8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 4, 2013 (February 27, 2013)

Fortress Investment Group LLC

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction

of incorporation)

001-33294	20-5837959
(Commission File Number)	(IRS Employer Identification No.)

1345 Avenue of the Americas, 46th Floor New York, New York	10105
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 798-6100

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operation and Financial Condition.

On February 27, 2013, Fortress Investment Group LLC (the “Company”) issued a press release announcing the Company’s results for the fourth fiscal quarter and the full year ended December 31, 2012. A copy of the Company’s press release and a copy of the transcript of the conference call are attached to this Current Report on Form 8-K (the “Current Report”) as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein solely for purposes of this Item 2.02 disclosure.

This Current Report, including the exhibits attached hereto, is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, unless expressly set forth as being incorporated by reference into such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press release issued by Fortress Investment Group LLC on February 27, 2013
99.2	Transcript of conference call on February 27, 2013

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FORTRESS INVESTMENT GROUP LLC

(Registrant)

/s/ David N. Brooks

David N. Brooks

General Counsel

Date: March 4, 2013

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release issued by Fortress Investment Group LLC on February 27, 2013
99.2	Transcript of conference call on February 27, 2013

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EX-99.1

Exhibit 99.1

Fortress Reports Fourth Quarter & Year End 2012 Results

Announces Dividend of $0.06 per Share

New York, NY. February 27, 2013 – Fortress Investment Group LLC (NYSE: FIG) today reported its fourth quarter and year end 2012 financial results.

FINANCIAL SUMMARY

• Announced 20% increase in base quarterly dividend to $0.06 per dividend paying share, effective for the fourth quarter of 2012 and full year 2013

• Repurchased 51.3 million dividend paying shares at a price of $3.50 per share, representing approximately 10% of dividend-paying shares outstanding

• Assets under management (“AUM”) of $53.4 billion as of December 31, 2012, an increase of 4% from the third quarter of 2012 and 22% from the fourth quarter of 2011

• GAAP net income of $222 million and $219 million for the fourth quarter and year ended December 31, 2012, respectively; GAAP book value per share of $2.60 as of December 31, 2012

• Pre-tax distributable earnings (“DE”) of $107 million and $278 million for the fourth quarter and year ended December 31, 2012, respectively, compared to pre-tax DE of $50 million and $242 million for the fourth quarter and year ended December 31, 2011, respectively

• Pre-tax DE per dividend paying share of $0.20 and $0.52 for the fourth quarter and year ended December 31, 2012, respectively, compared to pre-tax DE per dividend paying share of $0.09 and $0.46 for the fourth quarter and year ended December 31, 2011, respectively

• Net cash and investments of $2.48 per dividend paying share as of December 31, 2012, up from $2.17 per dividend paying share as of December 31, 2011

• $649 million of embedded unrecognized incentive income across our funds and options in our permanent capital vehicles as of December 31, 2012

• Uncalled capital, or “dry powder,” of $6.2 billion as of December 31, 2012, including approximately $5.0 billion in newer vintage funds available for general investment purposes

• Subsequent to year end, entered into a new $150 million revolving credit facility maturing in February 2016

BUSINESS HIGHLIGHTS

• Raised $1.5 billion of capital across alternatives businesses in the fourth quarter, bringing total alternative capital raised in 2012 to $6.7 billion

• Recorded $0.2 billion of net client outflows for Logan Circle in the fourth quarter, bringing total net client inflows in 2012 to $5.7 billion

• Delivered strong investment performance across all businesses:

• Net fourth quarter 2012 returns of 4.2% in the Drawbridge Special Opportunities Fund LP, 6.0% in the Fortress Macro Funds and 9.5% in the Fortress Asia Macro Funds; net full year 2012 returns of 17.9%, 17.8% and 21.2%, respectively

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• Private Equity fund valuations increased 3.9% during the quarter, and 25.4% in 2012

• Net annualized inception-to-date IRRs through year end for the Credit Opportunities Fund and Credit Opportunities Fund II of 26.9% and 18.5%, respectively

• 13 of 15 Logan Circle strategies outperformed respective benchmarks in the fourth quarter and 14 of 15 strategies outperformed respective benchmarks in 2012

• Subsequent to year end, raised $764 million of permanent equity capital for Newcastle Investment Corp.

“We set and achieved aggressive objectives for 2012, and broad-based momentum built into the close of the year and carried into 2013,” said Randal Nardone, interim Chief Executive Officer. “Our fourth quarter distributable earnings were the highest we have recorded in two years, and we believe only begin to reflect the potential of our company. Investment performance, the most important driver of our success, was outstanding across all of our businesses in 2012, and early 2013 returns in our main Liquid Markets funds have built further on 2012 results. Our strong performance has contributed to robust capital raising, with commitments from new and existing investors totaling $6.7 billion for 2012, and over $1.6 billion in the first two months of 2013. We are pleased with our performance to date and optimistic about our prospects looking ahead.”

“We announced today a 20% increase in our base quarterly dividend, to $0.06 per dividend paying share. This increase reflects visibility into higher management fees in the near-term, driven by the substantial amount of capital raised over the past 14 months, and expectations for increases in AUM going forward. This action supplements a $179 million, or $0.36 per dividend paying share, investment made in the fourth quarter to repurchase nearly 10% of outstanding shares at a substantial discount. We believe that these actions will generate significant value for our current investors in 2013 and beyond.”

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.

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The table below summarizes Fortress’s operating results for the fourth quarter and year ended December 31, 2012. The consolidated GAAP statement of operations and balance sheet are presented at the end of this press release.

