Credit Opportunities Fund IV, whose capital was
above the incentive income threshold as of June 30, 2017),
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.
|
6
|
Undistributed Incentive Income - Recognized represents the results
of the main fund investments for the Credit Hedge Funds including
the impact of realized gains and losses and unrealized losses on
sidepocket investments. Undistributed Incentive Income -
Unrecognized represents the results of the Private Equity Funds,
Credit PE Funds and Liquid and Credit Hedge Fund sidepocket and
redeeming capital account (RCA) investments which have not been
recognized in Distributable Earnings and will be recognized when
realized. The Undistributed Incentive Income presented for the
Credit Hedge Funds excludes co-managed funds and certain third party
originated funds and for Liquid Hedge Funds, excludes the Affiliated
Manager. Undistributed Incentive Income for Credit PE Funds includes
$4 million of net unrealized gains that would have been recorded in
Distributable Earnings if Fortress had settled Japanese Yen foreign
exchange derivative contracts used to economically hedge estimated
future incentive income it had outstanding as of June 30, 2017.
Undistributed Incentive Income for Permanent Capital Vehicles
includes $37 million of 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, 2017 closing price.
|
7
|
Includes Unallocated Expenses of $2 million incurred by Fortress
related to the proposed acquisition by SoftBank.
|
8
|
Includes Unallocated Expenses of $2 million, primarily related to
interest expense.
|
|
|
Pre-tax DE was $86 million in the second quarter of 2017, down from $101
million in the second quarter of 2016, primarily due to lower incentive
income and higher operating expenses, partially offset by lower profit
sharing expenses.
Management fees were $134 million in the second quarter of 2017, down
from $141 million in the second quarter of 2016. The decrease was
primarily due to lower management fees from the Liquid Hedge Funds, and
Private Equity Funds, partially offset by higher management fees from
the Permanent Capital Vehicles.
Incentive income in the second quarter of 2017 totaled $84 million, down
from $131 million in the second quarter of 2016, primarily due to lower
incentive income from the Credit PE Funds and Credit Hedge Funds,
partially offset by higher incentive income from the Permanent Capital
Vehicles.
Earnings from Affiliated Manager totaled $6 million in the second
quarter of 2017, up from $1 million in the second quarter of 2016.
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, 2017, AUM totaled $72.4 billion, up 3% compared to the
previous quarter. As of quarter end, approximately 87% of alternative
AUM was in funds with long-term investment structures.
During the quarter, Fortress's AUM increased primarily due to (i) $1.4
billion of net market-driven valuation gains, (ii) $0.7 billion of net
client flows for Logan Circle, (iii) a $0.5 billion increase in invested
capital, and (iv) a $0.2 billion change in AUM of the Affiliated Manager
and co-managed funds. These increases to AUM were partially offset by
(i) $0.3 billion of capital distributions to investors, (ii) $0.2
billion in distributions to investors in redeeming capital accounts, and
(iii) a $0.1 billion in Credit Hedge Fund redemptions.
As of June 30, 2017, the Credit Funds and Private Equity Funds had $6.8
billion and $0.7 billion of uncalled capital, respectively, that will
become AUM if 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.
BUSINESS SEGMENT RESULTS
Below is a discussion of second quarter 2017 segment results and
business highlights.
Credit:
-
DBSO LP and DBSO Ltd had second quarter 2017 net returns of 1.2%
and 1.0%, respectively
-
FCO, FCO II, FCO III, FJOF and FJOF II (Yen) recorded annualized
inception-to-date net IRRs of 23.1%, 15.9%, 10.5%, 28.0% and 27.2%,
respectively, through June 30, 2017
-
Nearly $1.1 billion of gross embedded incentive income that has not
yet been recognized in DE
(See supplemental data on pages 17-18 for more detail on Credit
results)
The Credit business, which includes our Credit PE Funds and Credit Hedge
Funds, generated pre-tax DE of $26 million in the second quarter of
2017, down from $73 million in the second quarter of 2016. The
year-over-year decrease in DE was primarily driven by lower incentive
income, partially offset by lower profit sharing expense.
The Credit Hedge Funds generated pre-tax DE of $18 million for the
quarter, down from $26 million in the second quarter of 2016, primarily
due to lower incentive income. Fortress's flagship credit hedge fund,
DBSO LP, had net returns of 1.2% for the quarter and annualized
inception to date net returns of 10.6% as of June 30, 2017.
The Credit PE Funds generated pre-tax DE of $8 million in the quarter,
compared to $47 million in the second quarter of 2016, primarily due to
lower incentive income. Over the last twelve months, the Credit PE Funds
have recognized $178 million of gross incentive income, while gross
unrecognized Credit PE incentive income has increased $147 million
year-over-year to $1.0 billion as of June 30, 2017.
Private Equity and Permanent Capital Vehicles:
-
Permanent Capital Vehicles generated $48 million of incentive
income in the quarter
-
Closed sale of Florida East Coast Railway ("FEC")
-
Post quarter end, completed IPO for doBank S.p.A. ("doBank")
(See supplemental data on pages 15-16 for more detail on Private
Equity results)
The Private Equity business recorded pre-tax DE of $58 million in the
second quarter of 2017, up from $35 million in the second quarter of
2016. The year-over-year increase was primarily driven by higher
incentive income and management fees for the Permanent Capital Vehicles,
partially offset by lower management fees from the Private Equity Funds.
The Permanent Capital Vehicles generated pre-tax DE of $44 million in
the quarter, up from $18 million in the second quarter of 2016,
primarily due to higher incentive income. The Private Equity Funds
generated pre-tax DE of $14 million, down from $17 million in the second
quarter of 2016.
During the quarter, the Private Equity Funds completed the sale of FEC
and related freight rail assets to Grupo México Transportes. The sale
generated approximately $500 million in net proceeds to Fortress-managed
funds.
Post quarter end, doBank completed its IPO at a price of €9.00 per
share. Acquired in 2015 by Eurocastle Investment Limited (Euronext
Amsterdam: ECT) and the Fortress Italian NPL Opportunities Fund (the
"Italian NPL Fund"), doBank (formerly UniCredit Credit Management Bank
S.p.A.) is the largest and highest rated independent non-performing loan
servicing group in Italy. As part of the offering, ECT and the Italian
NPL Fund sold approximately 38 million shares for approximately €332
million in net proceeds. Together, ECT and the Italian NPL Fund
currently own approximately 40 million shares of doBank, or
approximately 51% of shares outstanding.
Logan Circle:
-
14 of 16 Logan Circle strategies outperformed their respective
benchmarks in the second quarter
-
Post quarter end, announced agreement to sell Logan Circle to
MetLife for approximately $250 million
(See supplemental data on page 20 for more detail on Logan Circle
results)
Logan Circle, our traditional asset management business, recorded
breakeven pre-tax DE for the second quarter of 2017, down slightly
compared to the second quarter of 2016. Second quarter 2017 results
include $2 million of expenses incurred by Fortress related to the
proposed sale of Logan Circle.
Logan Circle ended the quarter with $35.5 billion in AUM, up 5% compared
to the previous quarter, primarily due to $1.1 billion of market-driven
valuation gains and $0.7 billion of net client inflows.
For the quarter ended June 30, 2017, 14 of 16 Logan Circle fixed income
strategies outperformed their respective benchmarks. Since inception,
all 16 Logan Circle fixed income strategies have outperformed their
respective benchmarks and nine were ranked in the top quartile of
performance for their competitor universe.
Post quarter end, Fortress entered into a definitive agreement to sell
Logan Circle to MetLife. The aggregate purchase price is approximately
$250 million, subject to certain customary closing and post-closing
adjustments and an allocation of $55 million of the purchase price to an
employee long-term incentive plan.
Liquid Hedge Funds:
-
Earnings from Affiliated Manager totaled $6 million in the quarter
(See supplemental data on page 19 for more detail on Liquid Hedge
Funds results)
The Liquid Hedge Funds recorded pre-tax DE of $6 million in the second
quarter of 2017, up from a $6 million pre-tax DE loss in the second
quarter of 2016. The year-over-year increase was due to higher earnings
from the Affiliated Manager and lower operating expenses.
LIQUIDITY & CAPITAL
As of June 30, 2017, Fortress had cash and cash equivalents of $342
million and debt obligations of $183 million.
As of June 30, 2017, Fortress had approximately $0.9 billion of
investments in Fortress funds and options in publicly traded permanent
capital vehicles and a total of $170 million in outstanding commitments
to its funds. In addition, the NAV of Fortress's investments in its own
funds exceeded its segment cost basis by $456 million at quarter end,
representing net unrealized gains that have not yet been recognized for
segment reporting purposes.
