Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 24, 2015 | |
Entity Registrant Name | Fortress Investment Group LLC | |
Entity Central Index Key | 1,380,393 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 | |
Class A Shares | ||
Entity Common Stock, Shares Outstanding | 215,673,299 | |
Class B Shares | ||
Entity Common Stock, Shares Outstanding | 226,331,513 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 233,912 | $ 391,089 |
Due from affiliates | 188,051 | 326,575 |
Investments | 1,144,597 | 1,121,545 |
Investments in options | 60,950 | 71,844 |
Deferred tax asset, net | 415,915 | 417,623 |
Other assets | 165,531 | 173,708 |
Total Assets | 2,208,956 | 2,502,384 |
Liabilities | ||
Accrued compensation and benefits | 181,967 | 374,709 |
Due to affiliates | 372,660 | 375,424 |
Deferred incentive income | 326,338 | 304,526 |
Debt obligations payable | 75,000 | 75,000 |
Other liabilities | 90,430 | 88,053 |
Total Liabilities | $ 1,046,395 | $ 1,217,712 |
Commitments and Contingencies | ||
Redeemable Non-controlling Interests | $ 19 | $ 1,717 |
Equity | ||
Paid-in capital | 1,922,869 | 1,996,137 |
Retained earnings (accumulated deficit) | (1,312,093) | (1,350,122) |
Accumulated other comprehensive income (loss) | (2,409) | (2,416) |
Total Fortress shareholders’ equity | 608,367 | 643,599 |
Principals’ and others’ interests in equity of consolidated subsidiaries | 554,175 | 639,356 |
Total Equity | 1,162,542 | 1,282,955 |
Total Liabilities, Redeemable Non-controlling Interests and Equity | 2,208,956 | 2,502,384 |
Class A Shares | ||
Equity | ||
Common stock | 0 | 0 |
Class B Shares | ||
Equity | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Jun. 30, 2015 | Dec. 31, 2014 |
Class A Shares | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 215,673,299 | 208,535,157 |
Common stock, shares outstanding | 215,673,299 | 208,535,157 |
Class B Shares | ||
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 226,331,513 | 226,331,513 |
Common stock, shares outstanding | 226,331,513 | 226,331,513 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues | ||||
Management fees: affiliates | $ 150,936 | $ 136,045 | $ 278,643 | $ 265,755 |
Management fees: non-affiliates | 14,966 | 17,716 | 30,257 | 35,338 |
Incentive income: affiliates | 82,158 | 60,442 | 106,381 | 94,693 |
Incentive income: non-affiliates | 296 | 44 | 296 | 687 |
Expense reimbursements: affiliates | 53,991 | 51,662 | 108,556 | 102,848 |
Expense reimbursements: non-affiliates | 3,568 | 2,614 | 6,816 | 5,062 |
Other revenues (affiliate portion disclosed in Note 6) | 2,573 | 1,821 | 4,228 | 3,071 |
Total Revenues | 308,488 | 270,344 | 535,177 | 507,454 |
Expenses | ||||
Compensation and benefits | 199,108 | 168,114 | 377,996 | 356,633 |
General, administrative and other | 45,185 | 42,186 | 88,166 | 80,009 |
Depreciation and amortization | 12,768 | 5,037 | 18,099 | 9,338 |
Interest expense | 1,039 | 947 | 1,878 | 1,638 |
Transfer of interest in Graticule | 0 | 0 | 101,000 | 0 |
Total Expenses | 258,100 | 216,284 | 587,139 | 447,618 |
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | (6,787) | 4,864 | 24,774 | (6,191) |
Tax receivable agreement liability adjustment | (7,500) | 0 | (7,500) | 0 |
Earnings (losses) from equity method investees | (36,321) | 22,448 | 5,387 | 42,822 |
Gain on transfer of Graticule | 0 | 0 | 134,400 | 0 |
Total Other Income (Loss) | (50,608) | 27,312 | 157,061 | 36,631 |
Income (Loss) Before Income Taxes | (220) | 81,372 | 105,099 | 96,467 |
Income tax benefit (expense) | 5,199 | (7,916) | (13,200) | (13,910) |
Net Income (Loss) | 4,979 | 73,456 | 91,899 | 82,557 |
Allocation of Net Income (Loss): | ||||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 1,653 | 42,100 | 53,876 | 48,177 |
Redeemable Non-controlling Interests in Income (Loss) | $ 10 | $ 157 | $ (6) | $ 157 |
Dividends declared per Class A share (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.46 | $ 0.16 |
Earnings (Loss) Per Class A share | ||||
Net income (loss) per Class A share, basic (in dollars per share) | 0.01 | 0.15 | 0.16 | 0.16 |
Net income (loss) per Class A share, diluted (in dollars per share) | $ 0 | $ 0.12 | $ 0.16 | $ 0.14 |
Weighted average number of Class A shares outstanding, basic (in shares) | 216,183,181 | 207,783,751 | 215,985,577 | 212,328,315 |
Weighted average number of Class A shares outstanding, diluted (in shares) | 449,210,362 | 444,566,847 | 222,210,732 | 459,673,136 |
Class A Shares | ||||
Allocation of Net Income (Loss): | ||||
Net Income (Loss) Attributable to Class A Shareholders | $ 3,316 | $ 31,199 | $ 38,029 | $ 34,223 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Comprehensive income (loss) (net of tax) | ||||
Net income (loss) | $ 4,979 | $ 73,456 | $ 91,899 | $ 82,557 |
Foreign currency translation | 526 | (570) | (372) | (1,602) |
Total comprehensive income (loss) | 5,505 | 72,886 | 91,527 | 80,955 |
Allocation of Comprehensive Income (Loss): | ||||
Comprehensive income (loss) attributable to principals’ and others’ interests | 1,949 | 41,739 | 53,568 | 47,157 |
Comprehensive income (loss) attributable to redeemable non-controlling interests | 10 | 157 | (6) | 157 |
Comprehensive income (loss) attributable to Class A shareholders | $ 3,546 | $ 30,990 | $ 37,965 | $ 33,641 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Class A Shares | Class B Shares | Common stockClass A Shares | Common stockClass B Shares | Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Fortress Shareholders’ Equity | Principals’ and Others’ Interests in Equity of Consolidated Subsidiaries |
Equity at Dec. 31, 2014 | $ 1,282,955 | $ 1,996,137 | $ (1,350,122) | $ (2,416) | $ 643,599 | $ 639,356 | ||||
Equity (in shares) at Dec. 31, 2014 | 208,535,157 | 226,331,513 | 208,535,157 | 226,331,513 | ||||||
Increase (Decrease) in Equity | ||||||||||
Contributions from principals’ and others’ interests in equity | 36,165 | 36,165 | ||||||||
Distributions to principals’ and others’ interests in equity (net of tax) | (175,755) | (175,755) | ||||||||
Dividends declared | (96,501) | (96,501) | (96,501) | |||||||
Dividend equivalents accrued in connection with equity-based compensation (net of tax) | (6,519) | (2,335) | (2,335) | (4,184) | ||||||
Net deferred tax effects resulting from acquisition and exchange of Fortress Operating Group units | 4,874 | 4,859 | 4,859 | 15 | ||||||
Director restricted share grant | 560 | 271 | 271 | 289 | ||||||
Director restricted share grant (in shares) | 71,208 | |||||||||
Capital increase related to equity-based compensation, net | 25,230 | 12,145 | 12,145 | 13,085 | ||||||
Capital increase related to equity-based compensation, net (in shares) | 7,066,934 | |||||||||
Dilution impact of equity transactions (Note 6) | 8,293 | 71 | 8,364 | (8,364) | ||||||
Comprehensive income (loss) (net of tax) | ||||||||||
Net income (loss) (excludes loss allocated to redeemable non-controlling interests) | 91,905 | 38,029 | 38,029 | 53,876 | ||||||
Foreign currency translation | (372) | (64) | (64) | (308) | ||||||
Total comprehensive income (loss) | 91,533 | 37,965 | 53,568 | |||||||
Equity at Jun. 30, 2015 | $ 1,162,542 | $ 1,922,869 | $ (1,312,093) | $ (2,409) | $ 608,367 | $ 554,175 | ||||
Equity (in shares) at Jun. 30, 2015 | 215,673,299 | 226,331,513 | 215,673,299 | 226,331,513 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ 91,899 | $ 82,557 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 18,099 | 9,338 |
Other amortization (included in interest expense) | 390 | 390 |
(Earnings) losses from equity method investees | (5,387) | (42,822) |
Distributions of earnings from equity method investees | 23,756 | 51,204 |
(Gains) losses | (24,774) | 6,191 |
Deferred incentive income | (65,709) | (53,362) |
Deferred tax (benefit) expense | 4,448 | 12,756 |
Options received from affiliates | (25,158) | (1,604) |
Tax receivable agreement liability adjustment | 7,500 | 0 |
Equity-based compensation | 25,388 | 18,334 |
Options in affiliates granted to employees | 5,681 | 4,052 |
Other | 356 | (764) |
Transfer of interest in Graticule | 101,000 | 0 |
Gain on transfer of Graticule | (134,400) | 0 |
Cash flows due to changes in | ||
Due from affiliates | 18,392 | 3,146 |
Other assets | (5,927) | 30,487 |
Accrued compensation and benefits | (157,551) | (187,033) |
Due to affiliates | (17,007) | (30,248) |
Deferred incentive income | 74,610 | 59,128 |
Other liabilities | 2,810 | 4,573 |
Purchase of investments by consolidated funds | (66,965) | (144,313) |
Proceeds from sale of investments by consolidated funds | 53,494 | 126,240 |
Receivables from brokers and counterparties | (211) | (41,302) |
Due to brokers and counterparties | 2,727 | 7,305 |
Net cash provided by (used in) operating activities | (72,539) | (85,747) |
Cash Flows From Investing Activities | ||
Contributions to equity method investees | (18,862) | (6,012) |
Distributions of capital from equity method investees | 155,255 | 321,085 |
Purchase of securities | (883) | (7,217) |
Proceeds from sale of securities | 18,101 | 74,922 |
Proceeds from exercise of options | 51,543 | 0 |
Purchase of fixed assets | (11,075) | (4,176) |
Purchase of software and technology-related assets | 0 | (25,976) |
Net cash provided by (used in) investing activities | 194,079 | 352,626 |
Cash Flows From Financing Activities | ||
Repayments of debt obligations | 0 | (50,000) |
Borrowings under debt obligations | 0 | 125,000 |
Proceeds from public offering | 0 | 186,551 |
Dividends and dividend equivalents paid | (104,554) | (32,583) |
Principals’ and others’ interests in equity of consolidated subsidiaries - contributions | 283 | 3,670 |
Principals’ and others’ interests in equity of consolidated subsidiaries - distributions | (167,554) | (78,833) |
Excess tax benefits from delivery of RSUs | 4,476 | 2,931 |
Redeemable non-controlling interests - (distributions) contributions | (1,692) | 16,253 |
Net cash provided by (used in) financing activities | (278,717) | (376,972) |
Net Increase (Decrease) in Cash and Cash Equivalents | (157,177) | (110,093) |
Cash and Cash Equivalents, Beginning of Period | 391,089 | 364,583 |
Cash and Cash Equivalents, End of Period | 233,912 | 254,490 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest | 1,019 | 788 |
Cash paid during the period for income taxes | 7,702 | 3,447 |
Supplemental Schedule of Non-cash Investing and Financing Activities | ||
Employee compensation invested directly in subsidiaries | 35,800 | 33,450 |
Investments of incentive receivable amounts into Fortress Funds | 134,657 | 249,740 |
Dividends, dividend equivalents and Fortress Operating Group unit distributions declared but not yet paid | 5,240 | 5,839 |
Retained equity interest related to Graticule transfer | 33,400 | 0 |
Non-cash redeemable non-controlling interest - contributions | 0 | 20,519 |
Class B Shares | ||
Cash Flows From Financing Activities | ||
Repurchase of shares | 0 | (186,551) |
Class A Shares | ||
Cash Flows From Financing Activities | ||
Repurchase of shares | $ (9,676) | $ (363,410) |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Fortress Investment Group LLC (the “Registrant,” or, together with its subsidiaries, “Fortress”) is a leading, highly diversified global investment management firm whose predecessor was founded in 1998. Its primary business is to sponsor the formation of, and provide investment management services for various investment funds, permanent capital vehicles and managed accounts (collectively, the “Fortress Funds”). Fortress generally makes investments in these funds. Fortress has three primary sources of income from the Fortress Funds: management fees, incentive income, and investment income on its investments in the funds. In addition, Fortress receives expense reimbursements pursuant to management agreements. The Fortress Funds fall into the following business segments in which Fortress operates: 1) Private equity: a) General buyout and sector-specific funds focused on control-oriented investments in cash flow generating assets and asset-based businesses in North America and Western Europe; and b) Entities which Fortress collectively refers to as "permanent capital vehicles" which includes (i) Newcastle Investment Corp. ("Newcastle"), New Residential Investment Corp. ("New Residential"), Eurocastle Investment Limited ("Eurocastle"), New Media Investment Group Inc. ("New Media"), New Senior Investment Group Inc. ("New Senior") and Fortress Transportation and Infrastructure Investors LLC ("FTAI"), which are publicly traded companies that are externally managed by Fortress pursuant to management agreements (collectively referred to as the "publicly traded permanent capital vehicles") and (ii) FHC Property Management LLC, (together with its subsidiaries, referred to as "Blue Harbor"), a senior living property management business. The publicly traded permanent capital vehicles invest in a wide variety of real estate related assets, including securities, loans, real estate properties and mortgage servicing related assets, media assets and transportation and infrastructure assets. All of the capital of Worldwide Transportation and Infrastructure Investors ("WWTAI"), a private fund managed by Fortress, was contributed to FTAI which completed its initial public offering ("IPO") in May 2015 (see Note 2). 2) Liquid hedge funds that invest globally in fixed income, currency, equity and commodity markets, and related derivatives to capitalize on imbalances in the financial markets. In addition, this segment includes an endowment style fund, which invests in Fortress Funds, funds managed by external managers, and direct investments; a fund that primarily focuses on an international "event driven" investment strategy, particularly in Europe, Asia-Pacific and Latin America; and a fund that seeks to generate returns by executing a positively convex investment strategy. On January 5, 2015, Fortress Asia Macro Funds and related managed accounts became the first group of funds to join Fortress's affiliated manager platform ("Affiliated Managers") as they transitioned to an autonomous asset management business named Graticule Asset Management Asia, L.P. ("Graticule"). Fortress retained a perpetual minority interest in Graticule amounting to 30% of earnings during 2015 and declining to approximately 27% of earnings over time. Fortress also receives additional fees for providing infrastructure services (technology, back office, and related services) to Graticule. During the quarter ended June 30, 2015, Graticule notified Fortress of its intention to terminate the infrastructure services agreement effective at the end of May 2016. Fortress will continue to earn fees for providing services to Graticule through the effective date of the termination. Fortress recorded the results of this transaction at fair value. During the six months ended June 30, 2015 , Fortress recorded a non-cash gain of $134.4 million , non-cash expense of $101.0 million related to the fair value of the controlling interest in Graticule transferred to a former senior employee for no consideration, and $33.4 million from its resulting retained interest as an equity method investment. Fortress utilized an income approach to value Graticule, its retained interest in Graticule and the controlling interest in Graticule which was transferred. This approach relies on a number of factors, including actual operating results, discount rates and economic projections. In the second quarter of 2015, Fortress determined that certain software and technology-related assets which were used in its liquid hedge funds business had not met certain growth targets and performed an asset impairment test. As a result of this test, $7.5 million of assets were written off and included in Depreciation and Amortization. 3) Credit funds: a) Credit hedge funds, which make highly diversified investments in direct lending, corporate debt and securities, portfolios and orphaned assets, real estate and structured finance, on a global basis and throughout the capital structure, with a value orientation, as well as non-Fortress originated funds for which Fortress has been retained as manager as part of an advisory business; and b) Credit private equity (“PE”) funds which are comprised of a family of “credit opportunities” funds focused on investing in distressed and undervalued assets, a family of ''long dated value'' funds focused on investing in undervalued assets with limited current cash flows and long investment horizons, a family of “real assets” funds focused on investing in tangible and intangible assets in the following principal categories (real estate, capital assets, natural resources and intellectual property), a family of Asia funds, including Japan real estate funds and an Asian investor based global opportunities fund, and a family of real estate opportunities funds, as well as certain sector-specific funds with narrower investment mandates tailored for the applicable sector. 4) Logan Circle Partners, L.P. (“Logan Circle”), which represents Fortress's traditional asset management business providing institutional clients actively managed investment solutions across a broad spectrum of fixed income strategies. Logan Circle's core fixed income products cover the breadth of the maturity and risk spectrums, including short, intermediate and long duration, core/core plus, investment grade credit, high yield and emerging market debt. For a reconciliation between the financial statements and the segment-based financial data that management uses for making operating decisions and assessing performance, see Note 10. FINANCIAL STATEMENT GUIDE Selected Financial Statement Captions Note Reference Explanation Balance Sheet Due from Affiliates 6 Generally, management fees, expense reimbursements and incentive income due from Fortress Funds. Investments and Investments in Options 3 Primarily the carrying value of Fortress’s investments in the Fortress Funds. Deferred Tax Asset, net 5 Relates to potential future net tax benefits. Due to Affiliates 6 Generally, amounts due to the Principals related to their interests in Fortress Operating Group and the tax receivable agreement. Deferred Incentive Income 2 Incentive income already received from certain Fortress Funds based on past performance, which is subject to contingent repayment based on future performance. Debt Obligations Payable 4 The balance outstanding on the credit agreement. Principals' and Others' Interests in Equity of Consolidated Subsidiaries 6 The GAAP basis of the Principals' and a former senior employee's ownership interests in Fortress Operating Group as well as employees' ownership interests in certain subsidiaries. Statement of Operations Management Fees: Affiliates 2 Fees earned for managing Fortress Funds and other affiliates, generally determined based on the size of such funds. Management Fees: Non-Affiliates 2 Fees earned from managed accounts and the traditional fixed income asset management business, generally determined based on the amount managed. Incentive Income: Affiliates 2 Income earned from Fortress Funds, based on the performance of such funds. Incentive Income: Non- Affiliates 2 Income earned from managed accounts, based on the performance of such accounts. Compensation and Benefits 7 Includes equity-based, profit-sharing and other compensation to employees. Gains (Losses) 3 The result of asset dispositions or changes in the fair value of investments or other financial instruments which are marked to market (including the publicly traded permanent capital vehicles and publicly traded portfolio companies). Continued on next page. FINANCIAL STATEMENT GUIDE Selected Financial Statement Captions Note Reference Explanation Tax Receivable Agreement Liability Adjustment 5 Represents a change in the amount due to the Principals under the tax receivable agreement. Earnings (Losses) from Equity Method Investees 3 Fortress’s share of the net earnings (losses) of the Fortress Funds resulting from its investments in these funds. Income Tax Benefit (Expense) 5 The net tax result related to the current period. Certain of Fortress’s revenues are not subject to taxes because they do not flow through taxable entities. Furthermore, Fortress has significant permanent differences between its GAAP and tax basis earnings. Principals’ and Others’ Interests in (Income) Loss of Consolidated Subsidiaries 6 Primarily the Principals’ and employees’ share of Fortress’s earnings based on their ownership interests in subsidiaries, including Fortress Operating Group. Earnings Per Share 8 GAAP earnings per Class A share based on Fortress’s capital structure, which is comprised of outstanding and unvested equity interests, including interests which participate in Fortress’s earnings, at both the Fortress and subsidiary levels. Other Distributions 8 A summary of dividends and distributions, and the related outstanding shares and units, is provided. Distributable Earnings 10 A presentation of Fortress's financial performance by segment (fund type) is provided, on the basis of the operating performance measure used by Fortress’s management committee. Recent Accounting Pronouncements In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB voted to approve a one year deferral of the effective date of the new revenue recognition standard. The new standard is effective for Fortress beginning January 1, 2018. Early adoption is permitted but not before the original public entity effective date (that is, annual periods beginning after December 15, 2016). The standard permits the use of either the retrospective or cumulative effect transition method. Fortress is currently evaluating the impact on its consolidated financial statements upon the adoption of this new standard. The FASB has recently issued or discussed a number of proposed standards on such topics as, leases, financial instruments and hedging. Some of the proposed changes are significant and could have a material impact on Fortress’s financial reporting. Fortress has not yet fully evaluated the potential impact of these proposals, but will make such an evaluation as the standards are finalized. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 eliminates the deferral of Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46 (R) previously provided to investment companies and certain other entities pursuant to ASC 810-10-65-2. ASU 2015-02 also amends the evaluation of whether (1) fees paid to a decision maker or service provider represent a variable interest, (2) a limited partnership or similar entity has the characteristics of a variable interest entity ("VIE") and (3) a reporting entity is the primary beneficiary of a VIE. ASU 2015-02 eliminates certain conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest. Fees received by a decision maker or service provider are no longer considered variable interests and are now excluded from the evaluation of whether the reporting entity is the primary beneficiary of a VIE if the fees are both customary and commensurate with the level of effort required for the services provided and the decision maker or service provider does not hold other interests in the entity being evaluated that would absorb more than an insignificant amount of the expected losses or returns of the entity. If the reporting entity determines that it does not have a variable interest in an entity, no further consolidation analysis is performed as the reporting entity would not be required to consolidate the entity. The effective date of ASU 2015-02 is for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015 for public companies and early adoption is permitted. Fortress has elected to early adopt ASU 2015-02 on a retrospective basis as permitted, for all periods presented. The consolidated financial statements and related footnote disclosures have been adjusted for the impact of the adoption. The adoption did not result in a cumulative effect adjustment to Fortress’s retained earnings (accumulated deficit). Fortress’s accounting policy, updated for the adoption of ASU 2015-02, is described below. Basis of Accounting and Consolidation - The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the accounts of Fortress and its consolidated subsidiaries, which are comprised of VIEs in which it is the primary beneficiary as described below and voting interest entities (“VOEs”) in which it is determined to have a controlling financial interest under ASC 810, as amended by ASU 2015-02. For legal entities evaluated for consolidation, Fortress must determine whether the interests that it holds and fees paid to it qualify as a variable interest in the entity. This includes an evaluation of fees paid to Fortress where Fortress acts as a decision maker or service provider to the entity being evaluated. Fees received by Fortress are not variable interests if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length and (iii) Fortress’s other economic interests in the VIE held directly and indirectly through its related parties, as well as economic interests held by related parties under common control, where applicable, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits. For those entities in which it has a variable interest, Fortress performs an analysis to first determine whether the entity is a VIE. This determination includes considering whether the entity’s equity investment at risk is sufficient, whether the voting rights of an investor are not proportional to its obligation to absorb the income or loss of the entity and substantially all of the entity's activities either involve or are conducted on behalf of that investor and its related parties and whether the entity’s at-risk equity holders have the characteristics of a controlling financial interest. A VIE must be consolidated by its primary beneficiary. Performance of such analysis requires the exercise of judgment. The primary beneficiary of a VIE is generally defined as the party who has a controlling financial interest in the VIE. Fortress is generally deemed to have a controlling financial interest in a VIE if it has (i) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above, fees paid to Fortress are excluded if the fees are compensation for services provided commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length. Fortress also evaluates its economic interests in the VIE held directly by it and indirectly through its related parties, as well as economic interests held by related parties under common control, where applicable. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These analyses require judgment. Changes in the economic interests (either by Fortress, related parties of Fortress or third parties) or amendments to the governing documents of the VIE could affect an entity's status as a VIE or the determination of the primary beneficiary. The primary beneficiary evaluation is updated continuously. For VOEs, Fortress shall consolidate the entity if it has a controlling financial interest. Fortress has a controlling financial interest in a VOE if (i) for legal entities other than limited partnerships, Fortress owns a majority voting interest in the VOE or, for limited partnerships and similar entities, Fortress owns a majority of the entity’s kick-out rights through voting limited partnership interests and (ii) non-controlling shareholders or partners do not hold substantive participating rights and no other conditions exist that would indicate that Fortress does not control the entity. For entities over which Fortress exercises significant influence but which do not meet the requirements for consolidation, Fortress uses the equity method of accounting whereby it records its share of the underlying income of these entities. These entities include the Fortress Funds. The evaluation of whether Fortress exerts control or significant influence over the financial and operational policies of an entity requires judgment based on the facts and circumstances surrounding each individual entity. Virtually all of the Fortress Funds are, for GAAP purposes, investment companies. Investment companies record realized and unrealized gains (losses) resulting from changes in the fair value of their investments as a component of current income. Additionally, investment companies generally do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). Distributions by Fortress and its subsidiaries are recognized when declared. Redeemable Non-controlling Interests represent ownership interests in consolidated subsidiaries which are redeemable and not owned by Fortress. Principals’ and others’ interests in consolidated subsidiaries represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Fortress. This is primarily related to the Principals’ interests in Fortress Operating Group (Note 6). Non-Fortress interests also include employee interests in majority owned and controlled fund advisor and general partner entities. Deconsolidation of New Media Prior to the adoption of ASU 2015-02, Fortress consolidated New Media, a VIE. The financial results of New Media were included in Fortress’s consolidated financial statements in previous filings with the Securities and Exchange Commission, based on the then existing consolidation guidance. The adoption of ASU 2015-02 resulted in the deconsolidation of New Media as Fortress determined that under ASU 2015-02, it was not the primary beneficiary of New Media. The fee arrangement with New Media is both commensurate with the level of effort required for the services provided and include only customary terms and Fortress does not hold other interests in New Media that would absorb more than an insignificant amount of New Media's losses or benefits. Therefore, Fortress no longer considers this fee arrangement to be a variable interest. Under ASU 2015-02, Fortress and its related parties under common control as a group, where applicable, do not have the obligation to absorb losses or the right to receive benefits from New Media that could potentially be significant to New Media. Also see Note 3 for the related disclosures for certain unconsolidated variable interest entities. The accompanying consolidated financial statements and related footnotes of Fortress have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under GAAP have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of Fortress’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with Fortress’s consolidated financial statements for the year ended December 31, 2014 and footnotes thereto included in Fortress’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2015, as revised in Fortress's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2015. Capitalized terms used herein, and not otherwise defined, are defined in Fortress’s consolidated financial statements for the year ended December 31, 2014 . All significant intercompany accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period's presentation. |
MANAGEMENT AGREEMENTS AND FORTR
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS | 6 Months Ended |
Jun. 30, 2015 | |
Management and Agreement Fortress Funds | |
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS | MANAGEMENT AGREEMENTS AND FORTRESS FUNDS Fortress has two principal sources of fee income from its agreements with the Fortress Funds: contractual management fees, which are generally based on a percentage of fee paying assets under management, and related incentive income, which is generally based on a percentage of returns, or profits, subject to the achievement of performance criteria. Substantially all of Fortress's net assets, after deducting the portion attributable to non-controlling interests, are a result of Fortress's investments in, or receivables from, these funds. The terms of agreements between Fortress and the Fortress Funds are generally determined in connection with third party fund investors. Management Fees and Incentive Income Fortress recognized management fees and incentive income as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Private Equity Private Equity Funds Management fees: affil. $ 29,222 $ 35,330 $ 58,362 $ 70,643 Management fees: non-affil. — 162 — 311 Incentive income: affil. — 22,094 — 22,094 Permanent Capital Vehicles Management fees: affil. 22,276 16,318 41,278 31,496 Management fees, options: affil. 21,014 1,604 25,158 1,604 Management fees: non-affil. 482 583 932 1,691 Incentive income: affil. 23,156 19,246 25,744 23,255 Liquid Hedge Funds Management fees: affil. 16,638 29,998 35,133 57,065 Management fees: non-affil. 2,054 6,164 4,548 12,575 Incentive income: affil. 41 908 53 986 Incentive income: non-affil. 39 44 39 44 Credit Funds Credit Hedge Funds Management fees: affil. 29,834 28,455 59,488 55,289 Management fees: non-affil. 13 20 23 44 Incentive income: affil. 21,516 16,429 22,169 17,733 Incentive income: non-affil. — — — — Credit PE Funds Management fees: affil. 31,068 23,651 57,387 48,259 Management fees: non-affil. 29 34 58 68 Incentive income: affil. 37,445 1,765 58,409 30,625 Incentive income: non-affil. 257 — 257 643 Logan Circle Management fees: affil. 884 689 1,837 1,399 Management fees: non-affil. 12,388 10,753 24,696 20,649 Incentive income: affil. — — 6 — Incentive income: non-affil. — — — — Total Management fees: affil. $ 150,936 $ 136,045 $ 278,643 $ 265,755 Management fees: non-affil. $ 14,966 $ 17,716 $ 30,257 $ 35,338 Incentive income: affil. (A) $ 82,158 $ 60,442 $ 106,381 $ 94,693 Incentive income: non-affil. $ 296 $ 44 $ 296 $ 687 (A) See “Deferred Incentive Income” below. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. Deferred Incentive Income Incentive income from certain Fortress Funds, primarily the private equity funds, private permanent capital vehicle through its IPO in May 2015 and credit PE funds, is received when such funds realize returns, or profits, based on the related agreements. However, this incentive income is subject to contingent repayment by Fortress to the funds until certain overall fund performance criteria are met. Accordingly, Fortress does not recognize this incentive income as revenue until the related contingencies are resolved. Until such time, this incentive income is recorded on the balance sheet as deferred incentive income and is included as “distributed-unrecognized” deferred incentive income in the table below. Incentive income from such funds, based on their net asset value, which has not yet been received is not recorded on the balance sheet and is included as “undistributed” deferred incentive income in the table below. Incentive income from certain Fortress Funds is earned based on achieving annual performance criteria. Accordingly, this incentive income is recorded as revenue at year end (in the fourth quarter of each year), is generally received subsequent to year end, and has not been recognized for these funds during the six months ended June 30, 2015 and 2014 . If the amount of incentive income contingent on achieving annual performance criteria was not contingent on the results of the subsequent quarters, $46.4 million and $56.3 million of additional incentive income would have been recognized during the six months ended June 30, 2015 and 2014 , respectively. Incentive income based on achieving annual performance criteria that has not yet been recognized, if any, is not recorded on the balance sheet and is included as “undistributed” deferred incentive income in the table below. During the six months ended June 30, 2015 and 2014 , Fortress recognized $58.4 million and $30.6 million , respectively, of incentive income distributions from its credit PE funds which were non-clawbackable or represented “tax distributions.” Tax distributions are not subject to clawback and reflect a cash amount approximately equal to the amount expected to be paid out by Fortress for taxes or tax-related distributions on the allocated income from such funds. Deferred incentive income from the Fortress Funds was comprised of the following, on an inception-to-date basis. This does not include any amounts related to third party funds, receipts from which are reflected as Other Liabilities until all contingencies are resolved. Distributed-Gross Distributed-Recognized (A) Distributed-Unrecognized (B) Undistributed, net of intrinsic clawback (C) (D) Deferred incentive income as of December 31, 2014 $ 1,243,441 $ (938,915 ) $ 304,526 $ 868,549 Fortress Funds which matured (no longer subject — — N/A N/A Share of income (loss) of Fortress Funds N/A N/A N/A 173,199 Distribution of private equity funds and credit PE 81,671 N/A 81,671 (81,671 ) Distribution of private permanent capital vehicle 6,299 N/A 6,299 (6,299 ) Recognition of previously deferred incentive income N/A (65,709 ) (65,709 ) N/A Changes in foreign exchange rates (449 ) — (449 ) N/A Deferred incentive income as of June 30, 2015 $ 1,330,962 (E) $ (1,004,624 ) $ 326,338 $ 953,778 (E) Deferred incentive income including Fortress Funds $ 1,384,618 $ (1,058,280 ) (A) All related contingencies have been resolved. (B) Reflected on the consolidated balance sheet. (C) At June 30, 2015 , the net undistributed incentive income is comprised of $1.0 billion of gross undistributed incentive income, net of $66.9 million of intrinsic clawback. The net undistributed incentive income represents the amount that would be received by Fortress from the related funds if such funds were liquidated on June 30, 2015 at their net asset values. (D) From inception to June 30, 2015 , Fortress has paid $621.9 million of compensation expense under its employee profit sharing arrangements (Note 7) in connection with distributed incentive income, of which $21.5 million has not been expensed because management has determined that it is not probable of being incurred as an expense and will be recovered from the related individuals. As of June 30, 2015 , Fortress has recovered $6.4 million from individuals relating to their clawback obligations. If the $1.0 billion of gross undistributed incentive income were realized, Fortress would recognize and pay an additional $498.7 million of compensation expense. (E) See detailed reconciliations of Distributed-Gross and Undistributed, net of intrinsic clawback below. The amounts set forth under Distributed-Gross can be reconciled to the incentive income threshold tables (on the following pages) as follows: June 30, 2015 Distributed incentive income - Private Equity Funds $ 846,671 Distributed incentive income - Private Equity Funds in Investment Period or Commitment — Distributed incentive income - Credit PE Funds 801,657 Distributed incentive income - Credit PE Funds in Investment Period or Commitment Period 4,776 Distributed incentive income - Private Permanent Capital Vehicle through IPO in May 2015 7,043 Less: Fortress Funds which are not subject to a clawback provision: — NIH (94,513 ) — GAGACQ Fund (51,476 ) Portion of Fund I distributed incentive income that Fortress is not entitled to (see footnote K of incentive income threshold tables) (183,196 ) Distributed-Gross $ 1,330,962 The amounts set forth under Undistributed, net of intrinsic clawback can be reconciled to the incentive income threshold tables (on the following pages) as follows: June 30, 2015 Undistributed incentive income - Private Equity Funds $ 26,310 Undistributed incentive income - Private Equity Funds in Investment Period or Commitment 3,509 Undistributed incentive income - Credit PE Funds 848,001 Undistributed incentive income - Credit PE Funds in Investment Period or Commitment 26,482 Undistributed incentive income - Permanent Capital Vehicles 1,191 Undistributed incentive income - Hedge Funds (total) 115,083 Undistributed incentive income - Logan Circle 105 Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds (66,903 ) Undistributed, net of intrinsic clawback $ 953,778 The following tables summarize information with respect to the Fortress Funds and their related incentive income thresholds as of June 30, 2015 : Fund (Vintage) (A) Maturity Date (B) Inception to Date Inception to Date Distributions (C) Net Asset Value (“NAV”) NAV Surplus (Deficit) (D) Current Preferred Return Threshold (E) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (G) Distributed Incentive Income (H) Distributed Incentive Income Subject to Clawback (I) Gross Intrinsic Clawback (J) Net Intrinsic Clawback (J) Private Equity Funds NIH (1998) Closed Jun-15 $ 415,574 $ (823,588 ) $ — $ N/A $ N/A $ N/A $ — $ 94,513 $ — $ — $ — Fund I (1999) (K) Closed May-13 1,015,943 (2,847,929 ) — N/A N/A N/A — 344,939 — — — Fund II (2002) In Liquidation 1,974,298 (3,442,900 ) 3,534 1,472,136 — N/A 696 288,840 — — — Fund III (2004) In Liquidation 2,762,992 (2,138,524 ) 930,951 306,483 2,154,994 1,848,511 — 66,903 66,903 66,903 45,108 Fund III Coinvestment (2004) In Liquidation 273,649 (225,188 ) 68,246 19,785 252,921 233,136 — — — — — Fund IV (2006) Jan-17 3,639,561 (1,357,054 ) 2,225,663 (56,844 ) 2,925,391 2,982,235 — — — — — Fund IV Coinvestment (2006) Jan-17 762,696 (271,319 ) 412,859 (78,518 ) 625,163 703,681 — — — — — Fund V (2007) Feb-18 4,103,713 (1,435,456 ) 5,303,858 2,635,601 2,355,965 81,806 13,665 — — — — Fund V Coinvestment (2007) Feb-18 990,480 (173,600 ) 526,359 (290,521 ) 708,207 998,728 — — — — — GAGACQ Fund (2004) (GAGFAH) Closed Nov-09 545,663 (595,401 ) — N/A N/A N/A — 51,476 — — — FRID (2005) (GAGFAH) Closed Nov-14 1,220,229 (1,202,153 ) — N/A N/A N/A — — — — — FRIC (2006) (Brookdale) Closed Dec-14 328,754 (291,330 ) — N/A N/A N/A — — — — — FICO (2006) (Intrawest) Jan-17 724,525 — (63,960 ) (788,485 ) 657,265 1,445,750 — — — — — FHIF (2006) (Holiday) Jan-17 1,543,463 (685,652 ) 1,520,480 662,669 1,249,260 586,591 — — — — — FECI (2007) (Florida East Coast Railway/Florida East Coast Industries) Feb-18 982,779 (624 ) 960,420 (21,735 ) 818,492 840,227 — — — — — MSR Opportunities Fund I A (2012) Aug-22 341,135 (141,754 ) 298,754 99,373 — N/A 9,566 — — — — MSR Opportunities Fund I B (2012) Aug-22 82,760 (34,275 ) 72,327 23,842 — N/A 2,383 — — — — $ 26,310 $ 846,671 $ 66,903 $ 66,903 $ 45,108 Private Equity Funds in Investment or Commitment Period MSR Opportunities Fund II A (2013) Jul-23 $ 158,724 $ (15,482 ) $ 162,338 $ 19,096 $ — $ N/A $ 2,820 $ — $ — $ — $ — MSR Opportunities Fund II B (2013) Jul-23 2,264 (212 ) 2,311 259 — N/A 39 — — — — MSR Opportunities MA I (2013) Jul-23 36,425 (3,541 ) 37,287 4,403 — N/A 650 — — — — Italian NPL Opportunities Fund (2013) Sep-24 32,312 (5,768 ) 24,044 (2,500 ) 1,767 4,267 — — — — — $ 3,509 $ — $ — $ — $ — Continued on next page. Fund (Vintage) (A) Maturity Date (B) Inception to Date Inception to Date Distributions (C) Net Asset Value (“NAV”) NAV Surplus (Deficit) (D) Current Preferred Return Threshold (E) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (G) Distributed Incentive Income (H) Distributed Incentive Income Subject to Clawback (I) Gross Intrinsic Clawback (J) Net Intrinsic Clawback (J) Credit PE Funds Long Dated Value Fund I (2005) Apr-30 $ 267,325 $ (127,971 ) $ 290,441 $ 151,087 $ 153,774 $ 4,579 $ 48 $ — $ — $ — $ — Long Dated Value Fund II (2005) Nov-30 274,280 (150,977 ) 204,428 81,125 123,552 42,427 — 412 — — — Long Dated Value Fund III (2007) Feb-32 343,156 (283,517 ) 190,703 131,064 — N/A 17,839 6,473 — — — LDVF Patent Fund (2007) Nov-27 41,779 (34,903 ) 33,493 26,617 — N/A 1,071 1,471 — — — Real Assets Fund (2007) Jun-17 359,024 (352,783 ) 105,051 98,810 — N/A 9,043 6,285 — — — Credit Opportunities Fund (2008) Oct-20 5,646,864 (7,084,071 ) 1,274,505 2,711,712 — N/A 169,710 362,870 145,297 — — Credit Opportunities Fund II (2009) Jul-22 2,335,264 (2,487,310 ) 1,083,393 1,235,439 — N/A 129,496 112,816 43,733 — — Credit Opportunities Fund III (2011) Mar-24 3,088,327 (1,298,051 ) 2,479,191 688,915 — N/A 108,185 26,852 499 — — FCO Managed Accounts (2008 - 2012) Apr-22 to Mar-24 4,231,548 (3,172,000 ) 2,573,108 1,513,560 — N/A 194,853 100,147 31,599 — — SIP Managed Account (2010) Sep-20 11,000 (37,033 ) 11,509 37,542 — N/A 2,877 5,207 — — — Japan Opportunity Fund (2009) Jun-19 890,161 (1,371,558 ) 578,353 1,059,750 — N/A 101,805 125,374 22,782 — — Net Lease Fund I (2010) Feb-20 152,851 (225,430 ) 1,686 74,265 — N/A 216 9,528 5,928 — — Real Estate Opportunities Fund (2011) Sep-24 539,470 (313,690 ) 384,195 158,415 — N/A 11,073 2,750 1,734 — — Global Opportunities Fund (2010) Sep-20 320,130 (155,479 ) 243,187 78,536 — N/A 13,387 1,927 1,927 — — Japan Opportunity Fund II (Yen) (2011) Dec-21 644,383 (249,226 ) 708,104 312,947 — N/A 48,800 15,416 — — — Japan Opportunity Fund II (Dollar) (2011) Dec-21 639,643 (242,269 ) 703,484 306,110 — N/A 37,606 21,482 — — — Real Estate Opportunities REOC Fund (2011) Oct-23 56,692 (37,548 ) 42,456 23,312 — N/A 1,992 2,647 1,160 — — $ 848,001 $ 801,657 $ 254,659 $ — $ — Credit PE Funds in Investment or Commitment Period FCO Managed Accounts (2010-2015) Jun-24 to Feb-28 $ 685,003 $ (301,411 ) $ 537,557 $ 153,965 $ 1,906 $ 3,471 $ 25,316 $ 4,776 $ 4,776 $ — $ — Life Settlements Fund (2010) Dec-22 406,548 (299,330 ) 78,102 (29,116 ) 81,242 110,358 — — — — — Life Settlements Fund MA (2010) Dec-22 33,321 (24,482 ) 6,195 (2,644 ) 6,666 9,310 — — — — — Real Estate Opportunities Fund II (2014) May-27 242,294 (42,808 ) 212,224 12,738 3,954 701 1,166 — — — — Japan Opportunity Fund III (Yen) (2014) Dec-24 107,011 — 106,999 (12 ) 2,742 2,754 — — — — — Japan Opportunity Fund III (Dollar) (2014) Dec-24 83,061 — 83,687 626 2,091 1,465 — — — — — Credit Opportunities Fund IV (2015) Feb-27 142,897 — 144,304 1,407 3,696 2,289 — — — — — $ 26,482 $ 4,776 $ 4,776 $ — $ — Continued on next page. Fund Equity Eligible for Incentive (L) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (O) Life-to-Date Incentive Income Crystallized (P) Publicly Traded Permanent Capital Vehicles Newcastle $ 751,469 $ (F) $ N/A $ 41,283 Eurocastle 62,476 — 1,191 39,217 New Residential 2,749,370 — N/A 85,593 New Media 645,007 — N/A 5,296 New Senior 1,089,384 1,115 N/A — FTAI (P) 1,219,416 1,950 — — Continued on next page. Incentive Income Eligible NAV (L) Gain to Cross Incentive Income Threshold (M) Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold (N) Undistributed Incentive Income (O) Year to Date Incentive Income Crystallized (P) Liquid Hedge Funds Macro Funds (Q) (T) Main fund investments $ 712,455 $ 91,022 0.0 % $ — $ — Single investor funds 903,052 68,109 0.0 % — 11 Sidepocket investments (R) 7,235 6,252 N/A 44 — Sidepocket investments - redeemers (S) 112,038 66,462 N/A 1,406 1 Managed accounts 397,078 26,980 0.0 % — 39 Fortress Convex Asia Funds (T) Main fund investments 193,120 11,718 0.0 % — — Fortress Partners Funds (T) Main fund investments 8,485 1,104 0.0 % — 41 Sidepocket investments (R) 79,272 6,951 N/A 4,338 — Fortress Centaurus Global Funds (T) Main fund investments 191,202 7,602 0.0 % — — Credit Hedge Funds Special Opportunities Funds (T) Main fund investments $ 4,767,347 $ — 100.0 % $ 44,097 $ — Sidepocket investments (R) 45,652 6 N/A 3,232 — Sidepocket investments - redeemers (S) 162,885 49,132 N/A 5,156 — Main fund investments (liquidating) (U) 477,952 — 100.0 % 55,612 22,169 Managed accounts 1,518 47,706 0.0 % — — Worden Funds Main fund investments 262,770 1,191 81.2 % 1,007 — Fortress Japan Income Fund Main fund investments 66,548 N/A 100.0 % 134 — Value Recovery Funds (V) Managed accounts 9,908 6,957 48.8 % 57 — Logan Circle Main fund investments $ 70,598 $ 1,182 0.0 % $ — $ — Managed accounts 218,111 19,677 26.3 % 105 — (A) Vintage represents the year in which the fund was formed. (B) Represents the contractual maturity date including the assumed exercise of all extension options, which in some cases may require the approval of the applicable fund advisory board. Private equity funds that have reached their maturity date are included in the table to the extent they have generated incentive income. (C) Includes an increase to the NAV surplus related to the U.S. income tax expense of certain investment entities, which is considered a distribution for the purposes of computing incentive income. (D) A NAV deficit represents the gain needed to cross the incentive income threshold (as described in (F) below), excluding the impact of any relevant performance (i.e. preferred return) thresholds (as described in (E) below). (E) For fund investors whose NAV is below the incentive income threshold, represents the gain needed for these investors to achieve the current relevant performance thresholds, assuming the gain described in (D) above is already achieved. (F) For fund investors whose NAV is below the incentive income threshold, represents the immediate increase in NAV needed for these investors for Fortress to begin earning incentive income, including the achievement of any relevant performance thresholds. It does not include the amount needed to earn back intrinsic clawback (see (J) below), if any. Incentive income is not recorded as revenue until it is received and any related contingencies are resolved (see (I) below). For the publicly traded permanent capital vehicles, represents the immediate increase of the entity's applicable supplemental measure of operating performance needed for Fortress to begin earning incentive income. As of June 30, 2015 , as a result of Newcastle not meeting the incentive income threshold, Fortress does not expect to earn incentive income from Newcastle for an indeterminate period of time. In April 2015, Fortress entered into an amended management agreement with Eurocastle. The amendment reset the earnings threshold for Fortress to earn incentive income. (G) Represents the amount of additional incentive income Fortress would receive if the fund were liquidated at the end of the period at its NAV. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. As of June 30, 2015 , a portion of Fund V, Long Dated Value Fund I and Real Estate Opportunities Fund II's capital is above their incentive income threshold. (H) Represents the amount of net incentive income previously received from the fund since inception. (I) Represents the amount of incentive income previously received from the fund which is still subject to contingencies and is therefore recorded on the consolidated balance sheet as Deferred Incentive Income. This amount will either be recorded as revenue when all related contingencies are resolved, or, if the fund does not meet certain performance thresholds, will be returned by Fortress to the fund (i.e., “clawed back”). (J) Represents the amount of incentive income previously received from the fund that would be clawed back (i.e., returned by Fortress to the fund) if the fund were liquidated at the end of the period at its NAV, excluding the effect of any tax adjustments. Employees, former employees and affiliates of Fortress would be required to return a portion of this incentive income that was paid to them under profit sharing arrangements. “Gross” and “Net” refer to amounts that are gross and net, respectively, of this employee/affiliate portion of the intrinsic clawback. Fortress remains liable to the funds for these amounts even if it is unable to collect the amounts from employees/affiliates. Fortress withheld a portion of the amounts due to employees under these profit sharing arrangements as a reserve against future clawback; as of June 30, 2015 , Fortress held $22.8 million of such amounts on behalf of employees related to all of the private equity funds. (K) The Fund I distributed incentive income amount is presented for the total fund, of which Fortress was entitled to approximately 50% . (L) Represents the portion of a fund’s or managed account's NAV or trading level that is eligible to earn incentive income. For the publicly traded permanent capital vehicles, represents the equity basis that is used to calculate incentive income. (M) Represents, for those investors whose NAV is below the performance threshold Fortress needs to obtain before it can earn incentive income from such investors (their “incentive income threshold” or “high water mark”), the amount by which their aggregate incentive income thresholds exceed their aggregate NAVs. The amount by which the NAV of each investor within this category is below their respective incentive income threshold varies and, therefore, Fortress may begin earning incentive income from certain investors before this entire amount is earned back. Fortress earns incentive income whenever the assets of new investors, as well as of investors whose NAV exceeds their incentive income threshold, increase in value. For Fortress Japan Income Fund, Fortress earns incentive income based on investment income, which does not include unrealized and realized gains and losses, earned in excess of a preferred return threshold. (N) Represents the percentage which is computed by dividing (i) the aggregate NAV of all investors who are at or above their respective incentive income thresholds, by (ii) the total incentive income eligible NAV of the fund. The amount by which the NAV of each fund investor who is not in this category is below their respective incentive income threshold may vary, and may vary significantly. This percentage represents the performance of only the main fund investments and managed accounts relative to their respective incentive income thresholds. It does not incorporate the impact of unrealized losses on sidepocket investments that can reduce the amount of incentive income earned from certain funds. See footnote (R) below. (O) Represents the amount of additional incentive income Fortress would earn from the fund or managed account if it were liquidated at the end of the period at its NAV. This amount is currently subject to performance contingencies generally until the end of the year or, in the case of sidepocket investments, until such investments are realized. Main Fund Investments (Liquidating) pay incentive income only after all capital is returned. For the Fortress Japan Income Fund, represents the amount of incentive income Fortress would earn from the fund assuming the amount of investment income earned in excess of the preferred return threshold was distributed as of the end of the period. For the Value Recovery Fund managed accounts, Fortress can earn incentive income if aggregate realizations exceed an agreed threshold. For FTAI, Fortress can earn incentive income if cumulative capital gains income, subject to certain adjustments, exceeds the incentive income threshold as of the end of each calendar year. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. (P) Represents the amount of incentive income Fortress has earned which is not subject to clawback. For the publicly traded permanent capital vehicles, represents the life-to-date incentive income amount that Fortress has earned and which is not subject to clawback. All of the capital of WWTAI, a private fund managed by Fortress, was contributed to FTAI which completed its IPO in May 2015 (see below). Fortress earned $7.0 million in life-to-date incentive income which is not subject to clawback and was not included in the table above. Of the $7.0 million in incentive income from WWTAI, Fortress received $5.9 million in FTAI common shares based on the share price at IPO. (Q) The Drawbridge Global Macro SPV (the “SPV”), which was established in February 2009 to liquidate illiquid investments and distribute the proceeds to then existing investors, is not subject to incentive income and is therefore not presented in the table. However, realized gains or losses within the SPV can decrease or increase, respectively, the gain needed to cross the incentive income threshold for investors with a corresponding investment in the main fund. The unrealized gains and losses within the SPV at June 30, 2015 , as if they became realized, would not materially impact the amounts presented in the table. (R) Represents investments held in sidepockets (also known as special investment accounts), which generally have investment profiles similar to private equity funds. The performance of these investments may impact Fortress’s ability to earn incentive income from main fund investments. For the credit hedge funds and Fortress Partners Funds, realized and unrealized losses from individual sidepockets below original cost may reduce the incentive income earned from main fund investments. For the Macro Funds, only realized losses from individual sidepockets reduce the incentive income earned from main fund investments. Based on current unrealized losses in Macro Fund sidepockets, if all of the Macro Fund sidepockets were liquidated at their NAV at June 30, 2015 , the undistributed incentive income from the Macro main fund would not be impacted. (S) Represents investments held in sidepockets for investors with no corresponding investment in the related main fund investments. In the case of the Macro Funds, such investors may have investments in the SPV (see (Q) above). (T) Includes onshore and offshore funds. (U) Relates to accounts where investors have provided return of capital notices and are subject to payout as underlying fund investments are realized. (V) Excludes the Value Recovery Funds which had a NAV of $146.0 million at June 30, 2015 . Fortress began managing the third party originated Value Recovery Funds in June 2009 and generally does not expect to earn any significant incentive income from the fund investments. Private Equity WWTAI was a private fund formed in July 2011 and managed by Fortress. All of the capital of WWTAI was contributed to FTAI which completed its IPO in May 2015. Fortress received shares in FTAI in exchange for its equity interests in WWTAI. During the second quarter of 2015, Fortress recognized $7.0 million in incentive income from WWTAI as these distributions were determined to no longer be subject to clawback. Of the $7.0 million in incentive income from WWTAI, Fortress received $5.9 million in FTAI common shares based on the share price at IPO. Fortress entered into a management agreement with FTAI and under the terms of the management agreement, Fortress will receive a management fee, incentive income and reimbursement for certain expenses incurred. During the six months ended June 30, 2015 , Fortress's senior living management subsidiary (Blue Harbor) entered into agreements to manage two senior living properties which are owned by New Senior. Fortress will receive management fees equal to 5.0% of revenues (as defined in the agreements) and reimbursement of certain expenses, including the compensation expense of all on-site employees. Logan Circle During the six months ended June 30, 2015 , Logan Circle, Fortress's fixed income asset manager, formed two new entities with net asset values as follows as of June 30, 2015 : Logan Circle Funds Fortress $ 9,899 Third party investors 50,745 Total capital NAV $ 60,644 Credit PE During the six months ended June 30, 2015 , Fortress formed new credit PE entities which had capital commitments as follows as of June 30, 2015 : Credit PE Fortress $ 33,750 Fortress's affiliates 36,035 Third party investors 3,864,910 Total capital commitments $ 3,934,695 |
INVESTMENTS AND FAIR VALUE
INVESTMENTS AND FAIR VALUE | 6 Months Ended |
Jun. 30, 2015 | |
Investments and Fair Value | |
INVESTMENTS AND FAIR VALUE | INVESTMENTS AND FAIR VALUE Investments consist primarily of investments in equity method investees and options in certain investees. The investees are primarily Fortress Funds. Investments can be summarized as follows: June 30, 2015 December 31, 2014 Equity method and other investees $ 1,115,092 $ 1,106,338 Equity method investees, held at fair value (A) 29,505 15,207 Total investments $ 1,144,597 $ 1,121,545 Options in equity method investees $ 60,950 $ 71,844 (A) Includes the publicly traded private equity portfolio companies and publicly traded permanent capital vehicles, including FTAI which completed its IPO in May 2015 (see Note 2). Gains (losses) are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net realized gains (losses) $ 54 $ (1,574 ) $ 1,313 $ (2,409 ) Net realized gains (losses) from affiliate investments (A) 33,867 44,922 32,701 44,348 Net unrealized gains (losses) 3,962 4,844 1,600 (1,959 ) Net unrealized gains (losses) from affiliate investments (A) (44,670 ) (43,328 ) (10,840 ) (46,171 ) Total gains (losses) $ (6,787 ) $ 4,864 $ 24,774 $ (6,191 ) (A) Includes the impact of the exercise of options held in New Residential in June 2015 and the sale of GAGFAH shares in June 2014. These gains (losses) were generated as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Mark to fair value on affiliate investments and options $ (10,886 ) $ 1,593 $ 21,899 $ (1,846 ) Mark to fair value on derivatives 3,903 (2,599 ) 5,017 (3,948 ) Mark to fair value on equity securities — 693 (509 ) 770 Gains (losses) on digital currency (Bitcoin) 368 3,904 (1,175 ) (2,272 ) Other (172 ) 1,273 (458 ) 1,105 Total gains (losses) $ (6,787 ) $ 4,864 $ 24,774 $ (6,191 ) Investments Fortress holds investments in certain Fortress Funds which are primarily recorded based on the equity method of accounting. Fortress’s maximum exposure to loss with respect to these entities is generally equal to its investment plus its basis in any options received from such entities, plus any receivables from such entities as described in Note 6. In addition, unconsolidated affiliates also hold ownership interests in certain of these entities. Summary financial information related to these investments is as follows: Fortress’s Investment Earnings (Losses) from Equity Method Investees June 30, December 31, Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 Private equity funds $ 657,569 $ 677,366 $ (33,674 ) $ 10,957 $ (7,819 ) $ 17,349 Publicly traded portfolio companies (A)(B) 1,368 1,035 N/A N/A N/A N/A FTAI (B) 14,236 5,284 (129 ) (92 ) 89 (57 ) Newcastle (B) 764 776 N/A N/A N/A N/A New Residential (B) 7,903 6,622 N/A N/A N/A N/A Eurocastle (B) 2,244 2,162 N/A N/A N/A N/A New Media (B) 1,342 1,769 N/A N/A N/A N/A New Senior (B) 2,311 2,843 N/A N/A N/A N/A Total private equity 687,737 697,857 (33,803 ) 10,865 (7,730 ) 17,292 Liquid hedge funds (C) 193,783 167,630 (8,850 ) 1,756 518 3,286 Credit hedge funds 41,898 57,224 990 2,440 2,958 4,809 Credit PE funds 195,801 183,127 5,000 7,387 10,065 17,394 Other 25,378 15,707 342 — (424 ) 41 $ 1,144,597 $ 1,121,545 $ (36,321 ) $ 22,448 $ 5,387 $ 42,822 (A) Represents Fortress’s direct investments in the common stock of publicly traded private equity portfolio companies. (B) Fortress elected to record the common shares held in these companies at fair value pursuant to the fair value option for financial instruments, including FTAI which completed its IPO in May 2015 (see Note 2). (C) Includes Fortress's investment in Affiliated Managers. A summary of the changes in Fortress’s investments is as follows: Six Months Ended June 30, 2015 Private Equity Funds Publicly Traded Portfolio Companies (A) Permanent Capital Vehicles (A) Liquid Hedge Funds (B) Credit Hedge Funds Credit PE Funds Other Total Investment, beginning $ 677,366 $ 1,035 $ 19,456 $ 167,630 $ 57,224 $ 183,127 $ 15,707 $ 1,121,545 Earnings from equity method investees (7,819 ) N/A 89 518 2,958 10,065 (424 ) 5,387 Other comprehensive income from equity — N/A — — — — — — Contributions to equity method and other 1,930 50 8,406 13,652 115,369 21,602 66 161,075 Distributions of earnings from equity (10,668 ) N/A (173 ) (427 ) (3,485 ) (8,269 ) (734 ) (23,756 ) Distributions of capital from equity (2,016 ) N/A (216 ) (20,990 ) (130,168 ) (10,278 ) (3 ) (163,671 ) Total distributions from equity method (12,684 ) — (389 ) (21,417 ) (133,653 ) (18,547 ) (737 ) (187,427 ) Mark to fair value - during period (D) 401 283 1,411 N/A N/A N/A (189 ) 1,906 Net purchases of investments by consolidated funds — — — — — — 10,955 10,955 Translation adjustment (28 ) — (173 ) — — (398 ) — (599 ) Dispositions (2,683 ) — — — — (48 ) — (2,731 ) Reclassification to Due to Affiliates (E) 1,086 — — — — — — 1,086 Retained interest in Graticule (Note 1) — — — 33,400 — — — 33,400 Investment, ending $ 657,569 $ 1,368 $ 28,800 $ 193,783 $ 41,898 $ 195,801 $ 25,378 $ 1,144,597 Ending balance of undistributed earnings $ 54,692 $ N/A $ N/A $ 7,826 $ 2,442 $ 13,547 $ 1,728 $ 80,235 (A) Fortress elected to record the common shares held in the publicly traded private equity portfolio companies and publicly traded permanent capital vehicles, including FTAI which completed its IPO in May 2015 (see Note 2), at fair value pursuant to the fair value option for financial instruments. (B) Includes Fortress's investment in Affiliated Managers. (C) The amounts presented above can be reconciled to the amounts presented on the statement of cash flows as follows: Six Months Ended June 30, 2015 Contributions Distributions of Capital Per Consolidated Statements of Cash Flows $ 18,862 $ (155,255 ) Investments of incentive receivable amounts into Fortress Funds 134,657 — Change in distributions payable out of Fortress Funds — — Net funded* 7,331 (7,331 ) Other 225 (1,085 ) Per Above $ 161,075 $ (163,671 ) * In some instances, a private equity style fund may need to simultaneously make both a capital call (for new investments or expenses) and a capital distribution (related to realizations from existing investments). This results in a net funding. (D) Recorded to Gains (Losses). (E) Represents a portion of the general partner liability discussed in Note 9. The following tables present summarized statements of operations for Fortress's significant equity method investees. The permanent capital vehicles, the publicly traded portfolio companies and Other are not presented as they are insignificant to Fortress’s investments. Private Equity Funds (A) Liquid Hedge Funds Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 (B) 2014 Revenues and gains (losses) on investments $ (284,694 ) $ 419,265 $ (132,365 ) $ (153,439 ) Expenses (84,796 ) (101,809 ) (95,131 ) (97,666 ) Net Income (Loss) $ (369,490 ) $ 317,456 $ (227,496 ) $ (251,105 ) Fortress’s equity in net income (loss) $ (7,819 ) $ 17,349 $ 518 $ 3,286 Credit Hedge Funds Credit PE Funds (A) Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues and gains (losses) on investments $ 499,641 $ 553,237 $ 854,159 $ 1,293,764 Expenses (212,050 ) (150,968 ) (141,262 ) (132,624 ) Net Income (Loss) $ 287,591 $ 402,269 $ 712,897 $ 1,161,140 Fortress’s equity in net income (loss) $ 2,958 $ 4,809 $ 10,065 $ 17,394 (A) For Private Equity Funds, includes four entities which are recorded on a one quarter lag (i.e. current year balances reflected for these entities are for the period ended March 31, 2015). For Credit PE Funds, includes one entity which is recorded on a one quarter lag and several entities which are recorded on a one month lag. They are recorded on a lag because they are foreign entities, or they have substantial operations in foreign countries, and do not provide financial reports under GAAP within the reporting time frame necessary for U.S. public entities. (B) Includes the operating results of Affiliated Managers. Investments in Variable Interest Entities and other Unconsolidated Entities All of Fortress’s interests in unconsolidated entities relate to (i) entities in which Fortress has an investment, which are included on the consolidated balance sheet and described in Note 3, and/or (ii) entities from which Fortress earns fees, which are included in revenues and described in Note 2. These entities are primarily Fortress Funds which are VOEs and provide their limited partners or members unrelated to Fortress with the substantive ability to liquidate the Fortress Fund or otherwise remove Fortress as the general partner and/or manager. No reconsideration events occurred during the six months ended June 30, 2015 or 2014, respectively, which caused a change in Fortress’s accounting, except as described below. The following tables set forth certain information as of June 30, 2015 regarding variable interest entities in which Fortress held a variable interest. Entities initially classified as variable interest entities during the six months ended June 30, 2015 : Fortress is not Primary Beneficiary Business Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Permanent Capital Vehicles 1 $ 2,009,945 $ 584,302 $ 19,121 (C) Liquid Hedge Funds 2 192,912 — 39,044 (D) Credit PE Funds 2 22,577 — 85 (D) All variable interest entities: Fortress is not Primary Beneficiary June 30, 2015 December 31, 2014 Business Number of VIEs Gross Financial Obligations Fortress Investment (B) Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Private Equity Funds 1 $ 126,427 $ — $ 53 2 $ 85,553 $ — $ 56 (D) Permanent Capital Vehicles 6 23,439,898 14,859,143 129,847 5 14,539,141 10,336,207 154,346 (C) Liquid Hedge Funds 4 2,224,814 283,069 42,347 2 3,070,203 432,580 7,094 (D) Credit Hedge Funds 8 2,145,724 373,920 2,915 8 1,976,328 152,806 25,474 (D) (E) Credit PE Funds 32 860,222 214,870 7,893 30 735,855 143,743 5,897 (D) (E) Fortress is Primary Beneficiary June 30, 2015 December 31, 2014 Business Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Private Equity Funds 9 $ 65,588 $ — $ 20,957 9 $ 90,723 $ — $ 20,368 (F) (G) Liquid Hedge Funds 1 8,154 — 3,429 3 8,714 — 4,125 (F) Credit PE Funds 2 446 — 20 2 434 — 22 (F) Logan Circle 1 4,951 — 4,807 1 6,566 — 4,783 (F) (A) Represents financial obligations of the VIEs which are not recourse to Fortress and assets of the VIEs which Fortress does not have the right to make use of to satisfy its obligations. Financial obligations include financial borrowings, derivative liabilities and short securities. In many cases, these VIEs have additional debt within unconsolidated subsidiaries. The debt obligations of the VIEs are not cross collateralized with the debt obligations of Fortress. Fortress has no obligation to satisfy the liabilities of the VIEs. The VIE’s debt obligations have no impact on Fortress’s cash flows and its ability to borrow or comply with its debt covenants under its revolving credit agreement. (B) Represents Fortress’s maximum exposure to loss with respect to these entities, which includes investments in these entities, plus any receivables due from these entities. In addition to the table above, Fortress is exposed to potential changes in cash flow and revenues attributable to the management fees and/or incentive income Fortress earns from those entities. For VIEs where Fortress is deemed to be the primary beneficiary, these investments and receivables are eliminated in consolidation but still represent Fortress’s economic exposure to the VIEs. (C) Includes permanent capital vehicles that are a VIE because the entity's at-risk equity holders as a group lack the characteristics of a controlling financial interest because the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance. Fortress is not the primary beneficiary of these entities. Fortress and its related parties under common control as a group, where applicable, do not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to these entities. (D) Includes entities, primarily investing vehicles set up on behalf of the Fortress Funds to make investments, that are a VIE because the entity’s at-risk equity holders as a group lack the characteristics of a controlling financial interest because either (i) the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance and/or (ii) the voting rights of an investor are not proportional to its obligation to absorb the income or loss of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of that investor and its related parties. Fortress is not the primary beneficiary of these entities. Fortress and its related parties under common control as a group, where applicable, do not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to these entities. Due to a reconsideration event in January 2015, Fortress no longer has the power to direct the activities that most significantly impact the economic performance of certain VIEs in the liquid hedge fund business. Therefore, Fortress is no longer deemed to be the primary beneficiary of these VIEs as of the reconsideration date. (E) Includes entities that are VIEs because the entity's equity investment at-risk is determined to be insufficient. Fortress is not the primary beneficiary of these entities because Fortress does not have the power to direct the activities that most significantly impact the economic performance of these entities. These entities represent an insignificant portion of the amounts presented in the table. (F) Includes entities that are a VIE because the entity's at-risk equity holders as a group lack the characteristics of a controlling financial interest because the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance. Fortress is the investment manager of these entities. Fortress is determined to be the primary beneficiary of these entities since it has both power over the activities that most significantly affect the success of the entity or impact the entity’s economic performance and has the right to receive benefits or the obligation to absorb losses from the VIE that potentially could be significant to the entity. Due to a reconsideration in January 2015, Fortress no longer has the power to direct the activities that most significantly impact the economic performance of certain VIEs in the liquid hedge fund business. Therefore, Fortress is no longer deemed to be the primary beneficiary of these VIEs as of the reconsideration date. (G) Includes an entity that is a VIE because the entity’s equity investment at risk is determined to be insufficient. Fortress, as a result of directing the operations of the entity through its management contracts with certain funds, and providing financial support to the entity, was deemed to be its primary beneficiary. Fair Value of Financial Instruments The following table presents information regarding Fortress’s financial instruments that are recorded at fair value. Investments denominated in foreign currencies have been translated at the period end exchange rate. Changes in fair value are recorded in Gains (Losses). Fair Value Valuation Method June 30, 2015 December 31, 2014 Assets (within Investments) Common shares of publicly traded permanent capital vehicles (A) $ 28,137 $ 14,172 Level 1 - Quoted prices in active markets for identical assets Common stock of publicly traded 1,368 1,035 Level 1 - Quoted prices in active markets for identical assets Total equity method investments $ 29,505 $ 15,207 Options in equity method investees $ 60,950 $ 71,844 Level 2 - Option valuation models using significant observable inputs Assets (within Other Assets) Derivatives $ 28,951 $ 27,105 Level 2 - See below $ — $ 17,627 Level 1 - Quoted prices in active markets for identical assets Liabilities (within Accrued Options in affiliates granted to $ (8,965 ) $ (8,356 ) Level 2 - Option valuation models using significant observable inputs Liabilities (within Other Liabilities) Derivatives $ (2,045 ) $ (932 ) Level 2 - See below (A) FTAI completed its IPO in May 2015 and Fortress elected to record its interest at fair value pursuant to the fair value option for financial instruments. (B) Equity securities were held at fair value and classified as trading. All equity securities were sold in 2015. See Note 4 regarding the fair value of outstanding debt. In January 2015, New Media issued 7.0 million shares of its common stock in a public offering at a price to the public of $21.70 per share. In connection with this offering, New Media compensated Fortress for its successful efforts in raising capital for New Media by granting options to Fortress to purchase 0.7 million shares of New Media's common stock at the public offering price, which were valued at $4.1 million . The options were fully vested upon issuance, become exercisable over thirty months and have a ten -year term. In April 2015, New Residential issued 57.5 million shares of its common stock. For the purpose of compensating Fortress for its successful efforts in raising capital, New Residential granted options to Fortress to purchase 5.8 million shares of New Residential's common stock at a price of $15.25 , which had a fair value of $9.0 million as of the grant date. The options were fully vested upon issuance, become exercisable over thirty months and have a ten -year term. In April 2015, Eurocastle issued 39.8 million shares of its common stock in a public offering at a price to the public of €7.85 per share. In connection with this offering, Eurocastle compensated Fortress for its successful efforts in raising capital for Eurocastle by granting options to Fortress to purchase 4.0 million shares of Eurocastle's common stock at the public offering price, which were valued at $5.1 million as of the grant date. The options were fully vested upon issuance and have a ten -year term. In June 2015, New Residential issued 27.9 million shares of its common stock in a public offering at a price to the public of $15.88 per share. In connection with this offering, New Residential compensated Fortress for its successful efforts in raising capital for New Residential by granting options to Fortress to purchase 2.8 million shares of New Residential’s common stock at the public offering price, which were valued at $3.7 million as of the grant date. The options were fully vested upon issuance, become exercisable over thirty months and have a ten -year term. In June 2015, Fortress exercised 6.2 million of its options held in New Residential, received $51.5 million of net proceeds in connection with the exercise and realized a gain of $30.6 million . In June 2015, New Senior issued 20.1 million shares of its common stock in a public offering at a price to the public of $13.75 per share. In connection with this offering, New Senior compensated Fortress for its successful efforts in raising capital for New Senior by granting options to Fortress to purchase 2.0 million shares of New Senior’s common stock at the public offering price, which were valued at $3.0 million as of the grant date. The options were fully vested upon issuance, become exercisable over thirty months and have a ten -year term. Derivatives Fortress is exposed to certain risks relating to its ongoing business operations. The primary risk managed by Fortress using derivative instruments is foreign currency risk. Fortress enters into foreign exchange forward contracts and options to economically hedge the risk of fluctuations in foreign exchange rates with respect to certain foreign currency denominated assets and expected revenues. Gains and losses on these contracts are reported currently in Gains (Losses). Fortress’s derivative instruments are carried at fair value and are generally valued using models with observable market inputs that can be verified and which do not involve significant judgment. The significant observable inputs used in determining the fair value of the Level 2 derivative contracts are contractual cash flows and market based parameters such as foreign exchange rates. Fortress’s derivatives (not designated as hedges) are recorded as follows: Balance Sheet June 30, 2015 (or six months ended) Maturity Classification (A) Fair Value Notional Amount Gains/(Losses) (B) Date Foreign exchange option contracts Other Assets $ 28,597 ¥ 45,560,526 $ 4,857 Dec-15 - Mar-18 Foreign exchange option contracts Other Liabilities $ (1,710 ) ¥ 5,412,312 $ (216 ) Dec-15 - Jun-16 Foreign exchange forward contracts Other Assets $ 354 ¥ 1,028,587 $ 278 Jun-16 - Dec-17 Foreign exchange forward contracts Other Liabilities $ (335 ) ¥ 3,008,426 $ (335 ) Dec-15 - Jun-16 (A) Fortress has a master netting agreement with its counterparty. (B) Reflects unrealized gains (losses) related to contracts existing at period end. Total net foreign exchange gains (losses) from derivatives were $5.0 million and $(3.9) million during the six months ended June 30, 2015 and 2014, respectively. Fortress's average notional amount outstanding for the six months ended June 30, 2015 was $437.5 million . The following tables summarizes the fair value of Fortress's derivative contacts on a gross basis and any amount of offset as permitted by netting agreements as of June 30, 2015 . Net Amounts of Gross Amounts Offset Assets Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Assets as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Assets June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ 30,715 $ (2,118 ) $ 28,597 Foreign exchange forward contracts 354 — 354 $ 31,069 $ (2,118 ) $ 28,951 Net Amounts of Gross Amounts Offset Liabilities Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Liabilities as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Liabilities June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ (1,188 ) $ (522 ) $ (1,710 ) Foreign exchange forward contracts (335 ) — (335 ) $ (1,523 ) $ (522 ) $ (2,045 ) The counterparty on the outstanding derivatives is Citibank N.A. |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | DEBT OBLIGATIONS Face Amount and Carrying Value Contractual Final June 30, 2015 June 30, December 31, Interest Stated Amount Debt Obligation 2015 2014 Rate Maturity Available for Draws Revolving credit agreement (A)(B) $ 75,000 $ 75,000 LIBOR + 2.50% (C) Feb 2016 $ 72,332 Total $ 75,000 $ 75,000 (A) Collateralized by substantially all of Fortress Operating Group’s assets as well as Fortress Operating Group’s rights to fees from the Fortress Funds and its equity interests therein, other than fees from Fortress's senior living property manager. (B) The $150.0 million revolving debt facility includes a $15.0 million letter of credit subfacility of which $2.7 million was utilized. (C) Subject to unused commitment fees of 0.4% per annum. Management believes the fair value of its outstanding debt was $75.1 million as of June 30, 2015 (classified as a level 3 valuation, which is based on internal models using discounted future contractual cash flows and market interest rates). Fortress was in compliance with all of its debt covenants as of June 30, 2015 . The following table sets forth the financial covenant requirements as of June 30, 2015 . June 30, 2015 (dollars in millions) Requirement Actual Notes AUM, as defined ≥ $ 25,000 $ 45,690 (A) Consolidated Leverage Ratio ≤ 2.00 0.20 (B) Consolidated Interest Coverage Ratio ≥ 4.00 102.97 (B) (A) Impacted by capital raised in funds, redemptions from funds, and valuations of fund investments. The AUM presented here is based on the definition of Management Fee Earning Assets contained in the Credit Agreement. (B) The Consolidated Leverage Ratio is equal to Adjusted Net Funded Indebtedness, as defined, divided by the trailing four quarters’ Consolidated EBITDA, as defined. The Consolidated Interest Coverage Ratio is equal to the quotient of (A) the trailing four quarters' Consolidated EBITDA, as defined, divided by (B) the trailing four quarters' interest charges as defined in the Credit Agreement. Consolidated EBITDA, as defined, is impacted by the same factors as distributable earnings, except Consolidated EBITDA is not impacted by changes in clawback reserves or gains and losses, including impairment, on investments. |
INCOME TAXES AND TAX RELATED PA
INCOME TAXES AND TAX RELATED PAYMENTS | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES AND TAX RELATED PAYMENTS | INCOME TAXES AND TAX RELATED PAYMENTS Fortress was established as a publicly traded partnership and also established a wholly owned corporate subsidiary. Accordingly, a substantial portion of Fortress’s income is earned by the corporate subsidiary and subject to U.S. federal and state income taxation, taxed at prevailing rates. The remainder of Fortress’s income is allocated directly to its shareholders and is not subject to a corporate level of taxation. The provision for income taxes consists of the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Current Federal income tax expense (benefit) $ 2,394 $ (4,384 ) $ (727 ) $ (4,452 ) Foreign income tax expense (benefit) 5,543 1,470 6,670 4,608 State and local income tax expense (benefit) 930 560 2,809 998 8,867 (2,354 ) 8,752 1,154 Deferred Federal income tax expense (benefit) (2,153 ) 9,096 10,834 10,613 Foreign income tax expense (benefit) (77 ) (107 ) 3,465 676 State and local income tax expense (benefit) (A) (11,836 ) 1,281 (9,851 ) 1,467 (14,066 ) 10,270 4,448 12,756 Total expense (benefit) $ (5,199 ) $ 7,916 $ 13,200 $ 13,910 (A) During the three months ended June 30, 2015, New York City enacted corporate taxation legislative changes, which increased the value of certain future tax benefits. The tax effects of temporary differences have resulted in deferred income tax assets and liabilities as follows: June 30, 2015 December 31, 2014 Total deferred tax assets $ 444,543 $ 439,159 Less: Valuation allowance (20,776 ) (13,072 ) Deferred tax liabilities (A) (7,852 ) (8,464 ) Deferred tax assets, net $ 415,915 $ 417,623 (A) The deferred tax liabilities primarily relate to timing differences in the recognition of income from options received from certain permanent capital vehicles. Deferred tax assets are shown net of deferred tax liabilities since they are both primarily of similar tax character and tax jurisdiction. The following table summarizes the change in the deferred tax asset valuation allowance: Valuation Allowance at December 31, 2014 $ 13,072 Changes due to FIG Corp. ownership change 306 Net increases (A) 7,398 Valuation Allowance at June 30, 2015 $ 20,776 (A) Primarily related to the change in the portion of the deferred tax asset that would be realized in connection with future capital gains. For the six months ended June 30, 2015 , a net deferred income tax provision of $0.2 million was credited to other comprehensive income, primarily related to foreign currency translation. For the six months ended June 30, 2015 , a current income tax benefit of $1.5 million was credited to paid-in capital, related to dividend equivalent payments on RSUs (Note 8), as applicable, which are currently deductible for income tax purposes. For the six months ended June 30, 2015 and 2014, Fortress recorded $4.5 million and $2.9 million , respectively, to paid-in capital for excess tax benefits from RSUs delivered during these periods and as a financing activity on the consolidated statements of cash flows. Tax Receivable Agreement Although the tax receivable agreement payments are calculated based on annual tax savings, for the six months ended June 30, 2015 , the payments which would have been made pursuant to the tax receivable agreement, if such period was calculated by itself, were estimated to be $12.2 million . In addition, during the three months ended June 30, 2015, a change in tax rate primarily related to enacted legislative changes to New York City corporate taxation, gave rise to a $7.5 million increase in the expected tax receivable agreement liability. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES | RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES Affiliate Receivables and Payables Due from affiliates was comprised of the following: Private Equity Liquid Credit Permanent Hedge Hedge Logan Funds Capital Vehicles Funds Funds PE Funds Circle Other Total June 30, 2015 Management fees and incentive income (A) $ 38,499 $ 29,601 $ 5,349 $ 2,766 $ 24,429 $ 507 $ — $ 101,151 Expense reimbursements (A) 24,257 7,796 7,200 12,267 10,541 109 — 62,170 Dividends and distributions — 347 — — — — — 347 Other — 2,353 — — — — 22,030 24,383 Total $ 62,756 $ 40,097 $ 12,549 $ 15,033 $ 34,970 $ 616 $ 22,030 $ 188,051 Private Equity Liquid Credit Permanent Hedge Hedge Logan Funds Capital Vehicles Funds Funds PE Funds Circle Other Total December 31, 2014 Management fees and incentive income (A) $ 35,970 $ 65,043 $ 15,634 $ 96,996 $ 18,393 $ 1,089 $ — $ 233,125 Expense reimbursements (A) 35,995 6,473 12,940 9,264 10,077 164 — 74,913 Dividends and distributions — 295 — — — — — 295 Other — 1,346 — — — — 16,896 18,242 Total $ 71,965 $ 73,157 $ 28,574 $ 106,260 $ 28,470 $ 1,253 $ 16,896 $ 326,575 (A) Net of allowances for uncollectible management fees and expense reimbursements of $12.2 million and $6.7 million as of June 30, 2015 , respectively, and of $12.2 million and $6.6 million as of December 31, 2014 , respectively. Allowances are recorded as General and Administrative expenses. As of June 30, 2015 , amounts due from Fortress Funds recorded in Due from Affiliates included $36.1 million of past due management fees and $11.3 million of private equity general and administrative expenses advanced on behalf of a certain Fortress Fund. Although such fund is currently experiencing a liquidity issue, the past due amounts represent less than 5% of such fund's NAV and Fortress believes these fees and reimbursable expenses will ultimately be collectible. As of June 30, 2015 , past due amounts recorded in Due from Affiliates also includes $12.2 million in management fees and $6.7 million in private equity general and administrative expenses due from another Fortress Fund which Fortress has fully reserved. Due to affiliates was comprised of the following: June 30, 2015 December 31, 2014 Principals - tax receivable agreement - Note 5 $ 296,916 $ 289,324 Principals - Principal Performance Payments - Note 7 22,114 30,659 Distributions payable on Fortress Operating Group units 5,240 — Other 3,274 11,411 General partner liability - Note 9 45,116 44,030 Total $ 372,660 $ 375,424 Other Related Party Transactions For the six months ended June 30, 2015 and 2014 , Other Revenues included $1.2 million and $1.4 million , respectively, of revenues from affiliates, primarily interest and dividends. During 2015 , Fortress advanced $6.5 million to three of its senior employees who are not officers. These advances bear interest ranging from LIBOR+ 4% to LIBOR+ 5% . All principal and interest is due and payable no later than February 2019. In addition, one senior employee repaid advances aggregating $0.1 million . Redeemable Non-Controlling Interests The following table represents the activity in Redeemable Non-controlling Interests as presented in the consolidated balance sheets: Six Months Ended June 30, 2015 Beginning balance $ 1,717 Capital distributions (1,692 ) Redeemable Non-controlling Interests in income (loss) of Consolidated Subsidiaries (6 ) $ 19 Principals’ and Others’ Interests in Consolidated Subsidiaries These amounts relate to equity interests in Fortress’s consolidated, but not wholly owned subsidiaries, which are held by the Principals, employees, and others. This balance sheet caption was comprised of the following: June 30, 2015 December 31, 2014 Fortress Operating Group units held by the Principals and a former senior $ 494,551 $ 556,720 Employee interests in majority owned and controlled fund advisor and general partner entities 57,373 80,333 Other 2,251 2,303 Total $ 554,175 $ 639,356 The Fortress Operating Group portion of these interests is computed as follows: June 30, 2015 December 31, 2014 Fortress Operating Group equity (Note 12) $ 1,025,423 $ 1,152,297 Less: Others' interests in equity of consolidated subsidiaries (Note 12) (59,624 ) (82,636 ) Total Fortress shareholders' equity in Fortress Operating Group $ 965,799 $ 1,069,661 Fortress Operating Group units outstanding (A) 226,331,513 226,331,513 Class A shares outstanding 215,673,299 208,535,157 Total 442,004,812 434,866,670 Fortress Operating Group units as a percent of total (B) 51.2 % 52.0 % Equity of Fortress Operating Group units held by the Principals and $ 494,551 $ 556,720 (A) Held by the Principals and a former senior employee; exclusive of Class A shares. (B) As a result, the Registrant owned 48.8% and 48.0% of Fortress Operating Group as of June 30, 2015 and December 31, 2014 , respectively. This statement of operations caption was comprised of shares of consolidated net income (loss) related to the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fortress Operating Group units held by the Principals and $ 1,355 $ 40,577 $ 52,960 $ 45,635 Employee interests in majority owned and controlled fund 199 1,505 1,039 2,516 Other 99 18 (123 ) 26 Total $ 1,653 $ 42,100 $ 53,876 $ 48,177 The Fortress Operating Group portion of these interests is computed as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fortress Operating Group net income (loss) (Note 12) $ 2,935 $ 79,257 $ 102,694 $ 90,083 Adjust: Others' interests in net (income) loss of consolidated subsidiaries (Note 12) (298 ) (1,523 ) (916 ) (2,542 ) Redeemable Non-controlling interests in (income) (10 ) (157 ) 6 (157 ) Total Fortress shareholders' net income (loss) in Fortress Operating Group $ 2,627 $ 77,577 $ 101,784 $ 87,384 Fortress Operating Group as a percent of total (A) 51.6 % 52.3 % 52.0 % 52.2 % Fortress Operating Group net income (loss) attributable to the Principals and a former senior employee $ 1,355 $ 40,577 $ 52,960 $ 45,635 (A) Represents the weighted average percentage of total Fortress shareholders' net income (loss) in Fortress Operating Group attributable to the Principals and a former senior employee. The purpose of this schedule is to disclose the effects of changes in Fortress’s ownership interest in Fortress Operating Group on Fortress’s equity: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net Income (loss) attributable to Class A shareholders $ 3,316 $ 31,199 $ 38,029 $ 34,223 Transfers (to) from the Principals' and Others' Interests: Increase in Fortress’s shareholders’ equity for the delivery of Class A shares primarily in connection with vested RSUs 8,338 4,359 8,364 4,776 Increase in Fortress's shareholders' equity for the public offering of Class A shares and repurchase of Class B shares and FOGUs — — — 53,510 Decrease in Fortress's shareholders' equity for the repurchase and cancellation of Class A shares and FOGUs — — — (101,156 ) Change from net income (loss) attributable to Fortress and transfers (to) from Principals’ and Others' Interests $ 11,654 $ 35,558 $ 46,393 $ (8,647 ) |