	4Q		3Q			4Q			% Change						FY					% Change
	2012		2012			2011			QoQ			YoY			2012		2011			YoY
(in millions, except per share amount)
GAAP
Net income (loss)	$	222	$	7		$	(234	)		N/M			N/M		$	219	$	(1,117	)		N/M
Net income (loss) attributable to Class A Shareholders	$	102	$	1		$	(91	)		N/M			N/M		$	78	$	(432	)		N/M
Per diluted share	$	0.24	$	(0.04	)	$	(0.49	)		N/M			N/M		$	0.27	$	(2.36	)		N/M
Weighted average Class A shares outstanding, diluted		525		520			496									525		493
Distributable Earnings (non-GAAP)
Fund management DE	$	105	$	63		$	53			67	%		98	%	$	277	$	253			9	%
Pre-tax DE	$	107	$	64		$	50			67	%		114	%	$	278	$	242			15	%
Per dividend paying share/unit	$	0.20	$	0.12		$	0.09			69	%		124	%	$	0.52	$	0.46			13	%
Weighted average dividend paying shares and units outstanding		530		537			531									533		528
Assets Under Management
Private Equity	$	14,271	$	14,718		$	12,466			-3	%		14	%	$	14,271	$	12,466			14	%
Credit		13,414		11,753			12,208			14	%		10	%		13,414		12,208			10	%
Liquid Markets		5,060		4,378			5,515			16	%		-8	%		5,060		5,515			-8	%
Logan Circle		20,685		20,626			13,524			0	%		53	%		20,685		13,524			53	%
Total Assets Under Management	$	53,430	$	51,475		$	43,713			4	%		22	%	$	53,430	$	43,713			22	%

CONSOLIDATED GAAP RESULTS

Fortress recorded GAAP net income of $222 million, or $0.24 per diluted share for the fourth quarter of 2012, compared with a GAAP net loss of $234 million, or $0.49 loss per diluted share, for the fourth quarter of 2011. Our diluted earnings 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.

The year-over-year improvement in Fortress’s GAAP results was primarily driven by higher incentive income and the expiration of the Principals Agreement and related compensation expense, a non-economic amortization expense that had accounted for approximately $4.8 billion in compensation expense between the first quarter of 2007 and the fourth quarter of 2011. No amounts were ever paid, or equity issued, in connection with this agreement. This agreement expired at the end of 2011 and will no longer impact Fortress’s financial results.

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CONSOLIDATED SEGMENT RESULTS (NON-GAAP)

This section provides information about each of Fortress’s businesses: (i) Credit, (ii) Private Equity, (iii) Liquid Hedge Funds, and (iv) Logan Circle.

Fortress uses “distributable earnings,” or DE, as a primary metric to manage its businesses and gauge the company’s performance, and it uses DE exclusively to report segment results. Consolidated segment results are non-GAAP information and are not presented as a substitute for Fortress’s GAAP results. Fortress urges you to read “Non-GAAP Information” below.

	As of December 31, 2012
				Private Equity						Liquid Hedge Funds			Credit Funds						Logan Circle Partners
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds
Assets Under Management1	$	53,430		$	10,611		$	3,660		$	5,060		$	5,665		$	7,749		$	20,685
Dry Powder	$	6,150		$	750			N/A			N/A			N/A		$	5,400			N/A
Average Management Fee Rate2					1.2	%		1.5	%		1.7	%		2.0	%		1.4	%		0.2	%
Incentive Eligible NAV Above Incentive Income Threshold3	$	16,269		$	211		$	—		$	3,095		$	4,627		$	8,336			N/A
Undistributed Incentive Income: Unrecognized	$	649		$	11		$	29		$	6		$	94		$	509			N/A
Undistributed Incentive Income: Recognized		—			—			—			—			—			—			N/A
Undistributed Incentive Income4	$	649		$	11		$	29		$	6		$	94		$	509			N/A
	Three Months Ended December 31, 2012
	Total			Private Equity						Liquid Hedge Funds			Credit Funds						Logan Circle Partners
(in millions)				Funds			Castles						Hedge Funds			PE Funds
Third-Party Capital Raised	$	1,485		$	71		$	6		$	546		$	31		$	831			N/A
Segment Revenues
Management fees	$	131		$	31		$	14		$	19		$	25		$	34		$	8
Incentive income		114			2			—			47			38			27			—
Total		245			33			14			66			63			61			8
Segment Expenses
Operating expenses		(91	)		(11	)		(4	)		(23	)		(16	)		(26	)		(11	)
Profit sharing compensation expenses		(42	)		(1	)		—			(10	)		(18	)		(13	)		—
Unallocated Expenses		1			—			—			—			—			—			—
Total		(132	)		(12	)		(4	)		(33	)		(34	)		(39	)		(11	)
Principal Performance Payments		(8	)		—			—			(3	)		(4	)		(1	)		—
Fund Management DE	$	105		$	21		$	10		$	30		$	25		$	21		$	(3	)
Pre-tax Distributable Earnings	$	107		$	21		$	10		$	30		$	25		$	21		$	(3	)

Pre-tax DE was $107 million in the fourth quarter of 2012, up from $50 million in the fourth quarter of 2011. The year-over-year increase was primarily due to higher incentive income and management fees earned from our funds, partially offset by higher compensation related expenses.

