Fortress Investment Group LLC

CIK:0001380393|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Management fees: affiliates	$ 117,229	$ 123,491	$ 363,108	$ 377,269
Management fees: non-affiliates	12,435	14,455	41,132	42,066
Incentive income: affiliates	59,434	17,396	145,219	71,334
Incentive income: non-affiliates	570	31,000	1,761	40,862
Expense reimbursements: affiliates	55,073	54,602	167,860	166,041
Expense reimbursements: non-affiliates	271	1,258	1,182	4,064
Other revenues (affiliate portion disclosed in Note 6)	9,351	18,943	13,318	23,832
Total Revenues	254,363	261,145	733,580	725,468
Expenses
Compensation and benefits	200,645	184,159	546,037	539,643
General, administrative and other	41,048	33,046	133,573	104,942
Depreciation and amortization	4,135	5,275	13,010	17,362
Interest expense	2,246	2,643	6,451	8,662
Total Expenses	248,074	225,123	699,071	670,609
Other Income (Loss)
Gains (losses) (affiliate portion disclosed in Note 3)	19,640	1,862	21,706	(22,077)
Tax receivable agreement liability adjustment	0	0	0	(2,699)
Earnings (losses) from equity method investees	22,577	27,467	29,221	(2,420)
Gain on sale of Logan Circle (see Note 1)	188,638	0	188,638	0
Total Other Income (Loss)	230,855	29,329	239,565	(27,196)
Income (Loss) Before Income Taxes	237,144	65,351	274,074	27,663
Income tax benefit (expense)	(46,840)	(7,008)	(58,795)	(11,863)
Net Income (Loss)	190,304	58,343	215,279	15,800
Allocation of Net Income (Loss):
Principals' and Others' Interests in Income (Loss) of Consolidated Subsidiaries	$ 101,484	$ 27,181	$ 115,200	$ 7,609
Dividends declared per Class A share (in dollars per share)	$ 0	$ 0.09	$ 0.18	$ 0.37
Earnings (Loss) Per Class A share
Net income (loss) per Class A share, basic (in dollars per share)	0.39	0.14	0.44	0.03
Net income (loss) per Class A share, diluted (in dollars per share)	$ 0.37	$ 0.07	$ 0.43	$ 0.02
Weighted average number of Class A shares outstanding, basic (in shares)	219,388,077	216,913,032	220,044,051	218,160,131
Weighted average number of Class A shares outstanding, diluted (in shares)	394,250,689	390,293,844	394,234,346	390,240,731
Class A Shares
Allocation of Net Income (Loss):
Net Income (Loss) Attributable to Class A Shareholders	$ 88,820	$ 31,162	$ 100,079	$ 8,191

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flows From Operating Activities
Net income (loss)	$ 215,279	$ 15,800
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	13,010	17,362
Other amortization (included in interest expense)	515	616
(Earnings) losses from equity method investees	(29,221)	2,420
Distributions of earnings from equity method and other investees	58,773	19,669
(Gains) losses	(21,706)	22,077
Deferred incentive income	(58,724)	(82,287)
Deferred tax (benefit) expense	18,263	9,003
Options received from affiliates	(8,068)	(2,262)
Tax receivable agreement liability adjustment	0	2,699
Equity-based compensation	26,915	21,618
Options in affiliates granted to employees	6,844	4,024
Gain on sale of Logan Circle (see Note 1)	(188,638)	0
Other	105	297
Cash flows due to changes in
Due from affiliates	(24,779)	34,897
Other assets	28,921	(17,187)
Accrued compensation and benefits	(28,695)	(12,327)
Due to affiliates	(14,381)	(9,556)
Deferred incentive income	114,944	118,755
Other liabilities	87,308	20,333
Purchase of investments by consolidated funds	(80,100)	(52,711)
Proceeds from sale of investments by consolidated funds	33,270	57,123
Receivables from brokers and counterparties	(613)	(1,148)
Due to brokers and counterparties	10,527	2,494
Net cash provided by (used in) operating activities	159,749	171,709
Cash Flows From Investing Activities
Contributions to equity method investees	(23,894)	(14,909)
Distributions of capital from equity method and other investees	182,498	193,720
Funding of loan receivable	0	(25,000)
Proceeds from loan receivable	0	10,869
Proceeds from sale of direct investments	0	933
Purchase of fixed assets	(11,538)	(13,841)
Proceeds from sale of Logan Circle (see Note 1)	195,000	0
Cash of fund on deconsolidation date	(20,956)	0
Net cash provided by (used in) investing activities	321,110	151,772
Cash Flows From Financing Activities
Repayments of debt obligations	(77,838)	(222,838)
Borrowings under debt obligations	0	175,000
Payment of deferred financing costs	0	(3,451)
Payments to settle RSU statutory withholding tax (Note 8)	(9,580)	(6,594)
Dividends and dividend equivalents paid	(41,238)	(83,134)
Principals' and others' interests in equity of consolidated subsidiaries - contributions	7,966	71
Principals' and others' interests in equity of consolidated subsidiaries - distributions	(83,294)	(137,618)
Net cash provided by (used in) financing activities	(212,418)	(312,611)
Net Increase (Decrease) in Cash and Cash Equivalents	268,441	10,870
Cash and Cash Equivalents, Beginning of Period	397,125	339,842
Cash and Cash Equivalents, End of Period	665,566	350,712
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	5,632	7,781
Cash paid during the period for income taxes	16,502	10,188
Supplemental Schedule of Non-cash Investing and Financing Activities
Employee compensation invested directly in subsidiaries	29,122	46,290
Investments of incentive receivable amounts into Fortress Funds	113,622	64,222
Dividends, dividend equivalents and Fortress Operating Group unit distributions declared but not yet paid	31,037	4,083
Non-cash non-controlling interest - distributions - deconsolidation of fund	7,151	0
Contribution of interests in a Fortress Fund from certain principals to certain senior employees (Note 7)	11,963	0
Class A Shares
Cash Flows From Financing Activities
Repurchase of Class A shares (Note 8)	$ (8,434)	$ (34,047)

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 665,566	$ 397,125
Due from affiliates	240,122	320,633
Investments	842,421	880,001
Investments in options	69,414	53,206
Deferred tax asset, net	408,560	424,244
Other assets	91,393	126,165
Total Assets	2,317,476	2,201,374
Liabilities
Accrued compensation and benefits	304,042	370,413
Due to affiliates	391,271	360,769
Deferred incentive income	398,211	330,354
Debt obligations payable	105,000	182,838
Other liabilities	125,784	69,255
Total Liabilities	1,324,308	1,313,629
Commitments and Contingencies
Equity
Paid-in capital	1,874,340	1,899,163
Retained earnings (accumulated deficit)	(1,234,351)	(1,333,828)
Accumulated other comprehensive income (loss)	(2,643)	(1,094)
Total Fortress shareholders' equity	637,346	564,241
Principals' and others' interests in equity of consolidated subsidiaries	355,822	323,504
Total Equity	993,168	887,745
Total Liabilities and Equity	2,317,476	2,201,374
Class A Shares
Equity
Common stock	0	0
Class B Shares
Equity
Common stock	$ 0	$ 0