EQUITY-BASED AND OTHER COMPENSA
EQUITY-BASED AND OTHER COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY-BASED AND OTHER COMPENSATION | EQUITY-BASED AND OTHER COMPENSATION Fortress’s total compensation and benefits expense, including Principal Performance Payments, is comprised of the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Equity-based compensation, per below $ 11,044 $ 9,661 $ 25,388 $ 18,334 Profit-sharing expense, per below 67,348 41,426 106,261 105,747 Discretionary bonuses 58,236 55,283 120,817 112,721 Other payroll, taxes and benefits 62,480 61,744 125,530 119,831 $ 199,108 $ 168,114 $ 377,996 $ 356,633 Equity-Based Compensation The following tables set forth information regarding equity-based compensation activities. RSUs Employees Non-Employees Number Value (A) Number Value (A) Outstanding at December 31, 2014 20,153,746 $ 5.52 396,874 $ 6.51 Issued 11,925,660 $ 6.89 111,540 $ 7.61 Transfers — $ — — $ — Converted to Class A shares (6,880,798 ) $ 4.74 (186,136 ) $ 6.78 Forfeited (441,455 ) $ 6.24 — $ — Outstanding at June 30, 2015 (B) 24,757,153 $ 6.38 322,278 $ 6.74 Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expense incurred (B) Employee RSUs $ 7,818 $ 5,477 $ 18,822 $ 11,364 Non-Employee RSUs 82 4 1,064 10 Principal Performance Payments (C) 3,144 4,180 5,502 6,960 Total equity-based compensation expense $ 11,044 $ 9,661 $ 25,388 $ 18,334 (A) Represents the weighted average grant date estimated fair value per share or unit. (B) In future periods, Fortress will further recognize compensation expense on its non-vested equity based awards outstanding as of June 30, 2015 of $108.1 million , with a weighted average recognition period of 4.1 years. (C) Accrued based on year-to-date performance; the actual number of RSUs granted are determined at year end. Based on year-to-date performance, a total of approximately 1.1 million RSUs would be awarded as Principal Performance Payments. Fortress’s management reviewed the estimated forfeiture factor as of June 30, 2015 and, based on the actual forfeiture rate incurred and the remaining vesting period of certain grants, determined that the forfeiture assumptions for certain grants required adjustment. The result of these changes in estimates did not materially impact equity-based compensation expense. During January and February 2015, Fortress granted 11.4 million RSUs to its employees valued at an aggregate of $77.6 million on the respective grant dates, of which 6.5 million are dividend paying. These RSUs vest over a period of three to six years. In February 2015, Fortress awarded 0.5 million dividend paying RSUs as Principal Performance Payments based on 2014 results valued at an aggregate of $4.0 million on the grant date. These RSUs vest over three years. The expense for Principal Performance Payments was comprised of the following: Six Months Ended June 30, 2015 Equity-Based Profit Sharing Total Private equity business $ 401 $ 10,495 $ 10,896 Liquid hedge fund business 997 — 997 Credit business 4,104 9,759 13,863 Total $ 5,502 $ 20,254 $ 25,756 In April 2010, in connection with the acquisition of Logan Circle, Fortress created the Logan Circle Comp Plan, as amended. The Logan Circle Comp Plan provides for annual bonuses which may be paid partially in RSUs, as well as for potential Class A share awards to certain employees related to the years 2016 and 2017. These awards are annual performance-based awards and depend on the future performance of Logan Circle in the specific years to which they relate. Furthermore, the amounts of RSUs or shares to be awarded are not fixed until the respective year is completed. As such, these awards are expensed over the related service period. If Logan Circle meets the future performance targets under this plan, the amounts to be awarded could be significant. Through June 30, 2015 , no compensation expense was recognized under this plan as the satisfaction of the performance condition and amount of the award were not considered to be probable. Profit Sharing Expense Recognized profit sharing compensation expense (benefit) is summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Private equity funds $ — $ 303 $ — $ 303 Permanent capital vehicles 2,462 4,170 8,961 9,085 Liquid hedge funds (2,705 ) 5,944 1,348 8,407 Credit hedge funds 18,524 19,698 30,133 35,332 Credit PE funds 31,617 5,152 45,565 39,563 Principal Performance Payments (A) 17,450 6,159 20,254 13,057 Total $ 67,348 $ 41,426 $ 106,261 $ 105,747 (A) Relates to all applicable segments. Accrued based on year-to-date performance; the actual payments due to each Principal are determined at year end. |
EARNINGS PER SHARE AND DISTRIBU
EARNINGS PER SHARE AND DISTRIBUTIONS | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE AND DISTRIBUTIONS | EARNINGS PER SHARE AND DISTRIBUTIONS Fortress's potentially dilutive equity instruments fall primarily into two general categories: (i) instruments that Fortress has issued as part of its compensation plan, and (ii) ownership interests in Fortress's subsidiary, Fortress Operating Group, that are owned by the Principals (and a former senior employee) and are convertible into Class A shares. Based on the rules for calculating earnings per share, there are two general ways to measure dilution for a given instrument: (a) calculate the net number of shares that would be issued assuming any related proceeds are used to buy back outstanding shares (the treasury stock method), or (b) assume the gross number of shares are issued and calculate any related effects on net income available for shareholders (the if-converted and two-class methods). Fortress has applied these methods as prescribed by GAAP to each of its outstanding equity instruments as shown below. Substantially all of Fortress's business is conducted at the Fortress Operating Group (“FOG”) level and FOG’s net income (loss) is allocated pro rata between the Fortress Operating Group units held by the Registrant, on the one hand, and the Principals and a former senior employee, on the other hand. The FOG income allocated to the Principals and a former senior employee is not subject to corporate income tax. A substantial portion of the Registrant’s income is allocated to FIG Corp. and is subject to U.S federal and state income taxation (taxed at prevailing rates), while the remainder of the Registrant’s portion of FOG income is allocated directly to its shareholders and is not subject to a corporate level of taxation. The primary difference between basic and diluted earnings per share (“EPS”), if any, is income tax related. If the Principals and a former senior employee converted all of their Fortress Operating Group units into Class A shares, their portion of FOG’s income would become subject to corporate level taxation. Certain permanent differences in the Registrant’s tax calculation are not based on FIG Corp.’s ownership percentage of FOG. Thus, the effective tax rate changes when more income or loss is allocated to FIG Corp. This change in the effective tax rate results in incremental per share income or loss in the diluted EPS calculation, depending on whether the Registrant has income tax expense or benefit for the period. The comparison of the Registrant’s effective tax rate and the if-converted tax rate determines the dilutive or anti-dilutive impact of the Fortress Operating Group units held by the Principals and a former senior employee. The computations of basic and diluted net income (loss) per Class A share are set forth below: Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Basic Diluted Basic Diluted Weighted average shares outstanding Class A shares outstanding 211,685,639 211,685,639 209,710,467 209,710,467 Fully vested restricted Class A share units with dividend equivalent rights 3,717,045 3,717,045 5,464,698 5,464,698 Fully vested restricted Class A shares 780,497 780,497 810,412 810,412 Fortress Operating Group units exchangeable into — 226,331,513 — — Class A restricted shares and Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (2) — — — — Class A restricted share units granted to employees (not eligible for dividend and dividend equivalent payments) (3) — 6,695,668 — 6,225,155 Total weighted average shares outstanding 216,183,181 449,210,362 215,985,577 222,210,732 Basic and diluted net income (loss) per Class A share Net income (loss) attributable to Class A shareholders $ 3,316 $ 3,316 $ 38,029 $ 38,029 Dividend equivalents declared on, and undistributed earnings allocated to, non-vested restricted Class A shares and restricted Class A share units (2) (452 ) (452 ) (2,577 ) (2,577 ) Add back Principals' and others' interests in income of Fortress Operating Group, net of assumed income taxes at enacted rates, attributable to Fortress Operating Group units (1) — (3,237 ) — — Net income (loss) available to Class A shareholders $ 2,864 $ (373 ) $ 35,452 $ 35,452 Weighted average shares outstanding 216,183,181 449,210,362 215,985,577 222,210,732 Basic and diluted net income (loss) per Class A share $ 0.01 $ 0.00 $ 0.16 $ 0.16 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Basic Diluted Basic Diluted Weighted average shares outstanding Class A shares outstanding 205,351,556 205,351,556 208,688,070 208,688,070 Fully vested restricted Class A share units with dividend 1,431,885 1,431,885 2,653,378 2,653,378 Fully vested restricted Class A shares 1,000,310 1,000,310 986,867 986,867 Fortress Operating Group units exchangeable into Class A — 226,331,513 — 236,074,150 Class A restricted shares and Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (2) — 1,415,845 — 1,433,170 Class A restricted share units granted to employees (not — 9,035,738 — 9,837,501 Total weighted average shares outstanding 207,783,751 444,566,847 212,328,315 459,673,136 Basic and diluted net income (loss) per Class A share Net income (loss) attributable to Class A shareholders $ 31,199 $ 31,199 $ 34,223 $ 34,223 Dividend equivalents declared on, and undistributed earnings allocated to, non-vested restricted Class A shares and restricted Class A share units (2) (712 ) (712 ) (489 ) (489 ) Add back Principals' and others' interests in income of — 24,909 — 31,447 Net income (loss) available to Class A shareholders $ 30,487 $ 55,396 $ 33,734 $ 65,181 Weighted average shares outstanding 207,783,751 444,566,847 212,328,315 459,673,136 Basic and diluted net income (loss) per Class A share $ 0.15 $ 0.12 $ 0.16 $ 0.14 (1) The Fortress Operating Group units not held by Fortress (that is, those held by the Principals and a former senior employee) are exchangeable into Class A shares on a one -to- one basis. These units are not included in the computation of basic earnings per share. These units enter into the computation of diluted net income (loss) per Class A share when the effect is dilutive using the if-converted method, which includes the income tax effects of nondiscretionary adjustments to the net income (loss) attributable to Class A shareholders from assumed conversion of these units. To the extent charges, particularly tax related charges, are incurred by the Registrant (i.e. not at the Fortress Operating Group level), the effect may be anti-dilutive. (2) Restricted Class A shares granted to directors and certain restricted Class A share units granted to employees are eligible to receive dividend or dividend equivalent payments when dividends are declared and paid on Fortress’s Class A shares and therefore participate fully in the results of Fortress’s operations from the date they are granted. They are considered in the computation of both basic and diluted earnings per Class A share using the two-class method for participating securities, except during periods of net losses. (3) Certain restricted Class A share units granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities. These units are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method. The effect of the units on the calculation is generally anti-dilutive during periods of net losses. The weighted average restricted Class A share units which are not entitled to receive dividend or dividend equivalent payments outstanding were: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Share Units 13,416,141 13,418,337 12,564,428 12,932,088 The Class B shares have no net income (loss) per share as they do not participate in Fortress’s earnings (losses) or distributions. The Class B shares have no dividend or liquidation rights. Each Class B share, along with one Fortress Operating Group unit, can be exchanged for one Class A share, subject to certain limitations. The Class B shares have voting rights on a pari passu basis with the Class A shares. Fortress’s dividend paying shares and units were as follows: Weighted Average Weighted Average Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Class A shares 211,685,639 205,351,556 209,710,467 208,688,070 Restricted Class A shares (directors) 780,497 1,000,310 810,412 986,867 Restricted Class A share units (employees) (A) 3,717,045 1,431,885 5,464,698 2,653,378 Restricted Class A share units (employees) (B) 11,159,183 7,513,984 9,761,060 6,763,630 Fortress Operating Group units (Principals and a former 226,331,513 226,331,513 226,331,513 236,074,150 Total 453,673,877 441,629,248 452,078,150 455,166,095 As of June 30, 2015 As of December 31, 2014 Class A shares 214,984,712 207,490,023 Restricted Class A shares (directors) 688,587 1,045,134 Restricted Class A share units (employees) (A) 554,209 194,287 Restricted Class A share units (employees) (B) 11,159,183 7,002,003 Fortress Operating Group units (Principals and a former senior 226,331,513 226,331,513 Total 453,718,204 442,062,960 (A) Represents fully vested restricted Class A share units which are entitled to dividend equivalent payments. (B) Represents unvested restricted Class A share units which are entitled to dividend equivalent payments. On February 13, 2014, Fortress entered into a purchase agreement with Nomura Investment Managers U.S.A. ("Nomura") to acquire 60,568,275 Class A shares for $363.4 million . All of the purchased Class A shares (and underlying Fortress Operating Group units) were canceled and ceased to be outstanding. As part of the purchase agreement, Fortress agreed for each year, until the third anniversary of the date of the agreement, to engage Nomura and its affiliates to provide certain financial advisory and financing services and/or pay Nomura certain annual sums in lieu thereof equal to the difference, if any, between (i) $12.0 million minus (ii) all fees earned or received by Nomura for the services provided to Fortress and its affiliates during each year. In connection with the agreement to engage Nomura and its affiliates as described above, Fortress recorded an estimated liability as of the date of the agreement (included in Other liabilities on the consolidated balance sheets) of approximately $30.0 million , which has been recorded as a reduction to equity as part of the repurchase of Class A shares. During 2015, Fortress paid $9.7 million to Nomura related to the estimated liability pursuant to the terms of the purchase agreement described above. In March 2014, Fortress issued and sold 23,202,859 Class A shares for $186.6 million . Fortress used all of the proceeds from the sale of the Class A shares to purchase from the Principals an equivalent number of outstanding Fortress Operating Group units and an equal number of Class B shares. Dividends and distributions during the six months ended June 30, 2015 are summarized as follows: Declared in Current Year Declared in Prior Year, Paid in Current Year Declared and Paid Declared but not yet Paid Total Dividends on Class A Shares $ — $ 96,501 $ — $ 96,501 Dividend equivalents on restricted Class A share units (A) — 8,053 — 8,053 Distributions to Fortress Operating Group unit holders (Principals and a former senior employee) (B) — 110,426 5,240 115,666 Total distributions $ — $ 214,980 $ 5,240 $ 220,220 (A) A portion of these dividend equivalents, if any, related to RSUs expected to be forfeited, is included as compensation expense in the consolidated statement of operations and is therefore considered an operating cash flow. (B) Fortress Operating Group made tax-related distributions to the FOG unit holders (the Principals and a former senior employee). On May 7, 2015, Fortress declared a base quarterly cash dividend of $0.08 per Class A share for the first quarter of 2015. The dividend was payable on May 21, 2015 to holders of record of Class A shares on May 18, 2015. The aggregate amount of this dividend payment, including dividend equivalent payments paid to holders of restricted Class A share units, was $18.2 million . On July 30, 2015, Fortress declared a base quarterly cash dividend of $0.08 per Class A share for the second quarter of 2015. The dividend is payable on August 14, 2015 to holders of record of Class A shares on August 11, 2015. The aggregate amount of this dividend payment, including dividend equivalent payments paid to holders of restricted Class A share units, is $18.2 million . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Other than as described below, Fortress’s commitments and contingencies remain materially unchanged from December 31, 2014 . General Partner Liability — Certain of Fortress’s consolidated subsidiaries act as the general partner of various Fortress Funds and accordingly have potentially unlimited liability for the obligations of the funds under applicable partnership law principles. In the event that any such fund was to fall into a negative net equity position (Note 2), the full amount of the negative net equity would be recorded on the balance sheet of the general partner entity. Such amount would be recorded on the Fortress balance sheet in consolidation until it is legally resolved. While these entities are limited liability companies and generally have no material assets other than their general partner interests, these entities and Fortress may be subject to litigation in connection with such amounts if fund creditors choose to sue Fortress to seek repayment. See “Litigation” below. In March 2011, a private equity fund fell into a negative equity position, after considering all of Fortress’s interests in such fund and its reserves related thereto. As described above, the amount of the negative equity was recorded, through earnings (losses) from equity method investees, by the general partner entity and is therefore included in the consolidated financial statements of Fortress. When the fund matures and is liquidated, Fortress will record a gain in the event and to the extent it does not fund this negative equity. The amount of negative equity recorded at June 30, 2015 was $45.1 million . Litigation — Fortress is, from time to time, a defendant in legal actions from transactions conducted in the ordinary course of business. Management, after consultation with legal counsel, believes the ultimate liability arising from such actions that existed as of June 30, 2015 , individually and in the aggregate, will not materially affect Fortress’s results of operations, liquidity or financial position. In some cases, Fortress is named as a defendant in legal actions pertaining to one of the Fortress Funds and/or their portfolio companies. In such cases, Fortress is generally indemnified by the fund against potential losses arising from Fortress’s role as investment manager. Private Equity Fund and Credit PE Fund Capital Commitments — Fortress has remaining capital commitments, which aggregated $166.3 million as of June 30, 2015 , primarily to certain of the Fortress Funds. These commitments can be drawn by the funds on demand. Minimum Future Rentals — Fortress is a lessee under operating leases for office space located in a number of locations worldwide. Minimum future rental payments (excluding expense escalations) under these leases as of June 30, 2015 are as follows: July 1, 2015 to December 31, 2015 $ 13,055 2016 24,231 2017 12,839 2018 20,139 2019 19,620 2020 19,620 Thereafter 260,092 Total $ 369,596 Rent expense, including operating expense escalations, during the six months ended June 30, 2015 and 2014 was $14.9 million and $11.3 million , respectively, and was included in general, administrative and other expense on the consolidated statements of operations. During 2015, Fortress entered into new lease agreements related to its primary office space in New York and which extends through October 2032. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING Fortress conducts its management and investment business through the following primary segments: (i) private equity funds, (ii) permanent capital vehicles, (iii) liquid hedge funds, (iv) credit hedge funds, (v) credit PE funds and (vi) Logan Circle. The amounts not allocated to a segment consist primarily of interest expense, foreign currency translation and interest income. Assets not allocated to a segment consist primarily of cash and net deferred tax assets. Management assesses Fortress’s segments on a Fortress Operating Group and pre-tax basis and therefore adds back the interests in consolidated subsidiaries related to Fortress Operating Group units (primarily held by the Principals) and income tax expense. Management assesses the net performance of each segment based on its “distributable earnings” (“DE”) and utilizes “fund management distributable earnings” or “fund management DE” as a supplemental measure of segment performance. Neither distributable earnings or fund management DE is a measure of cash generated by operations which is available for distribution. Rather, they are supplemental measures of operating performance used by management in analyzing its segments and overall results. Neither distributable earnings or fund management DE should be considered as an alternative to cash flow, in accordance with GAAP, as a measure of Fortress’s liquidity, and they are not necessarily indicative of cash available to fund cash needs (including dividends and distributions). “Distributable earnings” for the existing Fortress businesses is equal to net income (loss) attributable to Fortress’s Class A shareholders adjusted as follows: Incentive Income (i) a. for Fortress Funds which are private equity funds, the private permanent capital vehicle through IPO in May 2015 and credit PE funds, adding (a) incentive income paid (or declared as a distribution) to Fortress, less an applicable reserve for potential future clawbacks if the likelihood of a clawback is deemed greater than remote by Fortress’s chief operating decision maker (net of the reversal of any prior such reserves that are no longer deemed necessary), minus (b) incentive income recorded in accordance with GAAP, b. for other Fortress Funds, at interim periods, adding (a) incentive income on an accrual basis as if the incentive income from these funds were earned on a quarterly basis, minus (b) incentive income recorded in accordance with GAAP, c. adding the receipt of cash or proceeds from the sale of shares received (a) as incentive income from the publicly traded permanent capital vehicles and (b) pursuant to the exercise of options in the publicly traded permanent capital vehicles, if any, in excess of their strike price, Other Income (ii) with respect to income from certain investments in the Fortress Funds and certain other interests or assets that cannot be readily transferred or redeemed: a. for equity method investments in the private equity funds, private permanent capital vehicle through IPO in May 2015 and credit PE funds as well as indirect equity method investments in hedge fund special investment accounts (which generally have investment profiles similar to private equity funds), treating these investments as cost basis investments by adding (a) realizations of income, primarily dividends, from these funds, minus (b) impairment with respect to these funds, if necessary, minus (c) equity method earnings (or losses) recorded in accordance with GAAP, b. subtracting gains (or adding losses) on options held in the publicly traded permanent capital vehicles, c. subtracting unrealized gains (or adding unrealized losses) on derivatives, direct investments in publicly traded portfolio companies and in the publicly traded permanent capital vehicles, (iii) subtracting management fee income recorded in accordance with GAAP in connection with the receipt of these options from the publicly traded permanent capital vehicles, if any, (iv) subtracting the gain on transfer of Graticule, Expenses (v) adding or subtracting, as necessary, the employee profit sharing portion of incentive income described in (i) above to match the timing of the expense with the revenue, (vi) adding back equity-based compensation expense (including options in the publicly traded permanent capital vehicles assigned to employees, RSUs, and restricted shares), (vii) adding back the amortization of intangible assets and any impairment of goodwill or intangible assets recorded under GAAP, (viii) adding back the expense related to transfer of interest in Graticule, (ix) adding the income (or subtracting the loss) allocable to the interests in consolidated subsidiaries attributable to Fortress Operating Group units, (x) adding back income tax benefit or expense and any income or expense recorded in connection with the tax receivable agreement (Note 5). Fund management DE is equal to distributable earnings excluding investment-related results (specifically, investment income (loss) and interest expense) and is used by management to measure performance of the operating (management) business on a stand-alone basis. Fortress defines its segment operating margin to be equal to fund management DE divided by segment revenues. Total segment assets are equal to total GAAP assets adjusted for: (i) any difference between the GAAP carrying amount of equity method investments and their carrying amount for segment reporting purposes, which is generally fair value for publicly traded investments and net asset value for nonpublic investments, (ii) employees’ and others’ portions of investments, which are reported gross for GAAP purposes (as assets offset by Principals’ and others’ interests in equity of consolidated subsidiaries) but net for segment reporting purposes, (iii) the difference, if any, between the GAAP carrying amount of intangible assets and goodwill and their carrying amount for segment reporting purposes resulting from the distributable earnings adjustments listed above, and (iv) at interim periods, the accrued incentive income recorded for distributable earnings purposes in relation to the incentive income reconciling item in (i)(b) above. Distributable Earnings Impairment Clawback Reserve on Incentive Income for DE Purposes Fortress had recognized incentive income for DE purposes from certain private equity funds and credit PE funds, which are subject to contingent clawback, as of June 30, 2015 : Fund (A) Net Intrinsic Clawback (B) Periods in Intrinsic Clawback Prior Year End Inception-to-Date Net DE Reserve Current Current Inception-to-Date Net DE Reserve Notes Fund III $ 45,108 30 Quarters $ 45,108 $ — $ — $ 45,108 (C) Total $ 45,108 $ 45,108 $ — $ — $ 45,108 (A) Fortress has recognized incentive income for DE purposes from the following funds, which do not have intrinsic clawback and for which Fortress's CODM has determined no clawback reserve is necessary: Credit Opportunities Fund, Credit Opportunities Fund II, Credit Opportunities Fund III, certain FCO Managed Accounts, Real Estate Opportunities Fund, Real Estate Opportunities REOC Fund, Net Lease Fund I, Japan Opportunity Fund and Global Opportunities Fund. (B) See Note 2. (C) The potential clawback on this fund has been fully reserved in prior periods. Impairment Determination and Embedded Gain/Loss During the six months ended June 30, 2015 , Fortress recorded $3.4 million of impairment on its direct and indirect investments in its funds for segment reporting purposes. Additionally, during the three months ended June 30, 2015, Fortress recognized an impairment charge of $2.8 million related to its holdings of digital currency (Bitcoin). As of June 30, 2015 , Fortress had $6.3 million of unrealized losses on certain investments that have not been recorded as impairment. As of June 30, 2015 , Fortress’s share of the net asset value of its direct and indirect investments exceeded its segment cost basis by $538.0 million , representing a net unrealized gain. Embedded Incentive Income As of June 30, 2015 , Fortress had $1.0 billion of gross undistributed incentive income (Note 2), or $953.8 million net of intrinsic clawback. Of the $1.0 billion , $46.4 million has been recognized in distributable earnings. This amount represents accrued hedge fund, permanent capital vehicles and Logan Circle incentive income recorded during the six months ended June 30, 2015 . In addition, if Fortress had (i) exercised all of its in-the-money publicly traded permanent capital vehicle options (Note 3) and sold all of the resulting shares and (ii) sold all of its publicly traded permanent capital vehicle shares which it received as incentive income, it would have recorded $43.8 million of gross additional distributable earnings, or $35.1 million net of employee interests, based on their respective June 30, 2015 closing price. Segment Results of Operations Summary financial data on Fortress’s segments is presented on the following pages, together with a reconciliation to revenues, assets and net income (loss) for Fortress as a whole. Fortress’s investments in, and earnings (losses) from, its equity method investees by segment are presented in Note 3. June 30, 2015 and the Six Months Then Ended Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 58,376 $ 41,710 $ 39,681 $ 59,511 $ 57,445 $ 26,533 $ — $ 283,256 Incentive income — 76,993 55 72,874 83,623 111 — 233,656 Segment revenues - total $ 58,376 $ 118,703 $ 39,736 $ 132,385 $ 141,068 $ 26,644 $ — $ 516,912 Fund management distributable $ 29,082 $ 75,865 $ (8,564 ) $ 65,224 $ 36,599 $ (1,156 ) $ — $ 197,050 Fund management distributable earnings (loss) before Principal Performance Payments (B) $ 29,082 $ 75,865 $ (887 ) $ 65,224 $ 36,599 $ (1,156 ) $ — $ 204,727 Fund management distributable earnings (loss) $ 29,082 $ 65,370 $ (887 ) $ 56,882 $ 34,758 $ (1,156 ) $ — $ 184,049 Pre-tax distributable earnings (loss) $ 29,160 $ 66,081 $ 3,328 $ 57,914 $ 38,615 $ (1,590 ) $ (1,843 ) $ 191,665 Total segment assets $ 734,168 $ 135,762 $ 198,615 $ 101,818 $ 293,994 $ 52,555 $ 745,994 (A) $ 2,262,906 (A) Unallocated assets includes cash of $230.9 million and net deferred tax assets of $415.9 million . Three Months Ended June 30, 2015 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 29,236 $ 22,508 $ 18,693 $ 29,847 $ 31,097 $ 13,271 $ — $ 144,652 Incentive income — 73,973 (836 ) 49,709 59,475 (23 ) — 182,298 Segment revenues - total $ 29,236 $ 96,481 $ 17,857 $ 79,556 $ 90,572 $ 13,248 $ — $ 326,950 Fund management distributable $ 14,107 $ 72,096 $ (6,062 ) $ 42,119 $ 30,233 $ (293 ) $ — $ 152,200 Fund management distributable $ 14,107 $ 72,096 $ (7,666 ) $ 42,119 $ 30,233 $ (293 ) $ — $ 150,596 Fund management distributable $ 14,107 $ 61,601 $ (7,386 ) $ 36,138 $ 28,979 $ (293 ) $ — $ 133,146 Pre-tax distributable earnings (loss) $ 14,162 $ 61,973 $ (6,262 ) $ 36,183 $ 31,586 $ (471 ) $ (702 ) $ 136,469 (B) See Note 7. Fund management distributable earnings (loss) is only reduced for the profit sharing component of the Principal Performance Payments. Six Months Ended June 30, 2014 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 70,913 $ 32,500 $ 69,640 $ 55,333 $ 48,327 $ 22,048 $ — $ 298,761 Incentive income 2,854 24,740 1,288 74,130 78,772 — — 181,784 Segment revenues - total $ 73,767 $ 57,240 $ 70,928 $ 129,463 $ 127,099 $ 22,048 $ — $ 480,545 Fund management distributable $ 50,609 $ 20,524 $ 15,507 $ 60,294 $ 32,737 $ (3,532 ) $ — $ 176,139 Fund management distributable earnings (loss) $ 50,609 $ 17,740 $ 14,539 $ 52,063 $ 31,663 $ (3,532 ) $ — $ 163,082 Pre-tax distributable earnings (loss) $ 145,150 $ 18,768 $ 17,196 $ 54,726 $ 35,906 $ (2,672 ) $ (778 ) $ 268,296 Three Months Ended June 30, 2014 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 35,491 $ 16,464 $ 36,162 $ 28,475 $ 23,686 $ 11,444 $ — $ 151,722 Incentive income 855 20,731 1,155 42,301 12,817 — — 77,859 Segment revenues - total $ 36,346 $ 37,195 $ 37,317 $ 70,776 $ 36,503 $ 11,444 $ — $ 229,581 Fund management distributable $ 25,842 $ 14,498 $ 7,027 $ 33,733 $ 2,577 $ (1,461 ) $ — $ 82,216 Fund management distributable earnings (loss) $ 25,842 $ 12,397 $ 6,601 $ 30,039 $ 2,639 $ (1,461 ) $ — $ 76,057 Pre-tax distributable earnings (loss) $ 116,891 $ 13,083 $ 8,412 $ 31,311 $ 3,174 $ (726 ) $ (356 ) $ 171,789 Reconciling items between segment measures and GAAP measures: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fund management distributable earnings $ 133,146 $ 76,057 $ 184,049 $ 163,082 Investment income (loss) 4,279 96,598 9,393 106,752 Interest expense (956 ) (866 ) (1,777 ) (1,538 ) Pre-tax distributable earnings 136,469 171,789 191,665 268,296 Adjust incentive income Incentive income received from private equity funds, the private permanent capital vehicle and credit PE funds, subject to contingent repayment (59,528 ) (13,672 ) (84,071 ) (79,627 ) Incentive income received from third parties, subject to contingent repayment (3,867 ) — (3,867 ) (86 ) Incentive income from private equity funds, the private permanent capital vehicle and credit PE funds, not subject to contingent repayment 44,744 23,859 65,709 53,362 Incentive income from hedge funds, permanent capital vehicles and Logan Circle, subject to annual performance achievement (23,231 ) (25,784 ) (46,400 ) (56,278 ) Incentive income received related to the exercise of options (56,615 ) (1,485 ) (56,615 ) (1,485 ) Reserve for clawback, gross (see discussion above) — — — (1,999 ) (98,497 ) (17,082 ) (125,244 ) (86,113 ) Adjust other income Distributions of earnings from equity method investees* (8,724 ) (47,122 ) (12,566 ) (56,349 ) Earnings (losses) from equity method investees* (33,192 ) 19,602 (6,219 ) 37,216 Gains (losses) on options in equity method investees (9,202 ) (1,088 ) 23,126 (5,871 ) Gains (losses) on other investments 5,275 (42,221 ) 5,979 (47,065 ) Impairment of investments (see discussion above) 406 38 3,400 64 Adjust income from the receipt of options 21,014 1,604 25,158 1,604 Gain on transfer of Graticule (see Note 1) — — 134,400 — (24,423 ) (69,187 ) 173,278 (70,401 ) Adjust employee, Principal and director compensation Adjust employee, Principal and director equity-based compensation expense (5,552 ) (7,811 ) (26,012 ) (21,131 ) Adjust employee portion of incentive income from private equity funds and credit PE funds, accrued prior to the realization of incentive income (944 ) 2,039 (861 ) 3,174 (6,496 ) (5,772 ) (26,873 ) (17,957 ) Adjust for the transfer of interest in Graticule (see Note 1) — — (101,000 ) — Adjust amortization of intangible assets and impairment of goodwill and intangible (83 ) (11 ) (165 ) (22 ) Adjust non-controlling interests related to Fortress Operating Group units (1,355 ) (40,577 ) (52,960 ) (45,635 ) Adjust tax receivable agreement liability (7,500 ) — (7,500 ) — Adjust income taxes 5,201 (7,961 ) (13,172 ) (13,945 ) Total adjustments (133,153 ) (140,590 ) (153,636 ) (234,073 ) Net Income (Loss) Attributable to Class A Shareholders 3,316 31,199 38,029 34,223 Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries 1,653 42,100 53,876 48,177 Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries 10 157 (6 ) 157 Net Income (Loss) (GAAP) $ 4,979 $ 73,456 $ 91,899 $ 82,557 * This adjustment relates to all of the private equity, private permanent capital vehicle through IPO in May 2015 and credit PE Fortress Funds and hedge fund special investment accounts in which Fortress has an investment. June 30, 2015 Total segment assets $ 2,262,906 Adjust equity investments from segment carrying amount (1,049 ) Adjust investments gross of employees' and others' portion 16,501 Adjust intangible assets to cost (23,002 ) Accrued incentive income subject to annual performance achievement (46,400 ) Total assets (GAAP) $ 2,208,956 Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Total segment revenues $ 326,950 $ 229,581 $ 516,912 $ 480,545 Adjust management fees 237 435 486 727 Adjust incentive income* (99,845 ) (17,373 ) (126,979 ) (86,403 ) Adjust income from the receipt of options 21,014 1,604 25,158 1,604 Adjust other revenues (including expense reimbursements)** 60,132 56,097 119,600 110,981 Total revenues (GAAP) $ 308,488 $ 270,344 $ 535,177 $ 507,454 * Incentive income received from third parties, not subject to contingent repayment of $1.3 million and $0.3 million during the three months ended June 30, 2015 and June 30, 2014 , respectively, $1.7 million and $0.3 million for the six months ended June 30, 2015 and June 30, 2014 , respectively are included in segment measures as part of incentive income while included in GAAP as part of other revenues. ** Segment revenues do not include GAAP other revenues, except to the extent they represent management fees or incentive income; such revenues are included elsewhere in the calculation of distributable earnings. Fortress’s depreciation and amortization expense by segment prior to the allocation of corporate and intra-segment depreciation and amortization expense to the business segments was as follows. Amortization expense, related to intangible assets, is not a component of distributable earnings. Private Equity Liquid Credit Three Months Ended June 30, Funds Permanent Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Corporate Total 2015 Depreciation $ 395 $ 367 $ 9,475 $ 1,305 $ 395 $ 74 $ 674 $ 12,685 Amortization — — — — — 83 — 83 Total $ 395 $ 367 $ 9,475 $ 1,305 $ 395 $ 157 $ 674 $ 12,768 2014 Depreciation $ 404 $ 196 $ 1,974 $ 1,376 $ 275 $ 82 $ 719 $ 5,026 Amortization — — — — — 11 — 11 Total $ 404 $ 196 $ 1,974 $ 1,376 $ 275 $ 93 $ 719 $ 5,037 Six Months Ended June 30, 2015 Depreciation $ 769 $ 602 $ 11,517 $ 2,695 $ 652 $ 355 $ 1,344 $ 17,934 Amortization — — — — — 165 — 165 Total $ 769 $ 602 $ 11,517 $ 2,695 $ 652 $ 520 $ 1,344 $ 18,099 2014 Depreciation $ 798 $ 378 $ 3,227 $ 2,777 $ 475 $ 168 $ 1,493 $ 9,316 Amortization — — — — — 22 — 22 Total $ 798 $ 378 $ 3,227 $ 2,777 $ 475 $ 190 $ 1,493 $ 9,338 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS These financial statements include a discussion of material events, if any, which have occurred subsequent to June 30, 2015 (referred to as “subsequent events”) through the issuance of these consolidated financial statements. Events subsequent to that date have not been considered in these financial statements. Subsequent to June 30, 2015, Fortress formed and made a $36.9 million cash contribution to a new credit PE fund which it manages. Fortress intends to raise capital for the new fund and expects to sell substantially all of its interests in the new fund to third party investors. The contribution made by Fortress was used by the new fund to purchase an option to acquire an equity interest in a company. The new fund has the right to exercise the option by April 2016. In the event that the option is not exercised, Fortress would be required to write-off its investment in the new fund. For additional subsequent events, see Note 8. |
CONSOLIDATING FINANCIAL INFORMA
CONSOLIDATING FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2015 | |
Consolidating Financial Information | |
CONSOLIDATING FINANCIAL INFORMATION | CONSOLIDATING FINANCIAL INFORMATION The following consolidating financial information presents the balance sheet, statement of operations and statement of cash flows for Fortress Operating Group (on a combined basis), FOE II (New) LP and Fortress Investment Group LLC (including its consolidated subsidiaries other than those within Fortress Operating Group) on a deconsolidated basis, as well as the related eliminating entries for intercompany balances and transactions, which sum to Fortress Investment Group’s consolidated financial statements as of, and for the six months ended June 30, 2015 . Fortress Operating Group includes all of Fortress’s operating and investing entities. The upper tier Fortress Operating Group entities, other than FOE II (New) LP, are the obligors on Fortress’s credit agreement (Note 4). Segregating the financial results of this group of entities provides a more transparent view of the capital deployed in Fortress’s businesses as well as the relevant ratios for borrowing entities. The consolidating balance sheet information is as follows: As of June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Group LLC Consolidated (B) Elimination Adjustments Fortress Investment Group LLC Consolidated Assets Cash and cash equivalents $ 233,271 $ 513 $ — $ 128 $ — $ 233,912 Due from affiliates 188,095 2,644 (2,274 ) 4,580 (4,994 ) 188,051 Investments 1,144,597 2,175 (2,175 ) 471,248 (471,248 ) 1,144,597 Investments in options 60,950 — — — — 60,950 Deferred tax asset, net — — — 415,915 — 415,915 Other assets 150,151 1,968 — 13,412 — 165,531 Total Assets $ 1,777,064 $ 7,300 $ (4,449 ) $ 905,283 $ (476,242 ) $ 2,208,956 Liabilities and Equity Accrued compensation and benefits $ 179,035 $ 2,932 $ — $ — $ — $ 181,967 Due to affiliates 80,738 2,274 (2,274 ) 296,916 (4,994 ) 372,660 Deferred incentive income 326,338 — — — — 326,338 Debt obligations payable 75,000 — — — — 75,000 Other liabilities 89,957 473 — — — 90,430 Total Liabilities 751,068 5,679 (2,274 ) 296,916 (4,994 ) 1,046,395 Commitments and Contingencies Redeemable Non-controlling Interests, 19 — — — — 19 Equity Paid-in capital 5,773,202 5,691 (2,291 ) 1,922,869 (5,776,602 ) 1,922,869 Retained earnings (accumulated deficit) (4,798,760 ) (4,070 ) 116 (1,312,093 ) 4,802,714 (1,312,093 ) Accumulated other comprehensive income (loss) (8,089 ) — — (2,409 ) 8,089 (2,409 ) Total Fortress shareholders' equity (C) 966,353 1,621 (2,175 ) 608,367 (965,799 ) 608,367 Principals' and others' interests in equity 59,624 — — — 494,551 554,175 Total Equity 1,025,977 1,621 (2,175 ) 608,367 (471,248 ) 1,162,542 Total Liabilities, Redeemable Non-controlling $ 1,777,064 $ 7,300 $ (4,449 ) $ 905,283 $ (476,242 ) $ 2,208,956 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. (C) Includes the Principals’ (and a former senior employee's) equity in the Fortress Operating Group column, which is eliminated in consolidation. The consolidating statement of operations information is as follows: Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Group LLC Consolidated (B) Elimination Adjustments Fortress Investment Group LLC Consolidated Revenues Management fees: affiliates $ 275,184 $ 3,459 $ — $ — $ — $ 278,643 Management fees: non-affiliates 30,161 96 — — — 30,257 Incentive income: affiliates 106,381 — — — — 106,381 Incentive income: non-affiliates 296 — — — — 296 Expense reimbursements: affiliates 88,823 19,733 — — — 108,556 Expense reimbursements: non-affiliates 4,865 1,951 — — — 6,816 Other revenues (affiliate portion disclosed in 4,239 — — — (11 ) 4,228 Total Revenues 509,949 25,239 — — (11 ) 535,177 Expenses Compensation and benefits 353,343 24,653 — — — 377,996 General, administrative and other 86,981 1,185 — — — 88,166 Depreciation and amortization 18,026 73 — — — 18,099 Interest expense 1,772 63 (63 ) 117 (11 ) 1,878 Transfer of interest in Graticule (see Note 1) 101,000 — — — — 101,000 Total Expenses 561,122 25,974 (63 ) 117 (11 ) 587,139 Other Income (Loss) Gains (losses) (affiliate portion disclosed in 24,774 — — — — 24,774 Tax receivable agreement liability adjustment — — — (7,500 ) — (7,500 ) Earnings (losses) from equity method investees 5,387 — — 48,824 (48,824 ) 5,387 Gain on transfer of Graticule (see Note 1) 134,400 — — — — 134,400 Total Other Income (Loss) 164,561 — — 41,324 (48,824 ) 157,061 Income (Loss) Before Income Taxes 113,388 (735 ) 63 41,207 (48,824 ) 105,099 Income tax benefit (expense) (10,018 ) (4 ) — (3,178 ) — (13,200 ) Net Income (Loss) $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 Allocation of Net Income (Loss) Principals' and Others' Interests in Income $ 916 $ — $ — $ — $ 52,960 $ 53,876 Redeemable Non-controlling Interests in Income (6 ) — — — — (6 ) Net Income (Loss) Attributable to 102,460 (739 ) 63 38,029 (101,784 ) 38,029 $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. (C) Includes net income (loss) attributable to the Principals’ (and a former senior employee’s) interests in the Fortress Operating Group column, which is eliminated in consolidation. The consolidating statement of cash flows information is as follows: Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Elimination Adjustments Fortress Investment Group LLC Consolidated Cash Flows From Operating Activities Net income (loss) $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 18,026 73 — — — 18,099 Other amortization (included in interest expense) 390 — — — — 390 (Earnings) losses from equity method investees (5,387 ) — — (48,824 ) 48,824 (5,387 ) Distributions of earnings from equity 23,756 — — — — 23,756 (Gains) losses (24,774 ) — — — — (24,774 ) Deferred incentive income (65,709 ) — — — — (65,709 ) Deferred tax (benefit) expense 2,057 — — 2,391 — 4,448 Options received from affiliates (25,158 ) — — — — (25,158 ) Tax receivable agreement liability adjustment — — — 7,500 — 7,500 Equity-based compensation 25,388 — — — — 25,388 Options in affiliates granted to employees 5,681 — — — — 5,681 Other 356 — — — — 356 Transfer of interest in Graticule (see Note 1) 101,000 — — — — 101,000 Gain on transfer of Graticule (see Note 1) (134,400 ) — — — — (134,400 ) Cash flows due to changes in Due from affiliates 17,967 10 — 415 — 18,392 Other assets (3,318 ) 42 (63 ) (2,588 ) — (5,927 ) Accrued compensation and benefits (157,337 ) (214 ) — — — (157,551 ) Due to affiliates (17,100 ) — — 93 — (17,007 ) Deferred incentive income 74,610 — — — — 74,610 Other liabilities 9,806 391 — (7,387 ) — 2,810 Purchase of investments by consolidated funds (66,965 ) — — — — (66,965 ) Proceeds from sale of investments by consolidated 53,494 — — — — 53,494 Receivables from brokers and counterparties (211 ) — — — — (211 ) Due to brokers and counterparties 2,727 — — — — 2,727 Net cash provided by (used in) operating activities (61,731 ) (437 ) — (10,371 ) — (72,539 ) Cash Flows From Investing Activities Contributions to equity method investees (18,862 ) — — (57,081 ) 57,081 (18,862 ) Distributions of capital from equity method 155,255 — — 102,167 (102,167 ) 155,255 Purchase of securities (883 ) — — — — (883 ) Proceeds from sale of securities 18,101 — — — — 18,101 Proceeds from exercise of options 51,543 — — — — 51,543 Purchase of fixed assets (11,075 ) — — — — (11,075 ) Net cash provided by (used in) investing activities 194,079 — — 45,086 (45,086 ) 194,079 Continued on next page. Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Elimination Adjustments Fortress Investment Group LLC Consolidated Cash Flows From Financing Activities Issuance (purchase) of Class A shares (RSU (57,081 ) — — 57,081 — — Payments to repurchase Class A shares (Note 8) (9,676 ) — — — — (9,676 ) Capital contributions (distributions) 57,081 — — — (57,081 ) — Dividends and dividend equivalents paid (110,220 ) — — (96,501 ) 102,167 (104,554 ) Principals' and others' interests in equity of 283 — — — — 283 Principals' and others' interests in equity of (167,554 ) — — — — (167,554 ) Excess tax benefits from delivery of RSUs — — — 4,476 — 4,476 Redeemable non-controlling interests - (1,692 ) — — — — (1,692 ) Net cash provided by (used in) financing activities (288,859 ) — — (34,944 ) 45,086 (278,717 ) Net Increase (Decrease) in Cash and Cash (156,511 ) (437 ) — (229 ) — (157,177 ) Cash and Cash Equivalents, Beginning of Period 389,782 950 — 357 — 391,089 Cash and Cash Equivalents, End of Period $ 233,271 $ 513 $ — $ 128 $ — $ 233,912 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. |