Management fees were $131 million in the fourth quarter of 2012, up from $121 million for the fourth quarter of 2011, primarily due to higher management fees from the Credit Private Equity Funds and Logan Circle, partially offset by lower management fees from the Liquid and Credit Hedge Funds. Notably, 84% of the alternative assets under management at year end were in funds with long-^term, locked-up structures, which provides for a stable, predictable base of management fees.

¹ The Assets Under Management presented for the Credit Hedge Funds includes $496 million related to the third-party originated Value Recovery Funds. Fortress earns fees from the Value Recovery Funds based only on collections.

²  The Average Management Fee Rate presented for the Credit Hedge Funds excludes the third-party originated Value Recovery Funds. See footnote (1) above.

³  The Incentive Eligible NAV Above Threshold presented for hedge funds excludes sidepocket investments. The Incentive Eligible NAV Above Threshold presented for Private Equity Funds and Credit Private Equity Funds represents total fund NAV.

⁴  The Undistributed Incentive Income presented includes the impact of sidepocket investments on hedge funds. Undistributed Incentive Income for Private Equity Funds, Credit Private Equity Funds and hedge fund sidepocket and redeeming capital account (RCA) investments has not been recognized in Distributable Earnings and will be recognized when realized; Undistributed Incentive Income for other hedge fund investments was recognized in Distributable Earnings when earned. Undistributed Incentive Income for Private Equity Funds includes incentive income amounts of which Fortress is entitled to approximately 50%. Undistributed Incentive Income for Private Equity Castles includes incentive income that would have been recorded in Distributable Earnings if Fortress had exercised all of its in-the-money Newcastle options and sold all of the resulting shares at their December 31, 2012 closing price.

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Incentive income recorded in the fourth quarter of 2012 totaled $114 million, compared to $46 million recorded in the fourth quarter of 2011. This year-over-year increase was driven by higher incentive income generated by the Liquid Hedge Funds, Credit Hedge Funds, Credit Private Equity Funds and Private Equity Funds. Additionally, Fortress had $649 million in undistributed, unrecognized incentive income based on investment valuations at December 31, 2012. This includes $620 million from our funds and $29 million from options in our permanent capital vehicles.

The Company’s segment revenues and distributable earnings will fluctuate materially depending upon the performance of its funds and the realization events within its private equity businesses, as well as other factors. Accordingly, the revenues and profits in any particular period should not be expected to be indicative of future results.

ASSETS UNDER MANAGEMENT

As of December 31, 2012, assets under management (“AUM”) totaled $53.4 billion, up 4% from $51.5 billion as of September 30, 2012 and up 22% from $43.7 billion as of December 31, 2011. During the fourth quarter of 2012, Fortress raised $1.4 billion of capital that was directly added to AUM, had a $1.4 billion increase in invested capital and had a $1.0 billion increase in its fund valuations. These increases to AUM were partially offset by (i) $1.4 billion of capital distributions to investors, (ii) $0.2 billion of RCA payments to Credit Hedge Fund investors and (iii) $0.2 billion of net client outflows for Logan Circle. As of December 31, 2012, the Private Equity Funds and Credit PE Funds had approximately $0.8 billion and $5.4 billion of uncalled capital, respectively, that will become assets under management if deployed/called. Uncalled capital in our Credit PE Funds includes $1.1 billion that is only available for follow-on investments, management fees and other fund expenses.

BUSINESS SEGMENT RESULTS

Below is a discussion of fourth quarter 2012 segment results and business highlights.

Credit:

• Drawbridge Special Opportunities Fund LP had a net return of 4.2% for the fourth quarter of 2012 and 17.9% for the year ended December 31, 2012

• Raised $0.9 billion of third party capital in the fourth quarter, bringing total capital raised in full year 2012 to $4.6 billion

• Deployed $0.9 billion of capital during the quarter and distributed $0.4 billion of capital back to limited partners

• Held final close for Fortress Japan Opportunity Fund II (“FJOF II”) at its cap of ¥130 billion, or approximately $1.7 billion

(See supplemental data on pages 19-20 for more detail on Credit results)

The Credit business, which includes our Credit Hedge Funds and Credit Private Equity Funds, generated pre-tax DE of $46 million in the fourth quarter of 2012, which is up from $29 million in the fourth quarter of 2011. During the fourth quarter, the business recorded $65 million of incentive income, comprised of $38 million from hedge funds and $27 million from private-equity style funds.

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On a full year basis, pre-tax DE of $126 million is down slightly from $138 million for full year 2011. This is largely attributable to lower incentive income distributions from our private-equity style funds and higher compensation related expenses, partially offset by higher incentive income from our hedge funds.

In our Credit Hedge funds, the Drawbridge Special Opportunities Funds continued to deliver strong investment performance in the fourth quarter. The onshore fund had a net return of 4.2% in the quarter, bringing full year net returns to 17.9% through December 31, 2012. Net annualized inception-to-date returns in this fund increased to 11.1%. The Credit Hedge Fund segment had a total of $4.6 billion of incentive eligible NAV above performance thresholds as of December 31, 2012.

Fortress’s Credit Private Equity Funds also delivered strong investment performance in the fourth quarter, which contributed to a further increase in unrealized, undistributed incentive income. The Credit Opportunities Fund and Credit Opportunities Fund II had net annualized inception-to-date IRRs of 26.9% and 18.5%, respectively, through December 31, 2012. Unrealized, undistributed incentive income increased $79 million, or 18%, to $509 million in the fourth quarter and has increased $264 million, or 108%, since December 31, 2011.