DIVIDEND
In connection with the proposed merger between Fortress and an affiliate
of SoftBank, Fortress has contractually agreed that it will not pay any
dividends with respect to periods ending after March 31, 2017 while the
merger agreement remains in effect.
NON-GAAP INFORMATION
DE is a supplemental metric used by management to measure Fortress's
operating performance. DE is a 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.
ABOUT FORTRESS
Fortress Investment Group LLC is a leading, highly diversified global
investment firm with $72.4 billion in assets under management as of June
30, 2017. Founded in 1998, Fortress manages assets on behalf of over
1,850 institutional clients and private investors worldwide across a
range of credit, real estate, permanent capital, private equity and
traditional asset management strategies. Fortress is publicly traded on
the New York Stock Exchange (NYSE:FIG). 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 communication may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are generally identified by the use
of words such as "outlook," "believe," "expect," "potential,"
"continue," "may," "will," "should," "could," "would," "seek,"
"approximately," "predict," "intend," "plan," "estimate," "anticipate,"
"opportunity," "pipeline," "comfortable," "assume," "remain,"
"maintain," "sustain," "achieve" or the negative version of those words
or other comparable words. Forward-looking statements are not historical
facts, but instead represent only Fortress's beliefs as of the date of
this communication regarding future events, many of which, by their
nature, are inherently uncertain and outside of Fortress's control.
Numerous factors could cause actual events to differ from these
forward-looking statements, and any such differences could cause our
actual results to differ materially from the results expressed or
implied by these forward-looking statements. Such factors include but
are not limited to the following: (1) conditions to the closing of the
merger or the Logan Circle sale, including the obtaining of required
regulatory approvals, may not be satisfied; (2) the merger or the Logan
Circle sale may involve unexpected costs, liabilities or delays; (3) the
business of Fortress may suffer as a result of uncertainty surrounding
the merger or the Logan Circle sale; (4) the outcome of any legal
proceedings related to the merger or the Logan Circle sale; (5) Fortress
may be adversely affected by other economic, business, and/or
competitive factors, including the net asset value of assets in certain
of Fortress's funds; (6) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement or the Logan Circle purchase agreement; (7) risks that the
merger or the Logan Circle sale disrupts current plans and operations
and the potential difficulties in employee retention as a result of the
merger or the Logan Circle sale; (8) other risks to consummation of the
merger or the Logan Circle sale, including the risk that the merger or
the Logan Circle sale will not be consummated within the expected time
period or at all; and (9) the risks described from time to time in
Fortress's reports filed with the SEC under the heading "Risk Factors,"
including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K and in other of Fortress's filings with
the SEC. In addition, new risks and uncertainties emerge from time to
time, and it is not possible for Fortress to predict or assess the
impact of every factor that may cause its actual results to differ from
those expressed or implied in any forward-looking statements.
Accordingly, you should not place undue reliance on any forward-looking
statements contained in this communication, and you should not regard
any forward-looking statement as a representation by Fortress or any
other person that the future plans, estimates or expectations currently
contemplated by Fortress will be achieved. Fortress 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 communication. Fortress expressly disclaims any obligation to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Fortress's
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
|
|
|
|
|
|
|
Fortress Investment Group LLC
|
Condensed Consolidated Statements of Operations (Unaudited)
|
(dollars in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
Management fees: affiliates
|
|
|
|
$
|
119,710
|
|
|
$
|
126,388
|
|
|
$
|
245,879
|
|
|
$
|
253,778
|
|
Management fees: non-affiliates
|
|
|
|
|
14,474
|
|
|
|
14,192
|
|
|
|
28,697
|
|
|
|
27,611
|
|
Incentive income: affiliates
|
|
|
|
|
55,412
|
|
|
|
22,160
|
|
|
|
85,785
|
|
|
|
53,938
|
|
Incentive income: non-affiliates
|
|
|
|
|
781
|
|
|
|
9,411
|
|
|
|
1,191
|
|
|
|
9,862
|
|
Expense reimbursements: affiliates
|
|
|
|
|
54,493
|
|
|
|
56,148
|
|
|
|
112,787
|
|
|
|
111,439
|
|
Expense reimbursements: non-affiliates
|
|
|
|
|
292
|
|
|
|
1,649
|
|
|
|
911
|
|
|
|
2,806
|
|
Other revenues
|
|
|
|
|
1,827
|
|
|
|
2,758
|
|
|
|
3,967
|
|
|
|
4,889
|
|
Total Revenues
|
|
|
|
|
246,989
|
|
|
|
232,706
|
|
|
|
479,217
|
|
|
|
464,323
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
|
|
|
163,400
|
|
|
|
191,279
|
|
|
|
345,392
|
|
|
|
355,484
|
|
General, administrative and other
|
|
|
|
|
39,580
|
|
|
|
38,770
|
|
|
|
92,525
|
|
|
|
71,896
|
|
Depreciation and amortization
|
|
|
|
|
4,420
|
|
|
|
5,821
|
|
|
|
8,875
|
|
|
|
12,087
|
|
Interest expense
|
|
|
|
|
2,226
|
|
|
|
2,982
|
|
|
|
4,205
|
|
|
|
6,019
|
|
Total Expenses
|
|
|
|
|
209,626
|
|
|
|
238,852
|
|
|
|
450,997
|
|
|
|
445,486
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Gains (losses)
|
|
|
|
|
(18,373
|
)
|
|
|
(7,266
|
)
|
|
|
2,066
|
|
|
|
(23,939
|
)
|
Tax receivable agreement liability adjustment
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,699
|
)
|
Earnings (losses) from equity method investees
|
|
|
|
|
26,512
|
|
|
|
(9,107
|
)
|
|
|
6,644
|
|
|
|
(29,887
|
)
|
Total Other Income (Loss)
|
|
|
|
|
8,139
|
|
|
|
(16,373
|
)
|
|
|
8,710
|
|
|
|
(56,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
|
45,502
|
|
|
|
(22,519
|
)
|
|
|
36,930
|
|
|
|
(37,688
|
)
|
Income tax benefit (expense)
|
|
|
|
|
(13,693
|
)
|
|
|
(4,072
|
)
|
|
|
(11,955
|
)
|
|
|
(4,855
|
)
|
Net Income (Loss)
|
|
|
|
$
|
31,809
|
|
|
$
|
(26,591
|
)
|
|
$
|
24,975
|
|
|
$
|
(42,543
|
)
|
Allocation of Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
Principals' and Others' Interests in Income (Loss) of Consolidated
Subsidiaries
|
|
|
|
|
17,301
|
|
|
|
(12,146
|
)
|
|
|
13,716
|
|
|
|
(19,572
|
)
|
Net Income (Loss) Attributable to Class A Shareholders
|
|
|
|
|
14,508
|
|
|
|
(14,445
|
)
|
|
|
11,259
|
|
|
|
(22,971
|
)
|
|
|
|
|
$
|
31,809
|
|
|
$
|
(26,591
|
)
|
|
$
|
24,975
|
|
|
$
|
(42,543
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Class A Share
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per Class A share, basic
|
|
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.11
|
)
|
Net income (loss) per Class A share, diluted
|
|
|
|
$
|
0.06
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.11
|
)
|
Weighted average number of Class A shares outstanding, basic
|
|
|
|
|
220,259,863
|
|
|
|
216,733,660
|
|
|
|
220,377,475
|
|
|
|
218,790,533
|
|
Weighted average number of Class A shares outstanding, diluted
|
|
|
|
|
394,838,000
|
|
|
|
216,733,660
|
|
|
|
394,226,039
|
|
|
|
218,790,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
|
Condensed Consolidated Balance Sheets
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
(Unaudited)
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
341,712
|
|
|
$
|
397,125
|
|
Due from affiliates
|
|
|
|
|
231,611
|
|
|
|
320,633
|
|
Investments
|
|
|
|
|
849,660
|
|
|
|
880,001