ORGANIZATION AND BASIS OF PRE20
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued a comprehensive new revenue recognition standard for contracts with customers that will supersede most current revenue recognition guidance, including industry-specific guidance. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB voted to approve a one year deferral of the effective date of the new revenue recognition standard. The new standard is effective for Fortress beginning January 1, 2018. Early adoption is permitted but not before the original public entity effective date (that is, annual periods beginning after December 15, 2016). The standard permits the use of either the retrospective or cumulative effect transition method. Fortress is currently evaluating the impact on its consolidated financial statements upon the adoption of this new standard. The FASB has recently issued or discussed a number of proposed standards on such topics as, leases, financial instruments and hedging. Some of the proposed changes are significant and could have a material impact on Fortress’s financial reporting. Fortress has not yet fully evaluated the potential impact of these proposals, but will make such an evaluation as the standards are finalized. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 eliminates the deferral of Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46 (R) previously provided to investment companies and certain other entities pursuant to ASC 810-10-65-2. ASU 2015-02 also amends the evaluation of whether (1) fees paid to a decision maker or service provider represent a variable interest, (2) a limited partnership or similar entity has the characteristics of a variable interest entity ("VIE") and (3) a reporting entity is the primary beneficiary of a VIE. ASU 2015-02 eliminates certain conditions for evaluating whether a fee paid to a decision maker or a service provider represents a variable interest. Fees received by a decision maker or service provider are no longer considered variable interests and are now excluded from the evaluation of whether the reporting entity is the primary beneficiary of a VIE if the fees are both customary and commensurate with the level of effort required for the services provided and the decision maker or service provider does not hold other interests in the entity being evaluated that would absorb more than an insignificant amount of the expected losses or returns of the entity. If the reporting entity determines that it does not have a variable interest in an entity, no further consolidation analysis is performed as the reporting entity would not be required to consolidate the entity. The effective date of ASU 2015-02 is for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015 for public companies and early adoption is permitted. Fortress has elected to early adopt ASU 2015-02 on a retrospective basis as permitted, for all periods presented. The consolidated financial statements and related footnote disclosures have been adjusted for the impact of the adoption. The adoption did not result in a cumulative effect adjustment to Fortress’s retained earnings (accumulated deficit). Fortress’s accounting policy, updated for the adoption of ASU 2015-02, is described below. |
Basis of Accounting and Consolidation | Basis of Accounting and Consolidation - The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the accounts of Fortress and its consolidated subsidiaries, which are comprised of VIEs in which it is the primary beneficiary as described below and voting interest entities (“VOEs”) in which it is determined to have a controlling financial interest under ASC 810, as amended by ASU 2015-02. For legal entities evaluated for consolidation, Fortress must determine whether the interests that it holds and fees paid to it qualify as a variable interest in the entity. This includes an evaluation of fees paid to Fortress where Fortress acts as a decision maker or service provider to the entity being evaluated. Fees received by Fortress are not variable interests if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services, (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length and (iii) Fortress’s other economic interests in the VIE held directly and indirectly through its related parties, as well as economic interests held by related parties under common control, where applicable, would not absorb more than an insignificant amount of the entity’s losses or receive more than an insignificant amount of the entity’s benefits. For those entities in which it has a variable interest, Fortress performs an analysis to first determine whether the entity is a VIE. This determination includes considering whether the entity’s equity investment at risk is sufficient, whether the voting rights of an investor are not proportional to its obligation to absorb the income or loss of the entity and substantially all of the entity's activities either involve or are conducted on behalf of that investor and its related parties and whether the entity’s at-risk equity holders have the characteristics of a controlling financial interest. A VIE must be consolidated by its primary beneficiary. Performance of such analysis requires the exercise of judgment. The primary beneficiary of a VIE is generally defined as the party who has a controlling financial interest in the VIE. Fortress is generally deemed to have a controlling financial interest in a VIE if it has (i) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. For purposes of evaluating (ii) above, fees paid to Fortress are excluded if the fees are compensation for services provided commensurate with the level of effort required to be performed and the arrangement includes only customary terms, conditions or amounts present in arrangements for similar services negotiated at arm’s length. Fortress also evaluates its economic interests in the VIE held directly by it and indirectly through its related parties, as well as economic interests held by related parties under common control, where applicable. The primary beneficiary evaluation is generally performed qualitatively on the basis of all facts and circumstances. However, quantitative information may also be considered in the analysis, as appropriate. These analyses require judgment. Changes in the economic interests (either by Fortress, related parties of Fortress or third parties) or amendments to the governing documents of the VIE could affect an entity's status as a VIE or the determination of the primary beneficiary. The primary beneficiary evaluation is updated continuously. For VOEs, Fortress shall consolidate the entity if it has a controlling financial interest. Fortress has a controlling financial interest in a VOE if (i) for legal entities other than limited partnerships, Fortress owns a majority voting interest in the VOE or, for limited partnerships and similar entities, Fortress owns a majority of the entity’s kick-out rights through voting limited partnership interests and (ii) non-controlling shareholders or partners do not hold substantive participating rights and no other conditions exist that would indicate that Fortress does not control the entity. For entities over which Fortress exercises significant influence but which do not meet the requirements for consolidation, Fortress uses the equity method of accounting whereby it records its share of the underlying income of these entities. These entities include the Fortress Funds. The evaluation of whether Fortress exerts control or significant influence over the financial and operational policies of an entity requires judgment based on the facts and circumstances surrounding each individual entity. Virtually all of the Fortress Funds are, for GAAP purposes, investment companies. Investment companies record realized and unrealized gains (losses) resulting from changes in the fair value of their investments as a component of current income. Additionally, investment companies generally do not consolidate their majority-owned and controlled investments (the “Portfolio Companies”). Distributions by Fortress and its subsidiaries are recognized when declared. Redeemable Non-controlling Interests represent ownership interests in consolidated subsidiaries which are redeemable and not owned by Fortress. Principals’ and others’ interests in consolidated subsidiaries represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than Fortress. This is primarily related to the Principals’ interests in Fortress Operating Group (Note 6). Non-Fortress interests also include employee interests in majority owned and controlled fund advisor and general partner entities. |
ORGANIZATION AND BASIS OF PRE21
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of financial statement guide | FINANCIAL STATEMENT GUIDE Selected Financial Statement Captions Note Reference Explanation Balance Sheet Due from Affiliates 6 Generally, management fees, expense reimbursements and incentive income due from Fortress Funds. Investments and Investments in Options 3 Primarily the carrying value of Fortress’s investments in the Fortress Funds. Deferred Tax Asset, net 5 Relates to potential future net tax benefits. Due to Affiliates 6 Generally, amounts due to the Principals related to their interests in Fortress Operating Group and the tax receivable agreement. Deferred Incentive Income 2 Incentive income already received from certain Fortress Funds based on past performance, which is subject to contingent repayment based on future performance. Debt Obligations Payable 4 The balance outstanding on the credit agreement. Principals' and Others' Interests in Equity of Consolidated Subsidiaries 6 The GAAP basis of the Principals' and a former senior employee's ownership interests in Fortress Operating Group as well as employees' ownership interests in certain subsidiaries. Statement of Operations Management Fees: Affiliates 2 Fees earned for managing Fortress Funds and other affiliates, generally determined based on the size of such funds. Management Fees: Non-Affiliates 2 Fees earned from managed accounts and the traditional fixed income asset management business, generally determined based on the amount managed. Incentive Income: Affiliates 2 Income earned from Fortress Funds, based on the performance of such funds. Incentive Income: Non- Affiliates 2 Income earned from managed accounts, based on the performance of such accounts. Compensation and Benefits 7 Includes equity-based, profit-sharing and other compensation to employees. Gains (Losses) 3 The result of asset dispositions or changes in the fair value of investments or other financial instruments which are marked to market (including the publicly traded permanent capital vehicles and publicly traded portfolio companies). Continued on next page. FINANCIAL STATEMENT GUIDE Selected Financial Statement Captions Note Reference Explanation Tax Receivable Agreement Liability Adjustment 5 Represents a change in the amount due to the Principals under the tax receivable agreement. Earnings (Losses) from Equity Method Investees 3 Fortress’s share of the net earnings (losses) of the Fortress Funds resulting from its investments in these funds. Income Tax Benefit (Expense) 5 The net tax result related to the current period. Certain of Fortress’s revenues are not subject to taxes because they do not flow through taxable entities. Furthermore, Fortress has significant permanent differences between its GAAP and tax basis earnings. Principals’ and Others’ Interests in (Income) Loss of Consolidated Subsidiaries 6 Primarily the Principals’ and employees’ share of Fortress’s earnings based on their ownership interests in subsidiaries, including Fortress Operating Group. Earnings Per Share 8 GAAP earnings per Class A share based on Fortress’s capital structure, which is comprised of outstanding and unvested equity interests, including interests which participate in Fortress’s earnings, at both the Fortress and subsidiary levels. Other Distributions 8 A summary of dividends and distributions, and the related outstanding shares and units, is provided. Distributable Earnings 10 A presentation of Fortress's financial performance by segment (fund type) is provided, on the basis of the operating performance measure used by Fortress’s management committee. |
MANAGEMENT AGREEMENTS AND FOR22
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Management and Agreement Fortress Funds | |
Schedule of management fees and incentive income recognized | Fortress recognized management fees and incentive income as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Private Equity Private Equity Funds Management fees: affil. $ 29,222 $ 35,330 $ 58,362 $ 70,643 Management fees: non-affil. — 162 — 311 Incentive income: affil. — 22,094 — 22,094 Permanent Capital Vehicles Management fees: affil. 22,276 16,318 41,278 31,496 Management fees, options: affil. 21,014 1,604 25,158 1,604 Management fees: non-affil. 482 583 932 1,691 Incentive income: affil. 23,156 19,246 25,744 23,255 Liquid Hedge Funds Management fees: affil. 16,638 29,998 35,133 57,065 Management fees: non-affil. 2,054 6,164 4,548 12,575 Incentive income: affil. 41 908 53 986 Incentive income: non-affil. 39 44 39 44 Credit Funds Credit Hedge Funds Management fees: affil. 29,834 28,455 59,488 55,289 Management fees: non-affil. 13 20 23 44 Incentive income: affil. 21,516 16,429 22,169 17,733 Incentive income: non-affil. — — — — Credit PE Funds Management fees: affil. 31,068 23,651 57,387 48,259 Management fees: non-affil. 29 34 58 68 Incentive income: affil. 37,445 1,765 58,409 30,625 Incentive income: non-affil. 257 — 257 643 Logan Circle Management fees: affil. 884 689 1,837 1,399 Management fees: non-affil. 12,388 10,753 24,696 20,649 Incentive income: affil. — — 6 — Incentive income: non-affil. — — — — Total Management fees: affil. $ 150,936 $ 136,045 $ 278,643 $ 265,755 Management fees: non-affil. $ 14,966 $ 17,716 $ 30,257 $ 35,338 Incentive income: affil. (A) $ 82,158 $ 60,442 $ 106,381 $ 94,693 Incentive income: non-affil. $ 296 $ 44 $ 296 $ 687 (A) See “Deferred Incentive Income” below. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. |
Schedule of components of deferred incentive income from the Fortress Funds on an inception to date basis | Deferred incentive income from the Fortress Funds was comprised of the following, on an inception-to-date basis. This does not include any amounts related to third party funds, receipts from which are reflected as Other Liabilities until all contingencies are resolved. Distributed-Gross Distributed-Recognized (A) Distributed-Unrecognized (B) Undistributed, net of intrinsic clawback (C) (D) Deferred incentive income as of December 31, 2014 $ 1,243,441 $ (938,915 ) $ 304,526 $ 868,549 Fortress Funds which matured (no longer subject — — N/A N/A Share of income (loss) of Fortress Funds N/A N/A N/A 173,199 Distribution of private equity funds and credit PE 81,671 N/A 81,671 (81,671 ) Distribution of private permanent capital vehicle 6,299 N/A 6,299 (6,299 ) Recognition of previously deferred incentive income N/A (65,709 ) (65,709 ) N/A Changes in foreign exchange rates (449 ) — (449 ) N/A Deferred incentive income as of June 30, 2015 $ 1,330,962 (E) $ (1,004,624 ) $ 326,338 $ 953,778 (E) Deferred incentive income including Fortress Funds $ 1,384,618 $ (1,058,280 ) (A) All related contingencies have been resolved. (B) Reflected on the consolidated balance sheet. (C) At June 30, 2015 , the net undistributed incentive income is comprised of $1.0 billion of gross undistributed incentive income, net of $66.9 million of intrinsic clawback. The net undistributed incentive income represents the amount that would be received by Fortress from the related funds if such funds were liquidated on June 30, 2015 at their net asset values. (D) From inception to June 30, 2015 , Fortress has paid $621.9 million of compensation expense under its employee profit sharing arrangements (Note 7) in connection with distributed incentive income, of which $21.5 million has not been expensed because management has determined that it is not probable of being incurred as an expense and will be recovered from the related individuals. As of June 30, 2015 , Fortress has recovered $6.4 million from individuals relating to their clawback obligations. If the $1.0 billion of gross undistributed incentive income were realized, Fortress would recognize and pay an additional $498.7 million of compensation expense. (E) See detailed reconciliations of Distributed-Gross and Undistributed, net of intrinsic clawback below. |
Schedule of distributed- gross incentive income | The amounts set forth under Distributed-Gross can be reconciled to the incentive income threshold tables (on the following pages) as follows: June 30, 2015 Distributed incentive income - Private Equity Funds $ 846,671 Distributed incentive income - Private Equity Funds in Investment Period or Commitment — Distributed incentive income - Credit PE Funds 801,657 Distributed incentive income - Credit PE Funds in Investment Period or Commitment Period 4,776 Distributed incentive income - Private Permanent Capital Vehicle through IPO in May 2015 7,043 Less: Fortress Funds which are not subject to a clawback provision: — NIH (94,513 ) — GAGACQ Fund (51,476 ) Portion of Fund I distributed incentive income that Fortress is not entitled to (see footnote K of incentive income threshold tables) (183,196 ) Distributed-Gross $ 1,330,962 |
Schedule of undistributed incentive income | The amounts set forth under Undistributed, net of intrinsic clawback can be reconciled to the incentive income threshold tables (on the following pages) as follows: June 30, 2015 Undistributed incentive income - Private Equity Funds $ 26,310 Undistributed incentive income - Private Equity Funds in Investment Period or Commitment 3,509 Undistributed incentive income - Credit PE Funds 848,001 Undistributed incentive income - Credit PE Funds in Investment Period or Commitment 26,482 Undistributed incentive income - Permanent Capital Vehicles 1,191 Undistributed incentive income - Hedge Funds (total) 115,083 Undistributed incentive income - Logan Circle 105 Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds (66,903 ) Undistributed, net of intrinsic clawback $ 953,778 |
Schedule of investment funds and incentive income thresholds | The following tables summarize information with respect to the Fortress Funds and their related incentive income thresholds as of June 30, 2015 : Fund (Vintage) (A) Maturity Date (B) Inception to Date Inception to Date Distributions (C) Net Asset Value (“NAV”) NAV Surplus (Deficit) (D) Current Preferred Return Threshold (E) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (G) Distributed Incentive Income (H) Distributed Incentive Income Subject to Clawback (I) Gross Intrinsic Clawback (J) Net Intrinsic Clawback (J) Private Equity Funds NIH (1998) Closed Jun-15 $ 415,574 $ (823,588 ) $ — $ N/A $ N/A $ N/A $ — $ 94,513 $ — $ — $ — Fund I (1999) (K) Closed May-13 1,015,943 (2,847,929 ) — N/A N/A N/A — 344,939 — — — Fund II (2002) In Liquidation 1,974,298 (3,442,900 ) 3,534 1,472,136 — N/A 696 288,840 — — — Fund III (2004) In Liquidation 2,762,992 (2,138,524 ) 930,951 306,483 2,154,994 1,848,511 — 66,903 66,903 66,903 45,108 Fund III Coinvestment (2004) In Liquidation 273,649 (225,188 ) 68,246 19,785 252,921 233,136 — — — — — Fund IV (2006) Jan-17 3,639,561 (1,357,054 ) 2,225,663 (56,844 ) 2,925,391 2,982,235 — — — — — Fund IV Coinvestment (2006) Jan-17 762,696 (271,319 ) 412,859 (78,518 ) 625,163 703,681 — — — — — Fund V (2007) Feb-18 4,103,713 (1,435,456 ) 5,303,858 2,635,601 2,355,965 81,806 13,665 — — — — Fund V Coinvestment (2007) Feb-18 990,480 (173,600 ) 526,359 (290,521 ) 708,207 998,728 — — — — — GAGACQ Fund (2004) (GAGFAH) Closed Nov-09 545,663 (595,401 ) — N/A N/A N/A — 51,476 — — — FRID (2005) (GAGFAH) Closed Nov-14 1,220,229 (1,202,153 ) — N/A N/A N/A — — — — — FRIC (2006) (Brookdale) Closed Dec-14 328,754 (291,330 ) — N/A N/A N/A — — — — — FICO (2006) (Intrawest) Jan-17 724,525 — (63,960 ) (788,485 ) 657,265 1,445,750 — — — — — FHIF (2006) (Holiday) Jan-17 1,543,463 (685,652 ) 1,520,480 662,669 1,249,260 586,591 — — — — — FECI (2007) (Florida East Coast Railway/Florida East Coast Industries) Feb-18 982,779 (624 ) 960,420 (21,735 ) 818,492 840,227 — — — — — MSR Opportunities Fund I A (2012) Aug-22 341,135 (141,754 ) 298,754 99,373 — N/A 9,566 — — — — MSR Opportunities Fund I B (2012) Aug-22 82,760 (34,275 ) 72,327 23,842 — N/A 2,383 — — — — $ 26,310 $ 846,671 $ 66,903 $ 66,903 $ 45,108 Private Equity Funds in Investment or Commitment Period MSR Opportunities Fund II A (2013) Jul-23 $ 158,724 $ (15,482 ) $ 162,338 $ 19,096 $ — $ N/A $ 2,820 $ — $ — $ — $ — MSR Opportunities Fund II B (2013) Jul-23 2,264 (212 ) 2,311 259 — N/A 39 — — — — MSR Opportunities MA I (2013) Jul-23 36,425 (3,541 ) 37,287 4,403 — N/A 650 — — — — Italian NPL Opportunities Fund (2013) Sep-24 32,312 (5,768 ) 24,044 (2,500 ) 1,767 4,267 — — — — — $ 3,509 $ — $ — $ — $ — Continued on next page. Fund (Vintage) (A) Maturity Date (B) Inception to Date Inception to Date Distributions (C) Net Asset Value (“NAV”) NAV Surplus (Deficit) (D) Current Preferred Return Threshold (E) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (G) Distributed Incentive Income (H) Distributed Incentive Income Subject to Clawback (I) Gross Intrinsic Clawback (J) Net Intrinsic Clawback (J) Credit PE Funds Long Dated Value Fund I (2005) Apr-30 $ 267,325 $ (127,971 ) $ 290,441 $ 151,087 $ 153,774 $ 4,579 $ 48 $ — $ — $ — $ — Long Dated Value Fund II (2005) Nov-30 274,280 (150,977 ) 204,428 81,125 123,552 42,427 — 412 — — — Long Dated Value Fund III (2007) Feb-32 343,156 (283,517 ) 190,703 131,064 — N/A 17,839 6,473 — — — LDVF Patent Fund (2007) Nov-27 41,779 (34,903 ) 33,493 26,617 — N/A 1,071 1,471 — — — Real Assets Fund (2007) Jun-17 359,024 (352,783 ) 105,051 98,810 — N/A 9,043 6,285 — — — Credit Opportunities Fund (2008) Oct-20 5,646,864 (7,084,071 ) 1,274,505 2,711,712 — N/A 169,710 362,870 145,297 — — Credit Opportunities Fund II (2009) Jul-22 2,335,264 (2,487,310 ) 1,083,393 1,235,439 — N/A 129,496 112,816 43,733 — — Credit Opportunities Fund III (2011) Mar-24 3,088,327 (1,298,051 ) 2,479,191 688,915 — N/A 108,185 26,852 499 — — FCO Managed Accounts (2008 - 2012) Apr-22 to Mar-24 4,231,548 (3,172,000 ) 2,573,108 1,513,560 — N/A 194,853 100,147 31,599 — — SIP Managed Account (2010) Sep-20 11,000 (37,033 ) 11,509 37,542 — N/A 2,877 5,207 — — — Japan Opportunity Fund (2009) Jun-19 890,161 (1,371,558 ) 578,353 1,059,750 — N/A 101,805 125,374 22,782 — — Net Lease Fund I (2010) Feb-20 152,851 (225,430 ) 1,686 74,265 — N/A 216 9,528 5,928 — — Real Estate Opportunities Fund (2011) Sep-24 539,470 (313,690 ) 384,195 158,415 — N/A 11,073 2,750 1,734 — — Global Opportunities Fund (2010) Sep-20 320,130 (155,479 ) 243,187 78,536 — N/A 13,387 1,927 1,927 — — Japan Opportunity Fund II (Yen) (2011) Dec-21 644,383 (249,226 ) 708,104 312,947 — N/A 48,800 15,416 — — — Japan Opportunity Fund II (Dollar) (2011) Dec-21 639,643 (242,269 ) 703,484 306,110 — N/A 37,606 21,482 — — — Real Estate Opportunities REOC Fund (2011) Oct-23 56,692 (37,548 ) 42,456 23,312 — N/A 1,992 2,647 1,160 — — $ 848,001 $ 801,657 $ 254,659 $ — $ — Credit PE Funds in Investment or Commitment Period FCO Managed Accounts (2010-2015) Jun-24 to Feb-28 $ 685,003 $ (301,411 ) $ 537,557 $ 153,965 $ 1,906 $ 3,471 $ 25,316 $ 4,776 $ 4,776 $ — $ — Life Settlements Fund (2010) Dec-22 406,548 (299,330 ) 78,102 (29,116 ) 81,242 110,358 — — — — — Life Settlements Fund MA (2010) Dec-22 33,321 (24,482 ) 6,195 (2,644 ) 6,666 9,310 — — — — — Real Estate Opportunities Fund II (2014) May-27 242,294 (42,808 ) 212,224 12,738 3,954 701 1,166 — — — — Japan Opportunity Fund III (Yen) (2014) Dec-24 107,011 — 106,999 (12 ) 2,742 2,754 — — — — — Japan Opportunity Fund III (Dollar) (2014) Dec-24 83,061 — 83,687 626 2,091 1,465 — — — — — Credit Opportunities Fund IV (2015) Feb-27 142,897 — 144,304 1,407 3,696 2,289 — — — — — $ 26,482 $ 4,776 $ 4,776 $ — $ — Continued on next page. Fund Equity Eligible for Incentive (L) Gain to Cross Incentive Income Threshold (F) Undistributed Incentive Income (O) Life-to-Date Incentive Income Crystallized (P) Publicly Traded Permanent Capital Vehicles Newcastle $ 751,469 $ (F) $ N/A $ 41,283 Eurocastle 62,476 — 1,191 39,217 New Residential 2,749,370 — N/A 85,593 New Media 645,007 — N/A 5,296 New Senior 1,089,384 1,115 N/A — FTAI (P) 1,219,416 1,950 — — Incentive Income Eligible NAV (L) Gain to Cross Incentive Income Threshold (M) Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold (N) Undistributed Incentive Income (O) Year to Date Incentive Income Crystallized (P) Liquid Hedge Funds Macro Funds (Q) (T) Main fund investments $ 712,455 $ 91,022 0.0 % $ — $ — Single investor funds 903,052 68,109 0.0 % — 11 Sidepocket investments (R) 7,235 6,252 N/A 44 — Sidepocket investments - redeemers (S) 112,038 66,462 N/A 1,406 1 Managed accounts 397,078 26,980 0.0 % — 39 Fortress Convex Asia Funds (T) Main fund investments 193,120 11,718 0.0 % — — Fortress Partners Funds (T) Main fund investments 8,485 1,104 0.0 % — 41 Sidepocket investments (R) 79,272 6,951 N/A 4,338 — Fortress Centaurus Global Funds (T) Main fund investments 191,202 7,602 0.0 % — — Credit Hedge Funds Special Opportunities Funds (T) Main fund investments $ 4,767,347 $ — 100.0 % $ 44,097 $ — Sidepocket investments (R) 45,652 6 N/A 3,232 — Sidepocket investments - redeemers (S) 162,885 49,132 N/A 5,156 — Main fund investments (liquidating) (U) 477,952 — 100.0 % 55,612 22,169 Managed accounts 1,518 47,706 0.0 % — — Worden Funds Main fund investments 262,770 1,191 81.2 % 1,007 — Fortress Japan Income Fund Main fund investments 66,548 N/A 100.0 % 134 — Value Recovery Funds (V) Managed accounts 9,908 6,957 48.8 % 57 — Logan Circle Main fund investments $ 70,598 $ 1,182 0.0 % $ — $ — Managed accounts 218,111 19,677 26.3 % 105 — (A) Vintage represents the year in which the fund was formed. (B) Represents the contractual maturity date including the assumed exercise of all extension options, which in some cases may require the approval of the applicable fund advisory board. Private equity funds that have reached their maturity date are included in the table to the extent they have generated incentive income. (C) Includes an increase to the NAV surplus related to the U.S. income tax expense of certain investment entities, which is considered a distribution for the purposes of computing incentive income. (D) A NAV deficit represents the gain needed to cross the incentive income threshold (as described in (F) below), excluding the impact of any relevant performance (i.e. preferred return) thresholds (as described in (E) below). (E) For fund investors whose NAV is below the incentive income threshold, represents the gain needed for these investors to achieve the current relevant performance thresholds, assuming the gain described in (D) above is already achieved. (F) For fund investors whose NAV is below the incentive income threshold, represents the immediate increase in NAV needed for these investors for Fortress to begin earning incentive income, including the achievement of any relevant performance thresholds. It does not include the amount needed to earn back intrinsic clawback (see (J) below), if any. Incentive income is not recorded as revenue until it is received and any related contingencies are resolved (see (I) below). For the publicly traded permanent capital vehicles, represents the immediate increase of the entity's applicable supplemental measure of operating performance needed for Fortress to begin earning incentive income. As of June 30, 2015 , as a result of Newcastle not meeting the incentive income threshold, Fortress does not expect to earn incentive income from Newcastle for an indeterminate period of time. In April 2015, Fortress entered into an amended management agreement with Eurocastle. The amendment reset the earnings threshold for Fortress to earn incentive income. (G) Represents the amount of additional incentive income Fortress would receive if the fund were liquidated at the end of the period at its NAV. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. As of June 30, 2015 , a portion of Fund V, Long Dated Value Fund I and Real Estate Opportunities Fund II's capital is above their incentive income threshold. (H) Represents the amount of net incentive income previously received from the fund since inception. (I) Represents the amount of incentive income previously received from the fund which is still subject to contingencies and is therefore recorded on the consolidated balance sheet as Deferred Incentive Income. This amount will either be recorded as revenue when all related contingencies are resolved, or, if the fund does not meet certain performance thresholds, will be returned by Fortress to the fund (i.e., “clawed back”). (J) Represents the amount of incentive income previously received from the fund that would be clawed back (i.e., returned by Fortress to the fund) if the fund were liquidated at the end of the period at its NAV, excluding the effect of any tax adjustments. Employees, former employees and affiliates of Fortress would be required to return a portion of this incentive income that was paid to them under profit sharing arrangements. “Gross” and “Net” refer to amounts that are gross and net, respectively, of this employee/affiliate portion of the intrinsic clawback. Fortress remains liable to the funds for these amounts even if it is unable to collect the amounts from employees/affiliates. Fortress withheld a portion of the amounts due to employees under these profit sharing arrangements as a reserve against future clawback; as of June 30, 2015 , Fortress held $22.8 million of such amounts on behalf of employees related to all of the private equity funds. (K) The Fund I distributed incentive income amount is presented for the total fund, of which Fortress was entitled to approximately 50% . (L) Represents the portion of a fund’s or managed account's NAV or trading level that is eligible to earn incentive income. For the publicly traded permanent capital vehicles, represents the equity basis that is used to calculate incentive income. (M) Represents, for those investors whose NAV is below the performance threshold Fortress needs to obtain before it can earn incentive income from such investors (their “incentive income threshold” or “high water mark”), the amount by which their aggregate incentive income thresholds exceed their aggregate NAVs. The amount by which the NAV of each investor within this category is below their respective incentive income threshold varies and, therefore, Fortress may begin earning incentive income from certain investors before this entire amount is earned back. Fortress earns incentive income whenever the assets of new investors, as well as of investors whose NAV exceeds their incentive income threshold, increase in value. For Fortress Japan Income Fund, Fortress earns incentive income based on investment income, which does not include unrealized and realized gains and losses, earned in excess of a preferred return threshold. (N) Represents the percentage which is computed by dividing (i) the aggregate NAV of all investors who are at or above their respective incentive income thresholds, by (ii) the total incentive income eligible NAV of the fund. The amount by which the NAV of each fund investor who is not in this category is below their respective incentive income threshold may vary, and may vary significantly. This percentage represents the performance of only the main fund investments and managed accounts relative to their respective incentive income thresholds. It does not incorporate the impact of unrealized losses on sidepocket investments that can reduce the amount of incentive income earned from certain funds. See footnote (R) below. (O) Represents the amount of additional incentive income Fortress would earn from the fund or managed account if it were liquidated at the end of the period at its NAV. This amount is currently subject to performance contingencies generally until the end of the year or, in the case of sidepocket investments, until such investments are realized. Main Fund Investments (Liquidating) pay incentive income only after all capital is returned. For the Fortress Japan Income Fund, represents the amount of incentive income Fortress would earn from the fund assuming the amount of investment income earned in excess of the preferred return threshold was distributed as of the end of the period. For the Value Recovery Fund managed accounts, Fortress can earn incentive income if aggregate realizations exceed an agreed threshold. For FTAI, Fortress can earn incentive income if cumulative capital gains income, subject to certain adjustments, exceeds the incentive income threshold as of the end of each calendar year. The incentive income amounts presented in this table are based on the estimated results of investment vehicles for the current period. These estimates are subject to change based on the final results of such vehicles. (P) Represents the amount of incentive income Fortress has earned which is not subject to clawback. For the publicly traded permanent capital vehicles, represents the life-to-date incentive income amount that Fortress has earned and which is not subject to clawback. All of the capital of WWTAI, a private fund managed by Fortress, was contributed to FTAI which completed its IPO in May 2015 (see below). Fortress earned $7.0 million in life-to-date incentive income which is not subject to clawback and was not included in the table above. Of the $7.0 million in incentive income from WWTAI, Fortress received $5.9 million in FTAI common shares based on the share price at IPO. (Q) The Drawbridge Global Macro SPV (the “SPV”), which was established in February 2009 to liquidate illiquid investments and distribute the proceeds to then existing investors, is not subject to incentive income and is therefore not presented in the table. However, realized gains or losses within the SPV can decrease or increase, respectively, the gain needed to cross the incentive income threshold for investors with a corresponding investment in the main fund. The unrealized gains and losses within the SPV at June 30, 2015 , as if they became realized, would not materially impact the amounts presented in the table. (R) Represents investments held in sidepockets (also known as special investment accounts), which generally have investment profiles similar to private equity funds. The performance of these investments may impact Fortress’s ability to earn incentive income from main fund investments. For the credit hedge funds and Fortress Partners Funds, realized and unrealized losses from individual sidepockets below original cost may reduce the incentive income earned from main fund investments. For the Macro Funds, only realized losses from individual sidepockets reduce the incentive income earned from main fund investments. Based on current unrealized losses in Macro Fund sidepockets, if all of the Macro Fund sidepockets were liquidated at their NAV at June 30, 2015 , the undistributed incentive income from the Macro main fund would not be impacted. (S) Represents investments held in sidepockets for investors with no corresponding investment in the related main fund investments. In the case of the Macro Funds, such investors may have investments in the SPV (see (Q) above). (T) Includes onshore and offshore funds. (U) Relates to accounts where investors have provided return of capital notices and are subject to payout as underlying fund investments are realized. (V) Excludes the Value Recovery Funds which had a NAV of $146.0 million at June 30, 2015 . Fortress began managing the third party originated Value Recovery Funds in June 2009 and generally does not expect to earn any significant incentive income from the fund investments. |
Schedule of Logan Circle fixed income fund | During the six months ended June 30, 2015 , Logan Circle, Fortress's fixed income asset manager, formed two new entities with net asset values as follows as of June 30, 2015 : Logan Circle Funds Fortress $ 9,899 Third party investors 50,745 Total capital NAV $ 60,644 |
Schedule of credit PE funds formed during the period | During the six months ended June 30, 2015 , Fortress formed new credit PE entities which had capital commitments as follows as of June 30, 2015 : Credit PE Fortress $ 33,750 Fortress's affiliates 36,035 Third party investors 3,864,910 Total capital commitments $ 3,934,695 |
INVESTMENTS AND FAIR VALUE (Tab
INVESTMENTS AND FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments and Fair Value | |
Summary of investments | Investments can be summarized as follows: June 30, 2015 December 31, 2014 Equity method and other investees $ 1,115,092 $ 1,106,338 Equity method investees, held at fair value (A) 29,505 15,207 Total investments $ 1,144,597 $ 1,121,545 Options in equity method investees $ 60,950 $ 71,844 (A) Includes the publicly traded private equity portfolio companies and publicly traded permanent capital vehicles, including FTAI which completed its IPO in May 2015 (see Note 2). |
Summary of gains (losses) | Gains (losses) are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net realized gains (losses) $ 54 $ (1,574 ) $ 1,313 $ (2,409 ) Net realized gains (losses) from affiliate investments (A) 33,867 44,922 32,701 44,348 Net unrealized gains (losses) 3,962 4,844 1,600 (1,959 ) Net unrealized gains (losses) from affiliate investments (A) (44,670 ) (43,328 ) (10,840 ) (46,171 ) Total gains (losses) $ (6,787 ) $ 4,864 $ 24,774 $ (6,191 ) (A) Includes the impact of the exercise of options held in New Residential in June 2015 and the sale of GAGFAH shares in June 2014. |
Schedule of gains (losses) generated | These gains (losses) were generated as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Mark to fair value on affiliate investments and options $ (10,886 ) $ 1,593 $ 21,899 $ (1,846 ) Mark to fair value on derivatives 3,903 (2,599 ) 5,017 (3,948 ) Mark to fair value on equity securities — 693 (509 ) 770 Gains (losses) on digital currency (Bitcoin) 368 3,904 (1,175 ) (2,272 ) Other (172 ) 1,273 (458 ) 1,105 Total gains (losses) $ (6,787 ) $ 4,864 $ 24,774 $ (6,191 ) |
Summary of financial information related to investments | Summary financial information related to these investments is as follows: Fortress’s Investment Earnings (Losses) from Equity Method Investees June 30, December 31, Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 Private equity funds $ 657,569 $ 677,366 $ (33,674 ) $ 10,957 $ (7,819 ) $ 17,349 Publicly traded portfolio companies (A)(B) 1,368 1,035 N/A N/A N/A N/A FTAI (B) 14,236 5,284 (129 ) (92 ) 89 (57 ) Newcastle (B) 764 776 N/A N/A N/A N/A New Residential (B) 7,903 6,622 N/A N/A N/A N/A Eurocastle (B) 2,244 2,162 N/A N/A N/A N/A New Media (B) 1,342 1,769 N/A N/A N/A N/A New Senior (B) 2,311 2,843 N/A N/A N/A N/A Total private equity 687,737 697,857 (33,803 ) 10,865 (7,730 ) 17,292 Liquid hedge funds (C) 193,783 167,630 (8,850 ) 1,756 518 3,286 Credit hedge funds 41,898 57,224 990 2,440 2,958 4,809 Credit PE funds 195,801 183,127 5,000 7,387 10,065 17,394 Other 25,378 15,707 342 — (424 ) 41 $ 1,144,597 $ 1,121,545 $ (36,321 ) $ 22,448 $ 5,387 $ 42,822 (A) Represents Fortress’s direct investments in the common stock of publicly traded private equity portfolio companies. (B) Fortress elected to record the common shares held in these companies at fair value pursuant to the fair value option for financial instruments, including FTAI which completed its IPO in May 2015 (see Note 2). (C) Includes Fortress's investment in Affiliated Managers. |
Summary of changes in investments | A summary of the changes in Fortress’s investments is as follows: Six Months Ended June 30, 2015 Private Equity Funds Publicly Traded Portfolio Companies (A) Permanent Capital Vehicles (A) Liquid Hedge Funds (B) Credit Hedge Funds Credit PE Funds Other Total Investment, beginning $ 677,366 $ 1,035 $ 19,456 $ 167,630 $ 57,224 $ 183,127 $ 15,707 $ 1,121,545 Earnings from equity method investees (7,819 ) N/A 89 518 2,958 10,065 (424 ) 5,387 Other comprehensive income from equity — N/A — — — — — — Contributions to equity method and other 1,930 50 8,406 13,652 115,369 21,602 66 161,075 Distributions of earnings from equity (10,668 ) N/A (173 ) (427 ) (3,485 ) (8,269 ) (734 ) (23,756 ) Distributions of capital from equity (2,016 ) N/A (216 ) (20,990 ) (130,168 ) (10,278 ) (3 ) (163,671 ) Total distributions from equity method (12,684 ) — (389 ) (21,417 ) (133,653 ) (18,547 ) (737 ) (187,427 ) Mark to fair value - during period (D) 401 283 1,411 N/A N/A N/A (189 ) 1,906 Net purchases of investments by consolidated funds — — — — — — 10,955 10,955 Translation adjustment (28 ) — (173 ) — — (398 ) — (599 ) Dispositions (2,683 ) — — — — (48 ) — (2,731 ) Reclassification to Due to Affiliates (E) 1,086 — — — — — — 1,086 Retained interest in Graticule (Note 1) — — — 33,400 — — — 33,400 Investment, ending $ 657,569 $ 1,368 $ 28,800 $ 193,783 $ 41,898 $ 195,801 $ 25,378 $ 1,144,597 Ending balance of undistributed earnings $ 54,692 $ N/A $ N/A $ 7,826 $ 2,442 $ 13,547 $ 1,728 $ 80,235 (A) Fortress elected to record the common shares held in the publicly traded private equity portfolio companies and publicly traded permanent capital vehicles, including FTAI which completed its IPO in May 2015 (see Note 2), at fair value pursuant to the fair value option for financial instruments. (B) Includes Fortress's investment in Affiliated Managers. (C) The amounts presented above can be reconciled to the amounts presented on the statement of cash flows as follows: Six Months Ended June 30, 2015 Contributions Distributions of Capital Per Consolidated Statements of Cash Flows $ 18,862 $ (155,255 ) Investments of incentive receivable amounts into Fortress Funds 134,657 — Change in distributions payable out of Fortress Funds — — Net funded* 7,331 (7,331 ) Other 225 (1,085 ) Per Above $ 161,075 $ (163,671 ) * In some instances, a private equity style fund may need to simultaneously make both a capital call (for new investments or expenses) and a capital distribution (related to realizations from existing investments). This results in a net funding. (D) Recorded to Gains (Losses). (E) Represents a portion of the general partner liability discussed in Note 9. |
Schedule reconciling capital activity in equity method investments to the statement of cash flows | The amounts presented above can be reconciled to the amounts presented on the statement of cash flows as follows: Six Months Ended June 30, 2015 Contributions Distributions of Capital Per Consolidated Statements of Cash Flows $ 18,862 $ (155,255 ) Investments of incentive receivable amounts into Fortress Funds 134,657 — Change in distributions payable out of Fortress Funds — — Net funded* 7,331 (7,331 ) Other 225 (1,085 ) Per Above $ 161,075 $ (163,671 ) * In some instances, a private equity style fund may need to simultaneously make both a capital call (for new investments or expenses) and a capital distribution (related to realizations from existing investments). This results in a net funding. |