The Credit team deployed $0.9 billion of dry powder for investments and returned $0.4 billion of capital to our investors in the quarter. For the year ended December 31, 2012, Credit deployed over $2.8 billion of dry powder and returned $2.2 billion of capital to investors. Total Credit Private Equity dry powder - capital committed to the funds but not yet generating management fees - was $5.4 billion as of year end. Of that total, $1.1 billion is only available for follow-on investments, management fees and other fund expenses.

Total capital raised during the fourth quarter and year ended December 31, 2012 was $0.9 billion and $4.6 billion, respectively. Capital raised in the fourth quarter was primarily for our second Japan real estate credit fund, FJOF II, which we successfully closed at its cap of ¥130 billion, or approximately $1.7 billion. FJOF II is a successor fund to the Fortress Japan Opportunity Domestic Fund (“FJOF”), which closed in June 2010 at its cap of approximately $800 million. FJOF had an inception-to-date net annualized IRR of 20.5% through December 31, 2012.

“Investment performance in 2012 was strong across our Credit private equity and hedge fund strategies,” said Pete Briger, Fortress co-Chairman and Credit business co-CIO. “Looking at investment opportunities today, we believe the Credit markets continue to price in far too much optimism and that actual risk exceeds perceived risk by a substantial margin. Over the longer-term, we believe the market should present more compelling opportunities further into the current cycle. The opportunity set that we see in the near- or medium-term will depend in large part on our broad sourcing capabilities and the extent to which European financial institutions accelerate their pace of deleveraging. We will remain patient and opportunistic investors, focused on generating outstanding risk-adjusted returns for our limited partners.”

Private Equity:

• Fund portfolio investment valuations increased 3.9% in the fourth quarter of 2012, bringing full year 2012 appreciation to 25.4%

• Raised $77 million of capital in the fourth quarter, bringing total alternative and permanent equity capital raised in full year 2012 to $1.1 billion

• Subsequent to year end, raised $764 million of permanent equity capital for Newcastle Investment Corp.

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• Subsequent to year end, Newcastle announced plans to spin off all of its investments in mortgage servicing rights (“MSRs”) and other residential assets into a new publicly traded residential-focused mortgage REIT

• Subsequent to year end, announced plans to sell remaining interest in SeaCube Container Leasing (NYSE: BOX)

(See supplemental data on page 18 for more detail on Private Equity results)

The Private Equity business, which includes Private Equity Funds and Castles, had pre-tax DE of $31 million in the fourth quarter of 2012, up slightly from $29 million in the fourth quarter of 2011. Full year 2012 pre-tax DE was $115 million, down $3 million from full year 2011, largely due to lower Private Equity Fund management fees that resulted from changes in the basis on which these fees are calculated in three funds, partially offset by increased Private Equity Fund incentive income. The majority of this incentive income was attributable to an $8 million reversal of previously recognized claw-back reserves recorded for Fund II.

Private Equity Fund investment performance in the fourth quarter and year ended December 31, 2012 was strong, with valuations in underlying investments increasing by 3.9% and 25.4%, respectively. Full year appreciation of these fund investments was driven primarily by our public company investments, which increased 65% in 2012.

During the quarter, fundraising activity included $71 million in capital raised for transportation and infrastructure investments in our WWTAI Fund. Subsequent to year end, we raised an additional $221 million of capital, bringing total capital raised to date for WWTAI to $372 million. For the year ended December 31, 2012, the Private Equity segment raised over $1.1 billion of capital and distributed over $1.0 billion of capital back to investors. Fundraising activity in 2012 was highlighted by the nearly $600 million launch of our MSR Opportunities Funds, as well as $435 million of permanent equity capital raised for Newcastle Investment Corp. (NYSE: NCT). NCT raised an additional $764 million of permanent equity capital in the first two months of 2013, bringing total permanent equity capital raised by NCT in the last 12 months to $1.2 billion.

In January 2013, NCT announced plans to spin off all of its investments in MSRs and certain other residential assets into a new publicly traded real estate investment trust, New Residential Investment Corp. (“New Residential”). New Residential will be externally managed by an affiliate of Fortress and will primarily target opportunistic investments in MSRs, RMBS, servicing advances, non-performing loans and other real estate related investments.

Also in January 2013, SeaCube Container Leasing announced an agreement to sell 100% of its outstanding shares for $23.00 per common share. SeaCube (NYSE: BOX) is the container leasing subsidiary of Seacastle Inc., an intermodal equipment leasing operator Fortress formed in 2007. At the time of the announcement, Fortress Funds owned 8.4 million SeaCube common shares in Fund III, Fund III Co, Fund IV and Fund IV Co.

“For Fortress Private Equity, 2012 was a pivotal year in which we delivered significant valuation gains in our main funds while building out new strategies that we believe will be transformative for our business over time,” said Wes Edens, Fortress co-Chairman and Private Equity CIO. “With 25% valuation gains in 2012, we’ve seen a $6 billion increase in our Private Equity investment valuations over the past three years, and we see growing potential to generate significant value in our most recent vintage funds. We also had great success in raising capital for new sector-specific funds - WWTAI and our MSR Opportunities Funds - and in raising permanent equity capital through Newcastle. Altogether, we have

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raised over $2.1 billion in sector-specific funds and permanent equity over the past 14 months. We believe that the opportunities we are focused on can attract meaningful capital in strategies that can generate substantial long-term value and growth.”