|
|
Investments in options
|
|
|
|
|
65,494
|
|
|
|
53,206
|
|
Deferred tax asset, net
|
|
|
|
|
417,652
|
|
|
|
424,244
|
|
Other assets
|
|
|
|
|
134,983
|
|
|
|
126,165
|
|
Total Assets
|
|
|
|
$
|
2,041,112
|
|
|
$
|
2,201,374
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accrued compensation and benefits
|
|
|
|
$
|
219,186
|
|
|
$
|
370,413
|
|
Due to affiliates
|
|
|
|
|
335,662
|
|
|
|
360,769
|
|
Deferred incentive income
|
|
|
|
|
380,560
|
|
|
|
330,354
|
|
Debt obligations payable
|
|
|
|
|
182,838
|
|
|
|
182,838
|
|
Other liabilities
|
|
|
|
|
90,296
|
|
|
|
69,255
|
|
Total Liabilities
|
|
|
|
|
1,208,542
|
|
|
|
1,313,629
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Class A shares, no par value, 1,000,000,000 shares authorized,
219,367,912
|
|
|
|
|
|
|
and 216,891,601 shares issued and outstanding at June 30, 2017 and
|
|
|
|
|
|
|
December 31, 2016, respectively
|
|
|
|
|
-
|
|
|
|
-
|
|
Class B shares, no par value, 750,000,000 shares authorized,
169,207,335
|
|
|
|
|
|
|
issued and outstanding at June 30, 2017 and December 31, 2016,
respectively
|
|
|
|
|
-
|
|
|
|
-
|
|
Paid-in capital
|
|
|
|
|
1,871,400
|
|
|
|
1,899,163
|
|
Retained earnings (accumulated deficit)
|
|
|
|
|
(1,323,171
|
)
|
|
|
(1,333,828
|
)
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
(2,366
|
)
|
|
|
(1,094
|
)
|
|
|
|
|
|
|
|
Total Fortress shareholders' equity
|
|
|
|
|
545,863
|
|
|
|
564,241
|
|
Principals' and others' interests in equity of consolidated
subsidiaries
|
|
|
|
|
286,707
|
|
|
|
323,504
|
|
Total Equity
|
|
|
|
|
832,570
|
|
|
|
887,745
|
|
|
|
|
|
$
|
2,041,112
|
|
|
$
|
2,201,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
|
Exhibit 1-a
|
Supplemental Data for the Three Months Ended June 30, 2017 and
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
|
|
|
|
|
|
Private Equity
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - April 1, 2017
|
|
|
|
$
|
70,159
|
|
|
$
|
6,695
|
|
|
$
|
7,816
|
|
|
$
|
8,633
|
|
|
$
|
9,098
|
|
|
$
|
4,198
|
|
|
$
|
33,719
|
|
Capital raised
|
|
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
|
517
|
|
|
|
18
|
|
|
|
-
|
|
|
|
22
|
|
|
|
477
|
|
|
|
-
|
|
|
|
-
|
|
Redemptions
|
|
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
RCA distributions9
|
|
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(160
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
|
(281
|
)
|
|
|
(97
|
)
|
|
|
(25
|
)
|
|
|
(5
|
)
|
|
|
(154
|
)
|
|
|
-
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity buyback
|
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Manager and co-managed funds
|
|
|
|
|
195
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(172
|
)
|
|
|
-
|
|
|
|
367
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
|
704
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
704
|
|
Income (loss) and foreign exchange
|
|
|
|
|
1,420
|
|
|
|
234
|
|
|
|
46
|
|
|
|
110
|
|
|
|
(23
|
)
|
|
|
(7
|
)
|
|
|
1,060
|
|
AUM - Ending Balance
|
|
|
|
$
|
72,431
|
|
|
$
|
6,850
|
|
|
$
|
7,832
|
|
|
$
|
8,310
|
|
|
$
|
9,398
|
|
|
$
|
4,558
|
|
|
$
|
35,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
54
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
54
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
134
|
|
|
$
|
20
|
|
|
$
|
30
|
|
|
$
|
38
|
|
|
$
|
30
|
|
|
$
|
1
|
|
|
$
|
15
|
|
Incentive income
|
|
|
|
|
84
|
|
|
|
1
|
|
|
|
48
|
|
|
|
15
|
|
|
|
20
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
218
|
|
|
|
21
|
|
|
|
78
|
|
|
|
53
|
|
|
|
50
|
|
|
|
1
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses10
|
|
|
|
|
(116
|
)
|
|
|
(7
|
)
|
|
|
(29
|
)
|
|
|
(28
|
)
|
|
|
(32
|
)
|
|
|
(3
|
)
|
|
|
(15
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(17
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(133
|
)
|
|
|
(7
|
)
|
|
|
(29
|
)
|
|
|
(34
|
)
|
|
|
(43
|
)
|
|
|
(3
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Manager
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
91
|
|
|
|
14
|
|
|
|
49
|
|
|
|
19
|
|
|
|
7
|
|
|
|
4
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(9
|
)
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
|
82
|
|
|
|
14
|
|
|
|
43
|
|
|
|
16
|
|
|
|
7
|
|
|
|
4
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
6
|
|
|
|
-
|
|
|
|
1
|
|
|
|
2
|
|
|
|
1
|
|
|
|
2
|
|
|
|
-
|
|
Unallocated Expenses
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
86
|
|
|
$
|
14
|
|
|
$
|
44
|
|
|
$
|
18
|
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
-
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2016
|
|
|
|
|
|
|
Private Equity
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - April 1, 2016
|
|
|
|
$
|
70,637
|
|
|
$
|
7,179
|
|
|
$
|
6,773
|
|
|
$
|
9,336
|
|
|
$
|
9,353
|
|
|
$
|
5,195
|
|
|
$
|
32,801
|
|
Capital raised
|
|
|
|
|
59
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
43
|
|
|
|
16
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
|
98
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
90
|
|
|
|
-
|
|
|
|
-
|
|
Redemptions
|
|
|
|
|
(54
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(28
|
)
|
|
|
-
|
|
|
|
(26
|
)
|
|
|
-
|
|
RCA distributions9
|
|
|
|
|
(49
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(49
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
|
(844
|
)
|
|
|
(348
|
)
|
|
|
(25
|
)
|
|
|
(4
|
)
|
|
|
(457
|
)
|
|
|
(10
|
)
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity buyback
|
|
|
|
|
(83
|
)
|
|
|
-
|
|
|
|
(83
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers and co-managed funds
|
|
|
|
|
(867
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(511
|
)
|
|
|
-
|
|
|
|
(356
|
)
|
|
|
-
|
|
Divested Businesses
|
|
|
|
|
(177
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(177
|
)
|
|
|
-
|
|
Net Client Flows
|
|
|
|
|
18
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
18
|
|
Income (loss) and foreign exchange
|
|
|
|
|
1,461
|
|
|
|
(199
|
)
|
|
|
(21
|
)
|
|
|
226
|
|
|
|
214
|
|
|
|
(20
|
)
|
|
|
1,261
|
|
AUM - Ending Balance
|
|
|
|
$
|
70,195
|
|
|
$
|
6,640
|
|
|
$
|
6,644
|
|
|
$
|
8,966
|
|
|
$
|
9,243
|
|
|
$
|
4,622
|
|
|
$
|
34,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
86
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
27
|
|
|
$
|
43
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
141
|
|
|
$
|
26
|
|
|
$
|
27
|
|
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
6
|
|
|
$
|
14
|
|
Incentive income
|
|
|
|
|
131
|
|
|
|
-
|
|
|
|
14
|
|
|
|
33
|
|
|
|
85
|
|
|
|
(1
|
)
|
|
|
-
|
|
Total
|
|
|
|
|
272
|
|
|
|
26
|
|
|
|
41
|
|
|
|
70
|
|
|
|
116
|
|
|
|
5
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(106
|
)
|
|
|
(10
|
)
|
|
|
(18
|
)
|
|
|
(29
|
)
|
|
|
(29
|
)
|
|
|
(7
|
)
|
|
|
(13
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(58
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(11
|
)
|
|
|
(44
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(164
|
)
|
|
|
(10
|
)
|
|
|
(21
|
)
|
|
|
(40
|
)
|
|
|
(73
|
)
|
|
|
(7
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
109
|
|
|
|
16
|
|
|
|
20
|
|
|
|
30
|
|
|
|
43
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
|
98
|
|
|
|
16
|
|
|
|
17
|
|
|
|
25
|
|
|
|
40
|
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
6
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
7
|
|
|
|
(5
|
)
|
|
|
1
|
|
Unallocated Expenses
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
101
|
|
|
$
|
17
|
|
|
$
|
18
|
|
|
$
|
26
|
|
|
$
|
47
|
|
|
$
|
(6
|
)
|
|
$
|
2
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
9
|
Represents distributions from (i) assets held by redeeming capital
accounts in the Drawbridge Special Opportunities Funds, and (ii) the
Value Recovery Funds.