Schedule of ownership percentages in the tables reflective of the ownership interests held as of the end of the respective periods | The following tables present summarized statements of operations for Fortress's significant equity method investees. The permanent capital vehicles, the publicly traded portfolio companies and Other are not presented as they are insignificant to Fortress’s investments. Private Equity Funds (A) Liquid Hedge Funds Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 (B) 2014 Revenues and gains (losses) on investments $ (284,694 ) $ 419,265 $ (132,365 ) $ (153,439 ) Expenses (84,796 ) (101,809 ) (95,131 ) (97,666 ) Net Income (Loss) $ (369,490 ) $ 317,456 $ (227,496 ) $ (251,105 ) Fortress’s equity in net income (loss) $ (7,819 ) $ 17,349 $ 518 $ 3,286 Credit Hedge Funds Credit PE Funds (A) Six Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Revenues and gains (losses) on investments $ 499,641 $ 553,237 $ 854,159 $ 1,293,764 Expenses (212,050 ) (150,968 ) (141,262 ) (132,624 ) Net Income (Loss) $ 287,591 $ 402,269 $ 712,897 $ 1,161,140 Fortress’s equity in net income (loss) $ 2,958 $ 4,809 $ 10,065 $ 17,394 (A) For Private Equity Funds, includes four entities which are recorded on a one quarter lag (i.e. current year balances reflected for these entities are for the period ended March 31, 2015). For Credit PE Funds, includes one entity which is recorded on a one quarter lag and several entities which are recorded on a one month lag. They are recorded on a lag because they are foreign entities, or they have substantial operations in foreign countries, and do not provide financial reports under GAAP within the reporting time frame necessary for U.S. public entities. (B) Includes the operating results of Affiliated Managers. |
Schedule of variable interest entities | The following tables set forth certain information as of June 30, 2015 regarding variable interest entities in which Fortress held a variable interest. Entities initially classified as variable interest entities during the six months ended June 30, 2015 : Fortress is not Primary Beneficiary Business Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Permanent Capital Vehicles 1 $ 2,009,945 $ 584,302 $ 19,121 (C) Liquid Hedge Funds 2 192,912 — 39,044 (D) Credit PE Funds 2 22,577 — 85 (D) All variable interest entities: Fortress is not Primary Beneficiary June 30, 2015 December 31, 2014 Business Number of VIEs Gross Financial Obligations Fortress Investment (B) Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Private Equity Funds 1 $ 126,427 $ — $ 53 2 $ 85,553 $ — $ 56 (D) Permanent Capital Vehicles 6 23,439,898 14,859,143 129,847 5 14,539,141 10,336,207 154,346 (C) Liquid Hedge Funds 4 2,224,814 283,069 42,347 2 3,070,203 432,580 7,094 (D) Credit Hedge Funds 8 2,145,724 373,920 2,915 8 1,976,328 152,806 25,474 (D) (E) Credit PE Funds 32 860,222 214,870 7,893 30 735,855 143,743 5,897 (D) (E) Fortress is Primary Beneficiary June 30, 2015 December 31, 2014 Business Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Number of VIEs Gross Assets (A) Financial Obligations (A) Fortress Investment (B) Notes Private Equity Funds 9 $ 65,588 $ — $ 20,957 9 $ 90,723 $ — $ 20,368 (F) (G) Liquid Hedge Funds 1 8,154 — 3,429 3 8,714 — 4,125 (F) Credit PE Funds 2 446 — 20 2 434 — 22 (F) Logan Circle 1 4,951 — 4,807 1 6,566 — 4,783 (F) (A) Represents financial obligations of the VIEs which are not recourse to Fortress and assets of the VIEs which Fortress does not have the right to make use of to satisfy its obligations. Financial obligations include financial borrowings, derivative liabilities and short securities. In many cases, these VIEs have additional debt within unconsolidated subsidiaries. The debt obligations of the VIEs are not cross collateralized with the debt obligations of Fortress. Fortress has no obligation to satisfy the liabilities of the VIEs. The VIE’s debt obligations have no impact on Fortress’s cash flows and its ability to borrow or comply with its debt covenants under its revolving credit agreement. (B) Represents Fortress’s maximum exposure to loss with respect to these entities, which includes investments in these entities, plus any receivables due from these entities. In addition to the table above, Fortress is exposed to potential changes in cash flow and revenues attributable to the management fees and/or incentive income Fortress earns from those entities. For VIEs where Fortress is deemed to be the primary beneficiary, these investments and receivables are eliminated in consolidation but still represent Fortress’s economic exposure to the VIEs. (C) Includes permanent capital vehicles that are a VIE because the entity's at-risk equity holders as a group lack the characteristics of a controlling financial interest because the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance. Fortress is not the primary beneficiary of these entities. Fortress and its related parties under common control as a group, where applicable, do not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to these entities. (D) Includes entities, primarily investing vehicles set up on behalf of the Fortress Funds to make investments, that are a VIE because the entity’s at-risk equity holders as a group lack the characteristics of a controlling financial interest because either (i) the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance and/or (ii) the voting rights of an investor are not proportional to its obligation to absorb the income or loss of the entity and substantially all of the entity’s activities either involve or are conducted on behalf of that investor and its related parties. Fortress is not the primary beneficiary of these entities. Fortress and its related parties under common control as a group, where applicable, do not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to these entities. Due to a reconsideration event in January 2015, Fortress no longer has the power to direct the activities that most significantly impact the economic performance of certain VIEs in the liquid hedge fund business. Therefore, Fortress is no longer deemed to be the primary beneficiary of these VIEs as of the reconsideration date. (E) Includes entities that are VIEs because the entity's equity investment at-risk is determined to be insufficient. Fortress is not the primary beneficiary of these entities because Fortress does not have the power to direct the activities that most significantly impact the economic performance of these entities. These entities represent an insignificant portion of the amounts presented in the table. (F) Includes entities that are a VIE because the entity's at-risk equity holders as a group lack the characteristics of a controlling financial interest because the group of at-risk equity holders does not have the power, through voting rights or similar rights, to direct the activities that most significantly affect the success of the entity or impact the entity's economic performance. Fortress is the investment manager of these entities. Fortress is determined to be the primary beneficiary of these entities since it has both power over the activities that most significantly affect the success of the entity or impact the entity’s economic performance and has the right to receive benefits or the obligation to absorb losses from the VIE that potentially could be significant to the entity. Due to a reconsideration in January 2015, Fortress no longer has the power to direct the activities that most significantly impact the economic performance of certain VIEs in the liquid hedge fund business. Therefore, Fortress is no longer deemed to be the primary beneficiary of these VIEs as of the reconsideration date. (G) Includes an entity that is a VIE because the entity’s equity investment at risk is determined to be insufficient. Fortress, as a result of directing the operations of the entity through its management contracts with certain funds, and providing financial support to the entity, was deemed to be its primary beneficiary. |
Schedule of information regarding the entity's financial instruments that are recorded at fair value | The following table presents information regarding Fortress’s financial instruments that are recorded at fair value. Investments denominated in foreign currencies have been translated at the period end exchange rate. Changes in fair value are recorded in Gains (Losses). Fair Value Valuation Method June 30, 2015 December 31, 2014 Assets (within Investments) Common shares of publicly traded permanent capital vehicles (A) $ 28,137 $ 14,172 Level 1 - Quoted prices in active markets for identical assets Common stock of publicly traded 1,368 1,035 Level 1 - Quoted prices in active markets for identical assets Total equity method investments $ 29,505 $ 15,207 Options in equity method investees $ 60,950 $ 71,844 Level 2 - Option valuation models using significant observable inputs Assets (within Other Assets) Derivatives $ 28,951 $ 27,105 Level 2 - See below $ — $ 17,627 Level 1 - Quoted prices in active markets for identical assets Liabilities (within Accrued Options in affiliates granted to $ (8,965 ) $ (8,356 ) Level 2 - Option valuation models using significant observable inputs Liabilities (within Other Liabilities) Derivatives $ (2,045 ) $ (932 ) Level 2 - See below (A) FTAI completed its IPO in May 2015 and Fortress elected to record its interest at fair value pursuant to the fair value option for financial instruments. (B) Equity securities were held at fair value and classified as trading. All equity securities were sold in 2015. |
Schedule of the entity's derivatives (not designated as hedges) | Fortress’s derivatives (not designated as hedges) are recorded as follows: Balance Sheet June 30, 2015 (or six months ended) Maturity Classification (A) Fair Value Notional Amount Gains/(Losses) (B) Date Foreign exchange option contracts Other Assets $ 28,597 ¥ 45,560,526 $ 4,857 Dec-15 - Mar-18 Foreign exchange option contracts Other Liabilities $ (1,710 ) ¥ 5,412,312 $ (216 ) Dec-15 - Jun-16 Foreign exchange forward contracts Other Assets $ 354 ¥ 1,028,587 $ 278 Jun-16 - Dec-17 Foreign exchange forward contracts Other Liabilities $ (335 ) ¥ 3,008,426 $ (335 ) Dec-15 - Jun-16 (A) Fortress has a master netting agreement with its counterparty. (B) Reflects unrealized gains (losses) related to contracts existing at period end. Total net foreign exchange gains (losses) from derivatives were $5.0 million and $(3.9) million during the six months ended June 30, 2015 and 2014, respectively. |
Offsetting of financial assets and derivative assets | The following tables summarizes the fair value of Fortress's derivative contacts on a gross basis and any amount of offset as permitted by netting agreements as of June 30, 2015 . Net Amounts of Gross Amounts Offset Assets Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Assets as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Assets June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ 30,715 $ (2,118 ) $ 28,597 Foreign exchange forward contracts 354 — 354 $ 31,069 $ (2,118 ) $ 28,951 Net Amounts of Gross Amounts Offset Liabilities Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Liabilities as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Liabilities June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ (1,188 ) $ (522 ) $ (1,710 ) Foreign exchange forward contracts (335 ) — (335 ) $ (1,523 ) $ (522 ) $ (2,045 ) |
Offsetting of financial liabilities and derivative liabilities | The following tables summarizes the fair value of Fortress's derivative contacts on a gross basis and any amount of offset as permitted by netting agreements as of June 30, 2015 . Net Amounts of Gross Amounts Offset Assets Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Assets as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Assets June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ 30,715 $ (2,118 ) $ 28,597 Foreign exchange forward contracts 354 — 354 $ 31,069 $ (2,118 ) $ 28,951 Net Amounts of Gross Amounts Offset Liabilities Presented Gross Amounts of in the Consolidated in the Consolidated Recognized Liabilities as of Balance Sheet as of Balance Sheet as of Offsetting of Derivative Liabilities June 30, 2015 June 30, 2015 June 30, 2015 Foreign exchange option contracts $ (1,188 ) $ (522 ) $ (1,710 ) Foreign exchange forward contracts (335 ) — (335 ) $ (1,523 ) $ (522 ) $ (2,045 ) |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of debt instruments | Face Amount and Carrying Value Contractual Final June 30, 2015 June 30, December 31, Interest Stated Amount Debt Obligation 2015 2014 Rate Maturity Available for Draws Revolving credit agreement (A)(B) $ 75,000 $ 75,000 LIBOR + 2.50% (C) Feb 2016 $ 72,332 Total $ 75,000 $ 75,000 (A) Collateralized by substantially all of Fortress Operating Group’s assets as well as Fortress Operating Group’s rights to fees from the Fortress Funds and its equity interests therein, other than fees from Fortress's senior living property manager. (B) The $150.0 million revolving debt facility includes a $15.0 million letter of credit subfacility of which $2.7 million was utilized. (C) Subject to unused commitment fees of 0.4% per annum. |
Schedule of the financial covenant requirements | The following table sets forth the financial covenant requirements as of June 30, 2015 . June 30, 2015 (dollars in millions) Requirement Actual Notes AUM, as defined ≥ $ 25,000 $ 45,690 (A) Consolidated Leverage Ratio ≤ 2.00 0.20 (B) Consolidated Interest Coverage Ratio ≥ 4.00 102.97 (B) (A) Impacted by capital raised in funds, redemptions from funds, and valuations of fund investments. The AUM presented here is based on the definition of Management Fee Earning Assets contained in the Credit Agreement. (B) The Consolidated Leverage Ratio is equal to Adjusted Net Funded Indebtedness, as defined, divided by the trailing four quarters’ Consolidated EBITDA, as defined. The Consolidated Interest Coverage Ratio is equal to the quotient of (A) the trailing four quarters' Consolidated EBITDA, as defined, divided by (B) the trailing four quarters' interest charges as defined in the Credit Agreement. Consolidated EBITDA, as defined, is impacted by the same factors as distributable earnings, except Consolidated EBITDA is not impacted by changes in clawback reserves or gains and losses, including impairment, on investments. |
INCOME TAXES AND TAX RELATED 25
INCOME TAXES AND TAX RELATED PAYMENTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of provision for income taxes | The provision for income taxes consists of the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Current Federal income tax expense (benefit) $ 2,394 $ (4,384 ) $ (727 ) $ (4,452 ) Foreign income tax expense (benefit) 5,543 1,470 6,670 4,608 State and local income tax expense (benefit) 930 560 2,809 998 8,867 (2,354 ) 8,752 1,154 Deferred Federal income tax expense (benefit) (2,153 ) 9,096 10,834 10,613 Foreign income tax expense (benefit) (77 ) (107 ) 3,465 676 State and local income tax expense (benefit) (A) (11,836 ) 1,281 (9,851 ) 1,467 (14,066 ) 10,270 4,448 12,756 Total expense (benefit) $ (5,199 ) $ 7,916 $ 13,200 $ 13,910 (A) During the three months ended June 30, 2015, New York City enacted corporate taxation legislative changes, which increased the value of certain future tax benefits. |
Schedule of tax effects of temporary differences that have resulted in deferred income tax assets and liabilities | The tax effects of temporary differences have resulted in deferred income tax assets and liabilities as follows: June 30, 2015 December 31, 2014 Total deferred tax assets $ 444,543 $ 439,159 Less: Valuation allowance (20,776 ) (13,072 ) Deferred tax liabilities (A) (7,852 ) (8,464 ) Deferred tax assets, net $ 415,915 $ 417,623 (A) The deferred tax liabilities primarily relate to timing differences in the recognition of income from options received from certain permanent capital vehicles. Deferred tax assets are shown net of deferred tax liabilities since they are both primarily of similar tax character and tax jurisdiction. |
Summary of the change in the deferred tax asset valuation allowance | The following table summarizes the change in the deferred tax asset valuation allowance: Valuation Allowance at December 31, 2014 $ 13,072 Changes due to FIG Corp. ownership change 306 Net increases (A) 7,398 Valuation Allowance at June 30, 2015 $ 20,776 (A) Primarily related to the change in the portion of the deferred tax asset that would be realized in connection with future capital gains. |
RELATED PARTY TRANSACTIONS AN26
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of components of due from affiliates | Due from affiliates was comprised of the following: Private Equity Liquid Credit Permanent Hedge Hedge Logan Funds Capital Vehicles Funds Funds PE Funds Circle Other Total June 30, 2015 Management fees and incentive income (A) $ 38,499 $ 29,601 $ 5,349 $ 2,766 $ 24,429 $ 507 $ — $ 101,151 Expense reimbursements (A) 24,257 7,796 7,200 12,267 10,541 109 — 62,170 Dividends and distributions — 347 — — — — — 347 Other — 2,353 — — — — 22,030 24,383 Total $ 62,756 $ 40,097 $ 12,549 $ 15,033 $ 34,970 $ 616 $ 22,030 $ 188,051 Private Equity Liquid Credit Permanent Hedge Hedge Logan Funds Capital Vehicles Funds Funds PE Funds Circle Other Total December 31, 2014 Management fees and incentive income (A) $ 35,970 $ 65,043 $ 15,634 $ 96,996 $ 18,393 $ 1,089 $ — $ 233,125 Expense reimbursements (A) 35,995 6,473 12,940 9,264 10,077 164 — 74,913 Dividends and distributions — 295 — — — — — 295 Other — 1,346 — — — — 16,896 18,242 Total $ 71,965 $ 73,157 $ 28,574 $ 106,260 $ 28,470 $ 1,253 $ 16,896 $ 326,575 (A) Net of allowances for uncollectible management fees and expense reimbursements of $12.2 million and $6.7 million as of June 30, 2015 , respectively, and of $12.2 million and $6.6 million as of December 31, 2014 , respectively. Allowances are recorded as General and Administrative expenses. |
Schedule of components of due to affiliates | Due to affiliates was comprised of the following: June 30, 2015 December 31, 2014 Principals - tax receivable agreement - Note 5 $ 296,916 $ 289,324 Principals - Principal Performance Payments - Note 7 22,114 30,659 Distributions payable on Fortress Operating Group units 5,240 — Other 3,274 11,411 General partner liability - Note 9 45,116 44,030 Total $ 372,660 $ 375,424 |
Redeemable Noncontrolling Interest | The following table represents the activity in Redeemable Non-controlling Interests as presented in the consolidated balance sheets: Six Months Ended June 30, 2015 Beginning balance $ 1,717 Capital distributions (1,692 ) Redeemable Non-controlling Interests in income (loss) of Consolidated Subsidiaries (6 ) $ 19 |
Amounts related to equity interests, which are held by the Principals, employees, and others | This balance sheet caption was comprised of the following: June 30, 2015 December 31, 2014 Fortress Operating Group units held by the Principals and a former senior $ 494,551 $ 556,720 Employee interests in majority owned and controlled fund advisor and general partner entities 57,373 80,333 Other 2,251 2,303 Total $ 554,175 $ 639,356 |
Portion of interest of Fortress Operating Group | The Fortress Operating Group portion of these interests is computed as follows: June 30, 2015 December 31, 2014 Fortress Operating Group equity (Note 12) $ 1,025,423 $ 1,152,297 Less: Others' interests in equity of consolidated subsidiaries (Note 12) (59,624 ) (82,636 ) Total Fortress shareholders' equity in Fortress Operating Group $ 965,799 $ 1,069,661 Fortress Operating Group units outstanding (A) 226,331,513 226,331,513 Class A shares outstanding 215,673,299 208,535,157 Total 442,004,812 434,866,670 Fortress Operating Group units as a percent of total (B) 51.2 % 52.0 % Equity of Fortress Operating Group units held by the Principals and $ 494,551 $ 556,720 (A) Held by the Principals and a former senior employee; exclusive of Class A shares. (B) As a result, the Registrant owned 48.8% and 48.0% of Fortress Operating Group as of June 30, 2015 and December 31, 2014 , respectively. |
Statement of operations caption comprising of shares of consolidated net income (loss) | This statement of operations caption was comprised of shares of consolidated net income (loss) related to the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fortress Operating Group units held by the Principals and $ 1,355 $ 40,577 $ 52,960 $ 45,635 Employee interests in majority owned and controlled fund 199 1,505 1,039 2,516 Other 99 18 (123 ) 26 Total $ 1,653 $ 42,100 $ 53,876 $ 48,177 |
Schedule of interest computation of an entity | The Fortress Operating Group portion of these interests is computed as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fortress Operating Group net income (loss) (Note 12) $ 2,935 $ 79,257 $ 102,694 $ 90,083 Adjust: Others' interests in net (income) loss of consolidated subsidiaries (Note 12) (298 ) (1,523 ) (916 ) (2,542 ) Redeemable Non-controlling interests in (income) (10 ) (157 ) 6 (157 ) Total Fortress shareholders' net income (loss) in Fortress Operating Group $ 2,627 $ 77,577 $ 101,784 $ 87,384 Fortress Operating Group as a percent of total (A) 51.6 % 52.3 % 52.0 % 52.2 % Fortress Operating Group net income (loss) attributable to the Principals and a former senior employee $ 1,355 $ 40,577 $ 52,960 $ 45,635 (A) Represents the weighted average percentage of total Fortress shareholders' net income (loss) in Fortress Operating Group attributable to the Principals and a former senior employee. |
Statement showing effects of changes in the entity's ownership interest in Fortress Operating Group on the entity's equity | The purpose of this schedule is to disclose the effects of changes in Fortress’s ownership interest in Fortress Operating Group on Fortress’s equity: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Net Income (loss) attributable to Class A shareholders $ 3,316 $ 31,199 $ 38,029 $ 34,223 Transfers (to) from the Principals' and Others' Interests: Increase in Fortress’s shareholders’ equity for the delivery of Class A shares primarily in connection with vested RSUs 8,338 4,359 8,364 4,776 Increase in Fortress's shareholders' equity for the public offering of Class A shares and repurchase of Class B shares and FOGUs — — — 53,510 Decrease in Fortress's shareholders' equity for the repurchase and cancellation of Class A shares and FOGUs — — — (101,156 ) Change from net income (loss) attributable to Fortress and transfers (to) from Principals’ and Others' Interests $ 11,654 $ 35,558 $ 46,393 $ (8,647 ) |
EQUITY-BASED AND OTHER COMPEN27
EQUITY-BASED AND OTHER COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of total compensation and benefits expense, excluding Principals Agreement Compensation, but including Principal Performance Payments | Fortress’s total compensation and benefits expense, including Principal Performance Payments, is comprised of the following: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Equity-based compensation, per below $ 11,044 $ 9,661 $ 25,388 $ 18,334 Profit-sharing expense, per below 67,348 41,426 106,261 105,747 Discretionary bonuses 58,236 55,283 120,817 112,721 Other payroll, taxes and benefits 62,480 61,744 125,530 119,831 $ 199,108 $ 168,114 $ 377,996 $ 356,633 |
Schedule of equity-based compensation activities | The following tables set forth information regarding equity-based compensation activities. RSUs Employees Non-Employees Number Value (A) Number Value (A) Outstanding at December 31, 2014 20,153,746 $ 5.52 396,874 $ 6.51 Issued 11,925,660 $ 6.89 111,540 $ 7.61 Transfers — $ — — $ — Converted to Class A shares (6,880,798 ) $ 4.74 (186,136 ) $ 6.78 Forfeited (441,455 ) $ 6.24 — $ — Outstanding at June 30, 2015 (B) 24,757,153 $ 6.38 322,278 $ 6.74 Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Expense incurred (B) Employee RSUs $ 7,818 $ 5,477 $ 18,822 $ 11,364 Non-Employee RSUs 82 4 1,064 10 Principal Performance Payments (C) 3,144 4,180 5,502 6,960 Total equity-based compensation expense $ 11,044 $ 9,661 $ 25,388 $ 18,334 (A) Represents the weighted average grant date estimated fair value per share or unit. (B) In future periods, Fortress will further recognize compensation expense on its non-vested equity based awards outstanding as of June 30, 2015 of $108.1 million , with a weighted average recognition period of 4.1 years. (C) Accrued based on year-to-date performance; the actual number of RSUs granted are determined at year end. Based on year-to-date performance, a total of approximately 1.1 million RSUs would be awarded as Principal Performance Payments. |
Schedule of the expense accrual for the Principal Performance Payments by segment | The expense for Principal Performance Payments was comprised of the following: Six Months Ended June 30, 2015 Equity-Based Profit Sharing Total Private equity business $ 401 $ 10,495 $ 10,896 Liquid hedge fund business 997 — 997 Credit business 4,104 9,759 13,863 Total $ 5,502 $ 20,254 $ 25,756 |
Schedule of recognized profit sharing compensation expense | Recognized profit sharing compensation expense (benefit) is summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Private equity funds $ — $ 303 $ — $ 303 Permanent capital vehicles 2,462 4,170 8,961 9,085 Liquid hedge funds (2,705 ) 5,944 1,348 8,407 Credit hedge funds 18,524 19,698 30,133 35,332 Credit PE funds 31,617 5,152 45,565 39,563 Principal Performance Payments (A) 17,450 6,159 20,254 13,057 Total $ 67,348 $ 41,426 $ 106,261 $ 105,747 (A) Relates to all applicable segments. Accrued based on year-to-date performance; the actual payments due to each Principal are determined at year end. |
EARNINGS PER SHARE AND DISTRI28
EARNINGS PER SHARE AND DISTRIBUTIONS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted net income (loss) per Class A share | The computations of basic and diluted net income (loss) per Class A share are set forth below: Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Basic Diluted Basic Diluted Weighted average shares outstanding Class A shares outstanding 211,685,639 211,685,639 209,710,467 209,710,467 Fully vested restricted Class A share units with dividend equivalent rights 3,717,045 3,717,045 5,464,698 5,464,698 Fully vested restricted Class A shares 780,497 780,497 810,412 810,412 Fortress Operating Group units exchangeable into — 226,331,513 — — Class A restricted shares and Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (2) — — — — Class A restricted share units granted to employees (not eligible for dividend and dividend equivalent payments) (3) — 6,695,668 — 6,225,155 Total weighted average shares outstanding 216,183,181 449,210,362 215,985,577 222,210,732 Basic and diluted net income (loss) per Class A share Net income (loss) attributable to Class A shareholders $ 3,316 $ 3,316 $ 38,029 $ 38,029 Dividend equivalents declared on, and undistributed earnings allocated to, non-vested restricted Class A shares and restricted Class A share units (2) (452 ) (452 ) (2,577 ) (2,577 ) Add back Principals' and others' interests in income of Fortress Operating Group, net of assumed income taxes at enacted rates, attributable to Fortress Operating Group units (1) — (3,237 ) — — Net income (loss) available to Class A shareholders $ 2,864 $ (373 ) $ 35,452 $ 35,452 Weighted average shares outstanding 216,183,181 449,210,362 215,985,577 222,210,732 Basic and diluted net income (loss) per Class A share $ 0.01 $ 0.00 $ 0.16 $ 0.16 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Basic Diluted Basic Diluted Weighted average shares outstanding Class A shares outstanding 205,351,556 205,351,556 208,688,070 208,688,070 Fully vested restricted Class A share units with dividend 1,431,885 1,431,885 2,653,378 2,653,378 Fully vested restricted Class A shares 1,000,310 1,000,310 986,867 986,867 Fortress Operating Group units exchangeable into Class A — 226,331,513 — 236,074,150 Class A restricted shares and Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) (2) — 1,415,845 — 1,433,170 Class A restricted share units granted to employees (not — 9,035,738 — 9,837,501 Total weighted average shares outstanding 207,783,751 444,566,847 212,328,315 459,673,136 Basic and diluted net income (loss) per Class A share Net income (loss) attributable to Class A shareholders $ 31,199 $ 31,199 $ 34,223 $ 34,223 Dividend equivalents declared on, and undistributed earnings allocated to, non-vested restricted Class A shares and restricted Class A share units (2) (712 ) (712 ) (489 ) (489 ) Add back Principals' and others' interests in income of — 24,909 — 31,447 Net income (loss) available to Class A shareholders $ 30,487 $ 55,396 $ 33,734 $ 65,181 Weighted average shares outstanding 207,783,751 444,566,847 212,328,315 459,673,136 Basic and diluted net income (loss) per Class A share $ 0.15 $ 0.12 $ 0.16 $ 0.14 (1) The Fortress Operating Group units not held by Fortress (that is, those held by the Principals and a former senior employee) are exchangeable into Class A shares on a one -to- one basis. These units are not included in the computation of basic earnings per share. These units enter into the computation of diluted net income (loss) per Class A share when the effect is dilutive using the if-converted method, which includes the income tax effects of nondiscretionary adjustments to the net income (loss) attributable to Class A shareholders from assumed conversion of these units. To the extent charges, particularly tax related charges, are incurred by the Registrant (i.e. not at the Fortress Operating Group level), the effect may be anti-dilutive. (2) Restricted Class A shares granted to directors and certain restricted Class A share units granted to employees are eligible to receive dividend or dividend equivalent payments when dividends are declared and paid on Fortress’s Class A shares and therefore participate fully in the results of Fortress’s operations from the date they are granted. They are considered in the computation of both basic and diluted earnings per Class A share using the two-class method for participating securities, except during periods of net losses. (3) Certain restricted Class A share units granted to employees are not entitled to dividend or dividend equivalent payments until they are vested and are therefore non-participating securities. These units are not included in the computation of basic earnings per share. They are included in the computation of diluted earnings per share when the effect is dilutive using the treasury stock method. The effect of the units on the calculation is generally anti-dilutive during periods of net losses. The weighted average restricted Class A share units which are not entitled to receive dividend or dividend equivalent payments outstanding were: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Share Units 13,416,141 13,418,337 12,564,428 12,932,088 |
Schedule of weighted average restricted Class A share units which are not entitled to receive dividend or dividend equivalent payments outstanding | The weighted average restricted Class A share units which are not entitled to receive dividend or dividend equivalent payments outstanding were: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Share Units 13,416,141 13,418,337 12,564,428 12,932,088 |
Schedule of Fortress's dividend paying shares and units | Fortress’s dividend paying shares and units were as follows: Weighted Average Weighted Average Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Class A shares 211,685,639 205,351,556 209,710,467 208,688,070 Restricted Class A shares (directors) 780,497 1,000,310 810,412 986,867 Restricted Class A share units (employees) (A) 3,717,045 1,431,885 5,464,698 2,653,378 Restricted Class A share units (employees) (B) 11,159,183 7,513,984 9,761,060 6,763,630 Fortress Operating Group units (Principals and a former 226,331,513 226,331,513 226,331,513 236,074,150 Total 453,673,877 441,629,248 452,078,150 455,166,095 As of June 30, 2015 As of December 31, 2014 Class A shares 214,984,712 207,490,023 Restricted Class A shares (directors) 688,587 1,045,134 Restricted Class A share units (employees) (A) 554,209 194,287 Restricted Class A share units (employees) (B) 11,159,183 7,002,003 Fortress Operating Group units (Principals and a former senior 226,331,513 226,331,513 Total 453,718,204 442,062,960 (A) Represents fully vested restricted Class A share units which are entitled to dividend equivalent payments. (B) Represents unvested restricted Class A share units which are entitled to dividend equivalent payments. |
Schedule of Fortress's dividends and distributions | Dividends and distributions during the six months ended June 30, 2015 are summarized as follows: Declared in Current Year Declared in Prior Year, Paid in Current Year Declared and Paid Declared but not yet Paid Total Dividends on Class A Shares $ — $ 96,501 $ — $ 96,501 Dividend equivalents on restricted Class A share units (A) — 8,053 — 8,053 Distributions to Fortress Operating Group unit holders (Principals and a former senior employee) (B) — 110,426 5,240 115,666 Total distributions $ — $ 214,980 $ 5,240 $ 220,220 (A) A portion of these dividend equivalents, if any, related to RSUs expected to be forfeited, is included as compensation expense in the consolidated statement of operations and is therefore considered an operating cash flow. (B) Fortress Operating Group made tax-related distributions to the FOG unit holders (the Principals and a former senior employee). |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum future rental payments (excluding expense escalations) under operating leases | Minimum future rental payments (excluding expense escalations) under these leases as of June 30, 2015 are as follows: July 1, 2015 to December 31, 2015 $ 13,055 2016 24,231 2017 12,839 2018 20,139 2019 19,620 2020 19,620 Thereafter 260,092 Total $ 369,596 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Clawback Reserve on Incentive Income for DE Purposes | Fortress had recognized incentive income for DE purposes from certain private equity funds and credit PE funds, which are subject to contingent clawback, as of June 30, 2015 : Fund (A) Net Intrinsic Clawback (B) Periods in Intrinsic Clawback Prior Year End Inception-to-Date Net DE Reserve Current Current Inception-to-Date Net DE Reserve Notes Fund III $ 45,108 30 Quarters $ 45,108 $ — $ — $ 45,108 (C) Total $ 45,108 $ 45,108 $ — $ — $ 45,108 (A) Fortress has recognized incentive income for DE purposes from the following funds, which do not have intrinsic clawback and for which Fortress's CODM has determined no clawback reserve is necessary: Credit Opportunities Fund, Credit Opportunities Fund II, Credit Opportunities Fund III, certain FCO Managed Accounts, Real Estate Opportunities Fund, Real Estate Opportunities REOC Fund, Net Lease Fund I, Japan Opportunity Fund and Global Opportunities Fund. (B) See Note 2. (C) The potential clawback on this fund has been fully reserved in prior periods. |
Summary of financial data on Fortress's segments | June 30, 2015 and the Six Months Then Ended Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 58,376 $ 41,710 $ 39,681 $ 59,511 $ 57,445 $ 26,533 $ — $ 283,256 Incentive income — 76,993 55 72,874 83,623 111 — 233,656 Segment revenues - total $ 58,376 $ 118,703 $ 39,736 $ 132,385 $ 141,068 $ 26,644 $ — $ 516,912 Fund management distributable $ 29,082 $ 75,865 $ (8,564 ) $ 65,224 $ 36,599 $ (1,156 ) $ — $ 197,050 Fund management distributable earnings (loss) before Principal Performance Payments (B) $ 29,082 $ 75,865 $ (887 ) $ 65,224 $ 36,599 $ (1,156 ) $ — $ 204,727 Fund management distributable earnings (loss) $ 29,082 $ 65,370 $ (887 ) $ 56,882 $ 34,758 $ (1,156 ) $ — $ 184,049 Pre-tax distributable earnings (loss) $ 29,160 $ 66,081 $ 3,328 $ 57,914 $ 38,615 $ (1,590 ) $ (1,843 ) $ 191,665 Total segment assets $ 734,168 $ 135,762 $ 198,615 $ 101,818 $ 293,994 $ 52,555 $ 745,994 (A) $ 2,262,906 (A) Unallocated assets includes cash of $230.9 million and net deferred tax assets of $415.9 million . Three Months Ended June 30, 2015 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 29,236 $ 22,508 $ 18,693 $ 29,847 $ 31,097 $ 13,271 $ — $ 144,652 Incentive income — 73,973 (836 ) 49,709 59,475 (23 ) — 182,298 Segment revenues - total $ 29,236 $ 96,481 $ 17,857 $ 79,556 $ 90,572 $ 13,248 $ — $ 326,950 Fund management distributable $ 14,107 $ 72,096 $ (6,062 ) $ 42,119 $ 30,233 $ (293 ) $ — $ 152,200 Fund management distributable $ 14,107 $ 72,096 $ (7,666 ) $ 42,119 $ 30,233 $ (293 ) $ — $ 150,596 Fund management distributable $ 14,107 $ 61,601 $ (7,386 ) $ 36,138 $ 28,979 $ (293 ) $ — $ 133,146 Pre-tax distributable earnings (loss) $ 14,162 $ 61,973 $ (6,262 ) $ 36,183 $ 31,586 $ (471 ) $ (702 ) $ 136,469 (B) See Note 7. Fund management distributable earnings (loss) is only reduced for the profit sharing component of the Principal Performance Payments. Six Months Ended June 30, 2014 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 70,913 $ 32,500 $ 69,640 $ 55,333 $ 48,327 $ 22,048 $ — $ 298,761 Incentive income 2,854 24,740 1,288 74,130 78,772 — — 181,784 Segment revenues - total $ 73,767 $ 57,240 $ 70,928 $ 129,463 $ 127,099 $ 22,048 $ — $ 480,545 Fund management distributable $ 50,609 $ 20,524 $ 15,507 $ 60,294 $ 32,737 $ (3,532 ) $ — $ 176,139 Fund management distributable earnings (loss) $ 50,609 $ 17,740 $ 14,539 $ 52,063 $ 31,663 $ (3,532 ) $ — $ 163,082 Pre-tax distributable earnings (loss) $ 145,150 $ 18,768 $ 17,196 $ 54,726 $ 35,906 $ (2,672 ) $ (778 ) $ 268,296 Three Months Ended June 30, 2014 Private Equity Permanent Liquid Credit Funds Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Unallocated Total Segment revenues Management fees $ 35,491 $ 16,464 $ 36,162 $ 28,475 $ 23,686 $ 11,444 $ — $ 151,722 Incentive income 855 20,731 1,155 42,301 12,817 — — 77,859 Segment revenues - total $ 36,346 $ 37,195 $ 37,317 $ 70,776 $ 36,503 $ 11,444 $ — $ 229,581 Fund management distributable $ 25,842 $ 14,498 $ 7,027 $ 33,733 $ 2,577 $ (1,461 ) $ — $ 82,216 Fund management distributable earnings (loss) $ 25,842 $ 12,397 $ 6,601 $ 30,039 $ 2,639 $ (1,461 ) $ — $ 76,057 Pre-tax distributable earnings (loss) $ 116,891 $ 13,083 $ 8,412 $ 31,311 $ 3,174 $ (726 ) $ (356 ) $ 171,789 |
Schedule of reconciliation of net income (loss) | Reconciling items between segment measures and GAAP measures: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Fund management distributable earnings $ 133,146 $ 76,057 $ 184,049 $ 163,082 Investment income (loss) 4,279 96,598 9,393 106,752 Interest expense (956 ) (866 ) (1,777 ) (1,538 ) Pre-tax distributable earnings 136,469 171,789 191,665 268,296 Adjust incentive income Incentive income received from private equity funds, the private permanent capital vehicle and credit PE funds, subject to contingent repayment (59,528 ) (13,672 ) (84,071 ) (79,627 ) Incentive income received from third parties, subject to contingent repayment (3,867 ) — (3,867 ) (86 ) Incentive income from private equity funds, the private permanent capital vehicle and credit PE funds, not subject to contingent repayment 44,744 23,859 65,709 53,362 Incentive income from hedge funds, permanent capital vehicles and Logan Circle, subject to annual performance achievement (23,231 ) (25,784 ) (46,400 ) (56,278 ) Incentive income received related to the exercise of options (56,615 ) (1,485 ) (56,615 ) (1,485 ) Reserve for clawback, gross (see discussion above) — — — (1,999 ) (98,497 ) (17,082 ) (125,244 ) (86,113 ) Adjust other income Distributions of earnings from equity method investees* (8,724 ) (47,122 ) (12,566 ) (56,349 ) Earnings (losses) from equity method investees* (33,192 ) 19,602 (6,219 ) 37,216 Gains (losses) on options in equity method investees (9,202 ) (1,088 ) 23,126 (5,871 ) Gains (losses) on other investments 5,275 (42,221 ) 5,979 (47,065 ) Impairment of investments (see discussion above) 406 38 3,400 64 Adjust income from the receipt of options 21,014 1,604 25,158 1,604 Gain on transfer of Graticule (see Note 1) — — 134,400 — (24,423 ) (69,187 ) 173,278 (70,401 ) Adjust employee, Principal and director compensation Adjust employee, Principal and director equity-based compensation expense (5,552 ) (7,811 ) (26,012 ) (21,131 ) Adjust employee portion of incentive income from private equity funds and credit PE funds, accrued prior to the realization of incentive income (944 ) 2,039 (861 ) 3,174 (6,496 ) (5,772 ) (26,873 ) (17,957 ) Adjust for the transfer of interest in Graticule (see Note 1) — — (101,000 ) — Adjust amortization of intangible assets and impairment of goodwill and intangible (83 ) (11 ) (165 ) (22 ) Adjust non-controlling interests related to Fortress Operating Group units (1,355 ) (40,577 ) (52,960 ) (45,635 ) Adjust tax receivable agreement liability (7,500 ) — (7,500 ) — Adjust income taxes 5,201 (7,961 ) (13,172 ) (13,945 ) Total adjustments (133,153 ) (140,590 ) (153,636 ) (234,073 ) Net Income (Loss) Attributable to Class A Shareholders 3,316 31,199 38,029 34,223 Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries 1,653 42,100 53,876 48,177 Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries 10 157 (6 ) 157 Net Income (Loss) (GAAP) $ 4,979 $ 73,456 $ 91,899 $ 82,557 * This adjustment relates to all of the private equity, private permanent capital vehicle through IPO in May 2015 and credit PE Fortress Funds and hedge fund special investment accounts in which Fortress has an investment |
Schedule of reconciliation of assets | June 30, 2015 Total segment assets $ 2,262,906 Adjust equity investments from segment carrying amount (1,049 ) Adjust investments gross of employees' and others' portion 16,501 Adjust intangible assets to cost (23,002 ) Accrued incentive income subject to annual performance achievement (46,400 ) Total assets (GAAP) $ 2,208,956 |
Schedule of reconciliation of revenues | Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Total segment revenues $ 326,950 $ 229,581 $ 516,912 $ 480,545 Adjust management fees 237 435 486 727 Adjust incentive income* (99,845 ) (17,373 ) (126,979 ) (86,403 ) Adjust income from the receipt of options 21,014 1,604 25,158 1,604 Adjust other revenues (including expense reimbursements)** 60,132 56,097 119,600 110,981 Total revenues (GAAP) $ 308,488 $ 270,344 $ 535,177 $ 507,454 * Incentive income received from third parties, not subject to contingent repayment of $1.3 million and $0.3 million during the three months ended June 30, 2015 and June 30, 2014 , respectively, $1.7 million and $0.3 million for the six months ended June 30, 2015 and June 30, 2014 , respectively are included in segment measures as part of incentive income while included in GAAP as part of other revenues. ** Segment revenues do not include GAAP other revenues, except to the extent they represent management fees or incentive income; such revenues are included elsewhere in the calculation of distributable earnings. |
Schedule of Fortress's depreciation and amortization expense by segment | Fortress’s depreciation and amortization expense by segment prior to the allocation of corporate and intra-segment depreciation and amortization expense to the business segments was as follows. Amortization expense, related to intangible assets, is not a component of distributable earnings. Private Equity Liquid Credit Three Months Ended June 30, Funds Permanent Capital Vehicles Hedge Funds Hedge Funds PE Funds Logan Circle Corporate Total 2015 Depreciation $ 395 $ 367 $ 9,475 $ 1,305 $ 395 $ 74 $ 674 $ 12,685 Amortization — — — — — 83 — 83 Total $ 395 $ 367 $ 9,475 $ 1,305 $ 395 $ 157 $ 674 $ 12,768 2014 Depreciation $ 404 $ 196 $ 1,974 $ 1,376 $ 275 $ 82 $ 719 $ 5,026 Amortization — — — — — 11 — 11 Total $ 404 $ 196 $ 1,974 $ 1,376 $ 275 $ 93 $ 719 $ 5,037 Six Months Ended June 30, 2015 Depreciation $ 769 $ 602 $ 11,517 $ 2,695 $ 652 $ 355 $ 1,344 $ 17,934 Amortization — — — — — 165 — 165 Total $ 769 $ 602 $ 11,517 $ 2,695 $ 652 $ 520 $ 1,344 $ 18,099 2014 Depreciation $ 798 $ 378 $ 3,227 $ 2,777 $ 475 $ 168 $ 1,493 $ 9,316 Amortization — — — — — 22 — 22 Total $ 798 $ 378 $ 3,227 $ 2,777 $ 475 $ 190 $ 1,493 $ 9,338 |
CONSOLIDATING FINANCIAL INFOR31
CONSOLIDATING FINANCIAL INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Consolidating Financial Information | |
Schedule of consolidating balance sheet information | The consolidating balance sheet information is as follows: As of June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Group LLC Consolidated (B) Elimination Adjustments Fortress Investment Group LLC Consolidated Assets Cash and cash equivalents $ 233,271 $ 513 $ — $ 128 $ — $ 233,912 Due from affiliates 188,095 2,644 (2,274 ) 4,580 (4,994 ) 188,051 Investments 1,144,597 2,175 (2,175 ) 471,248 (471,248 ) 1,144,597 Investments in options 60,950 — — — — 60,950 Deferred tax asset, net — — — 415,915 — 415,915 Other assets 150,151 1,968 — 13,412 — 165,531 Total Assets $ 1,777,064 $ 7,300 $ (4,449 ) $ 905,283 $ (476,242 ) $ 2,208,956 Liabilities and Equity Accrued compensation and benefits $ 179,035 $ 2,932 $ — $ — $ — $ 181,967 Due to affiliates 80,738 2,274 (2,274 ) 296,916 (4,994 ) 372,660 Deferred incentive income 326,338 — — — — 326,338 Debt obligations payable 75,000 — — — — 75,000 Other liabilities 89,957 473 — — — 90,430 Total Liabilities 751,068 5,679 (2,274 ) 296,916 (4,994 ) 1,046,395 Commitments and Contingencies Redeemable Non-controlling Interests, 19 — — — — 19 Equity Paid-in capital 5,773,202 5,691 (2,291 ) 1,922,869 (5,776,602 ) 1,922,869 Retained earnings (accumulated deficit) (4,798,760 ) (4,070 ) 116 (1,312,093 ) 4,802,714 (1,312,093 ) Accumulated other comprehensive income (loss) (8,089 ) — — (2,409 ) 8,089 (2,409 ) Total Fortress shareholders' equity (C) 966,353 1,621 (2,175 ) 608,367 (965,799 ) 608,367 Principals' and others' interests in equity 59,624 — — — 494,551 554,175 Total Equity 1,025,977 1,621 (2,175 ) 608,367 (471,248 ) 1,162,542 Total Liabilities, Redeemable Non-controlling $ 1,777,064 $ 7,300 $ (4,449 ) $ 905,283 $ (476,242 ) $ 2,208,956 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. (C) Includes the Principals’ (and a former senior employee's) equity in the Fortress Operating Group column, which is eliminated in consolidation. |