Liquid Hedge Funds:

• Fortress Macro Fund had a net return of 6.0% for the fourth quarter of 2012 and 17.8% for the year ended December 31, 2012

• Fortress Asia Macro Fund had a net return of 9.5% for the fourth quarter of 2012 and 21.2% for the year ended December 31, 2012

• Raised approximately $546 million in new third-party capital during the quarter, bringing total third-party capital raised in 2012 to $1.0 billion

• Fortress Asia Macro Fund was named “Best Global Macro Fund” at the HFMWeek 2012 Asia Performance Awards

(See supplemental data on page 21 for more detail on Liquid Hedge Funds results)

The Liquid Hedge Funds generated pre-tax DE of $30 million in the fourth quarter of 2012 and $45 million for the year ended December 31, 2012. Pre-tax DE was up $22 million from the previous quarter, largely a result of increased incentive income from continued positive investment performance.

Net returns for the fourth quarter of 2012 for the Fortress Macro Funds, Fortress Asia Macro Funds and Fortress Partners Funds were 6.0%, 9.5% and 1.0%, respectively. Net returns for the year ended December 31, 2012 for the Fortress Macro Funds, Fortress Asia Macro Funds and Fortress Partners Funds were 17.8%, 21.2% and 8.0%, respectively.

In 2012, the Liquid Hedge Funds generated $68 million of incentive income, $47 million of which was generated in the fourth quarter. This is primarily attributable to strong full year performance bringing nearly all main Fortress Macro Fund capital above high water marks and thus eligible to generate incentive income. In aggregate, approximately $3.1 billion of capital was above respective high water marks at year end, a $2.9 billion increase from the end of last year.

Liquid Hedge Funds finished the fourth quarter with $5.1 billion of AUM, up 16% from the previous quarter primarily due to $546 million of capital raised and $267 million of appreciation, partially offset by $80 million of redemptions. As of December 31, 2012, there were $0.4 billion of Liquid Hedge Fund redemption notices outstanding, which will be paid primarily within one quarter.

Positive investment performance and capital raising momentum has continued in 2013, as the Fortress Macro Funds and Fortress Asia Macro Funds had estimated year-to-date net returns of 4.5% and 1.7%, respectively, through February 22, 2013. Subsequent to year end, the Liquid Hedge Funds have raised nearly $600 million of additional capital, which will be added to AUM in the first quarter of 2013.

“Our investment returns in the Fortress Macro Fund and Asia Macro Fund placed us in the top tier of our industry,” said Mike Novogratz, Fortress Principal and co-CIO of Macro Funds. “Net returns of nearly 18% in Macro and over 21% in Asia Macro reflect the type of performance we strive to deliver for our limited partners, and we are off to a strong start in 2013. As a result of our performance, we have seen a significant increase in capital raised, with nearly $550 million in the fourth quarter, over half our total for the year. With over $3 billion, virtually all main fund NAV, over high water marks at the close of 2012, we are positioned well to deliver strong financial performance in 2013.”

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Logan Circle:

• 13 of 15 Logan Circle investment strategies outperformed their respective benchmarks for the fourth quarter of 2012, and 14 of 15 strategies outperformed respective benchmarks for the year ended December 31, 2012

• Total traditional fixed income AUM rose to $20.7 billion as of quarter end, an increase of 53% from the fourth quarter of 2011

• Net client outflows were $0.2 billion in the fourth quarter of 2012, bringing net client inflows to $5.7 billion for the year ended December 31, 2012

(See supplemental data on page 22 for more detail on Logan Circle results)

Logan Circle, our traditional asset management business, generated a pre-tax DE loss of $3 million and $10 million in the fourth quarter and year ended December 31, 2012, respectively. This compares to a pre-tax DE loss of $5 million and $17 million in the fourth quarter and year ended December 31, 2011, respectively. The year-over-year improvement is primarily due to an increase in management fees driven by a $7.2 billion increase in assets under management.

Logan Circle’s strategies continued to deliver strong investment performance, with 13 of Logan Circle’s 15 strategies outperforming their respective benchmarks for the fourth quarter of 2012 and 14 of 15 strategies outperforming respective benchmarks for the year ended December 31, 2012. Notably, 14 of 15 Logan Circle strategies have also outperformed their respective benchmarks since inception and eight are ranked in the top quartile of performance for their competitor universe.

Logan Circle had $20.7 billion in AUM at the end of the quarter, flat compared to the previous quarter and a 53% increase compared to the fourth quarter of 2011. The $7.2 billion annual increase in AUM was driven by net client inflows of $5.7 billion and performance appreciation of $1.5 billion. Logan Circle’s AUM has grown over 80% since Fortress completed the acquisition in April 2010.

“For Logan Circle, 2012 was an extremely successful year, in which we saw sustained investment outperformance and capital raising efforts that hit an entirely new trajectory,” said Jude Driscoll, Logan Circle Partners Chief Executive Officer. “We captured significant market share during the year, with strong demand for our fixed-income strategies from an increasingly broad universe of investors. As a result, our AUM increased by over 50% over last year, and our current pipe-line for potential additional commitments is robust. We remain focused on building further on our record of strong investment performance, and believe we are well-positioned to generate substantial organic growth and to become a material contributor to Fortress’s profitability over time.”

Principal Investments:

The Principal Investments segment, which is comprised of Fortress’s investments in its own funds, generated pre-tax DE of $2 million and $1 million for the fourth quarter and year ended December 31, 2012, respectively, compared to a pre-tax DE loss of $3 million and $11 million for the fourth quarter and year ended December 31, 2011, respectively. This year-over-year improvement is largely a result of the positive performance of our investments in our funds and a decline in interest expense.