|
10
|
Includes Unallocated Expenses of $2 million incurred by Fortress
related to the proposed acquisition by SoftBank.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
|
Exhibit 1-a
|
Supplemental Data for the Six Months Ended June 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
Private Equity
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2017
|
|
|
|
$
|
69,627
|
|
|
$
|
6,532
|
|
|
$
|
6,961
|
|
|
$
|
8,803
|
|
|
$
|
9,306
|
|
|
$
|
4,589
|
|
|
$
|
33,436
|
|
Capital raised
|
|
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
|
835
|
|
|
|
-
|
|
|
|
835
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
|
741
|
|
|
|
22
|
|
|
|
-
|
|
|
|
44
|
|
|
|
675
|
|
|
|
-
|
|
|
|
-
|
|
Redemptions
|
|
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
RCA distributions11
|
|
|
|
|
(319
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(319
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
|
(984
|
)
|
|
|
(119
|
)
|
|
|
(114
|
)
|
|
|
(8
|
)
|
|
|
(573
|
)
|
|
|
(170
|
)
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
|
(108
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(108
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity buyback
|
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Manager and co-managed funds
|
|
|
|
|
(112
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(263
|
)
|
|
|
-
|
|
|
|
151
|
|
|
|
-
|
|
Net Client Flows
|
|
|
|
|
342
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
342
|
|
Income (loss) and foreign exchange
|
|
|
|
|
2,530
|
|
|
|
415
|
|
|
|
155
|
|
|
|
277
|
|
|
|
(10
|
)
|
|
|
(12
|
)
|
|
|
1,705
|
|
AUM - Ending Balance
|
|
|
|
$
|
72,431
|
|
|
$
|
6,850
|
|
|
$
|
7,832
|
|
|
$
|
8,310
|
|
|
$
|
9,398
|
|
|
$
|
4,558
|
|
|
$
|
35,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
1,604
|
|
|
$
|
-
|
|
|
$
|
835
|
|
|
$
|
67
|
|
|
$
|
702
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
267
|
|
|
$
|
40
|
|
|
$
|
61
|
|
|
$
|
75
|
|
|
$
|
60
|
|
|
$
|
1
|
|
|
$
|
30
|
|
Incentive income
|
|
|
|
|
187
|
|
|
|
1
|
|
|
|
64
|
|
|
|
47
|
|
|
|
75
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
454
|
|
|
|
41
|
|
|
|
125
|
|
|
|
122
|
|
|
|
135
|
|
|
|
1
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses12
|
|
|
|
|
(243
|
)
|
|
|
(15
|
)
|
|
|
(53
|
)
|
|
|
(55
|
)
|
|
|
(63
|
)
|
|
|
(5
|
)
|
|
|
(29
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(19
|
)
|
|
|
(38
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(300
|
)
|
|
|
(15
|
)
|
|
|
(53
|
)
|
|
|
(74
|
)
|
|
|
(101
|
)
|
|
|
(5
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Manager
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
161
|
|
|
|
26
|
|
|
|
72
|
|
|
|
48
|
|
|
|
34
|
|
|
|
3
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(18
|
)
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
|
143
|
|
|
|
26
|
|
|
|
62
|
|
|
|
43
|
|
|
|
31
|
|
|
|
3
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
20
|
|
|
|
-
|
|
|
|
2
|
|
|
|
3
|
|
|
|
4
|
|
|
|
11
|
|
|
|
-
|
|
Unallocated Investment Income
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
160
|
|
|
$
|
26
|
|
|
$
|
64
|
|
|
$
|
46
|
|
|
$
|
35
|
|
|
$
|
14
|
|
|
$
|
1
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
Private Equity
|
|
Credit Funds
|
|
|
|
|
(in millions)
|
|
|
|
Total
|
|
Funds
|
|
Permanent Capital Vehicles
|
|
Hedge Funds
|
|
PE Funds
|
|
Liquid Hedge Funds
|
|
Logan Circle
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM - January 1, 2016
|
|
|
|
$
|
70,501
|
|
|
$
|
8,991
|
|
|
$
|
6,816
|
|
|
$
|
8,799
|
|
|
$
|
9,308
|
|
|
$
|
5,409
|
|
|
$
|
31,178
|
|
Capital raised
|
|
|
|
|
403
|
|
|
|
-
|
|
|
|
-
|
|
|
|
268
|
|
|
|
56
|
|
|
|
79
|
|
|
|
-
|
|
Equity raised (Permanent Capital Vehicles)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Increase in invested capital
|
|
|
|
|
430
|
|
|
|
18
|
|
|
|
-
|
|
|
|
66
|
|
|
|
346
|
|
|
|
-
|
|
|
|
-
|
|
Capital acquisitions
|
|
|
|
|
682
|
|
|
|
-
|
|
|
|
-
|
|
|
|
682
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Redemptions
|
|
|
|
|
(323
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(64
|
)
|
|
|
-
|
|
|
|
(259
|
)
|
|
|
-
|
|
RCA distributions11
|
|
|
|
|
(173
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(173
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital distributions
|
|
|
|
|
(1,426
|
)
|
|
|
(602
|
)
|
|
|
(60
|
)
|
|
|
(4
|
)
|
|
|
(731
|
)
|
|
|
(29
|
)
|
|
|
-
|
|
Adjustment for capital reset
|
|
|
|
|
(650
|
)
|
|
|
(650
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Crystallized Incentive Income
|
|
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Equity buyback
|
|
|
|
|
(125
|
)
|
|
|
-
|
|
|
|
(125
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Change in AUM of Affiliated Managers and co-managed funds
|
|
|
|
|
(1,158
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(775
|
)
|
|
|
-
|
|
|
|
(383
|
)
|
|
|
-
|
|
Divested Businesses
|
|
|
|
|
(177
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(177
|
)
|
|
|
-
|
|
Net Client Flows
|
|
|
|
|
279
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
279
|
|
Income (loss) and foreign exchange
|
|
|
|
|
1,989
|
|
|
|
(1,117
|
)
|
|
|
13
|
|
|
|
224
|
|
|
|
264
|
|
|
|
(18
|
)
|
|
|
2,623
|
|
AUM - Ending Balance
|
|
|
|
$
|
70,195
|
|
|
$
|
6,640
|
|
|
$
|
6,644
|
|
|
$
|
8,966
|
|
|
$
|
9,243
|
|
|
$
|
4,622
|
|
|
$
|
34,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
434
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
299
|
|
|
$
|
56
|
|
|
$
|
79
|
|
|
$
|
-
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
282
|
|
|
$
|
52
|
|
|
$
|
54
|
|
|
$
|
74
|
|
|
$
|
62
|
|
|
$
|
12
|
|
|
$
|
28
|
|
Incentive income
|
|
|
|
|
195
|
|
|
|
-
|
|
|
|
16
|
|
|
|
40
|
|
|
|
138
|
|
|
|
1
|
|
|
|
-
|
|
Total
|
|
|
|
|
477
|
|
|
|
52
|
|
|
|
70
|
|
|
|
114
|
|
|
|
200
|
|
|
|
13
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(215
|
)
|
|
|
(20
|
)
|
|
|
(37
|
)
|
|
|
(55
|
)
|
|
|
(61
|
)
|
|
|
(16
|
)
|
|
|
(26
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(89
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(14
|
)
|
|
|
(70
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
Total
|
|
|
|
|
(304
|
)
|
|
|
(20
|
)
|
|
|
(41
|
)
|
|
|
(69
|
)
|
|
|
(131
|
)
|
|
|
(17
|
)
|
|
|
(26
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Managers
|
|
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
175
|
|
|
|
32
|
|
|
|
29
|
|
|
|
45
|
|
|
|
69
|
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(14
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
|
161
|
|
|
|
32
|
|
|
|
25
|
|
|
|
39
|
|
|
|
65
|
|
|
|
(2
|
)
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
11
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
1
|
|
|
|
10
|
|
|
|
(2
|
)
|
|
|
1
|
|
Unallocated Investment Income
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated Expenses
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
165
|
|
|
$
|
31
|
|
|
$
|
27
|
|
|
$
|
40
|
|
|
$
|
75
|
|
|
$
|
(4
|
)
|
|
$
|
3
|
|
Pre-tax Distributable Earnings per Dividend Paying Share
|
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
11
|
Represents distributions from (i) assets held by redeeming capital
accounts in the Drawbridge Special Opportunities Funds, and (ii) the
Value Recovery Funds.