Schedule of consolidating statement of operations information | The consolidating statement of operations information is as follows: Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Group LLC Consolidated (B) Elimination Adjustments Fortress Investment Group LLC Consolidated Revenues Management fees: affiliates $ 275,184 $ 3,459 $ — $ — $ — $ 278,643 Management fees: non-affiliates 30,161 96 — — — 30,257 Incentive income: affiliates 106,381 — — — — 106,381 Incentive income: non-affiliates 296 — — — — 296 Expense reimbursements: affiliates 88,823 19,733 — — — 108,556 Expense reimbursements: non-affiliates 4,865 1,951 — — — 6,816 Other revenues (affiliate portion disclosed in 4,239 — — — (11 ) 4,228 Total Revenues 509,949 25,239 — — (11 ) 535,177 Expenses Compensation and benefits 353,343 24,653 — — — 377,996 General, administrative and other 86,981 1,185 — — — 88,166 Depreciation and amortization 18,026 73 — — — 18,099 Interest expense 1,772 63 (63 ) 117 (11 ) 1,878 Transfer of interest in Graticule (see Note 1) 101,000 — — — — 101,000 Total Expenses 561,122 25,974 (63 ) 117 (11 ) 587,139 Other Income (Loss) Gains (losses) (affiliate portion disclosed in 24,774 — — — — 24,774 Tax receivable agreement liability adjustment — — — (7,500 ) — (7,500 ) Earnings (losses) from equity method investees 5,387 — — 48,824 (48,824 ) 5,387 Gain on transfer of Graticule (see Note 1) 134,400 — — — — 134,400 Total Other Income (Loss) 164,561 — — 41,324 (48,824 ) 157,061 Income (Loss) Before Income Taxes 113,388 (735 ) 63 41,207 (48,824 ) 105,099 Income tax benefit (expense) (10,018 ) (4 ) — (3,178 ) — (13,200 ) Net Income (Loss) $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 Allocation of Net Income (Loss) Principals' and Others' Interests in Income $ 916 $ — $ — $ — $ 52,960 $ 53,876 Redeemable Non-controlling Interests in Income (6 ) — — — — (6 ) Net Income (Loss) Attributable to 102,460 (739 ) 63 38,029 (101,784 ) 38,029 $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. (C) Includes net income (loss) attributable to the Principals’ (and a former senior employee’s) interests in the Fortress Operating Group column, which is eliminated in consolidation. |
Schedule of consolidating statement of cash flows information | The consolidating statement of cash flows information is as follows: Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Elimination Adjustments Fortress Investment Group LLC Consolidated Cash Flows From Operating Activities Net income (loss) $ 103,370 $ (739 ) $ 63 $ 38,029 $ (48,824 ) $ 91,899 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 18,026 73 — — — 18,099 Other amortization (included in interest expense) 390 — — — — 390 (Earnings) losses from equity method investees (5,387 ) — — (48,824 ) 48,824 (5,387 ) Distributions of earnings from equity 23,756 — — — — 23,756 (Gains) losses (24,774 ) — — — — (24,774 ) Deferred incentive income (65,709 ) — — — — (65,709 ) Deferred tax (benefit) expense 2,057 — — 2,391 — 4,448 Options received from affiliates (25,158 ) — — — — (25,158 ) Tax receivable agreement liability adjustment — — — 7,500 — 7,500 Equity-based compensation 25,388 — — — — 25,388 Options in affiliates granted to employees 5,681 — — — — 5,681 Other 356 — — — — 356 Transfer of interest in Graticule (see Note 1) 101,000 — — — — 101,000 Gain on transfer of Graticule (see Note 1) (134,400 ) — — — — (134,400 ) Cash flows due to changes in Due from affiliates 17,967 10 — 415 — 18,392 Other assets (3,318 ) 42 (63 ) (2,588 ) — (5,927 ) Accrued compensation and benefits (157,337 ) (214 ) — — — (157,551 ) Due to affiliates (17,100 ) — — 93 — (17,007 ) Deferred incentive income 74,610 — — — — 74,610 Other liabilities 9,806 391 — (7,387 ) — 2,810 Purchase of investments by consolidated funds (66,965 ) — — — — (66,965 ) Proceeds from sale of investments by consolidated 53,494 — — — — 53,494 Receivables from brokers and counterparties (211 ) — — — — (211 ) Due to brokers and counterparties 2,727 — — — — 2,727 Net cash provided by (used in) operating activities (61,731 ) (437 ) — (10,371 ) — (72,539 ) Cash Flows From Investing Activities Contributions to equity method investees (18,862 ) — — (57,081 ) 57,081 (18,862 ) Distributions of capital from equity method 155,255 — — 102,167 (102,167 ) 155,255 Purchase of securities (883 ) — — — — (883 ) Proceeds from sale of securities 18,101 — — — — 18,101 Proceeds from exercise of options 51,543 — — — — 51,543 Purchase of fixed assets (11,075 ) — — — — (11,075 ) Net cash provided by (used in) investing activities 194,079 — — 45,086 (45,086 ) 194,079 Continued on next page. Six Months Ended June 30, 2015 Fortress Operating Group Combined (A) FOE II (New) LP Fortress Operating Group Eliminations Fortress Investment Elimination Adjustments Fortress Investment Group LLC Consolidated Cash Flows From Financing Activities Issuance (purchase) of Class A shares (RSU (57,081 ) — — 57,081 — — Payments to repurchase Class A shares (Note 8) (9,676 ) — — — — (9,676 ) Capital contributions (distributions) 57,081 — — — (57,081 ) — Dividends and dividend equivalents paid (110,220 ) — — (96,501 ) 102,167 (104,554 ) Principals' and others' interests in equity of 283 — — — — 283 Principals' and others' interests in equity of (167,554 ) — — — — (167,554 ) Excess tax benefits from delivery of RSUs — — — 4,476 — 4,476 Redeemable non-controlling interests - (1,692 ) — — — — (1,692 ) Net cash provided by (used in) financing activities (288,859 ) — — (34,944 ) 45,086 (278,717 ) Net Increase (Decrease) in Cash and Cash (156,511 ) (437 ) — (229 ) — (157,177 ) Cash and Cash Equivalents, Beginning of Period 389,782 950 — 357 — 391,089 Cash and Cash Equivalents, End of Period $ 233,271 $ 513 $ — $ 128 $ — $ 233,912 (A) Excluding FOE II (New) LP. (B) Other than Fortress Operating Group. |
ORGANIZATION AND BASIS OF PRE32
ORGANIZATION AND BASIS OF PRESENTATION (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)source | Jun. 30, 2014USD ($) | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||||
Number of primary sources of income from the Fortress Funds | source | 3 | ||||
Minority interest | 48.80% | 48.80% | 48.00% | ||
Amount of gain (loss) associated with transfer of controlling interest | $ 0 | $ 0 | $ 134,400 | $ 0 | |
Non-cash expense associated with transfer of controlling interest | 0 | $ 0 | 101,000 | 0 | |
Retained equity interest related to Graticule transfer | 33,400 | $ 0 | |||
Technology-Based Intangible Assets | Depreciation And Amortization | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Intangible assets impairment | $ 7,500 | ||||
Graticule Asset Management | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Amount of gain (loss) associated with transfer of controlling interest | 134,400 | ||||
Non-cash expense associated with transfer of controlling interest | 101,000 | ||||
Retained equity interest related to Graticule transfer | $ 33,400 | ||||
Graticule Asset Management | During 2015 | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Minority interest | 30.00% | 30.00% | |||
Graticule Asset Management | After 2015 | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Minority interest | 27.00% | 27.00% |
MANAGEMENT AGREEMENTS AND FOR33
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Management Fees and Incentive Income) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)source | Jun. 30, 2014USD ($) | |
Schedule of Management Agreements [Line Items] | ||||
Number of principal sources of income from agreements with the Fortress Funds | source | 2 | |||
Management fees: affil. | $ 150,936 | $ 136,045 | $ 278,643 | $ 265,755 |
Management fees, options: affil. | 21,014 | 1,604 | 25,158 | 1,604 |
Management fees: non-affil. | 14,966 | 17,716 | 30,257 | 35,338 |
Incentive income: affil. | 82,158 | 60,442 | 106,381 | 94,693 |
Incentive income: non-affil. | 296 | 44 | 296 | 687 |
Private Equity Funds | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 29,222 | 35,330 | 58,362 | 70,643 |
Management fees: non-affil. | 0 | 162 | 0 | 311 |
Incentive income: affil. | 0 | 22,094 | 0 | 22,094 |
Permanent Capital Vehicles | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 22,276 | 16,318 | 41,278 | 31,496 |
Management fees, options: affil. | 21,014 | 1,604 | 25,158 | 1,604 |
Management fees: non-affil. | 482 | 583 | 932 | 1,691 |
Incentive income: affil. | 23,156 | 19,246 | 25,744 | 23,255 |
Liquid Hedge Funds | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 16,638 | 29,998 | 35,133 | 57,065 |
Management fees: non-affil. | 2,054 | 6,164 | 4,548 | 12,575 |
Incentive income: affil. | 41 | 908 | 53 | 986 |
Incentive income: non-affil. | 39 | 44 | 39 | 44 |
Credit Hedge Funds | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 29,834 | 28,455 | 59,488 | 55,289 |
Management fees: non-affil. | 13 | 20 | 23 | 44 |
Incentive income: affil. | 21,516 | 16,429 | 22,169 | 17,733 |
Incentive income: non-affil. | 0 | 0 | 0 | 0 |
Credit PE Funds | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 31,068 | 23,651 | 57,387 | 48,259 |
Management fees: non-affil. | 29 | 34 | 58 | 68 |
Incentive income: affil. | 37,445 | 1,765 | 58,409 | 30,625 |
Incentive income: non-affil. | 257 | 0 | 257 | 643 |
Logan Circle | ||||
Schedule of Management Agreements [Line Items] | ||||
Management fees: affil. | 884 | 689 | 1,837 | 1,399 |
Management fees: non-affil. | 12,388 | 10,753 | 24,696 | 20,649 |
Incentive income: affil. | 0 | 0 | 6 | 0 |
Incentive income: non-affil. | $ 0 | $ 0 | $ 0 | $ 0 |
MANAGEMENT AGREEMENTS AND FOR34
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Deferred Incentive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Management and Agreement Fortress Funds | ||||
Additional incentive income from affiliates which would be recognized if incentive income was not contingent on the results of the subsequent quarters | $ 46,400 | $ 56,300 | ||
Incentive income distributions from credit PE funds which represented tax distributions | 58,400 | 30,600 | ||
Distributed-Gross | ||||
Deferred incentive income as of the beginning of the period | 1,243,441 | |||
Fortress Funds which matured (no longer subject to clawback) | 0 | |||
Distribution of private equity funds and credit PE funds incentive income | 81,671 | |||
Distribution of private permanent capital vehicle incentive income | 6,299 | |||
Changes in foreign exchange rates | (449) | |||
Deferred incentive income as of the end of the period | $ 1,330,962 | 1,330,962 | ||
Deferred incentive income including Fortress Funds which matured | 1,384,618 | 1,384,618 | ||
Distributed-Recognized | ||||
Deferred incentive income as of the beginning of the period | (938,915) | |||
Fortress Funds which matured (no longer subject to clawback) | 0 | |||
Recognition of previously deferred incentive income | (44,744) | $ (23,859) | (65,709) | (53,362) |
Deferred incentive income as of the end of the period | (1,004,624) | (1,004,624) | ||
Deferred incentive income including Fortress Funds which matured | (1,058,280) | (1,058,280) | ||
Distributed-Unrecognized | ||||
Deferred incentive income as of the beginning of the period | 304,526 | |||
Distribution of private equity funds and credit PE funds incentive income | 81,671 | |||
Distribution of private permanent capital vehicle incentive income | 6,299 | |||
Recognition of previously deferred incentive income | (44,744) | $ (23,859) | (65,709) | $ (53,362) |
Changes in foreign exchange rates | (449) | |||
Deferred incentive income as of the end of the period | 326,338 | 326,338 | ||
Undistributed, net of intrinsic clawback | ||||
Deferred incentive income as of the beginning of the period | 868,549 | |||
Share of income (loss) of Fortress Funds | 173,199 | |||
Distribution of private equity funds and credit PE funds incentive income | (81,671) | |||
Distribution of private permanent capital vehicle incentive income | (6,299) | |||
Deferred incentive income as of the end of the period | 953,778 | 953,778 | ||
Gross undistributed incentive income | 1,000,000 | 1,000,000 | ||
Intrinsic clawback | 66,900 | 66,900 | ||
Compensation expense paid under employee profit sharing arrangements in connection with distributed incentive income | 621,900 | 621,900 | ||
Portion of compensation expense paid under employee profit sharing arrangements in connection with distributed incentive income which has not been expensed | 21,500 | 21,500 | ||
Clawback obligations recovered from individuals | 6,400 | 6,400 | ||
Additional expense which would be recognized and paid if gross undistributed incentive income were realized | $ 498,700 | $ 498,700 |
MANAGEMENT AGREEMENTS AND FOR35
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Distributed-Gross Reconciled to Incentive Income Threshold) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | $ 1,330,962 | $ 1,243,441 |
Private Equity Funds | Outside of Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 846,671 | |
Private Equity Funds | Outside of Investment Period | NIH (1998) | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 94,513 | |
Fortress Funds which are not subject to clawback provision | (94,513) | |
Private Equity Funds | Outside of Investment Period | GAGACQ Fund (2004) | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 51,476 | |
Fortress Funds which are not subject to clawback provision | (51,476) | |
Private Equity Funds | Outside of Investment Period | Fund I (1999) | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 344,939 | |
Distributed incentive income that Company is not entitled to | (183,196) | |
Private Equity Funds | In Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 0 | |
Credit PE Funds | Outside of Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 801,657 | |
Credit PE Funds | In Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | 4,776 | |
Permanent Capital Vehicles | In Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income distributed gross | $ 7,043 |
MANAGEMENT AGREEMENTS AND FOR36
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Undistributed, Net of Intrinsic Clawback Reconciled to Incentive Income Threshold) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Management Agreements [Line Items] | ||
Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds | $ (66,900) | |
Undistributed, net of intrinsic clawback | 953,778 | $ 868,549 |
Private Equity Funds | Outside of Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 26,310 | |
Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds | (66,903) | |
Private Equity Funds | In Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 3,509 | |
Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds | 0 | |
Credit PE Funds | Outside of Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 848,001 | |
Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds | 0 | |
Credit PE Funds | In Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 26,482 | |
Less: Gross intrinsic clawback per incentive income threshold tables - Private Equity Funds | 0 | |
Permanent Capital Vehicles | Outside of Investment Period | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 1,191 | |
Hedge Funds Business | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | 115,083 | |
Logan Circle | ||
Schedule of Management Agreements [Line Items] | ||
Deferred incentive income undistributed gross of intrinsic clawback | $ 105 |
MANAGEMENT AGREEMENTS AND FOR37
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (HWM) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2015 | May. 31, 2015 | Dec. 31, 2014 | |
Schedule of Management Agreements [Line Items] | ||||
Gross undistributed incentive income | $ 1,000,000 | $ 1,000,000 | ||
Distributed Incentive Income | 1,330,962 | 1,330,962 | $ 1,243,441 | |
Distributed incentive income subject to clawback | 326,338 | 326,338 | $ 304,526 | |
Gross Intrinsic Clawback | 66,900 | 66,900 | ||
Net Intrinsic Clawback | 45,108 | 45,108 | ||
Portion of amount due to employees under profit sharing arrangements withheld as reserve against future clawback | 22,800 | 22,800 | ||
FTAI | ||||
Schedule of Management Agreements [Line Items] | ||||
Fortress Funds which are not subject to clawback provision | $ 7,000 | |||
Private Equity Funds | FTAI | ||||
Schedule of Management Agreements [Line Items] | ||||
Fortress Funds which are not subject to clawback provision, portion from common shares received | 5,900 | |||
Private Equity Funds | Outside of Investment Period | ||||
Schedule of Management Agreements [Line Items] | ||||
Gross undistributed incentive income | 26,310 | 26,310 | ||
Distributed Incentive Income | 846,671 | 846,671 | ||
Distributed incentive income subject to clawback | 66,903 | 66,903 | ||
Gross Intrinsic Clawback | 66,903 | 66,903 | ||
Net Intrinsic Clawback | 45,108 | 45,108 | ||
Private Equity Funds | Outside of Investment Period | NIH (1998) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 415,574 | 415,574 | ||
Inception to Date Distributions | (823,588) | (823,588) | ||
Net Asset Value (“NAV”) | 0 | 0 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 94,513 | 94,513 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Fortress Funds which are not subject to clawback provision | 94,513 | 94,513 | ||
Private Equity Funds | Outside of Investment Period | Fund I (1999) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 1,015,943 | 1,015,943 | ||
Inception to Date Distributions | (2,847,929) | (2,847,929) | ||
Net Asset Value (“NAV”) | 0 | 0 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 344,939 | 344,939 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | $ 0 | $ 0 | ||
Percentage of undistributed and distributed income which the entity is entitled | 50.00% | 50.00% | ||
Private Equity Funds | Outside of Investment Period | Fund II (2002) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | $ 1,974,298 | $ 1,974,298 | ||
Inception to Date Distributions | (3,442,900) | (3,442,900) | ||
Net Asset Value (“NAV”) | 3,534 | 3,534 | ||
NAV Surplus (Deficit) | 1,472,136 | 1,472,136 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 696 | 696 | ||
Distributed Incentive Income | 288,840 | 288,840 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | Fund III (2004) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 2,762,992 | 2,762,992 | ||
Inception to Date Distributions | (2,138,524) | (2,138,524) | ||
Net Asset Value (“NAV”) | 930,951 | 930,951 | ||
NAV Surplus (Deficit) | 306,483 | 306,483 | ||
Current Preferred Return Threshold | 2,154,994 | 2,154,994 | ||
Gain to Cross Incentive Income Threshold | 1,848,511 | 1,848,511 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 66,903 | 66,903 | ||
Distributed incentive income subject to clawback | 66,903 | 66,903 | ||
Gross Intrinsic Clawback | 66,903 | 66,903 | ||
Net Intrinsic Clawback | 45,108 | 45,108 | ||
Private Equity Funds | Outside of Investment Period | Fund III Coinvestment (2004) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 273,649 | 273,649 | ||
Inception to Date Distributions | (225,188) | (225,188) | ||
Net Asset Value (“NAV”) | 68,246 | 68,246 | ||
NAV Surplus (Deficit) | 19,785 | 19,785 | ||
Current Preferred Return Threshold | 252,921 | 252,921 | ||
Gain to Cross Incentive Income Threshold | 233,136 | 233,136 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | Fund IV (2006) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 3,639,561 | 3,639,561 | ||
Inception to Date Distributions | (1,357,054) | (1,357,054) | ||
Net Asset Value (“NAV”) | 2,225,663 | 2,225,663 | ||
NAV Surplus (Deficit) | (56,844) | (56,844) | ||
Current Preferred Return Threshold | 2,925,391 | 2,925,391 | ||
Gain to Cross Incentive Income Threshold | 2,982,235 | 2,982,235 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | Fund IV Coinvestment (2006) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 762,696 | 762,696 | ||
Inception to Date Distributions | (271,319) | (271,319) | ||
Net Asset Value (“NAV”) | 412,859 | 412,859 | ||
NAV Surplus (Deficit) | (78,518) | (78,518) | ||
Current Preferred Return Threshold | 625,163 | 625,163 | ||
Gain to Cross Incentive Income Threshold | 703,681 | 703,681 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | Fund V (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 4,103,713 | 4,103,713 | ||
Inception to Date Distributions | (1,435,456) | (1,435,456) | ||
Net Asset Value (“NAV”) | 5,303,858 | 5,303,858 | ||
NAV Surplus (Deficit) | 2,635,601 | 2,635,601 | ||
Current Preferred Return Threshold | 2,355,965 | 2,355,965 | ||
Gain to Cross Incentive Income Threshold | 81,806 | 81,806 | ||
Gross undistributed incentive income | 13,665 | 13,665 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | Fund V Coinvestment (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 990,480 | 990,480 | ||
Inception to Date Distributions | (173,600) | (173,600) | ||
Net Asset Value (“NAV”) | 526,359 | 526,359 | ||
NAV Surplus (Deficit) | (290,521) | (290,521) | ||
Current Preferred Return Threshold | 708,207 | 708,207 | ||
Gain to Cross Incentive Income Threshold | 998,728 | 998,728 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | GAGACQ Fund (2004) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 545,663 | 545,663 | ||
Inception to Date Distributions | (595,401) | (595,401) | ||
Net Asset Value (“NAV”) | 0 | 0 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 51,476 | 51,476 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Fortress Funds which are not subject to clawback provision | 51,476 | 51,476 | ||
Private Equity Funds | Outside of Investment Period | FRID (2005) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 1,220,229 | 1,220,229 | ||
Inception to Date Distributions | (1,202,153) | (1,202,153) | ||
Net Asset Value (“NAV”) | 0 | 0 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | FRIC (2006) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 328,754 | 328,754 | ||
Inception to Date Distributions | (291,330) | (291,330) | ||
Net Asset Value (“NAV”) | 0 | 0 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | FICO (2006) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 724,525 | 724,525 | ||
Inception to Date Distributions | 0 | 0 | ||
Net Asset Value (“NAV”) | (63,960) | (63,960) | ||
NAV Surplus (Deficit) | (788,485) | (788,485) | ||
Current Preferred Return Threshold | 657,265 | 657,265 | ||
Gain to Cross Incentive Income Threshold | 1,445,750 | 1,445,750 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | FHIF (2006) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 1,543,463 | 1,543,463 | ||
Inception to Date Distributions | (685,652) | (685,652) | ||
Net Asset Value (“NAV”) | 1,520,480 | 1,520,480 | ||
NAV Surplus (Deficit) | 662,669 | 662,669 | ||
Current Preferred Return Threshold | 1,249,260 | 1,249,260 | ||
Gain to Cross Incentive Income Threshold | 586,591 | 586,591 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | FECI (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 982,779 | 982,779 | ||
Inception to Date Distributions | (624) | (624) | ||
Net Asset Value (“NAV”) | 960,420 | 960,420 | ||
NAV Surplus (Deficit) | (21,735) | (21,735) | ||
Current Preferred Return Threshold | 818,492 | 818,492 | ||
Gain to Cross Incentive Income Threshold | 840,227 | 840,227 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | MSR Opportunities Fund I A (2012) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 341,135 | 341,135 | ||
Inception to Date Distributions | (141,754) | (141,754) | ||
Net Asset Value (“NAV”) | 298,754 | 298,754 | ||
NAV Surplus (Deficit) | 99,373 | 99,373 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 9,566 | 9,566 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | Outside of Investment Period | MSR Opportunities Fund I B (2012) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 82,760 | 82,760 | ||
Inception to Date Distributions | (34,275) | (34,275) | ||
Net Asset Value (“NAV”) | 72,327 | 72,327 | ||
NAV Surplus (Deficit) | 23,842 | 23,842 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 2,383 | 2,383 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | In Investment Period | ||||
Schedule of Management Agreements [Line Items] | ||||
Gross undistributed incentive income | 3,509 | 3,509 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | In Investment Period | MSR Opportunities Fund II A (2013) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 158,724 | 158,724 | ||
Inception to Date Distributions | (15,482) | (15,482) | ||
Net Asset Value (“NAV”) | 162,338 | 162,338 | ||
NAV Surplus (Deficit) | 19,096 | 19,096 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 2,820 | 2,820 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | In Investment Period | MSR Opportunities Fund II B (2013) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 2,264 | 2,264 | ||
Inception to Date Distributions | (212) | (212) | ||
Net Asset Value (“NAV”) | 2,311 | 2,311 | ||
NAV Surplus (Deficit) | 259 | 259 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 39 | 39 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | In Investment Period | MSR Opportunities MA I (2013) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 36,425 | 36,425 | ||
Inception to Date Distributions | (3,541) | (3,541) | ||
Net Asset Value (“NAV”) | 37,287 | 37,287 | ||
NAV Surplus (Deficit) | 4,403 | 4,403 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 650 | 650 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Private Equity Funds | In Investment Period | Italian NPL Opportunities Fund (2013) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 32,312 | 32,312 | ||
Inception to Date Distributions | (5,768) | (5,768) | ||
Net Asset Value (“NAV”) | 24,044 | 24,044 | ||
NAV Surplus (Deficit) | (2,500) | (2,500) | ||
Current Preferred Return Threshold | 1,767 | 1,767 | ||
Gain to Cross Incentive Income Threshold | 4,267 | 4,267 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | ||||
Schedule of Management Agreements [Line Items] | ||||
Gross undistributed incentive income | 848,001 | 848,001 | ||
Distributed Incentive Income | 801,657 | 801,657 | ||
Distributed incentive income subject to clawback | 254,659 | 254,659 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Long Dated Value Fund I (2005) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 267,325 | 267,325 | ||
Inception to Date Distributions | (127,971) | (127,971) | ||
Net Asset Value (“NAV”) | 290,441 | 290,441 | ||
NAV Surplus (Deficit) | 151,087 | 151,087 | ||
Current Preferred Return Threshold | 153,774 | 153,774 | ||
Gain to Cross Incentive Income Threshold | 4,579 | 4,579 | ||
Gross undistributed incentive income | 48 | 48 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Long Dated Value Fund II (2005) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 274,280 | 274,280 | ||
Inception to Date Distributions | (150,977) | (150,977) | ||
Net Asset Value (“NAV”) | 204,428 | 204,428 | ||
NAV Surplus (Deficit) | 81,125 | 81,125 | ||
Current Preferred Return Threshold | 123,552 | 123,552 | ||
Gain to Cross Incentive Income Threshold | 42,427 | 42,427 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 412 | 412 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Long Dated Value Fund III (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 343,156 | 343,156 | ||
Inception to Date Distributions | (283,517) | (283,517) | ||
Net Asset Value (“NAV”) | 190,703 | 190,703 | ||
NAV Surplus (Deficit) | 131,064 | 131,064 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 17,839 | 17,839 | ||
Distributed Incentive Income | 6,473 | 6,473 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | LDVF Patent Fund (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 41,779 | 41,779 | ||
Inception to Date Distributions | (34,903) | (34,903) | ||
Net Asset Value (“NAV”) | 33,493 | 33,493 | ||
NAV Surplus (Deficit) | 26,617 | 26,617 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 1,071 | 1,071 | ||
Distributed Incentive Income | 1,471 | 1,471 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Real Assets Fund (2007) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 359,024 | 359,024 | ||
Inception to Date Distributions | (352,783) | (352,783) | ||
Net Asset Value (“NAV”) | 105,051 | 105,051 | ||
NAV Surplus (Deficit) | 98,810 | 98,810 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 9,043 | 9,043 | ||
Distributed Incentive Income | 6,285 | 6,285 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Credit Opportunities Fund (2008) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 5,646,864 | 5,646,864 | ||
Inception to Date Distributions | (7,084,071) | (7,084,071) | ||
Net Asset Value (“NAV”) | 1,274,505 | 1,274,505 | ||
NAV Surplus (Deficit) | 2,711,712 | 2,711,712 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 169,710 | 169,710 | ||
Distributed Incentive Income | 362,870 | 362,870 | ||
Distributed incentive income subject to clawback | 145,297 | 145,297 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Credit Opportunities Fund II (2009) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 2,335,264 | 2,335,264 | ||
Inception to Date Distributions | (2,487,310) | (2,487,310) | ||
Net Asset Value (“NAV”) | 1,083,393 | 1,083,393 | ||
NAV Surplus (Deficit) | 1,235,439 | 1,235,439 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 129,496 | 129,496 | ||
Distributed Incentive Income | 112,816 | 112,816 | ||
Distributed incentive income subject to clawback | 43,733 | 43,733 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Credit Opportunities Fund III (2011) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 3,088,327 | 3,088,327 | ||
Inception to Date Distributions | (1,298,051) | (1,298,051) | ||
Net Asset Value (“NAV”) | 2,479,191 | 2,479,191 | ||
NAV Surplus (Deficit) | 688,915 | 688,915 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 108,185 | 108,185 | ||
Distributed Incentive Income | 26,852 | 26,852 | ||
Distributed incentive income subject to clawback | 499 | 499 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | FCO Managed Accounts (2008-2012) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 4,231,548 | 4,231,548 | ||
Inception to Date Distributions | (3,172,000) | (3,172,000) | ||
Net Asset Value (“NAV”) | 2,573,108 | 2,573,108 | ||
NAV Surplus (Deficit) | 1,513,560 | 1,513,560 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 194,853 | 194,853 | ||
Distributed Incentive Income | 100,147 | 100,147 | ||
Distributed incentive income subject to clawback | 31,599 | 31,599 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | SIP Managed Account (2010) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 11,000 | 11,000 | ||
Inception to Date Distributions | (37,033) | (37,033) | ||
Net Asset Value (“NAV”) | 11,509 | 11,509 | ||
NAV Surplus (Deficit) | 37,542 | 37,542 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 2,877 | 2,877 | ||
Distributed Incentive Income | 5,207 | 5,207 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Japan Opportunity Fund (2009) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 890,161 | 890,161 | ||
Inception to Date Distributions | (1,371,558) | (1,371,558) | ||
Net Asset Value (“NAV”) | 578,353 | 578,353 | ||
NAV Surplus (Deficit) | 1,059,750 | 1,059,750 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 101,805 | 101,805 | ||
Distributed Incentive Income | 125,374 | 125,374 | ||
Distributed incentive income subject to clawback | 22,782 | 22,782 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Net Lease Fund I (2010) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 152,851 | 152,851 | ||
Inception to Date Distributions | (225,430) | (225,430) | ||
Net Asset Value (“NAV”) | 1,686 | 1,686 | ||
NAV Surplus (Deficit) | 74,265 | 74,265 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 216 | 216 | ||
Distributed Incentive Income | 9,528 | 9,528 | ||
Distributed incentive income subject to clawback | 5,928 | 5,928 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Real Estate Opportunities Fund (2011) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 539,470 | 539,470 | ||
Inception to Date Distributions | (313,690) | (313,690) | ||
Net Asset Value (“NAV”) | 384,195 | 384,195 | ||
NAV Surplus (Deficit) | 158,415 | 158,415 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 11,073 | 11,073 | ||
Distributed Incentive Income | 2,750 | 2,750 | ||
Distributed incentive income subject to clawback | 1,734 | 1,734 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Global Opportunities Fund (2010) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 320,130 | 320,130 | ||
Inception to Date Distributions | (155,479) | (155,479) | ||
Net Asset Value (“NAV”) | 243,187 | 243,187 | ||
NAV Surplus (Deficit) | 78,536 | 78,536 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 13,387 | 13,387 | ||
Distributed Incentive Income | 1,927 | 1,927 | ||
Distributed incentive income subject to clawback | 1,927 | 1,927 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Japan Opportunity Fund II (Yen) (2011) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 644,383 | 644,383 | ||
Inception to Date Distributions | (249,226) | (249,226) | ||
Net Asset Value (“NAV”) | 708,104 | 708,104 | ||
NAV Surplus (Deficit) | 312,947 | 312,947 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 48,800 | 48,800 | ||
Distributed Incentive Income | 15,416 | 15,416 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Japan Opportunity Fund II (Dollar) (2011) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 639,643 | 639,643 | ||
Inception to Date Distributions | (242,269) | (242,269) | ||
Net Asset Value (“NAV”) | 703,484 | 703,484 | ||
NAV Surplus (Deficit) | 306,110 | 306,110 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 37,606 | 37,606 | ||
Distributed Incentive Income | 21,482 | 21,482 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | Outside of Investment Period | Real Estate Opportunities REOC Fund (2011) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 56,692 | 56,692 | ||
Inception to Date Distributions | (37,548) | (37,548) | ||
Net Asset Value (“NAV”) | 42,456 | 42,456 | ||
NAV Surplus (Deficit) | 23,312 | 23,312 | ||
Current Preferred Return Threshold | 0 | 0 | ||
Gross undistributed incentive income | 1,992 | 1,992 | ||
Distributed Incentive Income | 2,647 | 2,647 | ||
Distributed incentive income subject to clawback | 1,160 | 1,160 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | ||||
Schedule of Management Agreements [Line Items] | ||||
Gross undistributed incentive income | 26,482 | 26,482 | ||
Distributed Incentive Income | 4,776 | 4,776 | ||
Distributed incentive income subject to clawback | 4,776 | 4,776 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | FCO Managed Accounts (2010-2015) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 685,003 | 685,003 | ||
Inception to Date Distributions | (301,411) | (301,411) | ||
Net Asset Value (“NAV”) | 537,557 | 537,557 | ||
NAV Surplus (Deficit) | 153,965 | 153,965 | ||
Current Preferred Return Threshold | 1,906 | 1,906 | ||
Gain to Cross Incentive Income Threshold | 3,471 | 3,471 | ||
Gross undistributed incentive income | 25,316 | 25,316 | ||
Distributed Incentive Income | 4,776 | 4,776 | ||
Distributed incentive income subject to clawback | 4,776 | 4,776 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Life Settlements Fund (2010) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 406,548 | 406,548 | ||
Inception to Date Distributions | (299,330) | (299,330) | ||
Net Asset Value (“NAV”) | 78,102 | 78,102 | ||
NAV Surplus (Deficit) | (29,116) | (29,116) | ||
Current Preferred Return Threshold | 81,242 | 81,242 | ||
Gain to Cross Incentive Income Threshold | 110,358 | 110,358 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Life Settlements Fund MA (2010) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 33,321 | 33,321 | ||
Inception to Date Distributions | (24,482) | (24,482) | ||
Net Asset Value (“NAV”) | 6,195 | 6,195 | ||
NAV Surplus (Deficit) | (2,644) | (2,644) | ||
Current Preferred Return Threshold | 6,666 | 6,666 | ||
Gain to Cross Incentive Income Threshold | 9,310 | 9,310 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Real Estate Opportunities Fund II (2014) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 242,294 | 242,294 | ||
Inception to Date Distributions | (42,808) | (42,808) | ||
Net Asset Value (“NAV”) | 212,224 | 212,224 | ||
NAV Surplus (Deficit) | 12,738 | 12,738 | ||
Current Preferred Return Threshold | 3,954 | 3,954 | ||
Gain to Cross Incentive Income Threshold | 701 | 701 | ||
Gross undistributed incentive income | 1,166 | 1,166 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Japan Opportunity Fund III (Yen) (2014) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 107,011 | 107,011 | ||
Inception to Date Distributions | 0 | 0 | ||
Net Asset Value (“NAV”) | 106,999 | 106,999 | ||
NAV Surplus (Deficit) | (12) | (12) | ||
Current Preferred Return Threshold | 2,742 | 2,742 | ||
Gain to Cross Incentive Income Threshold | 2,754 | 2,754 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Japan Opportunity Fund III (Dollar) (2014) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 83,061 | 83,061 | ||
Inception to Date Distributions | 0 | 0 | ||
Net Asset Value (“NAV”) | 83,687 | 83,687 | ||
NAV Surplus (Deficit) | 626 | 626 | ||
Current Preferred Return Threshold | 2,091 | 2,091 | ||
Gain to Cross Incentive Income Threshold | 1,465 | 1,465 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Credit PE Funds | In Investment Period | Credit Opportunities Fund IV (2015) | ||||
Schedule of Management Agreements [Line Items] | ||||
Inception to Date Capital Invested | 142,897 | 142,897 | ||
Inception to Date Distributions | 0 | 0 | ||
Net Asset Value (“NAV”) | 144,304 | 144,304 | ||
NAV Surplus (Deficit) | 1,407 | 1,407 | ||
Current Preferred Return Threshold | 3,696 | 3,696 | ||
Gain to Cross Incentive Income Threshold | 2,289 | 2,289 | ||
Gross undistributed incentive income | 0 | 0 | ||
Distributed Incentive Income | 0 | 0 | ||
Distributed incentive income subject to clawback | 0 | 0 | ||
Gross Intrinsic Clawback | 0 | 0 | ||
Net Intrinsic Clawback | 0 | 0 | ||
Permanent Capital Vehicles | Newcastle | ||||
Schedule of Management Agreements [Line Items] | ||||
Equity Eligible for Incentive Income | 751,469 | 751,469 | ||
Life to Date Incentive Income Crystallized | 41,283 | |||
Permanent Capital Vehicles | Eurocastle | ||||
Schedule of Management Agreements [Line Items] | ||||
Gain to Cross Incentive Income Threshold | 0 | 0 | ||
Gross undistributed incentive income | 1,191 | 1,191 | ||
Equity Eligible for Incentive Income | 62,476 | 62,476 | ||
Life to Date Incentive Income Crystallized | 39,217 | |||
Permanent Capital Vehicles | New Residential | ||||
Schedule of Management Agreements [Line Items] | ||||
Gain to Cross Incentive Income Threshold | 0 | 0 | ||
Equity Eligible for Incentive Income | 2,749,370 | 2,749,370 | ||
Life to Date Incentive Income Crystallized | 85,593 | |||
Permanent Capital Vehicles | New Media | ||||
Schedule of Management Agreements [Line Items] | ||||
Gain to Cross Incentive Income Threshold | 0 | 0 | ||
Equity Eligible for Incentive Income | 645,007 | 645,007 | ||
Life to Date Incentive Income Crystallized | 5,296 | |||
Permanent Capital Vehicles | New Senior | ||||
Schedule of Management Agreements [Line Items] | ||||
Gain to Cross Incentive Income Threshold | 1,115 | 1,115 | ||
Equity Eligible for Incentive Income | 1,089,384 | 1,089,384 | ||
Life to Date Incentive Income Crystallized | 0 | |||
Permanent Capital Vehicles | FTAI | ||||
Schedule of Management Agreements [Line Items] | ||||
Gain to Cross Incentive Income Threshold | 1,950 | 1,950 | ||
Gross undistributed incentive income | 0 | 0 | ||
Equity Eligible for Incentive Income | 1,219,416 | 1,219,416 | ||
Life to Date Incentive Income Crystallized | 0 | |||
Permanent Capital Vehicles | In Investment Period | ||||
Schedule of Management Agreements [Line Items] | ||||
Distributed Incentive Income | 7,043 | 7,043 | ||
Liquid Hedge Funds | Macro Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 712,455 | 712,455 | ||
Gain to Cross Incentive Income Threshold | $ 91,022 | $ 91,022 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Liquid Hedge Funds | Macro Funds | Single investor funds | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 903,052 | 903,052 | ||
Gain to Cross Incentive Income Threshold | $ 68,109 | $ 68,109 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 11 | |||
Liquid Hedge Funds | Macro Funds | Sidepocket investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 7,235 | 7,235 | ||
Gain to Cross Incentive Income Threshold | 6,252 | 6,252 | ||
Gross undistributed incentive income | 44 | 44 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Liquid Hedge Funds | Macro Funds | Sidepocket investments - redeemers | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 112,038 | 112,038 | ||
Gain to Cross Incentive Income Threshold | 66,462 | 66,462 | ||
Gross undistributed incentive income | 1,406 | 1,406 | ||
Year to Date Incentive Income Crystallized | 1 | |||
Liquid Hedge Funds | Macro Funds | Managed accounts | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 397,078 | 397,078 | ||
Gain to Cross Incentive Income Threshold | $ 26,980 | $ 26,980 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 39 | |||
Liquid Hedge Funds | Fortress Convex Asia Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 193,120 | 193,120 | ||
Gain to Cross Incentive Income Threshold | $ 11,718 | $ 11,718 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Liquid Hedge Funds | Fortress Partners Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 8,485 | 8,485 | ||
Gain to Cross Incentive Income Threshold | $ 1,104 | $ 1,104 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 41 | |||
Liquid Hedge Funds | Fortress Partners Funds | Sidepocket investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 79,272 | 79,272 | ||
Gain to Cross Incentive Income Threshold | 6,951 | 6,951 | ||
Gross undistributed incentive income | 4,338 | 4,338 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Liquid Hedge Funds | Fortress Centaurus Global Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 191,202 | 191,202 | ||
Gain to Cross Incentive Income Threshold | $ 7,602 | $ 7,602 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Special Opportunities Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 4,767,347 | 4,767,347 | ||
Gain to Cross Incentive Income Threshold | $ 0 | $ 0 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 100.00% | 100.00% | ||
Gross undistributed incentive income | $ 44,097 | $ 44,097 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Special Opportunities Funds | Sidepocket investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 45,652 | 45,652 | ||
Gain to Cross Incentive Income Threshold | 6 | 6 | ||
Gross undistributed incentive income | 3,232 | 3,232 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Special Opportunities Funds | Sidepocket investments - redeemers | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 162,885 | 162,885 | ||
Gain to Cross Incentive Income Threshold | 49,132 | 49,132 | ||
Gross undistributed incentive income | 5,156 | 5,156 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Special Opportunities Funds | Main fund investments (liquidating) | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 477,952 | 477,952 | ||
Gain to Cross Incentive Income Threshold | $ 0 | $ 0 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 100.00% | 100.00% | ||
Gross undistributed incentive income | $ 55,612 | $ 55,612 | ||
Year to Date Incentive Income Crystallized | 22,169 | |||
Credit Hedge Funds | Special Opportunities Funds | Managed accounts | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 1,518 | 1,518 | ||
Gain to Cross Incentive Income Threshold | $ 47,706 | $ 47,706 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Worden Funds | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 262,770 | 262,770 | ||
Gain to Cross Incentive Income Threshold | $ 1,191 | $ 1,191 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 81.20% | 81.20% | ||
Gross undistributed incentive income | $ 1,007 | $ 1,007 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Fortress Japan Income Fund | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | $ 66,548 | $ 66,548 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 100.00% | 100.00% | ||
Gross undistributed incentive income | $ 134 | $ 134 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Credit Hedge Funds | Value Recovery Funds | Managed accounts | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 9,908 | 9,908 | ||
Gain to Cross Incentive Income Threshold | $ 6,957 | $ 6,957 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 48.80% | 48.80% | ||
Gross undistributed incentive income | $ 57 | $ 57 | ||
Year to Date Incentive Income Crystallized | 0 | |||
NAV of fund excluded | 146,000 | 146,000 | ||
Logan Circle | Main fund investments | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 70,598 | 70,598 | ||
Gain to Cross Incentive Income Threshold | $ 1,182 | $ 1,182 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 0.00% | 0.00% | ||
Gross undistributed incentive income | $ 0 | $ 0 | ||
Year to Date Incentive Income Crystallized | 0 | |||
Logan Circle | Managed accounts | ||||
Schedule of Management Agreements [Line Items] | ||||
Incentive Income Eligible NAV | 218,111 | 218,111 | ||
Gain to Cross Incentive Income Threshold | $ 19,677 | $ 19,677 | ||
Percentage of Incentive Income Eligible NAV Above Incentive Income Threshold | 26.30% | 26.30% | ||
Gross undistributed incentive income | $ 105 | $ 105 | ||
Year to Date Incentive Income Crystallized | $ 0 |
MANAGEMENT AGREEMENTS AND FOR38
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Private Equity) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2015USD ($) | Jun. 30, 2015senior_living_property | May. 31, 2015USD ($) | |
FTAI | |||
Schedule of Management Agreements [Line Items] | |||
Gross undistributed incentive income | $ 7 | ||
Private Equity Funds | |||
Schedule of Management Agreements [Line Items] | |||
Annual management fee (percent of revenues) | 5.00% | ||
Private Equity Funds | FTAI | |||
Schedule of Management Agreements [Line Items] | |||
Fortress Funds which are not subject to clawback provision, portion from common shares received | $ 5.9 | ||
Private Equity Funds | Blue Harbor | |||
Schedule of Management Agreements [Line Items] | |||
Number of properties managed | senior_living_property | 2 |