As of December 31 2012, Principal Investments had segment assets (excluding cash and cash equivalents) totaling $1.2 billion, up 16% from December 31, 2011. As of December 31, 2012, Fortress had a total of $156 million of outstanding commitments to its funds.

9

In addition, as of December 31, 2012, the net asset value of Fortress’s Principal Investments exceeded its segment cost basis by $469 million, representing net unrealized gains that have not yet been recognized for segment reporting purposes. This is up 61%, or $179 million, from December 31, 2011.

LIQUIDITY & CAPITAL

As of December 31, 2012, Fortress had cash and cash equivalents of $104 million, down from $333 million as of December 31, 2011. As of January 31, 2013, Fortress had cash and cash equivalents of $312 million.

In October 2012, the completed sale of private equity portfolio company RailAmerica resulted in Fortress receiving aggregate proceeds of $182 million. Fortress used these proceeds to pay down in full its remaining corporate term loan balance of $181 million.

In connection with the purchase of 51.3 million class A or equivalent shares from a former Principal for an aggregate of $179 million in December 2012, Fortress issued a $149 million promissory note to the Principal, which bears interest at 5% and matures based on the following schedule: $40 million in March 2013, $20 million in June 2013, $30 million in September 2013 and $59 million in February 2014.

In February 2013, Fortress terminated its existing $60 million revolving credit facility and entered into a new $150 million facility with a $15 million letter of credit subfacility.

DIVIDEND

Fortress’s Board of Directors declared a fourth quarter 2012 dividend of $0.06 per dividend paying share, bringing full year 2012 distributions to $0.21 per dividend paying share. The dividend is payable on March 15, 2013 to Class A shareholders of record as of the close of business on March 12, 2013.

Fortress announced an increase in its base quarterly dividend, effective for the fourth quarter of 2012 and full year 2013, to $0.06 per dividend paying share, up 20% from $0.05 per dividend paying share.

The declaration and payment of any distributions are at the sole discretion of the Board of Directors, which may decide to change its distribution policy at any time. Please see below for information on the U.S. federal income tax implications of the dividend.

NON-GAAP INFORMATION

Distributable earnings, or DE, is a primary metric used by management to measure Fortress’s operating performance. Consistent with GAAP, DE is the sole measure that management uses to manage, and thus report on, Fortress’s segments, namely: Private Equity, Castles, Credit Hedge Funds, Credit Private Equity Funds, Liquid Hedge Funds, Logan Circle and Principal Investments. DE differs from GAAP net income in a number of material ways. For a detailed description of the calculation of DE, see note 11 in the financial statements included in the Company’s most recent annual report on Form 10-K, or note 10 to the financial statements included in the Company’s most recent quarterly report on Form 10-Q.

Fortress aggregates its segment results to report consolidated segment results, as shown in the table under “Summary Financial Results” and in the “total” column of the table under “Consolidated Segment Results (Non-GAAP).” The consolidated segment results are non-GAAP financial information. Management believes that consolidated segment results provide a meaningful basis for comparison among present and future periods. However, consolidated segment results should not be considered a substitute for

10

Fortress’s consolidated GAAP results. The exhibits to this release contain reconciliations of the components of Fortress’s consolidated segment results to the comparable GAAP measures, and Fortress urges you to review these exhibits.

CONFERENCE CALL

Management will host a conference call today, Wednesday, February 27, 2013 at 10:00 A.M. Eastern Time. A copy of the earnings release is posted to the Investor Relations section of Fortress’s website, www.fortress.com.

All interested parties are welcome to participate on the live call. The conference call may be accessed by dialing 1-888-243-2046 (from within the U.S.) or 1-706-679-1533 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Fortress Year End Earnings Call.”

A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.fortress.com. Please allow extra time prior to the call to visit the site and download the necessary software required to listen to the internet broadcast.

A telephonic replay of the conference call will also be available until 11:59 P.M. Eastern Time on Friday, March 8, 2013 by dialing 1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the U.S.); please reference access code “98939994.”

INVESTOR & MEDIA RELATIONS CONTACT

Gordon E. Runté

Fortress Investment Group

+1-212-798-6082

grunte@fortress.com

ABOUT FORTRESS

Fortress Investment Group LLC (NYSE: FIG) is a leading, highly diversified global investment management firm with $53.4 billion in assets under management as of December 31, 2012. Fortress applies its deep experience and specialized expertise across a range of investment strategies - private equity, credit, liquid hedge funds and traditional fixed income - on behalf of over 1,400 institutional clients and private investors worldwide. For more information regarding Fortress Investment Group LLC or to be added to its e-mail distribution list, please visit www.fortress.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Fortress’s sources of management fees, incentive income and investment income (loss), estimated fund performance and the amount and source of expected capital commitments. These statements are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. It is possible that the sources and amounts of management fees, incentive income and investment income, the amount and source of expected capital commitments for any new fund or redemption amounts may differ, possibly materially, from these forward-looking statements, and any such differences could cause the Company’s actual results to differ

11

materially from the results expressed or implied by these forward-looking statements. For a discussion of some of the risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, which is, or will be, available on the Company’s website (www.fortress.com). In addition, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict or assess the impact of every factor that may cause its actual results to differ from those contained in any forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking statements contained in this press release. The Company can give no assurance that the expectations of any forward-looking statement will be obtained. Such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

U.S. FEDERAL INCOME TAX IMPLICATIONS OF DIVIDEND

For U.S. federal income tax purposes, the dividend declared in February 2013 will be treated as a partnership distribution. Based on the best information currently available, when calculating withholding taxes, 2.30 cents of the per share distribution will be treated as U.S. source interest income. Accordingly, for non-U.S. holders of Class A shares, unless an exception to withholding tax applies, the distribution will be subject to a U.S. federal withholding tax of 0.69 cents per share. Non-U.S. holders of Class A shares are generally subject to U.S. federal withholding tax at a rate of 30% (subject to reduction by applicable treaty or other exception) on certain types of U.S. source income realized by the Company. With respect to interest, however, no withholding is generally required if proper certification (on an IRS Form W-8) of a beneficial owner’s foreign status has been filed with the withholding agent. In addition, non-U.S. holders must generally provide the withholding agent with a properly completed IRS Form W-8 to obtain any reduction in withholding.