|
12
|
Includes Unallocated Expenses of $23 million incurred by Fortress
related to the proposed acquisition by SoftBank.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Equity Funds
|
|
|
|
$
|
7,179
|
|
|
$
|
6,640
|
|
|
$
|
7,071
|
|
|
$
|
6,532
|
|
|
$
|
6,532
|
|
|
$
|
6,695
|
|
|
$
|
6,850
|
|
Permanent Capital Vehicles
|
|
|
|
|
6,773
|
|
|
|
6,644
|
|
|
|
6,846
|
|
|
|
6,961
|
|
|
|
6,961
|
|
|
|
7,816
|
|
|
|
7,832
|
|
Credit Hedge Funds13
|
|
|
|
|
9,336
|
|
|
|
8,966
|
|
|
|
8,804
|
|
|
|
8,803
|
|
|
|
8,803
|
|
|
|
8,633
|
|
|
|
8,310
|
|
Credit Private Equity Funds
|
|
|
|
|
9,353
|
|
|
|
9,243
|
|
|
|
9,483
|
|
|
|
9,306
|
|
|
|
9,306
|
|
|
|
9,098
|
|
|
|
9,398
|
|
Liquid Hedge Funds14
|
|
|
|
|
5,195
|
|
|
|
4,622
|
|
|
|
4,541
|
|
|
|
4,589
|
|
|
|
4,589
|
|
|
|
4,198
|
|
|
|
4,558
|
|
Logan Circle
|
|
|
|
|
32,801
|
|
|
|
34,080
|
|
|
|
33,386
|
|
|
|
33,436
|
|
|
|
33,436
|
|
|
|
33,719
|
|
|
|
35,483
|
|
AUM - Ending Balance
|
|
|
|
$
|
70,637
|
|
|
$
|
70,195
|
|
|
$
|
70,131
|
|
|
$
|
69,627
|
|
|
$
|
69,627
|
|
|
$
|
70,159
|
|
|
$
|
72,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
348
|
|
|
$
|
86
|
|
|
$
|
399
|
|
|
$
|
437
|
|
|
$
|
1,270
|
|
|
$
|
1,550
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
141
|
|
|
$
|
141
|
|
|
$
|
136
|
|
|
$
|
133
|
|
|
$
|
551
|
|
|
$
|
133
|
|
|
$
|
134
|
|
Incentive income
|
|
|
|
|
64
|
|
|
|
131
|
|
|
|
113
|
|
|
|
133
|
|
|
|
441
|
|
|
|
103
|
|
|
|
84
|
|
Total
|
|
|
|
|
205
|
|
|
|
272
|
|
|
|
249
|
|
|
|
266
|
|
|
|
992
|
|
|
|
236
|
|
|
|
218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses15
|
|
|
|
|
(109
|
)
|
|
|
(106
|
)
|
|
|
(104
|
)
|
|
|
(119
|
)
|
|
|
(438
|
)
|
|
|
(127
|
)
|
|
|
(116
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(31
|
)
|
|
|
(58
|
)
|
|
|
(50
|
)
|
|
|
(49
|
)
|
|
|
(188
|
)
|
|
|
(40
|
)
|
|
|
(17
|
)
|
Total
|
|
|
|
|
(140
|
)
|
|
|
(164
|
)
|
|
|
(154
|
)
|
|
|
(168
|
)
|
|
|
(626
|
)
|
|
|
(167
|
)
|
|
|
(133
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Manager
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
10
|
|
|
|
15
|
|
|
|
1
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
66
|
|
|
|
109
|
|
|
|
98
|
|
|
|
108
|
|
|
|
381
|
|
|
|
70
|
|
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(3
|
)
|
|
|
(11
|
)
|
|
|
(10
|
)
|
|
|
(12
|
)
|
|
|
(36
|
)
|
|
|
(9
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
63
|
|
|
$
|
98
|
|
|
$
|
88
|
|
|
$
|
96
|
|
|
$
|
345
|
|
|
$
|
61
|
|
|
$
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
1
|
|
|
|
3
|
|
|
|
2
|
|
|
|
11
|
|
|
|
17
|
|
|
|
13
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
64
|
|
|
$
|
101
|
|
|
$
|
90
|
|
|
$
|
107
|
|
|
$
|
362
|
|
|
$
|
74
|
|
|
$
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
13
|
The Assets Under Management presented for the Credit Hedge Funds
includes $1,433 million related to co-managed funds as of 2Q 2017.
|
14
|
The Assets Under Management presented for the Liquid Hedge Funds
includes $4,516 million related to the Affiliated Manager as of 2Q
2017.
|
15
|
Includes Unallocated Expenses of $21 million and $2 million
incurred by Fortress related to the proposed acquisition by
SoftBank in 1Q 2017 and in 2Q 2017, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main Funds16
|
|
|
|
$
|
4,907
|
|
|
$
|
4,479
|
|
|
$
|
4,980
|
|
|
$
|
4,502
|
|
|
$
|
4,502
|
|
|
$
|
4,676
|
|
|
$
|
4,660
|
|
Coinvestment Funds17
|
|
|
|
|
1,552
|
|
|
|
1,463
|
|
|
|
1,412
|
|
|
|
1,374
|
|
|
|
1,374
|
|
|
|
1,378
|
|
|
|
1,617
|
|
MSR Opportunities Funds18
|
|
|
|
|
333
|
|
|
|
309
|
|
|
|
285
|
|
|
|
261
|
|
|
|
261
|
|
|
|
239
|
|
|
|
220
|
|
Italian NPL Opportunities Fund
|
|
|
|
|
231
|
|
|
|
225
|
|
|
|
228
|
|
|
|
213
|
|
|
|
213
|
|
|
|
216
|
|
|
|
163
|
|
Fortress Equity Partners
|
|
|
|
|
156
|
|
|
|
164
|
|
|
|
166
|
|
|
|
182
|
|
|
|
182
|
|
|
|
186
|
|
|
|
190
|
|
AUM - Ending Balance
|
|
|
|
$
|
7,179
|
|
|
$
|
6,640
|
|
|
$
|
7,071
|
|
|
$
|
6,532
|
|
|
$
|
6,532
|
|
|
$
|
6,695
|
|
|
$
|
6,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
94
|
|
|
$
|
20
|
|
|
$
|
20
|
|
Incentive income
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
Total
|
|
|
|
|
26
|
|
|
|
26
|
|
|
|
21
|
|
|
|
21
|
|
|
|
94
|
|
|
|
20
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
(8
|
)
|
|
|
(8
|
)
|
|
|
(36
|
)
|
|
|
(8
|
)
|
|
|
(7
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
(8
|
)
|
|
|
(8
|
)
|
|
|
(36
|
)
|
|
|
(8
|
)
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
16
|
|
|
|
16
|
|
|
|
13
|
|
|
|
13
|
|
|
|
58
|
|
|
|
12
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
58
|
|
|
$
|
12
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
2
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
14
|
|
|
$
|
17
|
|
|
$
|
13
|
|
|
$
|
15
|
|
|
$
|
59
|
|
|
$
|
12
|
|
|
$
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
16
|
Combined AUM for Fund IV and Fund V.
|
17
|
Combined AUM for Fund IV Coinvestment, Fund V Coinvestment, FHIF
and FECI.
|
18
|
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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drive Shack Inc.
|
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
$
|
680
|
|
|
$
|
681
|
|
New Residential Investment Corp.
|
|
|
|
|
2,689
|
|
|
|
2,689
|
|
|
|
2,948
|
|
|
|
2,948
|
|
|
|
2,948
|
|
|
|
3,782
|
|
|
|
3,782
|
|
Eurocastle Investment Limited
|
|
|
|
|
608
|
|
|
|
510
|
|
|
|
486
|
|
|
|
488
|
|
|
|
488
|
|
|
|
587
|
|
|
|
627
|
|
New Media Investment Group Inc.
|
|
|
|
|
637
|
|
|
|
637
|
|
|
|
637
|
|
|
|
772
|
|
|
|
772
|
|
|
|
712
|
|
|
|
707
|
|
New Senior Investment Group Inc.