MANAGEMENT AGREEMENTS AND FOR39
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Fixed Income) (Details) - Jun. 30, 2015 - Logan Circle - Fixed Income Funds $ in Thousands | USD ($)fund |
Schedule of Management Agreements [Line Items] | |
Number of new funds under management | fund | 2 |
Capital Net Asset Value | $ 60,644 |
Fortress | |
Schedule of Management Agreements [Line Items] | |
Capital Net Asset Value | 9,899 |
Third party investors | |
Schedule of Management Agreements [Line Items] | |
Capital Net Asset Value | $ 50,745 |
MANAGEMENT AGREEMENTS AND FOR40
MANAGEMENT AGREEMENTS AND FORTRESS FUNDS (Credit PE) (Details) - Credit PE Funds $ in Thousands | Jun. 30, 2015USD ($) |
Schedule of Private Equity Funds Formed During the Period [Line Items] | |
Capital commitments | $ 3,934,695 |
Fortress | |
Schedule of Private Equity Funds Formed During the Period [Line Items] | |
Capital commitments | 33,750 |
Fortress's affiliates | |
Schedule of Private Equity Funds Formed During the Period [Line Items] | |
Capital commitments | 36,035 |
Third party investors | |
Schedule of Private Equity Funds Formed During the Period [Line Items] | |
Capital commitments | $ 3,864,910 |
INVESTMENTS AND FAIR VALUE (Inv
INVESTMENTS AND FAIR VALUE (Investments, Gains (Losses) and Generation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Investments | |||||
Equity method and other investees | $ 1,115,092 | $ 1,115,092 | $ 1,106,338 | ||
Equity method investees, held at fair value | 29,505 | 29,505 | 15,207 | ||
Total investments | 1,144,597 | 1,144,597 | 1,121,545 | ||
Options in equity method investees | 60,950 | 60,950 | $ 71,844 | ||
Gains (losses) from investments | |||||
Net realized gains (losses) | 54 | $ (1,574) | 1,313 | $ (2,409) | |
Net realized gains (losses) from affiliate investments | 33,867 | 44,922 | 32,701 | 44,348 | |
Net unrealized gains (losses) | 3,962 | 4,844 | 1,600 | (1,959) | |
Net unrealized gains (losses) from affiliate investments | (44,670) | (43,328) | (10,840) | (46,171) | |
Total gains (losses) | (6,787) | 4,864 | 24,774 | (6,191) | |
Gains (losses) | |||||
Mark to fair value on affiliate investments and options | (10,886) | 1,593 | 21,899 | (1,846) | |
Mark to fair value on derivatives | 3,903 | (2,599) | 5,017 | (3,948) | |
Mark to fair value on equity securities | 0 | 693 | (509) | 770 | |
Gains (losses) on digital currency (Bitcoin) | 368 | 3,904 | (1,175) | (2,272) | |
Other | (172) | 1,273 | (458) | 1,105 | |
Total gains (losses) | $ (6,787) | $ 4,864 | $ 24,774 | $ (6,191) |
INVESTMENTS AND FAIR VALUE (Sum
INVESTMENTS AND FAIR VALUE (Summary Financial Information Related to Investments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | $ 1,144,597 | $ 1,144,597 | $ 1,121,545 | ||
Fortress's investment at fair value | 29,505 | 29,505 | 15,207 | ||
Earnings (losses) from equity method investees | (36,321) | $ 22,448 | 5,387 | $ 42,822 | |
Private Equity Funds | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 657,569 | 657,569 | 677,366 | ||
Earnings (losses) from equity method investees | (33,674) | 10,957 | (7,819) | 17,349 | |
Publicly traded portfolio companies | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 1,368 | 1,368 | 1,035 | ||
FTAI | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment carrying and fair value amounts | 14,236 | 14,236 | 5,284 | ||
Earnings (losses) from equity method investees | (129) | (92) | 89 | (57) | |
Newcastle | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 764 | 764 | 776 | ||
New Residential | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 7,903 | 7,903 | 6,622 | ||
Eurocastle | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 2,244 | 2,244 | 2,162 | ||
New Media | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 1,342 | 1,342 | 1,769 | ||
New Senior | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress's investment at fair value | 2,311 | 2,311 | 2,843 | ||
Total private equity | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 687,737 | 687,737 | 697,857 | ||
Earnings (losses) from equity method investees | (33,803) | 10,865 | (7,730) | 17,292 | |
Liquid Hedge Funds | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 193,783 | 193,783 | 167,630 | ||
Earnings (losses) from equity method investees | (8,850) | 1,756 | 518 | 3,286 | |
Credit Hedge Funds | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 41,898 | 41,898 | 57,224 | ||
Earnings (losses) from equity method investees | 990 | 2,440 | 2,958 | 4,809 | |
Credit PE funds | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 195,801 | 195,801 | 183,127 | ||
Earnings (losses) from equity method investees | 5,000 | 7,387 | 10,065 | 17,394 | |
Other | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Fortress’s Investment | 25,378 | 25,378 | $ 15,707 | ||
Earnings (losses) from equity method investees | $ 342 | $ 0 | $ (424) | $ 41 |
INVESTMENTS AND FAIR VALUE (S43
INVESTMENTS AND FAIR VALUE (Summary of Changes in Fortress’s Investments in Equity Method Investees) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Changes in investments in equity method investees | ||||
Investment, beginning | $ 1,121,545 | |||
Earnings (losses) from equity method investees | $ (36,321) | $ 22,448 | 5,387 | $ 42,822 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 161,075 | |||
Distributions of earnings from equity method and other investees | (23,756) | |||
Distributions of capital from equity method investees | (163,671) | |||
Total distributions from equity method and other investees | (187,427) | |||
Mark to fair value - during period | 1,906 | |||
Net purchases of investments by consolidated funds | 10,955 | |||
Translation adjustment | (599) | |||
Dispositions | (2,731) | |||
Reclassification to Due to Affiliates | 1,086 | |||
Retained equity interest related to Graticule transfer | 33,400 | 0 | ||
Investment, ending | 1,144,597 | 1,144,597 | ||
Ending balance of undistributed earnings | 80,235 | 80,235 | ||
Private Equity Funds | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 677,366 | |||
Earnings (losses) from equity method investees | (33,674) | 10,957 | (7,819) | 17,349 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 1,930 | |||
Distributions of earnings from equity method and other investees | (10,668) | |||
Distributions of capital from equity method investees | (2,016) | |||
Total distributions from equity method and other investees | (12,684) | |||
Mark to fair value - during period | 401 | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | (28) | |||
Dispositions | (2,683) | |||
Reclassification to Due to Affiliates | 1,086 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 657,569 | 657,569 | ||
Ending balance of undistributed earnings | 54,692 | 54,692 | ||
Private Equity Portfolio Companies and Permanent Capital Vehicles | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 1,035 | |||
Contributions to equity method investees | 50 | |||
Total distributions from equity method and other investees | 0 | |||
Mark to fair value - during period | 283 | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | 0 | |||
Dispositions | 0 | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 1,368 | 1,368 | ||
Permanent Capital Vehicles | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 19,456 | |||
Earnings (losses) from equity method investees | 89 | |||
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 8,406 | |||
Distributions of earnings from equity method and other investees | (173) | |||
Distributions of capital from equity method investees | (216) | |||
Total distributions from equity method and other investees | (389) | |||
Mark to fair value - during period | 1,411 | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | (173) | |||
Dispositions | 0 | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 28,800 | 28,800 | ||
Liquid Hedge Funds | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 167,630 | |||
Earnings (losses) from equity method investees | (8,850) | 1,756 | 518 | 3,286 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 13,652 | |||
Distributions of earnings from equity method and other investees | (427) | |||
Distributions of capital from equity method investees | (20,990) | |||
Total distributions from equity method and other investees | (21,417) | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | 0 | |||
Dispositions | 0 | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 33,400 | |||
Investment, ending | 193,783 | 193,783 | ||
Ending balance of undistributed earnings | 7,826 | 7,826 | ||
Credit Hedge Funds | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 57,224 | |||
Earnings (losses) from equity method investees | 990 | 2,440 | 2,958 | 4,809 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 115,369 | |||
Distributions of earnings from equity method and other investees | (3,485) | |||
Distributions of capital from equity method investees | (130,168) | |||
Total distributions from equity method and other investees | (133,653) | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | 0 | |||
Dispositions | 0 | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 41,898 | 41,898 | ||
Ending balance of undistributed earnings | 2,442 | 2,442 | ||
Credit PE Funds | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 183,127 | |||
Earnings (losses) from equity method investees | 5,000 | 7,387 | 10,065 | 17,394 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 21,602 | |||
Distributions of earnings from equity method and other investees | (8,269) | |||
Distributions of capital from equity method investees | (10,278) | |||
Total distributions from equity method and other investees | (18,547) | |||
Net purchases of investments by consolidated funds | 0 | |||
Translation adjustment | (398) | |||
Dispositions | (48) | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 195,801 | 195,801 | ||
Ending balance of undistributed earnings | 13,547 | 13,547 | ||
Other | ||||
Changes in investments in equity method investees | ||||
Investment, beginning | 15,707 | |||
Earnings (losses) from equity method investees | 342 | $ 0 | (424) | $ 41 |
Other comprehensive income from equity method investees | 0 | |||
Contributions to equity method investees | 66 | |||
Distributions of earnings from equity method and other investees | (734) | |||
Distributions of capital from equity method investees | (3) | |||
Total distributions from equity method and other investees | (737) | |||
Mark to fair value - during period | (189) | |||
Net purchases of investments by consolidated funds | 10,955 | |||
Translation adjustment | 0 | |||
Dispositions | 0 | |||
Reclassification to Due to Affiliates | 0 | |||
Retained equity interest related to Graticule transfer | 0 | |||
Investment, ending | 25,378 | 25,378 | ||
Ending balance of undistributed earnings | $ 1,728 | $ 1,728 |
INVESTMENTS AND FAIR VALUE (Amo
INVESTMENTS AND FAIR VALUE (Amounts Presented on the Statement of Cash Flows) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Contributions | ||
Per Consolidated Statements of Cash Flows | $ 18,862 | $ 6,012 |
Investments of incentive receivable amounts into Fortress Funds | 134,657 | 249,740 |
Net funded | 7,331 | |
Other | 225 | |
Per Above | 161,075 | |
Distributions of Capital | ||
Per Consolidated Statements of Cash Flows | (155,255) | $ (321,085) |
Investments of incentive receivable amounts into Fortress Funds | 0 | |
Change in distributions payable out of Fortress Funds | 0 | |
Net funded | (7,331) | |
Other | (1,085) | |
Per Above | $ (163,671) |
INVESTMENTS AND FAIR VALUE (S45
INVESTMENTS AND FAIR VALUE (Summarized Statements of Operations for Significant Equity Method Investees) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)quarterentity | Jun. 30, 2014USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Fortress’s equity in net income (loss) | $ (36,321) | $ 22,448 | $ 5,387 | $ 42,822 |
Private Equity Funds | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues and gains (losses) on investments | (284,694) | 419,265 | ||
Expenses | (84,796) | (101,809) | ||
Net Income (Loss) | (369,490) | 317,456 | ||
Fortress’s equity in net income (loss) | (33,674) | 10,957 | $ (7,819) | 17,349 |
Number of entities reported using lagging financial information | entity | 4 | |||
Lag in preparation of summary of financial information (in quarters) | quarter | 1 | |||
Liquid Hedge Funds | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues and gains (losses) on investments | $ (132,365) | (153,439) | ||
Expenses | (95,131) | (97,666) | ||
Net Income (Loss) | (227,496) | (251,105) | ||
Fortress’s equity in net income (loss) | (8,850) | 1,756 | 518 | 3,286 |
Credit Hedge Funds | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues and gains (losses) on investments | 499,641 | 553,237 | ||
Expenses | (212,050) | (150,968) | ||
Net Income (Loss) | 287,591 | 402,269 | ||
Fortress’s equity in net income (loss) | 990 | 2,440 | 2,958 | 4,809 |
Credit PE Funds | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues and gains (losses) on investments | 854,159 | 1,293,764 | ||
Expenses | (141,262) | (132,624) | ||
Net Income (Loss) | 712,897 | 1,161,140 | ||
Fortress’s equity in net income (loss) | $ 5,000 | $ 7,387 | $ 10,065 | $ 17,394 |
Number of entities reported using lagging financial information | entity | 1 | |||
Lag in preparation of summary of financial information (in quarters) | quarter | 1 | |||
Lag in preparation of summary of financial information (in months) | 1 month |
INVESTMENTS AND FAIR VALUE (Ent
INVESTMENTS AND FAIR VALUE (Entities Information) (Details) $ in Thousands | Jun. 30, 2015USD ($)variable_interest_entity | Dec. 31, 2014USD ($)variable_interest_entity |
Fortress is not Primary Beneficiary | Private Equity Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 1 | 2 |
Gross Assets | $ 126,427 | $ 85,553 |
Financial Obligations | 0 | 0 |
Fortress Investment | $ 53 | $ 56 |
Fortress is not Primary Beneficiary | Permanent Capital Vehicles | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 6 | 5 |
Gross Assets | $ 23,439,898 | $ 14,539,141 |
Financial Obligations | 14,859,143 | 10,336,207 |
Fortress Investment | $ 129,847 | $ 154,346 |
Fortress is not Primary Beneficiary | Liquid Hedge Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 4 | 2 |
Gross Assets | $ 2,224,814 | $ 3,070,203 |
Financial Obligations | 283,069 | 432,580 |
Fortress Investment | $ 42,347 | $ 7,094 |
Fortress is not Primary Beneficiary | Credit Hedge Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 8 | 8 |
Gross Assets | $ 2,145,724 | $ 1,976,328 |
Financial Obligations | 373,920 | 152,806 |
Fortress Investment | $ 2,915 | $ 25,474 |
Fortress is not Primary Beneficiary | Credit PE Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 32 | 30 |
Gross Assets | $ 860,222 | $ 735,855 |
Financial Obligations | 214,870 | 143,743 |
Fortress Investment | $ 7,893 | $ 5,897 |
Fortress is not Primary Beneficiary | Investments made in current year | Permanent Capital Vehicles | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 1 | |
Gross Assets | $ 2,009,945 | |
Financial Obligations | 584,302 | |
Fortress Investment | $ 19,121 | |
Fortress is not Primary Beneficiary | Investments made in current year | Liquid Hedge Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 2 | |
Gross Assets | $ 192,912 | |
Financial Obligations | 0 | |
Fortress Investment | $ 39,044 | |
Fortress is not Primary Beneficiary | Investments made in current year | Credit PE Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 2 | |
Gross Assets | $ 22,577 | |
Financial Obligations | 0 | |
Fortress Investment | $ 85 | |
Fortress is Primary Beneficiary | Private Equity Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 9 | 9 |
Gross Assets | $ 65,588 | $ 90,723 |
Financial Obligations | 0 | 0 |
Fortress Investment | $ 20,957 | $ 20,368 |
Fortress is Primary Beneficiary | Liquid Hedge Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 1 | 3 |
Gross Assets | $ 8,154 | $ 8,714 |
Financial Obligations | 0 | 0 |
Fortress Investment | $ 3,429 | $ 4,125 |
Fortress is Primary Beneficiary | Credit PE Funds | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 2 | 2 |
Gross Assets | $ 446 | $ 434 |
Financial Obligations | 0 | 0 |
Fortress Investment | $ 20 | $ 22 |
Fortress is Primary Beneficiary | Logan Circle | ||
Investments in Variable Interest Entities | ||
Number of VIEs | variable_interest_entity | 1 | 1 |
Gross Assets | $ 4,951 | $ 6,566 |
Financial Obligations | 0 | 0 |
Fortress Investment | $ 4,807 | $ 4,783 |
INVESTMENTS AND FAIR VALUE (Fai
INVESTMENTS AND FAIR VALUE (Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Assets (within Investments) | ||
Total equity method investments carried at fair value | $ 29,505 | $ 15,207 |
Options in equity method investees | 60,950 | 71,844 |
Level 1 | Permanent Capital Vehicles | Common stock | ||
Assets (within Investments) | ||
Total equity method investments carried at fair value | 28,137 | 14,172 |
Level 1 | Publicly traded portfolio companies | Common stock | ||
Assets (within Investments) | ||
Total equity method investments carried at fair value | 1,368 | 1,035 |
Level 1 | Logan Circle | ||
Assets (within Other Assets) | ||
Equity Securities | 0 | 17,627 |
Level 2 | ||
Assets (within Other Assets) | ||
Derivatives | 28,951 | 27,105 |
Liabilities (within Accrued Compensation and Benefits) | ||
Options in affiliates granted to employees | (8,965) | (8,356) |
Liabilities (within Other Liabilities) | ||
Derivatives | (2,045) | (932) |
Level 2 | Permanent Capital Vehicles | ||
Assets (within Investments) | ||
Options in equity method investees | $ 60,950 | $ 71,844 |
INVESTMENTS AND FAIR VALUE (F48
INVESTMENTS AND FAIR VALUE (Fair Value of Financial Instruments Narrative) (Details) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015USD ($)$ / sharesshares | Apr. 30, 2015USD ($)$ / sharesshares | Jan. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | Apr. 30, 2015€ / sharesshares | |
Investment [Line Items] | ||||||
Number of options exercised | 6.2 | 6.2 | ||||
Proceeds from exercise of options | $ | $ 51,543 | $ 0 | ||||
Gain on exercise of options | $ | $ 30,600 | |||||
New Media | ||||||
Investment [Line Items] | ||||||
Public offering (in shares) | 7 | |||||
Price per share | $ / shares | $ 21.70 | |||||
Options granted | 0.7 | |||||
Equity Method Investment, Options Grants in Period, Value | $ | $ 4,100 | |||||
Exercisable period | 30 months | |||||
Options term | 10 years | |||||
New Residential | ||||||
Investment [Line Items] | ||||||
Public offering (in shares) | 27.9 | 57.5 | ||||
Price per share | $ / shares | $ 15.88 | $ 15.25 | $ 15.88 | |||
Options granted | 2.8 | 5.8 | 2.8 | 5.8 | ||
Equity Method Investment, Options Grants in Period, Value | $ | $ 3,700 | $ 9,000 | ||||
Exercisable period | 30 months | 30 months | ||||
Options term | 10 years | 10 years | ||||
Eurocastle | ||||||
Investment [Line Items] | ||||||
Public offering (in shares) | 39.8 | |||||
Price per share | € / shares | € 7.85 | |||||
Options granted | 4 | 4 | ||||
Equity Method Investment, Options Grants in Period, Value | $ | $ 5,100 | |||||
Options term | 10 years | |||||
New Senior | ||||||
Investment [Line Items] | ||||||
Public offering (in shares) | 20.1 | |||||
Price per share | $ / shares | $ 13.75 | $ 13.75 | ||||
Options granted | 2 | 2 | ||||
Equity Method Investment, Options Grants in Period, Value | $ | $ 3,000 | |||||
Exercisable period | 30 months | |||||
Options term | 10 years |
INVESTMENTS AND FAIR VALUE (Der
INVESTMENTS AND FAIR VALUE (Derivatives) (Details) ¥ in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015JPY (¥) | |
Derivatives | |||||
Notional Amount | $ 437,500 | $ 437,500 | |||
Mark to fair value on derivatives | 3,903 | $ (2,599) | 5,017 | $ (3,948) | |
Other Assets [Member] | Foreign Exchange Option [Member] | |||||
Derivatives | |||||
Derivative asset, fair value | 28,597 | 28,597 | |||
Notional Amount | ¥ | ¥ 45,560,526 | ||||
Gains/(Losses) | 4,857 | ||||
Other Assets [Member] | Foreign Exchange Forward [Member] | |||||
Derivatives | |||||
Derivative asset, fair value | 354 | 354 | |||
Notional Amount | ¥ | 1,028,587 | ||||
Gains/(Losses) | 278 | ||||
Other Liabilities [Member] | Foreign Exchange Option [Member] | |||||
Derivatives | |||||
Derivative liability, fair value | (1,710) | (1,710) | |||
Notional Amount | ¥ | 5,412,312 | ||||
Gains/(Losses) | (216) | ||||
Other Liabilities [Member] | Foreign Exchange Forward [Member] | |||||
Derivatives | |||||
Derivative liability, fair value | $ (335) | (335) | |||
Notional Amount | ¥ | ¥ 3,008,426 | ||||
Gains/(Losses) | $ (335) |
INVESTMENTS AND FAIR VALUE (D50
INVESTMENTS AND FAIR VALUE (Derivative Offsets) (Details) - Citibank N.A. [Member] $ in Thousands | Jun. 30, 2015USD ($) |
Offsetting Assets [Line Items] | |
Gross amounts of recognized assets | $ 31,069 |
Gross amounts offset in the Consolidated Balance Sheet | (2,118) |
Net amounts of assets presented in the Consolidated Balance Sheet | 28,951 |
Gross amounts of recognized liabilities | (1,523) |
Gross amounts offset in the Consolidated Balance Sheet | (522) |
Net amount of liabilities presented in the Consolidated Balance Sheet | (2,045) |
Foreign Exchange Option [Member] | |
Offsetting Assets [Line Items] | |
Gross amounts of recognized assets | 30,715 |
Gross amounts offset in the Consolidated Balance Sheet | (2,118) |
Net amounts of assets presented in the Consolidated Balance Sheet | 28,597 |
Gross amounts of recognized liabilities | (1,188) |
Gross amounts offset in the Consolidated Balance Sheet | (522) |
Net amount of liabilities presented in the Consolidated Balance Sheet | (1,710) |
Foreign Exchange Forward [Member] | |
Offsetting Assets [Line Items] | |
Gross amounts of recognized assets | 354 |
Gross amounts offset in the Consolidated Balance Sheet | 0 |
Net amounts of assets presented in the Consolidated Balance Sheet | 354 |
Gross amounts of recognized liabilities | (335) |
Gross amounts offset in the Consolidated Balance Sheet | 0 |
Net amount of liabilities presented in the Consolidated Balance Sheet | $ (335) |
DEBT OBLIGATIONS (Schedule of D
DEBT OBLIGATIONS (Schedule of Debt) (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
DEBT OBLIGATIONS | ||
Face Amount and Carrying Value | $ 75,000,000 | $ 75,000,000 |
Fair value of debt | 75,100,000 | |
Revolving debt | ||
DEBT OBLIGATIONS | ||
Face Amount and Carrying Value | $ 75,000,000 | $ 75,000,000 |
Final Stated Maturity | Feb. 28, 2016 | |
Amount Available for Draws | $ 72,332,000 | |
Maximum borrowing amount | $ 150,000,000 | |
Unused commitment fees (as a percent) | 0.40% | |
Revolving debt | LIBOR | ||
DEBT OBLIGATIONS | ||
Contractual interest rate, spread (as a percent) | 2.50% | |
Letter of credit subfacility | ||
DEBT OBLIGATIONS | ||
Maximum borrowing amount | $ 15,000,000 | |
Amount utilized | $ 2,700,000 |
DEBT OBLIGATIONS (Debt Covenant
DEBT OBLIGATIONS (Debt Covenants) (Details) - Jun. 30, 2015 | USD ($) |
DEBT OBLIGATIONS | |
Assets under Management, Actual | $ 45,690,000,000 |
Consolidated Leverage Ratio, Actual | 0.20 |
Consolidated Interest Coverage Ratio, Actual | 102.97 |
Minimum | |
DEBT OBLIGATIONS | |
Assets under Management, Requirement | $ 25,000,000,000 |
Consolidated Interest Coverage Ratio, Requirement | 4 |
Maximum | |
DEBT OBLIGATIONS | |
Consolidated Leverage Ratio, Requirement | 2 |
INCOME TAXES AND TAX RELATED 53
INCOME TAXES AND TAX RELATED PAYMENTS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Line Items] | ||||
Deferred income tax expense (benefit) | $ (14,066) | $ 10,270 | $ 4,448 | $ 12,756 |
Current income tax benefit credited to paid-in capital, related to dividend equivalent payments on RSUs | 1,500 | |||
Excess tax benefits from delivery of RSUs | 4,476 | 2,931 | ||
Payments pursuant to the tax receivable agreement | 12,200 | 12,200 | ||
Tax receivable agreement liability adjustment | $ 7,500 | $ 0 | 7,500 | $ 0 |
Equity Method Investee | ||||
Income Tax Disclosure [Line Items] | ||||
Deferred income tax expense (benefit) | $ 200 |
INCOME TAXES AND TAX RELATED 54
INCOME TAXES AND TAX RELATED PAYMENTS (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Current | ||||
Federal income tax expense (benefit) | $ 2,394 | $ (4,384) | $ (727) | $ (4,452) |
Foreign income tax expense (benefit) | 5,543 | 1,470 | 6,670 | 4,608 |
State and local income tax expense (benefit) | 930 | 560 | 2,809 | 998 |
Total current tax expense | 8,867 | (2,354) | 8,752 | 1,154 |
Deferred | ||||
Federal income tax expense (benefit) | (2,153) | 9,096 | 10,834 | 10,613 |
Foreign income tax expense (benefit) | (77) | (107) | 3,465 | 676 |
State and local income tax expense (benefit) (A) | (11,836) | 1,281 | (9,851) | 1,467 |
Deferred income tax expense (benefit) | (14,066) | 10,270 | 4,448 | 12,756 |
Total expense (benefit) | $ (5,199) | $ 7,916 | $ 13,200 | $ 13,910 |
INCOME TAXES AND TAX RELATED 55
INCOME TAXES AND TAX RELATED PAYMENTS (Tax Effect of Temporary Differences) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Total deferred tax assets | $ 444,543 | $ 439,159 |
Less: | ||
Valuation allowance | (20,776) | (13,072) |
Deferred tax liabilities | (7,852) | (8,464) |
Deferred tax assets, net | $ 415,915 | $ 417,623 |
INCOME TAXES AND TAX RELATED 56
INCOME TAXES AND TAX RELATED PAYMENTS (Changes in Deferred Tax Asset Valuation Allowance) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |
Valuation Allowance at December 31, 2014 | $ 13,072 |
Valuation Allowance at June 30, 2015 | 20,776 |
Due to Change in Ownership | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |
Valuation allowance for deferred tax asset, change in amount | 306 |
Due to Factors Other Than Change in Ownership | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |
Valuation allowance for deferred tax asset, change in amount | $ 7,398 |
RELATED PARTY TRANSACTIONS AN57
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Affiliate Receivables and Payables) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Due from Affiliates | ||
Management fees and incentive income | $ 101,151 | $ 233,125 |
Expense reimbursements | 62,170 | 74,913 |
Dividends and distributions | 347 | 295 |
Other | 24,383 | 18,242 |
Total | 188,051 | 326,575 |
Allowances for uncollectible management fees | 12,200 | 12,200 |
Allowances for uncollectible expense reimbursements | 6,700 | 6,600 |
Past due management fees receivable | 36,100 | |
Private equity general and administrative expenses advanced on behalf of certain Fortress Funds | $ 11,300 | |
Unreserved amount as percentage of NAV, both individually and in the aggregate (less than 5%) | 5.00% | |
Due to Affiliates | ||
Principals - tax receivable agreement | $ 296,916 | 289,324 |
Principals - Principal Performance Payments | 22,114 | 30,659 |
Distributions payable on Fortress Operating Group units | 5,240 | 0 |
Other | 3,274 | 11,411 |
General partner liability | 45,116 | 44,030 |
Total | 372,660 | 375,424 |
Private Equity Funds | ||
Due from Affiliates | ||
Management fees and incentive income | 38,499 | 35,970 |
Expense reimbursements | 24,257 | 35,995 |
Dividends and distributions | 0 | 0 |
Other | 0 | 0 |
Total | 62,756 | 71,965 |
Permanent Capital Vehicles | ||
Due from Affiliates | ||
Management fees and incentive income | 29,601 | 65,043 |
Expense reimbursements | 7,796 | 6,473 |
Dividends and distributions | 347 | 295 |
Other | 2,353 | 1,346 |
Total | 40,097 | 73,157 |
Liquid Hedge Funds | ||
Due from Affiliates | ||
Management fees and incentive income | 5,349 | 15,634 |
Expense reimbursements | 7,200 | 12,940 |
Dividends and distributions | 0 | 0 |
Other | 0 | 0 |
Total | 12,549 | 28,574 |
Credit Hedge Funds | ||
Due from Affiliates | ||
Management fees and incentive income | 2,766 | 96,996 |
Expense reimbursements | 12,267 | 9,264 |
Dividends and distributions | 0 | 0 |
Other | 0 | 0 |
Total | 15,033 | 106,260 |
Credit PE Funds | ||
Due from Affiliates | ||
Management fees and incentive income | 24,429 | 18,393 |
Expense reimbursements | 10,541 | 10,077 |
Dividends and distributions | 0 | 0 |
Other | 0 | 0 |
Total | 34,970 | 28,470 |
Logan Circle | ||
Due from Affiliates | ||
Management fees and incentive income | 507 | 1,089 |
Expense reimbursements | 109 | 164 |
Dividends and distributions | 0 | 0 |
Other | 0 | 0 |
Total | 616 | 1,253 |
Other | ||
Due from Affiliates | ||
Management fees and incentive income | 0 | 0 |
Expense reimbursements | 0 | 0 |
Dividends and distributions | 0 | 0 |
Other | 22,030 | 16,896 |
Total | $ 22,030 | $ 16,896 |
RELATED PARTY TRANSACTIONS AN58
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Other Related Party Transactions) (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2015USD ($)employee | Jun. 30, 2014USD ($) | |
Related Party Transaction [Line Items] | ||
Revenues from affiliates included in other revenues | $ 1.2 | $ 1.4 |
Senior employee | ||
Related Party Transaction [Line Items] | ||
Advances made to senior employees | $ 6.5 | |
Number of employees who received advances | employee | 3 | |
Number of employees who repaid advances | employee | 1 | |
Advances repaid by senior employees | $ 0.1 | |
Senior employee | LIBOR | Minimum | ||
Related Party Transaction [Line Items] | ||
Interest rate on advances to employees | 4.00% | |
Senior employee | LIBOR | Maximum | ||
Related Party Transaction [Line Items] | ||
Interest rate on advances to employees | 5.00% |
RELATED PARTY TRANSACTIONS AN59
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Redeemable Non-controlling Interests) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Increase (Decrease) In Redeemable Noncontrolling Interest [Roll Forward] | ||||
Beginning balance | $ 1,717 | |||
Capital distributions | (1,692) | |||
Redeemable Non-controlling Interests in Income (Loss) | $ 10 | $ 157 | (6) | $ 157 |
Ending balance | $ 19 | $ 19 |
RELATED PARTY TRANSACTIONS AN60
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Balance Sheet Caption) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | ||
Fortress Operating Group units held by the Principals and a former senior employee | $ 494,551 | $ 556,720 |
Employee interests in majority owned and controlled fund advisor and general partner entities | 57,373 | 80,333 |
Other | 2,251 | 2,303 |
Total | $ 554,175 | $ 639,356 |
RELATED PARTY TRANSACTIONS AN61
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Balance Sheet Caption - Fortress Operating Group) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Total Equity | $ 1,162,542 | $ 1,282,955 |
Less: Others' interests in equity of consolidated subsidiaries | (554,175) | (639,356) |
Total Fortress shareholders' equity in Fortress Operating Group | 608,367 | 643,599 |
Equity of Fortress Operating Group units held by the Principals and a former senior employee | $ 494,551 | $ 556,720 |
Shares owned by registrant (as a percent) | 48.80% | 48.00% |
Class B Shares | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Common stock, shares outstanding | 226,331,513 | 226,331,513 |
Class A Shares | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Common stock, shares outstanding | 215,673,299 | 208,535,157 |
Class A and Class B Shares | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Common stock, shares outstanding | 442,004,812 | 434,866,670 |
Fortress Operating Group portion of interests | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Total Equity | $ 1,025,423 | $ 1,152,297 |
Less: Others' interests in equity of consolidated subsidiaries | (59,624) | (82,636) |
Total Fortress shareholders' equity in Fortress Operating Group | $ 965,799 | $ 1,069,661 |
Fortress Operating Group units as a percent of the total | 51.20% | 52.00% |
Equity of Fortress Operating Group units held by the Principals and a former senior employee | $ 494,551 | $ 556,720 |
Fortress Operating Group portion of interests | Class B Shares | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Common stock, shares outstanding | 226,331,513 | 226,331,513 |
Fortress Operating Group portion of interests | Class A Shares | ||
Non Controlling Interest in the Equity of the Consolidated Subsidiary | ||
Common stock, shares outstanding | 215,673,299 | 208,535,157 |
RELATED PARTY TRANSACTIONS AN62
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Statement of Operations Caption) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ||||
Fortress Operating Group units held by the Principals and a former senior employee | $ 1,355 | $ 40,577 | $ 52,960 | $ 45,635 |
Employee interests in majority owned and controlled fund advisor and general partner entities | 199 | 1,505 | 1,039 | 2,516 |
Other | 99 | 18 | (123) | 26 |
Total | $ 1,653 | $ 42,100 | $ 53,876 | $ 48,177 |
RELATED PARTY TRANSACTIONS AN63
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Statement of Operations Caption - Fortress Operating Group) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Fortress Operating Group net income (loss) | $ 4,979 | $ 73,456 | $ 91,899 | $ 82,557 |
Adjust: | ||||
Less: Others' interests in net income (loss) of consolidated subsidiaries | (1,653) | (42,100) | (53,876) | (48,177) |
Fortress Operating Group net income (loss) attributable to the Principals and a former senior employee | 1,355 | 40,577 | 52,960 | 45,635 |
Fortress Operating Group portion of interests | ||||
Related Party Transaction [Line Items] | ||||
Fortress Operating Group net income (loss) | 2,935 | 79,257 | 102,694 | 90,083 |
Adjust: | ||||
Less: Others' interests in net income (loss) of consolidated subsidiaries | (298) | (1,523) | (916) | (2,542) |
Redeemable Non-controlling interests in (income) loss of consolidated subsidiaries | (10) | (157) | 6 | (157) |
Total Fortress shareholders' net income (loss) in Fortress Operating Group | $ 2,627 | $ 77,577 | $ 101,784 | $ 87,384 |
Fortress Operating Group as a percent of total | 51.60% | 52.30% | 52.00% | 52.20% |
Fortress Operating Group net income (loss) attributable to the Principals and a former senior employee | $ 1,355 | $ 40,577 | $ 52,960 | $ 45,635 |
RELATED PARTY TRANSACTIONS AN64
RELATED PARTY TRANSACTIONS AND INTERESTS IN CONSOLIDATED SUBSIDIARIES (Changes in Ownership Interest) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Transfers (to) from the Principals' and Others' Interests: | ||||
Increase in Fortress’s shareholders’ equity for the delivery of Class A shares primarily in connection with vested RSUs | $ 8,338 | $ 4,359 | $ 8,364 | $ 4,776 |
Increase in Fortress's shareholders' equity for the public offering of Class A shares and repurchase of Class B shares and FOGUs | 0 | 0 | 0 | 53,510 |
Decrease in Fortress's shareholders' equity for the repurchase and cancellation of Class A shares and FOGUs | 0 | 0 | 0 | (101,156) |
Change from net income (loss) attributable to Fortress and transfers (to) from Principals’ and Others' Interests | 11,654 | 35,558 | 46,393 | (8,647) |
Class A Shares | ||||
Changes in the Registrant's Equity due to Changes in Ownership in the Consolidated Operating Group Subsidiary | ||||
Net Income (loss) attributable to Class A shareholders | $ 3,316 | $ 31,199 | $ 38,029 | $ 34,223 |
EQUITY-BASED AND OTHER COMPEN65
EQUITY-BASED AND OTHER COMPENSATION (Compensation and Benefit Expenses and Equity-Based Compensation Activities) (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Equity-Based Compensation | |||||
Equity-based compensation, per below | $ 11,044 | $ 9,661 | $ 25,388 | $ 18,334 | |
Profit-sharing expense, per below | 67,348 | 41,426 | 106,261 | 105,747 | |
Discretionary bonuses | 58,236 | 55,283 | 120,817 | 112,721 | |
Other payroll, taxes and benefits | 62,480 | 61,744 | 125,530 | 119,831 | |
Total compensation and benefit expense | 199,108 | 168,114 | 377,996 | 356,633 | |
Additional disclosures | |||||
Unrecognized compensation expense on non-vested equity based awards | 108,100 | $ 108,100 | |||
Weighted average recognition period (in years) | 4 years 1 month 16 days | ||||
Principal Performance Payments | |||||
Equity-Based Compensation | |||||
Equity-based compensation, per below | 3,144 | 4,180 | $ 5,502 | 6,960 | |
Profit-sharing expense, per below | 17,450 | 6,159 | $ 20,254 | 13,057 | |
RSUs | |||||
Number of shares and units | |||||
Issued (in shares) | 11,400,000 | ||||
RSUs | Principal Performance Payments | |||||
Additional disclosures | |||||
Awards expected to be granted on the basis of year-to-date performance (in shares) | 1,100,000 | ||||
RSUs | Employees | |||||
Equity-Based Compensation | |||||
Equity-based compensation, per below | $ 7,818 | 5,477 | $ 18,822 | 11,364 | |
Number of shares and units | |||||
Outstanding at the beginning of the period (in shares) | 20,153,746 | 20,153,746 | |||
Issued (in shares) | 11,925,660 | ||||
Transfers (in shares) | 0 | ||||
Converted (in shares) | (6,880,798) | ||||
Forfeited (in shares) | (441,455) | ||||
Balance outstanding at the end of the period (in shares) | 24,757,153 | 24,757,153 | |||
Weighted average grant date estimated fair value per share or unit | |||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 5.52 | $ 5.52 | |||
Issued (in dollars per share) | 6.89 | ||||
Transfers (in dollars per share) | 0 | ||||
Converted (in dollars per share) | 4.74 | ||||
Forfeited (in dollars per share) | 6.24 | ||||
Balance outstanding at the end of the period (in dollars per share) | $ 6.38 | $ 6.38 | |||
RSUs | Non-Employees | |||||
Equity-Based Compensation | |||||
Equity-based compensation, per below | $ 82 | $ 4 | $ 1,064 | $ 10 | |
Number of shares and units | |||||
Outstanding at the beginning of the period (in shares) | 396,874 | 396,874 | |||
Issued (in shares) | 111,540 | ||||
Transfers (in shares) | 0 | ||||
Converted (in shares) | (186,136) | ||||
Forfeited (in shares) | 0 | ||||
Balance outstanding at the end of the period (in shares) | 322,278 | 322,278 | |||
Weighted average grant date estimated fair value per share or unit | |||||
Balance outstanding at the beginning of the period (in dollars per share) | $ 6.51 | $ 6.51 | |||
Issued (in dollars per share) | 7.61 | ||||
Transfers (in dollars per share) | 0 | ||||
Converted (in dollars per share) | 6.78 | ||||
Forfeited (in dollars per share) | 0 | ||||
Balance outstanding at the end of the period (in dollars per share) | $ 6.74 | $ 6.74 |
EQUITY-BASED AND OTHER COMPEN66
EQUITY-BASED AND OTHER COMPENSATION (Narrative) (Details) - USD ($) shares in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 63 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | |
Equity-Based Compensation | |||||||
Equity-Based Compensation | $ 11,044,000 | $ 9,661,000 | $ 25,388,000 | $ 18,334,000 | |||
Principal Performance Payments | |||||||
Equity-Based Compensation | |||||||
Equity-Based Compensation | $ 3,144,000 | $ 4,180,000 | $ 5,502,000 | $ 6,960,000 | |||
RSUs | |||||||
Equity-Based Compensation | |||||||
Issued (in shares) | 11.4 | ||||||
Aggregate fair value | $ 77,600,000 | ||||||
RSUs | Principal Performance Payments | |||||||
Equity-Based Compensation | |||||||
Aggregate fair value | $ 4,000,000 | ||||||
Vesting period (in years) | 3 years | ||||||
RSUs | Minimum | |||||||
Equity-Based Compensation | |||||||
Vesting period (in years) | 3 years | ||||||
RSUs | Maximum | |||||||
Equity-Based Compensation | |||||||
Vesting period (in years) | 6 years | ||||||
Dividend Paying RSUs | |||||||
Equity-Based Compensation | |||||||
Issued (in shares) | 6.5 | ||||||
Dividend Paying RSUs | Principal Performance Payments | |||||||
Equity-Based Compensation | |||||||
Issued (in shares) | 0.5 | ||||||
Performance Shares | Logan Circle Comp Plan | |||||||
Equity-Based Compensation | |||||||
Equity-Based Compensation | $ 0 |
EQUITY-BASED AND OTHER COMPEN67
EQUITY-BASED AND OTHER COMPENSATION (Principal Performance Payments Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Deferred and equity related compensation | ||||
Equity-Based Compensation | $ 11,044 | $ 9,661 | $ 25,388 | $ 18,334 |
Profit Sharing Expense | 67,348 | 41,426 | 106,261 | 105,747 |
Liquid Hedge Funds | ||||
Deferred and equity related compensation | ||||
Profit Sharing Expense | (2,705) | 5,944 | 1,348 | 8,407 |
Principal Performance Payments | ||||
Deferred and equity related compensation | ||||
Equity-Based Compensation | 3,144 | 4,180 | 5,502 | 6,960 |
Profit Sharing Expense | $ 17,450 | $ 6,159 | 20,254 | $ 13,057 |
Total | 25,756 | |||
Principal Performance Payments | Private Equity Business | ||||
Deferred and equity related compensation | ||||
Equity-Based Compensation | 401 | |||
Profit Sharing Expense | 10,495 | |||
Total | 10,896 | |||
Principal Performance Payments | Liquid Hedge Funds | ||||
Deferred and equity related compensation | ||||
Equity-Based Compensation | 997 | |||
Profit Sharing Expense | 0 | |||
Total | 997 | |||
Principal Performance Payments | Credit Business | ||||
Deferred and equity related compensation | ||||
Equity-Based Compensation | 4,104 | |||
Profit Sharing Expense | 9,759 | |||
Total | $ 13,863 |
EQUITY-BASED AND OTHER COMPEN68
EQUITY-BASED AND OTHER COMPENSATION (Profit Sharing Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | $ 67,348 | $ 41,426 | $ 106,261 | $ 105,747 |
Principal Performance Payments | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | 17,450 | 6,159 | 20,254 | 13,057 |
Private Equity Funds | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | 0 | 303 | 0 | 303 |
Permanent Capital Vehicles | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | 2,462 | 4,170 | 8,961 | 9,085 |
Liquid Hedge Funds | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | (2,705) | 5,944 | 1,348 | 8,407 |
Liquid Hedge Funds | Principal Performance Payments | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | 0 | |||
Credit Hedge Funds | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | 18,524 | 19,698 | 30,133 | 35,332 |
Credit PE Funds | ||||
Recognized Profit Sharing Compensation | ||||
Profit Sharing Expense | $ 31,617 | $ 5,152 | $ 45,565 | $ 39,563 |
EARNINGS PER SHARE AND DISTRI69
EARNINGS PER SHARE AND DISTRIBUTIONS (Computations of Basic and Diluted EPS) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($)$ / sharesshares | Jun. 30, 2015USD ($)category$ / sharesshares | Jun. 30, 2014USD ($)$ / sharesshares | |
Schedule of Earnings per Share [Line Items] | ||||
Number of general categories of potentially dilutive equity instruments | category | 2 | |||
Weighted average shares outstanding | ||||
Class A shares outstanding | 211,685,639 | 205,351,556 | 209,710,467 | 208,688,070 |
Fully vested restricted Class A share units with dividend equivalent rights | 3,717,045 | 1,431,885 | 5,464,698 | 2,653,378 |
Fully vested restricted Class A shares | 780,497 | 1,000,310 | 810,412 | 986,867 |
Total weighted average shares outstanding | 216,183,181 | 207,783,751 | 215,985,577 | 212,328,315 |
Basic net income (loss) per Class A share | ||||
Dividend equivalents declared on non-vested restricted Class A shares and restricted Class A share units | $ | $ (452) | $ (712) | $ (2,577) | $ (489) |
Net income (loss) available to Class A shareholders | $ | $ 2,864 | $ 30,487 | $ 35,452 | $ 33,734 |
Total weighted average shares outstanding | 216,183,181 | 207,783,751 | 215,985,577 | 212,328,315 |
Basic net income (loss) per Class A share (in dollars per share) | $ / shares | $ 0.01 | $ 0.15 | $ 0.16 | $ 0.16 |
Weighted average shares outstanding | ||||
Class A shares outstanding | 211,685,639 | 205,351,556 | 209,710,467 | 208,688,070 |
Fully vested restricted Class A share units with dividend equivalent rights | 3,717,045 | 1,431,885 | 5,464,698 | 2,653,378 |
Fully vested restricted Class A shares | 780,497 | 1,000,310 | 810,412 | 986,867 |
Fortress Operating Group units and fully vested RPUs exchangeable into Class A shares | 226,331,513 | 226,331,513 | 0 | 236,074,150 |
Class A restricted shares and Class A restricted share units granted to employees and directors (eligible for dividend and dividend equivalent payments) | 0 | 1,415,845 | 0 | 1,433,170 |
Class A restricted share units granted to employees (not eligible for dividend and dividend equivalent payments) | 6,695,668 | 9,035,738 | 6,225,155 | 9,837,501 |
Total weighted average shares outstanding | 449,210,362 | 444,566,847 | 222,210,732 | 459,673,136 |
Diluted net income (loss) per Class A share | ||||
Dividend equivalents declared on non-vested restricted Class A shares and restricted Class A share units | $ | $ (452) | $ (712) | $ (2,577) | $ (489) |
Add back Principals’ and others’ interests in loss of Fortress Operating Group, net of assumed corporate income taxes at enacted rates, attributable to Fortress Operating Group units and fully vested RPUs exchangeable into Class A shares (1) | $ | (3,237) | 24,909 | 0 | 31,447 |
Net income (loss) available to Class A shareholders | $ | $ (373) | $ 55,396 | $ 35,452 | $ 65,181 |
Total weighted average shares outstanding | 449,210,362 | 444,566,847 | 222,210,732 | 459,673,136 |
Diluted net income (loss) per Class A share (in dollars per share) | $ / shares | $ 0 | $ 0.12 | $ 0.16 | $ 0.14 |
Number of Units Along with Class B Share Exchangeable for Each Class a Share | 1 | 1 | ||
Number of Shares Exchanged for Each Unit Along with Class B Share | 1 | 1 | ||
Share Units | 13,416,141 | 13,418,337 | 12,564,428 | 12,932,088 |
Class A Shares | ||||
Basic net income (loss) per Class A share | ||||
Net income (loss) attributable to Class A shareholders | $ | $ 3,316 | $ 31,199 | $ 38,029 | $ 34,223 |
Diluted net income (loss) per Class A share | ||||
Net income (loss) attributable to Class A shareholders | $ | $ 3,316 | $ 31,199 | $ 38,029 | $ 34,223 |
EARNINGS PER SHARE AND DISTRI70
EARNINGS PER SHARE AND DISTRIBUTIONS (Dividend Paying Shares and Units) (Details) - USD ($) | Feb. 13, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
EARNINGS PER SHARE AND DITRIBUTIONS | |||||||
Number of Units Along with Class B Share Exchangeable for Each Class a Share | 1 | 1 | |||||
Number of Shares Exchanged for Each Unit Along with Class B Share | 1 | 1 | |||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 453,673,877 | 441,629,248 | 452,078,150 | 455,166,095 | |||
Dividend paying shares and units | 453,718,204 | 453,718,204 | 442,062,960 | ||||
Nomura | |||||||
Dividend paying shares and units | |||||||
Shares Acquired | 60,568,275 | ||||||
Purchase price, amount to be paid | $ 363,400,000 | ||||||
Contingent Consideration, Liability | 12,000,000 | ||||||
