NEW YORK – Fortress Investment Group (FIG), which owns Jacksonville-based Florida East Coast Ry., reported today generally accepted accounting principles show a net loss, excluding principals agreement compensation, of $9 million in the second quarter of 2011, compared to a net loss of $14 million in the second quarter of 2010; GAAP net loss attributable to Class A Shareholders in the second quarter of 2011 was $95 million, compared to a net loss of $92 million in the second quarter of 2010.
Assets under management of $43.8 billion as of June 30 was up 5 percent from $41.7 billion as of June 30, 2010.
Pre-tax distributable earnings (DE) of $46 million in the second quarter of 2011, was down from $73 million in the second quarter of 2010; pre-tax DE of 9 cents per dividend paying share in the second quarter of 2011, down 36 percent from 14 cents per dividend paying share in the second quarter of 2010.
Fund management DE of $54 million in the second quarter of 2011, was down 26 percent from $73 million in the second quarter of 2010.
Fortress’s principals, Wesley Edens, Peter Briger, Robert Kauffman, Randal Nardone and Michael Novogratz, entered into new five-year employment agreements, effective as of January 1, 2012.
The board of directors has approved a revised dividend policy under which it will reinstate the quarterly dividend to Class A shareholders beginning in the fourth quarter of 2011. The dividend related to the fourth quarter of 2011 will be 5 cents per share.
Total cash and cash equivalents plus investments net of debt obligations payable of $2.03 per dividend paying share, and GAAP book value per share of $2.09 as of June 30, 2011.
“Today marks more progress for Fortress and our shareholders,” said Daniel Mudd, Fortress CEO. “Our dividend reinstatement reflects the board’s confidence in the financial strength and earnings power of our company, and I am pleased that we are able to reward shareholders for their investment. Our new Principals Agreement ensures that Fortress will continue to benefit from the contributions and leadership of those who founded and built this company.
He continued, “Our earnings today were just off expectations, but further off what we expect from ourselves. In a non-linear and untethered global environment, our Macro funds had a challenging quarter that took our earnings down a notch.”
He said their credit business “continues to generate strong returns, our PE business saw continued valuation gains, our deal pipeline remains robust, and our outlook is optimistic for the second half of the year.”