|
|
|
|
|
1,024
|
|
|
|
1,024
|
|
|
|
1,024
|
|
|
|
1,024
|
|
|
|
1,024
|
|
|
|
1,020
|
|
|
|
1,020
|
|
Fortress Transportation and Infrastructure Investors LLC
|
|
|
|
|
1,135
|
|
|
|
1,104
|
|
|
|
1,071
|
|
|
|
1,049
|
|
|
|
1,049
|
|
|
|
1,035
|
|
|
|
1,015
|
|
AUM - Ending Balance
|
|
|
|
$
|
6,773
|
|
|
$
|
6,644
|
|
|
$
|
6,846
|
|
|
$
|
6,961
|
|
|
$
|
6,961
|
|
|
$
|
7,816
|
|
|
$
|
7,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
279
|
|
|
$
|
135
|
|
|
$
|
414
|
|
|
$
|
835
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
27
|
|
|
$
|
27
|
|
|
$
|
28
|
|
|
$
|
28
|
|
|
$
|
110
|
|
|
$
|
31
|
|
|
$
|
30
|
|
Incentive income
|
|
|
|
|
2
|
|
|
|
14
|
|
|
|
10
|
|
|
|
41
|
|
|
|
67
|
|
|
|
16
|
|
|
|
48
|
|
Total
|
|
|
|
|
29
|
|
|
|
41
|
|
|
|
38
|
|
|
|
69
|
|
|
|
177
|
|
|
|
47
|
|
|
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(19
|
)
|
|
|
(18
|
)
|
|
|
(17
|
)
|
|
|
(26
|
)
|
|
|
(80
|
)
|
|
|
(24
|
)
|
|
|
(29
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(15
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(20
|
)
|
|
|
(21
|
)
|
|
|
(22
|
)
|
|
|
(32
|
)
|
|
|
(95
|
)
|
|
|
(24
|
)
|
|
|
(29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
9
|
|
|
|
20
|
|
|
|
16
|
|
|
|
37
|
|
|
|
82
|
|
|
|
23
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
(12
|
)
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
8
|
|
|
$
|
17
|
|
|
$
|
14
|
|
|
$
|
31
|
|
|
$
|
70
|
|
|
$
|
19
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
3
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
9
|
|
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
32
|
|
|
$
|
73
|
|
|
$
|
20
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Investment Group LLC
|
Exhibit 2-d
|
Assets Under Management and Fund Management DE
|
(dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
Credit Hedge Funds
|
|
|
|
March 31,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Funds19
|
|
|
|
$
|
5,816
|
|
|
$
|
5,928
|
|
|
$
|
6,019
|
|
|
$
|
6,153
|
|
|
$
|
6,153
|
|
|
$
|
6,054
|
|
|
$
|
6,010
|
|
Third Party Originated Funds20
|
|
|
|
|
815
|
|
|
|
837
|
|
|
|
821
|
|
|
|
840
|
|
|
|
840
|
|
|
|
831
|
|
|
|
706
|
|
Japan Income Fund
|
|
|
|
|
116
|
|
|
|
123
|
|
|
|
125
|
|
|
|
114
|
|
|
|
114
|
|
|
|
143
|
|
|
|
161
|
|
Co-Managed Funds21
|
|
|
|
|
2,589
|
|
|
|
2,078
|
|
|
|
1,838
|
|
|
|
1,696
|
|
|
|
1,696
|
|
|
|
1,605
|
|
|
|
1,433
|
|
AUM - Ending Balance
|
|
|
|
$
|
9,336
|
|
|
$
|
8,966
|
|
|
$
|
8,804
|
|
|
$
|
8,803
|
|
|
$
|
8,803
|
|
|
$
|
8,633
|
|
|
$
|
8,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
272
|
|
|
$
|
27
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
299
|
|
|
$
|
13
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
37
|
|
|
$
|
37
|
|
|
$
|
39
|
|
|
$
|
37
|
|
|
$
|
150
|
|
|
$
|
37
|
|
|
$
|
38
|
|
Incentive income
|
|
|
|
|
7
|
|
|
|
33
|
|
|
|
44
|
|
|
|
47
|
|
|
|
131
|
|
|
|
32
|
|
|
|
15
|
|
Total
|
|
|
|
|
44
|
|
|
|
70
|
|
|
|
83
|
|
|
|
84
|
|
|
|
281
|
|
|
|
69
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(26
|
)
|
|
|
(29
|
)
|
|
|
(25
|
)
|
|
|
(27
|
)
|
|
|
(107
|
)
|
|
|
(27
|
)
|
|
|
(28
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(3
|
)
|
|
|
(11
|
)
|
|
|
(16
|
)
|
|
|
(20
|
)
|
|
|
(50
|
)
|
|
|
(13
|
)
|
|
|
(6
|
)
|
Total
|
|
|
|
|
(29
|
)
|
|
|
(40
|
)
|
|
|
(41
|
)
|
|
|
(47
|
)
|
|
|
(157
|
)
|
|
|
(40
|
)
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
15
|
|
|
|
30
|
|
|
|
42
|
|
|
|
37
|
|
|
|
124
|
|
|
|
29
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(5
|
)
|
|
|
(19
|
)
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
14
|
|
|
$
|
25
|
|
|
$
|
34
|
|
|
$
|
32
|
|
|
$
|
105
|
|
|
$
|
27
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
-
|
|
|
|
1
|
|
|
|
2
|
|
|
|
3
|
|
|
|
6
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
14
|
|
|
$
|
26
|
|
|
$
|
36
|
|
|
$
|
35
|
|
|
$
|
111
|
|
|
$
|
28
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Special Opportunities Fund LP
|
|
|
|
|
0.6
|
%
|
|
|
2.8
|
%
|
|
|
2.7
|
%
|
|
|
3.3
|
%
|
|
|
9.7
|
%
|
|
|
2.4
|
%
|
|
|
1.2
|
%
|
Drawbridge Special Opportunities Fund Ltd
|
|
|
|
|
(1.3
|
%)
|
|
|
1.5
|
%
|
|
|
3.1
|
%
|
|
|
2.6
|
%
|
|
|
5.9
|
%
|
|
|
2.2
|
%
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
19
|
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. Worden Fund II LP was closed in 1Q 2016.
|
20
|
Combined AUM for the third party originated JP Funds and third
party originated Value Recovery Funds.
|
21
|
Combined AUM for the Mount Kellett investment funds and related
accounts.
|
22
|
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, December 31, 2014, December 31, 2015 and December 31,
2016 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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Dated Value Funds23
|
|
|
|
$
|
292
|
|
|
$
|
203
|
|
|
$
|
186
|
|
|
$
|
186
|
|
|
$
|
186
|
|
|
$
|
186
|
|
|
$
|
186
|
|
Real Assets Funds
|
|
|
|
|
50
|
|
|
|
33
|
|
|
|
33
|
|
|
|
33
|
|
|
|
33
|
|
|
|
33
|
|
|
|
-
|
|
Fortress Credit Opportunities Funds24
|
|
|
|
|
6,894
|
|
|
|
6,765
|
|
|
|
7,031
|
|
|
|
7,112
|
|
|
|
7,112
|
|
|
|
6,773
|
|
|
|
7,145
|
|
Japan Opportunity Funds25
|
|
|
|
|
2,117
|
|
|
|
2,242
|
|
|
|
2,234
|
|
|
|
1,975
|
|
|
|
1,975
|
|
|
|
2,107
|
|
|
|
2,067
|
|
AUM - Ending Balance
|
|
|
|
$
|
9,353
|
|
|
$
|
9,243
|
|
|
$
|
9,483
|
|
|
$
|
9,306
|
|
|
$
|
9,306
|
|
|
$
|
9,098
|
|
|
$
|
9,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
13
|
|
|
$
|
43
|
|
|
$
|
120
|
|
|
$
|
302
|
|
|
$
|
478
|
|
|
$
|
702
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
31
|
|
|
$
|
31
|
|
|
$
|
32
|
|
|
$
|
32
|
|
|
$
|
126
|
|
|
$
|
30
|
|
|
$
|
30
|
|
Incentive income
|
|
|
|
|
53
|
|
|
|
85
|
|
|
|
59
|
|
|
|
44
|
|
|
|
241
|
|
|
|
55
|
|
|
|
20
|
|
Total
|
|
|
|
|
84
|
|
|
|
116
|
|
|
|
91
|
|
|
|
76
|
|
|
|
367
|
|
|
|
85
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(32
|
)
|
|
|
(29
|
)
|
|
|
(34
|
)
|
|
|
(38
|
)
|
|
|
(133
|
)
|
|
|
(31
|
)
|
|
|
(32
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(26
|
)
|
|
|
(44
|
)
|
|
|
(29
|
)
|
|
|
(23
|
)
|
|
|
(122
|
)
|
|
|
(27
|
)
|
|
|
(11
|
)
|
Total
|
|
|
|
|
(58
|
)
|
|
|
(73
|
)
|
|
|
(63
|
)
|
|
|
(61
|
)
|
|
|
(255
|
)
|
|
|
(58
|
)
|
|
|
(43
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
26
|
|
|
|
43
|
|
|
|
28
|
|
|
|
15
|
|
|
|
112
|
|
|
|
27
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
25
|
|
|
$
|
40
|
|
|
$
|
28
|
|
|
$
|
14
|
|
|
$
|
107
|
|
|
$
|
24
|
|
|
$
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
3
|
|
|
|
7
|
|
|
|
4
|
|
|
|
6
|
|
|
|
20
|
|
|
|
3
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
28
|
|
|
$
|
47
|
|
|
$
|
32
|
|
|
$
|
20
|
|
|
$
|
127
|
|
|
$
|
27
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
23
|
Combined AUM for Long Dated Value Fund I, Long Dated Value Fund
II, Long Dated Value Fund III and LDVF Patent Fund.
|
24
|
Combined AUM for Credit Opportunities Fund, Credit Opportunities
Fund II, Credit Opportunities Fund III, Credit Opportunities Fund
IV, FCO Managed Accounts, Global Opportunities Funds, Life
Settlements Fund, Life Settlements Fund MA, SIP managed account,
Real Estate Opportunities Fund, Real Estate Opportunities Fund II,
Real Estate Opportunities REOC Fund and Secured Lending Fund I.