Liabilities, Fair Value | $ 30,000,000 | ||||||
Payment of contingent liability | $ 9,700,000 | ||||||
Fortress Operating Group units (Principals and one senior employee) | |||||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 226,331,513 | 226,331,513 | 226,331,513 | 236,074,150 | |||
Dividend paying shares and units | 226,331,513 | 226,331,513 | 226,331,513 | ||||
Restricted Class A shares (directors) | |||||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 780,497 | 1,000,310 | 810,412 | 986,867 | |||
Dividend paying shares and units | 688,587 | 688,587 | 1,045,134 | ||||
Restricted Class A share units fully vested (employees) | |||||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 3,717,045 | 1,431,885 | 5,464,698 | 2,653,378 | |||
Dividend paying shares and units | 554,209 | 554,209 | 194,287 | ||||
Restricted Class A share units nonvested (employees) | |||||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 11,159,183 | 7,513,984 | 9,761,060 | 6,763,630 | |||
Dividend paying shares and units | 11,159,183 | 11,159,183 | 7,002,003 | ||||
Class A Shares | |||||||
Dividend paying shares and units | |||||||
Weighted average dividend paying shares and units | 211,685,639 | 205,351,556 | 209,710,467 | 208,688,070 | |||
Dividend paying shares and units | 214,984,712 | 214,984,712 | 207,490,023 | ||||
Purchase price, amount to be paid | $ 9,676,000 | $ 363,410,000 | |||||
Class A Shares | Common stock | |||||||
Dividend paying shares and units | |||||||
Public offering (in shares) | 23,202,859 | ||||||
Proceeds from issuance of common stock | $ 186,600,000 |
EARNINGS PER SHARE AND DISTRI71
EARNINGS PER SHARE AND DISTRIBUTIONS (Dividends and Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 30, 2015 | May. 07, 2015 | Jun. 30, 2015 |
Dividends and distributions | |||
Declared in Prior Year, Paid in Current Year | $ 0 | ||
Declared and Paid | 214,980 | ||
Declared but not yet Paid | 5,240 | ||
Total | 220,220 | ||
Fortress Operating Group unit holders | |||
Dividends and distributions | |||
Declared in Prior Year, Paid in Current Year | 0 | ||
Declared and Paid | 110,426 | ||
Declared but not yet Paid | 5,240 | ||
Total | 115,666 | ||
Restricted Class A share units | |||
Dividends and distributions | |||
Declared in Prior Year, Paid in Current Year | 0 | ||
Declared and Paid | 8,053 | ||
Declared but not yet Paid | 0 | ||
Total | 8,053 | ||
Class A Shares | |||
Dividends and distributions | |||
Declared in Prior Year, Paid in Current Year | 0 | ||
Declared and Paid | $ 18,200 | 96,501 | |
Declared but not yet Paid | 0 | ||
Total | $ 96,501 | ||
Cash dividend declared (in dollars per share) | $ 0.08 | ||
Class A Shares | Subsequent event | |||
Dividends and distributions | |||
Declared and Paid | $ 18,200 | ||
Cash dividend declared (in dollars per share) | $ 0.08 |
COMMITMENTS AND CONTINGENCIES72
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
General Partner Liability | ||
Amount of negative equity recorded in private equity fund | $ 45,100 | |
Private Equity Fund and Credit PE Fund Capital Commitments | ||
Private equity fund, private placement capital vehicle, and credit PE fund capital commitments | 166,300 | |
Minimum Future Rentals | ||
July 1, 2015 to December 31, 2015 | 13,055 | |
2,016 | 24,231 | |
2,017 | 12,839 | |
2,018 | 20,139 | |
2,019 | 19,620 | |
2,020 | 19,620 | |
Thereafter | 260,092 | |
Total | 369,596 | |
Rent expense under operating leases | $ 14,900 | $ 11,300 |
SEGMENT REPORTING (Clawback Res
SEGMENT REPORTING (Clawback Reserve, Impairment Determination, Embedded Incentive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Clawback Reserve On Incentive Income For Distributable Earning Purposes Roll Forward | |||||
Net Intrinsic Clawback (B) | $ 45,108 | $ 45,108 | |||
Prior Year End Inception-to-Date Net DE Reserve | 45,108 | ||||
Current Year-to-Date Gross DE Reserve (Reversal) | 0 | $ 0 | 0 | $ 1,999 | |
Current Year-to-Date Net DE Reserve (Reversal) | 0 | ||||
Inception-to-Date Net DE Reserve | 45,108 | 45,108 | |||
Impairment determination | |||||
Impairment on direct and indirect investments | 406 | 38 | 3,400 | 64 | |
Impairment on digital currency (Bitcoin) | 2,800 | ||||
Unrealized losses on certain investments that have not been recorded as impairment for DE purposes | 6,300 | 6,300 | |||
Unrealized gains on investments | 538,000 | 538,000 | |||
Embedded Incentive Income [Abstract] | |||||
Gross undistributed incentive income | 1,000,000 | 1,000,000 | |||
Undistributed, net of intrinsic clawback | 953,778 | 953,778 | $ 868,549 | ||
Gross undistributed incentive income recognized in distributable earnings | 23,231 | $ 25,784 | 46,400 | $ 56,278 | |
Permanent Capital Vehicles | |||||
Embedded Incentive Income [Abstract] | |||||
Gross Additional Distributable Earnings on Exercise of in Money Options and Incentive Shares | 43,800 | ||||
Net Additional Distributable Earnings on Exercise of in Money Options | 35,100 | ||||
Fund III | |||||
Clawback Reserve On Incentive Income For Distributable Earning Purposes Roll Forward | |||||
Net Intrinsic Clawback (B) | 45,108 | $ 45,108 | |||
Periods in Intrinsic Clawback | 90 months | ||||
Prior Year End Inception-to-Date Net DE Reserve | $ 45,108 | ||||
Current Year-to-Date Gross DE Reserve (Reversal) | 0 | ||||
Current Year-to-Date Net DE Reserve (Reversal) | 0 | ||||
Inception-to-Date Net DE Reserve | $ 45,108 | $ 45,108 |
SEGMENT REPORTING (Segment Resu
SEGMENT REPORTING (Segment Results of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment revenues | |||||
Management fees | $ 144,652 | $ 151,722 | $ 283,256 | $ 298,761 | |
Incentive income | 182,298 | 77,859 | 233,656 | 181,784 | |
Segment revenues - total | 326,950 | 229,581 | 516,912 | 480,545 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 152,200 | 197,050 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 150,596 | 82,216 | 204,727 | 176,139 | |
Fund management distributable earnings (loss) | 133,146 | 76,057 | 184,049 | 163,082 | |
Pre-tax distributable earnings (loss) | 136,469 | 171,789 | 191,665 | 268,296 | |
Total segment assets | 2,262,906 | 2,262,906 | |||
Deferred tax asset, net | 415,915 | 415,915 | $ 417,623 | ||
Private Equity Funds | |||||
Segment revenues | |||||
Management fees | 29,236 | 35,491 | 58,376 | 70,913 | |
Incentive income | 0 | 855 | 0 | 2,854 | |
Segment revenues - total | 29,236 | 36,346 | 58,376 | 73,767 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 14,107 | 29,082 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 14,107 | 25,842 | 29,082 | 50,609 | |
Fund management distributable earnings (loss) | 14,107 | 25,842 | 29,082 | 50,609 | |
Pre-tax distributable earnings (loss) | 14,162 | 116,891 | 29,160 | 145,150 | |
Total segment assets | 734,168 | 734,168 | |||
Permanent Capital Vehicles | |||||
Segment revenues | |||||
Management fees | 22,508 | 16,464 | 41,710 | 32,500 | |
Incentive income | 73,973 | 20,731 | 76,993 | 24,740 | |
Segment revenues - total | 96,481 | 37,195 | 118,703 | 57,240 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 72,096 | 75,865 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 72,096 | 14,498 | 75,865 | 20,524 | |
Fund management distributable earnings (loss) | 61,601 | 12,397 | 65,370 | 17,740 | |
Pre-tax distributable earnings (loss) | 61,973 | 13,083 | 66,081 | 18,768 | |
Total segment assets | 135,762 | 135,762 | |||
Liquid Hedge Funds | |||||
Segment revenues | |||||
Management fees | 18,693 | 36,162 | 39,681 | 69,640 | |
Incentive income | (836) | 1,155 | 55 | 1,288 | |
Segment revenues - total | 17,857 | 37,317 | 39,736 | 70,928 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | (6,062) | (8,564) | |||
Fund management distributable earnings (loss) before Principal Performance Payments | (7,666) | 7,027 | (887) | 15,507 | |
Fund management distributable earnings (loss) | (7,386) | 6,601 | (887) | 14,539 | |
Pre-tax distributable earnings (loss) | (6,262) | 8,412 | 3,328 | 17,196 | |
Total segment assets | 198,615 | 198,615 | |||
Credit Hedge Funds | |||||
Segment revenues | |||||
Management fees | 29,847 | 28,475 | 59,511 | 55,333 | |
Incentive income | 49,709 | 42,301 | 72,874 | 74,130 | |
Segment revenues - total | 79,556 | 70,776 | 132,385 | 129,463 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 42,119 | 65,224 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 42,119 | 33,733 | 65,224 | 60,294 | |
Fund management distributable earnings (loss) | 36,138 | 30,039 | 56,882 | 52,063 | |
Pre-tax distributable earnings (loss) | 36,183 | 31,311 | 57,914 | 54,726 | |
Total segment assets | 101,818 | 101,818 | |||
Credit PE Funds | |||||
Segment revenues | |||||
Management fees | 31,097 | 23,686 | 57,445 | 48,327 | |
Incentive income | 59,475 | 12,817 | 83,623 | 78,772 | |
Segment revenues - total | 90,572 | 36,503 | 141,068 | 127,099 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 30,233 | 36,599 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 30,233 | 2,577 | 36,599 | 32,737 | |
Fund management distributable earnings (loss) | 28,979 | 2,639 | 34,758 | 31,663 | |
Pre-tax distributable earnings (loss) | 31,586 | 3,174 | 38,615 | 35,906 | |
Total segment assets | 293,994 | 293,994 | |||
Logan Circle | |||||
Segment revenues | |||||
Management fees | 13,271 | 11,444 | 26,533 | 22,048 | |
Incentive income | (23) | 0 | 111 | 0 | |
Segment revenues - total | 13,248 | 11,444 | 26,644 | 22,048 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | (293) | (1,156) | |||
Fund management distributable earnings (loss) before Principal Performance Payments | (293) | (1,461) | (1,156) | (3,532) | |
Fund management distributable earnings (loss) | (293) | (1,461) | (1,156) | (3,532) | |
Pre-tax distributable earnings (loss) | (471) | (726) | (1,590) | (2,672) | |
Total segment assets | 52,555 | 52,555 | |||
Unallocated | |||||
Segment revenues | |||||
Management fees | 0 | 0 | 0 | 0 | |
Incentive income | 0 | 0 | 0 | 0 | |
Segment revenues - total | 0 | 0 | 0 | 0 | |
Fund management distributable earnings (loss) before earnings from Affiliated Managers and Principal Performance Payments | 0 | 0 | |||
Fund management distributable earnings (loss) before Principal Performance Payments | 0 | 0 | 0 | 0 | |
Fund management distributable earnings (loss) | 0 | 0 | 0 | 0 | |
Pre-tax distributable earnings (loss) | (702) | $ (356) | (1,843) | $ (778) | |
Total segment assets | 745,994 | 745,994 | |||
Cash | 230,900 | 230,900 | |||
Deferred tax asset, net | $ 415,900 | $ 415,900 |
SEGMENT REPORTING (Reconciling
SEGMENT REPORTING (Reconciling Items) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reconciling items between segment measures and GAAP measures: | ||||
Fund management distributable earnings | $ 133,146 | $ 76,057 | $ 184,049 | $ 163,082 |
Investment income (loss) | 4,279 | 96,598 | 9,393 | 106,752 |
Interest expense | (956) | (866) | (1,777) | (1,538) |
Pre-tax distributable earnings | 136,469 | 171,789 | 191,665 | 268,296 |
Adjust incentive income | ||||
Incentive income received from private equity funds, the private permanent capital vehicle and credit PE funds, subject to contingent repayment | (59,528) | (13,672) | (84,071) | (79,627) |
Incentive income received from third parties, subject to contingent repayment | (3,867) | 0 | (3,867) | (86) |
Incentive income from private equity funds, the private permanent capital vehicle and credit PE funds, not subject to contingent repayment | 44,744 | 23,859 | 65,709 | 53,362 |
Incentive income from hedge funds, permanent capital vehicles and Logan Circle, subject to annual performance achievement | (23,231) | (25,784) | (46,400) | (56,278) |
Incentive income received related to the exercise of options | (56,615) | (1,485) | (56,615) | (1,485) |
Reserve for clawback, gross (see discussion above) | 0 | 0 | 0 | (1,999) |
Adjust incentive income | (98,497) | (17,082) | (125,244) | (86,113) |
Adjust other income | ||||
Distributions of earnings from equity method investees | (8,724) | (47,122) | (12,566) | (56,349) |
Earnings (losses) from equity method investees | (33,192) | 19,602 | (6,219) | 37,216 |
Gains (losses) on options in equity method investees | (9,202) | (1,088) | 23,126 | (5,871) |
Gains (losses) on other investments | 5,275 | (42,221) | 5,979 | (47,065) |
Impairment of investments (see discussion above) | 406 | 38 | 3,400 | 64 |
Adjust income from the receipt of options | 21,014 | 1,604 | 25,158 | 1,604 |
Gain on transfer of Graticule | 0 | 0 | 134,400 | 0 |
Adjust other income | (24,423) | (69,187) | 173,278 | (70,401) |
Adjust employee, Principal and director compensation | ||||
Adjust employee, Principal and director equity-based compensation expense (including Castle options assigned) | (5,552) | (7,811) | (26,012) | (21,131) |
Adjust employee portion of incentive income from private equity funds accrued prior to the realization of incentive income | (944) | 2,039 | (861) | 3,174 |
Adjust employee, Principal and director compensation | (6,496) | (5,772) | (26,873) | (17,957) |
Adjust for the transfer of interest in Graticule | 0 | 0 | (101,000) | 0 |
Adjust amortization of intangible assets and impairment of goodwill and intangible assets | (83) | (11) | (165) | (22) |
Adjust non-controlling interests related to Fortress Operating Group units | (1,355) | (40,577) | (52,960) | (45,635) |
Adjust tax receivable agreement liability | (7,500) | 0 | (7,500) | 0 |
Adjust income taxes | 5,201 | (7,961) | (13,172) | (13,945) |
Total adjustments | (133,153) | (140,590) | (153,636) | (234,073) |
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 1,653 | 42,100 | 53,876 | 48,177 |
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 10 | 157 | (6) | 157 |
Net Income | 4,979 | 73,456 | 91,899 | 82,557 |
Class A Shares | ||||
Adjust employee, Principal and director compensation | ||||
Net income (loss) attributable to Class A shareholders | $ 3,316 | $ 31,199 | $ 38,029 | $ 34,223 |
SEGMENT REPORTING (Segment Asse
SEGMENT REPORTING (Segment Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Segment Reporting [Abstract] | ||
Total segment assets | $ 2,262,906 | |
Adjust equity investments from segment carrying amount | (1,049) | |
Adjust investments gross of employees' and others' portion | 16,501 | |
Adjust intangible assets to cost | (23,002) | |
Accrued incentive income subject to annual performance achievement | (46,400) | |
Total Assets | $ 2,208,956 | $ 2,502,384 |
SEGMENT REPORTING (Segment Reve
SEGMENT REPORTING (Segment Revenues) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting [Abstract] | ||||
Segment revenues | $ 326,950 | $ 229,581 | $ 516,912 | $ 480,545 |
Adjust management fees | 237 | 435 | 486 | 727 |
Adjust incentive income | (99,845) | (17,373) | (126,979) | (86,403) |
Adjust income from the receipt of options | 21,014 | 1,604 | 25,158 | 1,604 |
Adjust other revenues (including expense reimbursements) | 60,132 | 56,097 | 119,600 | 110,981 |
Total Revenues | 308,488 | 270,344 | 535,177 | 507,454 |
Incentive income received from third parties, not subject to contingent repayment | $ 1,300 | $ 300 | $ 1,700 | $ 300 |
SEGMENT REPORTING (Depreciation
SEGMENT REPORTING (Depreciation and Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Depreciation | $ 12,685 | $ 5,026 | $ 17,934 | $ 9,316 |
Amortization | 83 | 11 | 165 | 22 |
Total depreciation and amortization | 12,768 | 5,037 | 18,099 | 9,338 |
Private Equity Funds | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 395 | 404 | 769 | 798 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | 395 | 404 | 769 | 798 |
Permanent Capital Vehicles | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 367 | 196 | 602 | 378 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | 367 | 196 | 602 | 378 |
Liquid Hedge Funds | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 9,475 | 1,974 | 11,517 | 3,227 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | 9,475 | 1,974 | 11,517 | 3,227 |
Credit Hedge Funds | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 1,305 | 1,376 | 2,695 | 2,777 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | 1,305 | 1,376 | 2,695 | 2,777 |
Credit PE Funds | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 395 | 275 | 652 | 475 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | 395 | 275 | 652 | 475 |
Logan Circle | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 74 | 82 | 355 | 168 |
Amortization | 83 | 11 | 165 | 22 |
Total depreciation and amortization | 157 | 93 | 520 | 190 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation | 674 | 719 | 1,344 | 1,493 |
Amortization | 0 | 0 | 0 | 0 |
Total depreciation and amortization | $ 674 | $ 719 | $ 1,344 | $ 1,493 |
SUBSEQUENT EVENTS Subsequent Ev
SUBSEQUENT EVENTS Subsequent Events (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jul. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | |
Subsequent Event [Line Items] | |||
Contributions to equity method investees | $ 18,862 | $ 6,012 | |
Credit PE Funds | Subsequent event | |||
Subsequent Event [Line Items] | |||
Contributions to equity method investees | $ 36,900 |
CONSOLIDATING FINANCIAL INFOR80
CONSOLIDATING FINANCIAL INFORMATION (Consolidating Balance Sheet Information) (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Assets | ||||
Cash and cash equivalents | $ 233,912 | $ 391,089 | $ 254,490 | $ 364,583 |
Due from affiliates | 188,051 | 326,575 | ||
Investments | 1,144,597 | 1,121,545 | ||
Investments in options | 60,950 | 71,844 | ||
Deferred tax asset, net | 415,915 | 417,623 | ||
Other assets | 165,531 | 173,708 | ||
Total Assets | 2,208,956 | 2,502,384 | ||
Liabilities | ||||
Accrued compensation and benefits | 181,967 | 374,709 | ||
Due to affiliates | 372,660 | 375,424 | ||
Deferred incentive income | 326,338 | 304,526 | ||
Debt obligations payable | 75,000 | 75,000 | ||
Other liabilities | 90,430 | 88,053 | ||
Total Liabilities | $ 1,046,395 | $ 1,217,712 | ||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 19 | $ 1,717 | ||
Equity | ||||
Paid-in capital | 1,922,869 | 1,996,137 | ||
Retained earnings (accumulated deficit) | (1,312,093) | (1,350,122) | ||
Accumulated other comprehensive income (loss) | (2,409) | (2,416) | ||
Total Fortress shareholders’ equity | 608,367 | 643,599 | ||
Principals’ and others’ interests in equity of consolidated subsidiaries | 554,175 | 639,356 | ||
Total Equity | 1,162,542 | 1,282,955 | ||
Total Liabilities, Redeemable Non-controlling Interests and Equity | 2,208,956 | 2,502,384 | ||
Fortress Operating Group Combined | ||||
Assets | ||||
Cash and cash equivalents | 233,271 | 389,782 | ||
Due from affiliates | 188,095 | |||
Investments | 1,144,597 | |||
Investments in options | 60,950 | |||
Deferred tax asset, net | 0 | |||
Other assets | 150,151 | |||
Total Assets | 1,777,064 | |||
Liabilities | ||||
Accrued compensation and benefits | 179,035 | |||
Due to affiliates | 80,738 | |||
Deferred incentive income | 326,338 | |||
Debt obligations payable | 75,000 | |||
Other liabilities | 89,957 | |||
Total Liabilities | $ 751,068 | |||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 19 | |||
Equity | ||||
Paid-in capital | 5,773,202 | |||
Retained earnings (accumulated deficit) | (4,798,760) | |||
Accumulated other comprehensive income (loss) | (8,089) | |||
Total Fortress shareholders’ equity | 966,353 | |||
Principals’ and others’ interests in equity of consolidated subsidiaries | 59,624 | |||
Total Equity | 1,025,977 | |||
Total Liabilities, Redeemable Non-controlling Interests and Equity | 1,777,064 | |||
FOE II LP | ||||
Assets | ||||
Cash and cash equivalents | 513 | 950 | ||
Due from affiliates | 2,644 | |||
Investments | 2,175 | |||
Investments in options | 0 | |||
Deferred tax asset, net | 0 | |||
Other assets | 1,968 | |||
Total Assets | 7,300 | |||
Liabilities | ||||
Accrued compensation and benefits | 2,932 | |||
Due to affiliates | 2,274 | |||
Deferred incentive income | 0 | |||
Debt obligations payable | 0 | |||
Other liabilities | 473 | |||
Total Liabilities | $ 5,679 | |||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 0 | |||
Equity | ||||
Paid-in capital | 5,691 | |||
Retained earnings (accumulated deficit) | (4,070) | |||
Accumulated other comprehensive income (loss) | 0 | |||
Total Fortress shareholders’ equity | 1,621 | |||
Principals’ and others’ interests in equity of consolidated subsidiaries | 0 | |||
Total Equity | 1,621 | |||
Total Liabilities, Redeemable Non-controlling Interests and Equity | 7,300 | |||
Fortress Operating Group Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Due from affiliates | (2,274) | |||
Investments | (2,175) | |||
Investments in options | 0 | |||
Deferred tax asset, net | 0 | |||
Other assets | 0 | |||
Total Assets | (4,449) | |||
Liabilities | ||||
Accrued compensation and benefits | 0 | |||
Due to affiliates | (2,274) | |||
Deferred incentive income | 0 | |||
Debt obligations payable | 0 | |||
Other liabilities | 0 | |||
Total Liabilities | $ (2,274) | |||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 0 | |||
Equity | ||||
Paid-in capital | (2,291) | |||
Retained earnings (accumulated deficit) | 116 | |||
Accumulated other comprehensive income (loss) | 0 | |||
Total Fortress shareholders’ equity | (2,175) | |||
Principals’ and others’ interests in equity of consolidated subsidiaries | 0 | |||
Total Equity | (2,175) | |||
Total Liabilities, Redeemable Non-controlling Interests and Equity | (4,449) | |||
Fortress Investment Group LLC Consolidated (Other than FOG) | ||||
Assets | ||||
Cash and cash equivalents | 128 | 357 | ||
Due from affiliates | 4,580 | |||
Investments | 471,248 | |||
Investments in options | 0 | |||
Deferred tax asset, net | 415,915 | |||
Other assets | 13,412 | |||
Total Assets | 905,283 | |||
Liabilities | ||||
Accrued compensation and benefits | 0 | |||
Due to affiliates | 296,916 | |||
Deferred incentive income | 0 | |||
Debt obligations payable | 0 | |||
Other liabilities | 0 | |||
Total Liabilities | $ 296,916 | |||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 0 | |||
Equity | ||||
Paid-in capital | 1,922,869 | |||
Retained earnings (accumulated deficit) | (1,312,093) | |||
Accumulated other comprehensive income (loss) | (2,409) | |||
Total Fortress shareholders’ equity | 608,367 | |||
Principals’ and others’ interests in equity of consolidated subsidiaries | 0 | |||
Total Equity | 608,367 | |||
Total Liabilities, Redeemable Non-controlling Interests and Equity | 905,283 | |||
Elimination Adjustments | ||||
Assets | ||||
Cash and cash equivalents | 0 | $ 0 | ||
Due from affiliates | (4,994) | |||
Investments | (471,248) | |||
Investments in options | 0 | |||
Deferred tax asset, net | 0 | |||
Other assets | 0 | |||
Total Assets | (476,242) | |||
Liabilities | ||||
Accrued compensation and benefits | 0 | |||
Due to affiliates | (4,994) | |||
Deferred incentive income | 0 | |||
Debt obligations payable | 0 | |||
Other liabilities | 0 | |||
Total Liabilities | $ (4,994) | |||
Commitments and Contingencies | ||||
Redeemable Non-controlling Interests, Investment Company - consolidated VIE | $ 0 | |||
Equity | ||||
Paid-in capital | (5,776,602) | |||
Retained earnings (accumulated deficit) | 4,802,714 | |||
Accumulated other comprehensive income (loss) | 8,089 | |||
Total Fortress shareholders’ equity | (965,799) | |||
Principals’ and others’ interests in equity of consolidated subsidiaries | 494,551 | |||
Total Equity | (471,248) | |||
Total Liabilities, Redeemable Non-controlling Interests and Equity | $ (476,242) |
CONSOLIDATING FINANCIAL INFOR81
CONSOLIDATING FINANCIAL INFORMATION (Consolidating Statement of Operations Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues | ||||
Management fees: affiliates | $ 150,936 | $ 136,045 | $ 278,643 | $ 265,755 |
Management fees: non-affiliates | 14,966 | 17,716 | 30,257 | 35,338 |
Incentive income: affiliates | 82,158 | 60,442 | 106,381 | 94,693 |
Incentive income: non-affiliates | 296 | 44 | 296 | 687 |
Expense reimbursements: affiliates | 53,991 | 51,662 | 108,556 | 102,848 |
Expense reimbursements: non-affiliates | 3,568 | 2,614 | 6,816 | 5,062 |
Other revenues (affiliate portion disclosed in Note 6) | 2,573 | 1,821 | 4,228 | 3,071 |
Total Revenues | 308,488 | 270,344 | 535,177 | 507,454 |
Expenses | ||||
Compensation and benefits | 199,108 | 168,114 | 377,996 | 356,633 |
General, administrative and other | 45,185 | 42,186 | 88,166 | 80,009 |
Depreciation and amortization | 12,768 | 5,037 | 18,099 | 9,338 |
Interest expense | 1,039 | 947 | 1,878 | 1,638 |
Transfer of interest in Graticule | 0 | 0 | 101,000 | 0 |
Total Expenses | 258,100 | 216,284 | 587,139 | 447,618 |
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | (6,787) | 4,864 | 24,774 | (6,191) |
Tax receivable agreement liability adjustment | (7,500) | 0 | (7,500) | 0 |
Earnings (losses) from equity method investees | (36,321) | 22,448 | 5,387 | 42,822 |
Gain on transfer of Graticule | 0 | 0 | 134,400 | 0 |
Total Other Income (Loss) | (50,608) | 27,312 | 157,061 | 36,631 |
Income (Loss) Before Income Taxes | (220) | 81,372 | 105,099 | 96,467 |
Income tax benefit (expense) | 5,199 | (7,916) | (13,200) | (13,910) |
Net Income (Loss) | 4,979 | 73,456 | 91,899 | 82,557 |
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 1,653 | 42,100 | 53,876 | 48,177 |
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 10 | 157 | (6) | 157 |
Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | $ 3,316 | $ 31,199 | 38,029 | $ 34,223 |
Fortress Operating Group Combined | ||||
Revenues | ||||
Management fees: affiliates | 275,184 | |||
Management fees: non-affiliates | 30,161 | |||
Incentive income: affiliates | 106,381 | |||
Incentive income: non-affiliates | 296 | |||
Expense reimbursements: affiliates | 88,823 | |||
Expense reimbursements: non-affiliates | 4,865 | |||
Other revenues (affiliate portion disclosed in Note 6) | 4,239 | |||
Total Revenues | 509,949 | |||
Expenses | ||||
Compensation and benefits | 353,343 | |||
General, administrative and other | 86,981 | |||
Depreciation and amortization | 18,026 | |||
Interest expense | 1,772 | |||
Transfer of interest in Graticule | 101,000 | |||
Total Expenses | 561,122 | |||
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | 24,774 | |||
Tax receivable agreement liability adjustment | 0 | |||
Earnings (losses) from equity method investees | 5,387 | |||
Gain on transfer of Graticule | 134,400 | |||
Total Other Income (Loss) | 164,561 | |||
Income (Loss) Before Income Taxes | 113,388 | |||
Income tax benefit (expense) | (10,018) | |||
Net Income (Loss) | 103,370 | |||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 916 | |||
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | (6) | |||
Fortress Operating Group Combined | Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | 102,460 | |||
FOE II LP | ||||
Revenues | ||||
Management fees: affiliates | 3,459 | |||
Management fees: non-affiliates | 96 | |||
Incentive income: affiliates | 0 | |||
Incentive income: non-affiliates | 0 | |||
Expense reimbursements: affiliates | 19,733 | |||
Expense reimbursements: non-affiliates | 1,951 | |||
Other revenues (affiliate portion disclosed in Note 6) | 0 | |||
Total Revenues | 25,239 | |||
Expenses | ||||
Compensation and benefits | 24,653 | |||
General, administrative and other | 1,185 | |||
Depreciation and amortization | 73 | |||
Interest expense | 63 | |||
Transfer of interest in Graticule | 0 | |||
Total Expenses | 25,974 | |||
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Earnings (losses) from equity method investees | 0 | |||
Gain on transfer of Graticule | 0 | |||
Total Other Income (Loss) | 0 | |||
Income (Loss) Before Income Taxes | (735) | |||
Income tax benefit (expense) | (4) | |||
Net Income (Loss) | (739) | |||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
FOE II LP | Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | (739) | |||
Fortress Operating Group Eliminations | ||||
Revenues | ||||
Management fees: affiliates | 0 | |||
Management fees: non-affiliates | 0 | |||
Incentive income: affiliates | 0 | |||
Incentive income: non-affiliates | 0 | |||
Expense reimbursements: affiliates | 0 | |||
Expense reimbursements: non-affiliates | 0 | |||
Other revenues (affiliate portion disclosed in Note 6) | 0 | |||
Total Revenues | 0 | |||
Expenses | ||||
Compensation and benefits | 0 | |||
General, administrative and other | 0 | |||
Depreciation and amortization | 0 | |||
Interest expense | (63) | |||
Transfer of interest in Graticule | 0 | |||
Total Expenses | (63) | |||
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Earnings (losses) from equity method investees | 0 | |||
Gain on transfer of Graticule | 0 | |||
Total Other Income (Loss) | 0 | |||
Income (Loss) Before Income Taxes | 63 | |||
Income tax benefit (expense) | 0 | |||
Net Income (Loss) | 63 | |||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Fortress Operating Group Eliminations | Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | 63 | |||
Fortress Investment Group LLC Consolidated (Other than FOG) | ||||
Revenues | ||||
Management fees: affiliates | 0 | |||
Management fees: non-affiliates | 0 | |||
Incentive income: affiliates | 0 | |||
Incentive income: non-affiliates | 0 | |||
Expense reimbursements: affiliates | 0 | |||
Expense reimbursements: non-affiliates | 0 | |||
Other revenues (affiliate portion disclosed in Note 6) | 0 | |||
Total Revenues | 0 | |||
Expenses | ||||
Compensation and benefits | 0 | |||
General, administrative and other | 0 | |||
Depreciation and amortization | 0 | |||
Interest expense | 117 | |||
Transfer of interest in Graticule | 0 | |||
Total Expenses | 117 | |||
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | 0 | |||
Tax receivable agreement liability adjustment | (7,500) | |||
Earnings (losses) from equity method investees | 48,824 | |||
Gain on transfer of Graticule | 0 | |||
Total Other Income (Loss) | 41,324 | |||
Income (Loss) Before Income Taxes | 41,207 | |||
Income tax benefit (expense) | (3,178) | |||
Net Income (Loss) | 38,029 | |||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Fortress Investment Group LLC Consolidated (Other than FOG) | Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | 38,029 | |||
Elimination Adjustments | ||||
Revenues | ||||
Management fees: affiliates | 0 | |||
Management fees: non-affiliates | 0 | |||
Incentive income: affiliates | 0 | |||
Incentive income: non-affiliates | 0 | |||
Expense reimbursements: affiliates | 0 | |||
Expense reimbursements: non-affiliates | 0 | |||
Other revenues (affiliate portion disclosed in Note 6) | (11) | |||
Total Revenues | (11) | |||
Expenses | ||||
Compensation and benefits | 0 | |||
General, administrative and other | 0 | |||
Depreciation and amortization | 0 | |||
Interest expense | (11) | |||
Transfer of interest in Graticule | 0 | |||
Total Expenses | (11) | |||
Other Income (Loss) | ||||
Gains (losses) (affiliate portion disclosed in Note 3) | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Earnings (losses) from equity method investees | (48,824) | |||
Gain on transfer of Graticule | 0 | |||
Total Other Income (Loss) | (48,824) | |||
Income (Loss) Before Income Taxes | (48,824) | |||
Income tax benefit (expense) | 0 | |||
Net Income (Loss) | (48,824) | |||
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries | 52,960 | |||
Redeemable non-controlling interests in Income (Loss) of Consolidated Subsidiaries | 0 | |||
Elimination Adjustments | Class A Shares | ||||
Other Income (Loss) | ||||
Net income (loss) attributable to Class A shareholders | $ (101,784) |
CONSOLIDATING FINANCIAL INFOR82
CONSOLIDATING FINANCIAL INFORMATION (Consolidating Statement of Cash Flows Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows From Operating Activities | ||||
Net income (loss) | $ 4,979 | $ 73,456 | $ 91,899 | $ 82,557 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 12,768 | 5,037 | 18,099 | 9,338 |
Other amortization (included in interest expense) | 390 | 390 | ||
(Earnings) losses from equity method investees | 36,321 | (22,448) | (5,387) | (42,822) |
Distributions of earnings from equity method investees | 23,756 | 51,204 | ||
(Gains) losses | 6,787 | (4,864) | (24,774) | 6,191 |
Deferred incentive income | (44,744) | (23,859) | (65,709) | (53,362) |
Deferred tax (benefit) expense | (14,066) | 10,270 | 4,448 | 12,756 |
Options received from affiliates | (25,158) | (1,604) | ||
Tax receivable agreement liability adjustment | 7,500 | 0 | 7,500 | 0 |
Equity-based compensation | 25,388 | 18,334 | ||
Options in affiliates granted to employees | 5,681 | 4,052 | ||
Other | 356 | (764) | ||
Transfer of interest in Graticule | 0 | 0 | 101,000 | 0 |
Gain on transfer of Graticule | 0 | 0 | (134,400) | 0 |
Cash flows due to changes in | ||||
Due from affiliates | 18,392 | 3,146 | ||
Other assets | (5,927) | 30,487 | ||
Accrued compensation and benefits | (157,551) | (187,033) | ||
Due to affiliates | (17,007) | (30,248) | ||
Deferred incentive income | 74,610 | 59,128 | ||
Other liabilities | 2,810 | 4,573 | ||
Purchase of investments by consolidated funds | (66,965) | (144,313) | ||
Proceeds from sale of investments by consolidated funds | 53,494 | 126,240 | ||
Receivables from brokers and counterparties | (211) | (41,302) | ||
Due to brokers and counterparties | 2,727 | 7,305 | ||
Net cash provided by (used in) operating activities | (72,539) | (85,747) | ||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | (18,862) | (6,012) | ||
Distributions of capital from equity method investees | 155,255 | 321,085 | ||
Purchase of securities | (883) | (7,217) | ||
Proceeds from sale of securities | 18,101 | 74,922 | ||
Proceeds from exercise of options | 51,543 | 0 | ||
Purchase of fixed assets | (11,075) | (4,176) | ||
Net cash provided by (used in) investing activities | 194,079 | 352,626 | ||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | 0 | |||
Repurchase of shares and RSUs | (9,676) | |||
Capital contributions (distributions) | 0 | |||
Dividends and dividend equivalents paid | (104,554) | (32,583) | ||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 283 | 3,670 | ||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | (167,554) | (78,833) | ||
Excess tax benefits from delivery of RSUs | 4,476 | 2,931 | ||
Redeemable non-controlling interests - (distributions) contributions | (1,692) | 16,253 | ||
Net cash provided by (used in) financing activities | (278,717) | (376,972) | ||
Net Increase (Decrease) in Cash and Cash Equivalents | (157,177) | (110,093) | ||
Cash and Cash Equivalents, Beginning of Period | 391,089 | 364,583 | ||
Cash and Cash Equivalents, End of Period | 233,912 | $ 254,490 | 233,912 | $ 254,490 |
Fortress Operating Group Combined | ||||
Cash Flows From Operating Activities | ||||
Net income (loss) | 103,370 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 18,026 | |||
Other amortization (included in interest expense) | 390 | |||
(Earnings) losses from equity method investees | (5,387) | |||
Distributions of earnings from equity method investees | 23,756 | |||
(Gains) losses | (24,774) | |||
Deferred incentive income | (65,709) | |||
Deferred tax (benefit) expense | 2,057 | |||
Options received from affiliates | (25,158) | |||
Tax receivable agreement liability adjustment | 0 | |||
Equity-based compensation | 25,388 | |||
Options in affiliates granted to employees | 5,681 | |||
Other | 356 | |||
Transfer of interest in Graticule | 101,000 | |||
Gain on transfer of Graticule | (134,400) | |||
Cash flows due to changes in | ||||
Due from affiliates | 17,967 | |||
Other assets | (3,318) | |||
Accrued compensation and benefits | (157,337) | |||
Due to affiliates | (17,100) | |||
Deferred incentive income | 74,610 | |||
Other liabilities | 9,806 | |||
Purchase of investments by consolidated funds | (66,965) | |||
Proceeds from sale of investments by consolidated funds | 53,494 | |||
Receivables from brokers and counterparties | (211) | |||
Due to brokers and counterparties | 2,727 | |||
Net cash provided by (used in) operating activities | (61,731) | |||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | (18,862) | |||
Distributions of capital from equity method investees | 155,255 | |||
Purchase of securities | (883) | |||
Proceeds from sale of securities | 18,101 | |||
Proceeds from exercise of options | 51,543 | |||
Purchase of fixed assets | (11,075) | |||
Net cash provided by (used in) investing activities | 194,079 | |||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | (57,081) | |||
Repurchase of shares and RSUs | (9,676) | |||
Capital contributions (distributions) | 57,081 | |||
Dividends and dividend equivalents paid | (110,220) | |||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 283 | |||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | (167,554) | |||
Excess tax benefits from delivery of RSUs | 0 | |||
Redeemable non-controlling interests - (distributions) contributions | (1,692) | |||
Net cash provided by (used in) financing activities | (288,859) | |||
Net Increase (Decrease) in Cash and Cash Equivalents | (156,511) | |||
Cash and Cash Equivalents, Beginning of Period | 389,782 | |||
Cash and Cash Equivalents, End of Period | 233,271 | 233,271 | ||
FOE II LP | ||||
Cash Flows From Operating Activities | ||||
Net income (loss) | (739) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 73 | |||
Other amortization (included in interest expense) | 0 | |||
(Earnings) losses from equity method investees | 0 | |||
Distributions of earnings from equity method investees | 0 | |||
(Gains) losses | 0 | |||
Deferred incentive income | 0 | |||
Deferred tax (benefit) expense | 0 | |||
Options received from affiliates | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Equity-based compensation | 0 | |||
Options in affiliates granted to employees | 0 | |||
Other | 0 | |||
Transfer of interest in Graticule | 0 | |||
Gain on transfer of Graticule | 0 | |||
Cash flows due to changes in | ||||
Due from affiliates | 10 | |||
Other assets | 42 | |||
Accrued compensation and benefits | (214) | |||
Due to affiliates | 0 | |||
Deferred incentive income | 0 | |||
Other liabilities | 391 | |||
Purchase of investments by consolidated funds | 0 | |||
Proceeds from sale of investments by consolidated funds | 0 | |||
Receivables from brokers and counterparties | 0 | |||
Due to brokers and counterparties | 0 | |||
Net cash provided by (used in) operating activities | (437) | |||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | 0 | |||
Distributions of capital from equity method investees | 0 | |||
Purchase of securities | 0 | |||
Proceeds from sale of securities | 0 | |||
Proceeds from exercise of options | 0 | |||
Purchase of fixed assets | 0 | |||
Net cash provided by (used in) investing activities | 0 | |||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | 0 | |||
Repurchase of shares and RSUs | 0 | |||
Capital contributions (distributions) | 0 | |||
Dividends and dividend equivalents paid | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | 0 | |||
Excess tax benefits from delivery of RSUs | 0 | |||
Redeemable non-controlling interests - (distributions) contributions | 0 | |||
Net cash provided by (used in) financing activities | 0 | |||
Net Increase (Decrease) in Cash and Cash Equivalents | (437) | |||
Cash and Cash Equivalents, Beginning of Period | 950 | |||
Cash and Cash Equivalents, End of Period | 513 | 513 | ||
Fortress Operating Group Eliminations | ||||
Cash Flows From Operating Activities | ||||
Net income (loss) | 63 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 0 | |||
Other amortization (included in interest expense) | 0 | |||
(Earnings) losses from equity method investees | 0 | |||
Distributions of earnings from equity method investees | 0 | |||
(Gains) losses | 0 | |||
Deferred incentive income | 0 | |||
Deferred tax (benefit) expense | 0 | |||
Options received from affiliates | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Equity-based compensation | 0 | |||
Options in affiliates granted to employees | 0 | |||
Other | 0 | |||
Transfer of interest in Graticule | 0 | |||
Gain on transfer of Graticule | 0 | |||
Cash flows due to changes in | ||||
Due from affiliates | 0 | |||
Other assets | (63) | |||
Accrued compensation and benefits | 0 | |||
Due to affiliates | 0 | |||
Deferred incentive income | 0 | |||
Other liabilities | 0 | |||
Purchase of investments by consolidated funds | 0 | |||
Proceeds from sale of investments by consolidated funds | 0 | |||
Receivables from brokers and counterparties | 0 | |||
Due to brokers and counterparties | 0 | |||
Net cash provided by (used in) operating activities | 0 | |||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | 0 | |||
Distributions of capital from equity method investees | 0 | |||
Purchase of securities | 0 | |||
Proceeds from sale of securities | 0 | |||
Proceeds from exercise of options | 0 | |||
Purchase of fixed assets | 0 | |||
Net cash provided by (used in) investing activities | 0 | |||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | 0 | |||
Repurchase of shares and RSUs | 0 | |||
Capital contributions (distributions) | 0 | |||
Dividends and dividend equivalents paid | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | 0 | |||
Excess tax benefits from delivery of RSUs | 0 | |||
Redeemable non-controlling interests - (distributions) contributions | 0 | |||
Net cash provided by (used in) financing activities | 0 | |||
Net Increase (Decrease) in Cash and Cash Equivalents | 0 | |||
Cash and Cash Equivalents, Beginning of Period | 0 | |||
Cash and Cash Equivalents, End of Period | 0 | 0 | ||
Fortress Investment Group LLC Consolidated (Other than FOG) | ||||
Cash Flows From Operating Activities | ||||
Net income (loss) | 38,029 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 0 | |||
Other amortization (included in interest expense) | 0 | |||
(Earnings) losses from equity method investees | (48,824) | |||
Distributions of earnings from equity method investees | 0 | |||
(Gains) losses | 0 | |||
Deferred incentive income | 0 | |||
Deferred tax (benefit) expense | 2,391 | |||
Options received from affiliates | 0 | |||
Tax receivable agreement liability adjustment | 7,500 | |||
Equity-based compensation | 0 | |||
Options in affiliates granted to employees | 0 | |||
Other | 0 | |||
Transfer of interest in Graticule | 0 | |||
Gain on transfer of Graticule | 0 | |||
Cash flows due to changes in | ||||
Due from affiliates | 415 | |||
Other assets | (2,588) | |||
Accrued compensation and benefits | 0 | |||
Due to affiliates | 93 | |||
Deferred incentive income | 0 | |||
Other liabilities | (7,387) | |||
Purchase of investments by consolidated funds | 0 | |||
Proceeds from sale of investments by consolidated funds | 0 | |||
Receivables from brokers and counterparties | 0 | |||
Due to brokers and counterparties | 0 | |||
Net cash provided by (used in) operating activities | (10,371) | |||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | (57,081) | |||
Distributions of capital from equity method investees | 102,167 | |||
Purchase of securities | 0 | |||
Proceeds from sale of securities | 0 | |||
Proceeds from exercise of options | 0 | |||
Purchase of fixed assets | 0 | |||
Net cash provided by (used in) investing activities | 45,086 | |||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | 57,081 | |||
Repurchase of shares and RSUs | 0 | |||
Capital contributions (distributions) | 0 | |||
Dividends and dividend equivalents paid | (96,501) | |||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | 0 | |||
Excess tax benefits from delivery of RSUs | 4,476 | |||
Redeemable non-controlling interests - (distributions) contributions | 0 | |||
Net cash provided by (used in) financing activities | (34,944) | |||
Net Increase (Decrease) in Cash and Cash Equivalents | (229) | |||
Cash and Cash Equivalents, Beginning of Period | 357 | |||
Cash and Cash Equivalents, End of Period | 128 | 128 | ||
Elimination Adjustments | ||||
Cash Flows From Operating Activities | ||||
Net income (loss) | (48,824) | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||
Depreciation and amortization | 0 | |||
Other amortization (included in interest expense) | 0 | |||
(Earnings) losses from equity method investees | 48,824 | |||
Distributions of earnings from equity method investees | 0 | |||
(Gains) losses | 0 | |||
Deferred incentive income | 0 | |||
Deferred tax (benefit) expense | 0 | |||
Options received from affiliates | 0 | |||
Tax receivable agreement liability adjustment | 0 | |||
Equity-based compensation | 0 | |||
Options in affiliates granted to employees | 0 | |||
Other | 0 | |||
Transfer of interest in Graticule | 0 | |||
Gain on transfer of Graticule | 0 | |||
Cash flows due to changes in | ||||
Due from affiliates | 0 | |||
Other assets | 0 | |||
Accrued compensation and benefits | 0 | |||
Due to affiliates | 0 | |||
Deferred incentive income | 0 | |||
Other liabilities | 0 | |||
Purchase of investments by consolidated funds | 0 | |||
Proceeds from sale of investments by consolidated funds | 0 | |||
Receivables from brokers and counterparties | 0 | |||
Due to brokers and counterparties | 0 | |||
Net cash provided by (used in) operating activities | 0 | |||
Cash Flows From Investing Activities | ||||
Contributions to equity method investees | 57,081 | |||
Distributions of capital from equity method investees | (102,167) | |||
Purchase of securities | 0 | |||
Proceeds from sale of securities | 0 | |||
Proceeds from exercise of options | 0 | |||
Purchase of fixed assets | 0 | |||
Net cash provided by (used in) investing activities | (45,086) | |||
Cash Flows From Financing Activities | ||||
Issuance (purchase) of Class A shares (RSU settlements) | 0 | |||
Repurchase of shares and RSUs | 0 | |||
Capital contributions (distributions) | (57,081) | |||
Dividends and dividend equivalents paid | 102,167 | |||
Principals' and others' interests in equity of consolidated subsidiaries - contributions | 0 | |||
Principals' and others' interests in equity of consolidated subsidiaries - distributions | 0 | |||
Excess tax benefits from delivery of RSUs | 0 | |||
Redeemable non-controlling interests - (distributions) contributions | 0 | |||
Net cash provided by (used in) financing activities | 45,086 | |||
Net Increase (Decrease) in Cash and Cash Equivalents | 0 | |||
Cash and Cash Equivalents, Beginning of Period | 0 | |||
Cash and Cash Equivalents, End of Period | $ 0 | $ 0 |