12

Fortress Investment Group LLC

Consolidated Statements of Operations (Unaudited)

(dollars in thousands, except share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Revenues
Management fees: affiliates	$	119,155		$	111,036		$	456,090		$	464,305
Management fees: non-affiliates		13,083			10,455			45,617			58,096
Incentive income: affiliates		207,444			110,942			246,438			155,303
Incentive income: non-affiliates		24,598			666			26,162			1,917
Expense reimbursements from affiliates		50,987			42,128			189,304			172,465
Other revenues		2,373			1,109			6,258			6,542
		417,640			276,336			969,869			858,628
Expenses
Interest expense		3,904			4,643			15,781			18,526
Compensation and benefits		213,092			170,801			750,359			706,060
Principals agreement compensation (expired in 2011)		—			299,448			—			1,051,197
General, administrative and other		33,784			36,181			127,149			145,726
Depreciation and amortization (including impairment)		3,213			3,285			14,931			33,399
		253,993			514,358			908,220			1,954,908
Other Income (Loss)
Gains (losses)		19,379			(3,303	)		48,921			(30,054	)
Tax receivable agreement liability adjustment		(1,935	)		3,214			(8,870	)		3,098
Earnings (losses) from equity method investees		46,113			15,518			156,530			41,935
		63,557			15,429			196,581			14,979
Income (Loss) Before Income Taxes		227,204			(222,593	)		258,230			(1,081,301	)
Income tax benefit (expense)		(5,157	)		(11,542	)		(39,408	)		(36,035	)
Net Income (Loss)	$	222,047		$	(234,135	)	$	218,822		$	(1,117,336	)
Principals’ and Others’ Interests in Income (Loss) of Consolidated Subsidiaries	$	119,840		$	(142,646	)	$	140,538		$	(685,821	)
Net Income (Loss) Attributable to Class A Shareholders	$	102,207		$	(91,489	)	$	78,284		$	(431,515	)
Dividends Declared Per Class A Share	$	0.05		$	—		$	0.20		$	—
Earnings (Loss) Per Class A Share
Net income (loss) per Class A share, basic	$	0.40		$	(0.48	)	$	0.29		$	(2.34	)
Net income (loss) per Class A share, diluted	$	0.24		$	(0.49	)	$	0.27		$	(2.36	)
Weighted average number of Class A shares outstanding, basic		220,660,135			190,487,829			214,399,422			186,662,670
Weighted average number of Class A shares outstanding, diluted		525,242,510			496,345,580			524,900,132			493,392,235

13

Fortress Investment Group LLC

Consolidated Balance Sheets

(dollars in thousands)

	December 31, 2012			December 31, 2011
Assets
Cash and cash equivalents	$	104,242		$	333,166
Due from affiliates		280,557			298,689
Investments		1,249,761			1,079,777
Deferred tax asset		402,135			400,196
Other assets		124,798			108,858
	$	2,161,493		$	2,220,686
Liabilities and Equity
Liabilities
Accrued compensation and benefits	$	146,911		$	247,024
Due to affiliates		357,407			354,158
Deferred incentive income		231,846			238,658
Debt obligations payable		149,453			261,250
Other liabilities		59,226			57,204
		944,843			1,158,294
Commitments and Contingencies
Equity
Class A shares, no par value, 1,000,000,000 shares authorized, 218,286,342 and 189,824,053 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively		—			—
Class B shares, no par value, 750,000,000 shares authorized, 249,534,372 and 305,857,751 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively		—			—
Paid-in capital		2,119,102			1,972,711
Retained earnings (accumulated deficit)		(1,486,578	)		(1,484,120	)
Treasury Shares (2,082,684 Class A shares held by subsidiary)		(3,419	)		—
Accumulated other comprehensive income (loss)		(2,634	)		(1,160	)
Total Fortress shareholders’ equity		626,471			487,431
Principals’ and others’ interests in equity of consolidated subsidiaries		590,179			574,961
Total Equity		1,216,650			1,062,392
	$	2,161,493		$	2,220,686

