Fortress Reports Second Quarter 2012 Results And Announces Dividend Of $0.05 Per Share

SUMMARY FINANCIAL RESULTS

Fortress’s business model is highly diversified, and management believes that this positions the company to capitalize on opportunities for investing, capital formation and harvesting profits that can occur at different points in any cycle for our individual businesses. The cornerstone of Fortress’s business model is its ability to generate stable and predictable management fees, which is a function of the majority of alternative assets under management residing in long-term investment structures. Fortress’s alternatives businesses also generate variable incentive income based on performance, and this incentive income can contribute meaningfully to financial results. Balance sheet investments represent a third component of Fortress’s business model, and the company has built substantial value in these investments, which are made in Fortress funds alongside the company’s limited partners.

The table below summarizes Fortress’s operating results for the three and six months ended June 30, 2012. The consolidated GAAP statement of operations and balance sheet are presented at the end of this press release.

		2Q				1Q				2Q				% Change						1H				1H				% Change
			2012				2012				2011			QoQ			YoY				2012				2011			YoY
(in millions, except per share amount)
GAAP
Net income (loss)		$	14			$	(24	)		$	(246	)		N/M			N/M			$	(10	)		$	(501	)		N/M
Net income (loss) attributable to Class A Shareholders		$	5			$	(30	)		$	(95	)		N/M			N/M			$	(25	)		$	(198	)		N/M
Per diluted share		$	(0.12	)		$	(0.16	)		$	(0.56	)		N/M			N/M			$	(0.13	)		$	(1.11	)		N/M
Weighted average Class A shares outstanding, diluted			516				516				491										516				491
Distributable Earnings (non-GAAP)
Fund management DE		$	53			$	56			$	54			-5	%		-2	%		$	109			$	149			-27	%
Pre-tax DE		$	50			$	57			$	46			-12	%		9	%		$	107			$	149			-28	%
Per dividend paying share/unit		$	0.09			$	0.11			$	0.09			-15	%		7	%		$	0.20			$	0.28			-28	%
Weighted average dividend paying shares and units outstanding			533				533				526										533				526
Assets Under Management
Private Equity		$	13,826			$	13,239			$	13,256			4	%		4	%		$	13,826			$	13,256			4	%
Credit			11,452				12,269				11,315			-7	%		1	%			11,452				11,315			1	%
Liquid Markets			4,398				4,840				6,321			-9	%		-30	%			4,398				6,321			-30	%
Logan Circle			18,112				16,084				12,931			13	%		40	%			18,112				12,931			40	%
Total Assets Under Management		$	47,788			$	46,432			$	43,823			3	%		9	%		$	47,788			$	43,823			9	%

CONSOLIDATED GAAP RESULTS

Fortress recorded GAAP net income of $14 million, or a $0.12 loss per diluted share in the second quarter of 2012, compared with a GAAP net loss of $246 million, or $0.56 per diluted share, in the second quarter of 2011. Our diluted loss per share for all periods presented includes the income tax effects to net income (loss) attributable to Class A Shareholders from the assumed conversion of Fortress Operating Group Units and fully vested Restricted Partnership Units to Class A shares.

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