|
25
|
Combined AUM for Japan Opportunity Fund, Japan Opportunity Fund II
(Dollar), Japan Opportunity Fund II (Yen), Japan Opportunity Fund
III (Dollar), Japan Opportunity Fund III (Yen), FJOF3 Residential
Coinvestment Fund (Dollar) and FJOF3 Residential Coinvestment Fund
(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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawbridge Global Macro Funds26
|
|
|
|
|
116
|
|
|
|
112
|
|
|
|
101
|
|
|
|
39
|
|
|
|
39
|
|
|
|
39
|
|
|
|
35
|
|
Fortress Convex Asia Funds27
|
|
|
|
|
176
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Fortress Centaurus Global Funds28
|
|
|
|
|
206
|
|
|
|
182
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Fortress Partners Funds29
|
|
|
|
|
228
|
|
|
|
215
|
|
|
|
199
|
|
|
|
186
|
|
|
|
186
|
|
|
|
9
|
|
|
|
7
|
|
Affiliated Manager30
|
|
|
|
|
4,469
|
|
|
|
4,113
|
|
|
|
4,240
|
|
|
|
4,365
|
|
|
|
4,365
|
|
|
|
4,150
|
|
|
|
4,516
|
|
AUM - Ending Balance
|
|
|
|
$
|
5,195
|
|
|
$
|
4,622
|
|
|
$
|
4,541
|
|
|
$
|
4,589
|
|
|
$
|
4,589
|
|
|
$
|
4,198
|
|
|
$
|
4,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third-Party Capital Raised
|
|
|
|
$
|
63
|
|
|
$
|
16
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
79
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
14
|
|
|
$
|
-
|
|
|
$
|
1
|
|
Incentive income
|
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
8
|
|
|
|
5
|
|
|
|
1
|
|
|
|
1
|
|
|
|
15
|
|
|
|
-
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
|
(28
|
)
|
|
|
(2
|
)
|
|
|
(3
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(10
|
)
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
|
(29
|
)
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings From Affiliated Manager
|
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
10
|
|
|
|
15
|
|
|
|
1
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE (before Principal Performance Payments)
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
6
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Performance Payments
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
3
|
|
|
|
(5
|
)
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
9
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
|
$
|
7
|
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Returns31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortress Convex Asia Fund Ltd
|
|
|
|
|
1.5
|
%
|
|
|
(1.2
|
%)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
0.3
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
Fortress Centaurus Global Fund Ltd
|
|
|
|
|
1.9
|
%
|
|
|
(6.1
|
%)
|
|
|
(3.3
|
%)
|
|
|
N/A
|
|
|
|
(7.5
|
%)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
26
|
Combined AUM for Drawbridge Global Macro Fund LP and Drawbridge
Global Macro Intermediate Fund LP.
|
27
|
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. In 2Q 2016, Fortress transferred its interests
as general partner and investment manager of the Fortress Convex
Asia Funds to a third party.
|
28
|
Combined AUM for Fortress Centaurus Global Fund LP and Fortress
Centaurus Global Fund Ltd. In 3Q 2016, Fortress closed the
Fortress Centaurus Global Funds.
|
29
|
Combined AUM for Fortress Partners Fund LP and Fortress Partners
Offshore Fund LP.
|
30
|
In 1Q 2015, the Fortress Asia Macro Funds and related managed
accounts transitioned to Graticule Asset Management and became an
Affiliated Manager.
|
31
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|
AUM - Ending Balance
|
|
|
|
$
|
32,801
|
|
|
$
|
34,080
|
|
|
$
|
33,386
|
|
|
$
|
33,436
|
|
|
$
|
33,436
|
|
|
$
|
33,719
|
|
|
$
|
35,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Client Flows
|
|
|
|
$
|
261
|
|
|
$
|
18
|
|
|
$
|
(1,453
|
)
|
|
$
|
1,049
|
|
|
$
|
(125
|
)
|
|
$
|
(362
|
)
|
|
$
|
704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
57
|
|
|
$
|
15
|
|
|
$
|
15
|
|
Incentive income
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
14
|
|
|
|
14
|
|
|
|
15
|
|
|
|
15
|
|
|
|
58
|
|
|
|
15
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
|
(54
|
)
|
|
|
(14
|
)
|
|
|
(15
|
)
|
Profit sharing compensation expenses
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
|
(54
|
)
|
|
|
(14
|
)
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund Management DE
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
-
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
-
|
|
|
|
1
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
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
|
|
|
|
|
|
|
March 31,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
Full Year
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
Six Months Ended
June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income (Loss)
|
|
|
|
$
|
(16
|
)
|
|
$
|
(27
|
)
|
|
$
|
58
|
|
|
$
|
165
|
|
|
$
|
181
|
|
|
$
|
(7
|
)
|
|
$
|
32
|
|
|
$
|
25
|
|
Principals' and Others' Interests in (Income) Loss of Consolidated
Subsidiaries
|
|
|
|
7
|
|
|
|
13
|
|
|
|
(28
|
)
|
|
|
(79
|
)
|
|
|
(87
|
)
|
|
|
4
|
|
|
|
(17
|
)
|
|
|
(14
|
)
|
Redeemable non-controlling interests in Income (Loss)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
GAAP Net Income (Loss) Attributable to Class A Shareholders
|
|
|
$
|
(9
|
)
|
|
$
|
(14
|
)
|
|
$
|
31
|
|
|
$
|
86
|
|
|
$
|
94
|
|
|
$
|
(3
|
)
|
|
$
|
15
|
|
|
$
|
11
|
|
Private Equity incentive income
|
|
|
|
|
23
|
|
|
|
73
|
|
|
|
8
|
|
|
|
(38
|
)
|
|
|
66
|
|
|
|
41
|
|
|
|
12
|
|
|
|
53
|
|
Hedge Fund, PCV and Logan Circle incentive income
|
|
|
|
8
|
|
|
|
26
|
|
|
|
35
|
|
|
|
(69
|
)
|
|
|
-
|
|
|
|
31
|
|
|
|
16
|
|
|
|
47
|
|
Incentive income received related to exercise of options
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Distributions of earnings from equity method investees
|
|
|
|
3
|
|
|
|
8
|
|
|
|
4
|
|
|
|
11
|
|
|
|
26
|
|
|
|
13
|
|
|
|
3
|
|
|
|
17
|
|
Losses (earnings) from equity method investees
|
|
|
|
|
24
|
|
|
|
8
|
|
|
|
(24
|
)
|
|
|
30
|
|
|
|
38
|
|
|
|
22
|
|
|
|
(20
|
)
|
|
|
2
|
|
Losses (gains) on options
|
|
|
|
|
2
|
|
|
|
(12
|
)
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
(23
|
)
|
|
|
(27
|
)
|
|
|
23
|
|
|
|
(4
|
)
|
Losses (gains) on other Investments
|
|
|
|
|
15
|
|
|
|
19
|
|
|
|
1
|
|
|
|
(37
|
)
|
|
|
(2
|
)
|
|
|
6
|
|
|
|
(3
|
)
|
|
|
3
|
|
Impairment of investments
|
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Adjust income from the receipt of options
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
Amortization of intangible assets and impairment of goodwill
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
Employee, Principal and director compensation
|
|
|
|
|
3
|
|
|
|
2
|
|
|
|
2
|
|
|
|
37
|
|
|
|
44
|
|
|
|
3
|
|
|
|
10
|
|
|
|
13
|
|
Adjust non-controlling interests related to Fortress Operating Group
units
|
|
|
|
(8
|
)
|
|
|
(12
|
)
|
|
|
27
|
|
|
|
79
|
|
|
|
86
|
|
|
|
(4
|
)
|
|
|
17
|
|
|
|
13
|
|
Tax receivable agreement liability reduction
|
|
|
|
|
3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
|
7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Adjust income taxes and other tax related items
|
|
|
|
|
1
|
|
|
|
4
|
|
|
|
7
|
|
|
|
16
|
|
|
|
28
|
|
|
|
(1
|
)
|
|
|
13
|
|
|
|
12
|
|
Pre-tax Distributable Earnings
|
|
|
|
$
|
64
|
|
|
$
|
101
|
|
|
$
|
90
|
|
|
$
|
107
|
|
|
$
|
362
|
|
|
$
|
74
|
|
|
$
|
86
|
|
|
$
|
160
|
|
Investment Loss (income)
|
|
|
|
|
(4
|
)
|
|
|
(6
|
)
|
