Fortress Reports Third 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. Fortress’s business model generates 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 funds’ limited partners.

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

		3Q				2Q				3Q				% Change								YTD September								% Change
		2012				2012				2011				QoQ				YoY				2012				2011				YoY
(in millions, except per share amount)
GAAP
Net income (loss)		$	7			$	14			$	(382	)			-53	%			N/M			$	(3	)		$	(883	)		N/M
Net income (loss) attributable to Class A Shareholders		$	1			$	5			$	(142	)			-86	%			N/M			$	(24	)		$	(340	)		N/M
Per diluted share		$	(0.04	)		$	(0.12	)		$	(0.83	)			N/M				N/M			$	(0.13	)		$	(1.88	)		N/M
Weighted average Class A shares outstanding, diluted			520				516				496												517				492
Distributable Earnings (non-GAAP)
Fund management DE		$	63			$	53			$	51				19	%			24	%		$	172			$	200			-14	%
Pre-tax DE		$	64			$	50			$	43				28	%			49	%		$	171			$	192			-11	%
Per dividend paying share/unit		$	0.12			$	0.09			$	0.08				27	%			47	%		$	0.32			$	0.36			-12	%
Weighted average dividend paying shares and units outstanding			537				533				530												534				527
Assets Under Management
Private Equity		$	14,718			$	13,826			$	12,708				6	%			16	%		$	14,718			$	12,708			16	%
Credit			11,753				11,452				11,833				3	%			-1	%			11,753				11,833			-1	%
Liquid Markets			4,378				4,398				6,165				0	%			-29	%			4,378				6,165			-29	%
Logan Circle			20,626				18,112				12,913				14	%			60	%			20,626				12,913			60	%
Total Assets Under Management		$	51,475			$	47,788			$	43,619				8	%			18	%		$	51,475			$	43,619			18	%

CONSOLIDATED GAAP RESULTS

Fortress recorded GAAP net income of $7 million, or a $0.04 loss per diluted share in the third quarter of 2012, compared with a GAAP net loss of $382 million, or $0.83 loss per diluted share, in the third 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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