|
|
(4
|
)
|
|
|
(13
|
)
|
|
|
(27
|
)
|
|
|
(15
|
)
|
|
|
(6
|
)
|
|
|
(21
|
)
|
Interest Expense
|
|
|
|
|
3
|
|
|
|
3
|
|
|
|
2
|
|
|
|
2
|
|
|
|
10
|
|
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
Fund Management DE
|
|
|
|
$
|
63
|
|
|
$
|
98
|
|
|
$
|
88
|
|
|
$
|
96
|
|
|
$
|
345
|
|
|
$
|
61
|
|
|
$
|
82
|
|
|
$
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenues
|
|
|
|
$
|
232
|
|
|
$
|
232
|
|
|
$
|
261
|
|
|
$
|
438
|
|
|
$
|
1,164
|
|
|
$
|
232
|
|
|
$
|
247
|
|
|
$
|
479
|
|
Adjust management fees
|
|
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
Adjust incentive income
|
|
|
|
|
31
|
|
|
|
100
|
|
|
|
65
|
|
|
|
(107
|
)
|
|
|
89
|
|
|
|
72
|
|
|
|
28
|
|
|
|
100
|
|
Adjust income from the receipt of options
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
Other revenues
|
|
|
|
|
(59
|
)
|
|
|
(60
|
)
|
|
|
(75
|
)
|
|
|
(62
|
)
|
|
|
(257
|
)
|
|
|
(61
|
)
|
|
|
(57
|
)
|
|
|
(118
|
)
|
Segment Revenues
|
|
|
|
$
|
205
|
|
|
$
|
272
|
|
|
$
|
249
|
|
|
$
|
266
|
|
|
$
|
992
|
|
|
$
|
236
|
|
|
$
|
218
|
|
|
$
|
454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Expenses
|
|
|
|
$
|
207
|
|
|
$
|
238
|
|
|
$
|
226
|
|
|
$
|
280
|
|
|
$
|
951
|
|
|
$
|
241
|
|
|
$
|
210
|
|
|
$
|
451
|
|
Adjust interest expense
|
|
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(10
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(4
|
)
|
Adjust employee, Principal and director compensation
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(35
|
)
|
|
|
(39
|
)
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
(8
|
)
|
Adjust amortization of intangible assets and impairment of goodwill
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Adjust expense reimbursements from affiliates and non-affiliates
|
|
|
|
(57
|
)
|
|
|
(58
|
)
|
|
|
(58
|
)
|
|
|
(60
|
)
|
|
|
(233
|
)
|
|
|
(58
|
)
|
|
|
(57
|
)
|
|
|
(115
|
)
|
Adjust Principal Performance Payments
|
|
|
|
|
(4
|
)
|
|
|
(12
|
)
|
|
|
(10
|
)
|
|
|
(14
|
)
|
|
|
(40
|
)
|
|
|
(11
|
)
|
|
|
(12
|
)
|
|
|
(23
|
)
|
Segment Expenses
|
|
|
|
$
|
140
|
|
|
$
|
164
|
|
|
$
|
154
|
|
|
$
|
168
|
|
|
$
|
626
|
|
|
$
|
167
|
|
|
$
|
133
|
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
''Distributable earnings'' is Fortress's supplemental measure of
operating performance used by management in analyzing segment and
overall results. 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, 2017.
Fortress's management uses distributable earnings:
-
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;
-
as a valuation measure in strategic analyses in connection with the
performance of its funds and the performance of its employees; and
-
to assist in evaluating its periodic distributions to equity holders.
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for Basic EPS)
|
|
|
|
220,259,863
|
|
|
|
216,733,660
|
|
|
220,377,475
|
|
|
|
218,790,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average fully vested restricted Class A share units with
dividend equivalent rights
|
|
|
|
(1,907,872
|
)
|
|
|
(291,469
|
)
|
|
(2,208,686
|
)
|
|
|
(984,000
|
)
|
Weighted average restricted Class A shares
|
|
|
|
(934,192
|
)
|
|
|
(810,882
|
)
|
|
(933,669
|
)
|
|
|
(790,155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding
|
|
|
|
217,417,799
|
|
|
|
215,631,309
|
|
|
217,235,120
|
|
|
|
217,016,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average restricted Class A shares32
|
|
|
|
1,907,872
|
|
|
|
810,882
|
|
|
2,208,686
|
|
|
|
790,155
|
|
Weighted average fully vested restricted Class A share units which
are entitled to dividend equivalent payments
|
|
|
|
934,192
|
|
|
|
291,469
|
|
|
933,669
|
|
|
|
984,000
|
|
Weighted average unvested restricted Class A share units which are
entitled to dividend equivalent payments
|
|
|
|
7,461,953
|
|
|
|
8,063,715
|
|
|
7,363,765
|
|
|
|
7,940,803
|
|
Weighted average Fortress Operating Group units
|
|
|
|
169,207,335
|
|
|
|
169,514,478
|
|
|
169,207,335
|
|
|
|
169,514,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Class A Shares Outstanding (Used for DEPS)
|
|
|
|
396,929,151
|
|
|
|
394,311,853
|
|
|
396,948,575
|
|
|
|
396,245,814
|
|
Weighted average vested and unvested restricted Class A share units
which are not entitled to dividend equivalent payments
|
|
|
|
8,493,099
|
|
|
|
9,344,273
|
|
|
8,251,752
|
|
|
|
9,050,075
|
|
Weighted Average Fully Diluted Shares and Units Outstanding
(Used for Diluted DEPS)
|
|
|
|
405,422,250
|
|
|
|
403,656,126
|
|
|
405,200,327
|
|
|
|
405,295,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________________________
|
32
|
Includes both fully vested and unvested restricted Class A shares.
|
|
|
"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. 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.
|
|
|
|
|
|
|
|
|
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, 2017
|
|
|
As of December 31, 2016
|
|
|
|
|
GAAP
Book Value
|
|
Net Cash and Investments
|
|
|
GAAP
Book Value
|
|
Net Cash and Investments
|
Cash and Cash equivalents
|
|
|
|
$
|
341,712
|
|
$
|
341,712
|
|
|
$
|
397,125
|
|
$
|
397,125
|
Investments
|
|
|
|
|
849,660
|
|
|
849,660
|
|
|
|
880,001
|
|
|
880,001
|
Investments in options33
|
|
|
|
|
65,494
|
|
|
-
|
|
|
|
53,206
|
|
|
-
|
Due from Affiliates
|
|
|
|
|
231,611
|
|
|
-
|
|
|
|
320,633
|
|
|
-
|
Deferred Tax Asset, net
|
|
|
|
|
417,652
|
|
|
-
|
|
|
|
424,244
|
|
|
-
|
Other Assets
|
|
|
|
|
134,983
|
|
|
-
|
|
|
|
126,165
|
|
|
-
|
Total Assets
|
|
|
|
|
2,041,112
|
|
|
1,191,372
|
|
|
|
2,201,374
|
|
|
1,277,126
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Obligations Payable
|
|
|
|
$
|
182,838
|
|
$
|
182,838
|
|
|
$
|
182,838
|
|
$
|
182,838
|
Accrued Compensation and Benefits
|
|
|
|
|
219,186
|
|
|
-
|
|
|
|
370,413
|
|
|
-
|
Due to Affiliates
|
|
|
|
|
335,662
|
|
|
-
|
|
|
|
360,769
|
|
|
-
|
Deferred Incentive Income
|
|
|
|
|
380,560
|
|
|
-
|
|
|
|
330,354
|
|
|
-
|
Other Liabilities
|
|
|
|
|
90,296
|
|
|
-
|
|
|
|
69,255
|
|
|
-
|
Total Liabilities
|
|
|
|
|
1,208,542
|
|
|
182,838
|
|
|
|
1,313,629
|
|
|
182,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
|
|
$
|
832,570
|
|
$
|
1,008,534
|
|
|
$
|
887,745
|
|
$
|
1,094,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
Dividend Paying Shares and Units Outstanding
|
|
|
Shares
Outstanding
|
|
Dividend Paying Shares and Units Outstanding
|
Class A Shares
|
|
|
|
|
218,434
|
|
|
218,434
|
|
|
|
216,005
|
|
|
216,005
|
Restricted Class A Shares
|
|
|
|
|
934
|
|
|
934
|
|
|
|
887
|
|
|
887
|
Fortress Operating Group Units
|
|
|
|
|
169,207
|
|
|
169,207
|
|
|
|
169,207
|
|
|
169,207
|
Fully Vested Class A Shares - Dividend Paying
|
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
468
|
Unvested Class A Shares - Dividend Paying
|
|
|
|
|
-
|
|
|
7,462
|
|
|
|
-
|
|
|
8,064
|
Shares Outstanding
|
|
|
|
|
388,575
|
|
|
396,037
|
|
|
|
386,099
|
|
|
394,631
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
|
$
|
2.14
|
|
$
|
2.55
|
|
|
$
|
2.30
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
__________________________________
|
33
|
The intrinsic value of options in equity method investees totaled
$32 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, 2017 closing price and differs from the
fair value derived from option pricing models included in the
table above.
|
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