14

Fortress Investment Group LLC

Exhibit 1-a

Supplemental Data for the Three Months Ended December 31, 2012 and 2011

	Three Months Ended December 31, 2012
				Private Equity						Liquid Hedge Funds			Credit Funds						Logan Circle			Principal
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds						Investments
Assets Under Management
AUM - October 1, 2012	$	51,475		$	11,113		$	3,605		$	4,378		$	5,663		$	6,090		$	20,626		$	—
Capital raised		1,408			—			—			546			31			831			—			—
Equity raised (Permanent capital vehicles)		6			—			6			—			—			—			—			—
Increase in invested capital		1,426			65			—			7			1			1,353			—			—
Redemptions		(106	)		—			—			(80	)		(26	)		—			—			—
SPV distribution		—			—			—			—			—			—			—			—
RCA distributions 5		(198	)		—			—			—			(198	)		—			—			—
Return of capital distributions		(1,351	)		(894	)		—			(57	)		—			(400	)		—			—
Adjustment for reset date		—			—			—			—			—			—			—			—
Crystallized Incentive Income		(6	)		—			—			(1	)		(5	)		—			—			—
Equity buyback		—			—			—			—			—			—			—			—
Net Client Flows		(225	)		—			—			—			—			—			(225	)		—
Income (loss) and foreign exchange		1,001			327			49			267			199			(125	)		284			—
AUM - Ending Balance		53,430			10,611			3,660			5,060			5,665			7,749			20,685			—
Third-Party Capital Raised	$	1,485		$	71		$	6		$	546		$	31		$	831		$	—		$	—
Segment Revenues
Management fees	$	131		$	31		$	14		$	19		$	25		$	34		$	8		$	—
Incentive income		114			2			—			47			38			27			—			—
Total		245			33			14			66			63			61			8			—
Segment Expenses
Operating expenses	$	(91	)	$	(11	)	$	(4	)	$	(23	)	$	(16	)	$	(26	)	$	(11	)	$	—
Profit sharing compensation expenses		(42	)		(1	)		—			(10	)		(18	)		(13	)		—			—
Unallocated Expenses		1			—			—			—			—			—			—			—
Total		(132	)		(12	)		(4	)		(33	)		(34	)		(39	)		(11	)		—
Fund Management DE (before Principal Performance Payments)		113			21			10			33			29			22			(3	)		—
Principal Performance Payments		(8	)		—			—			(3	)		(4	)		(1	)		—			—
Fund Management DE		105			21			10			30			25			21			(3	)		—
Investment Income		6																					6
Interest Expense		(4	)																				(4	)
Pre-tax Distributable Earnings	$	107		$	21		$	10		$	30		$	25		$	21		$	(3	)	$	2
Pre-tax Distributable Earnings per Dividend Paying Share	$	0.20

	Three Months Ended December 31, 2011
				Private Equity						Liquid Hedge Funds			Credit Funds									Principal
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds			Logan Circle			Investments
Assets Under Management
AUM - October 1, 2011	$	43,619		$	9,471		$	3,237		$	6,165		$	6,214		$	5,619		$	12,913		$	—
Capital raised		198			—			—			177			21			—			—			—
Equity raised		—			—			—			—			—			—			—			—
Increase in invested capital		1,060			13			—			14			—			1,033			—			—
Redemptions		(722	)		—			—			(722	)		—			—			—			—
SPV distribution		—			—			—			—			—			—			—			—
RCA distributions 5		(254	)		—			—			—			(254	)		—			—			—
Return of capital distributions		(384	)		(4	)		—			—			(21	)		(359	)		—			—
Adjustment for reset date		—			—			—			—			—			—			—			—
Crystallized Incentive Income		—			—			—			—			—			—			—			—
Net Client Flows		365			—			—			—			—			—			365			—
Income (loss) and foreign exchange		(169	)		(195	)		(56	)		(119	)		16			(61	)		245			—
AUM - Ending Balance	$	43,713		$	9,285		$	3,181		$	5,515		$	5,976		$	6,232		$	13,524		$	—
Third-Party Capital Raised	$	1,818		$	—		$	—		$	177		$	21		$	1,620		$	—		$	—
Segment Revenues
Management fees	$	121		$	30		$	14		$	25		$	26		$	21		$	5		$	—
Incentive income		46			—			—			—			28			18			—			—
Total		167			30			14			25			54			39			5			—
Segment Expenses
Operating expenses	$	(89	)	$	(7	)	$	(8	)	$	(20	)	$	(33	)	$	(11	)	$	(10	)	$	—
Profit sharing compensation expenses		(25	)		—			—			(5	)		(12	)		(8	)		—			—
Total		(114	)		(7	)		(8	)		(25	)		(45	)		(19	)		(10	)		—
Fund Management DE		53			23			6			—			9			20			(5	)		—
Investment Income		2																					2
Interest Expense		(5	)																				(5	)
Pre-tax Distributable Earnings	$	50		$	23		$	6		$	—		$	9		$	20		$	(5	)	$	(3	)
Pre-tax Distributable Earnings per Dividend Paying Share	$	0.09

⁵  Represents distributions from (i) assets held by redeeming capital accounts in the Drawbridge Special Opportunities Funds, and (ii) the Value Recovery Funds.

15

Fortress Investment Group LLC

Exhibit 1-b

Supplemental Data for the Year Ended December 31, 2012 and 2011

	Full Year Ended December 31, 2012
				Private Equity						Liquid Hedge Funds			Credit Funds						Logan Circle			Principal
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds						Investments
Assets Under Management
AUM - January 1, 2012	$	43,713		$	9,285		$	3,181		$	5,515		$	5,976		$	6,232		$	13,524		$	—
Capital raised		2,298			—			—			993			247			1,058			—			—
Equity raised		450			—			450			—			—			—			—			—
Increase in invested capital		3,008			163			—			7			21			2,817			—			—
Redemptions		(2,082	)		—			—			(2,045	)		(37	)		—			—			—
SPV distributions		—			—			—			—			—			—			—			—
RCA distributions 6		(1,100	)		—			—			—			(1,100	)		—			—			—
Return of capital distributions		(3,326	)		(1,036	)		—			(93	)		(233	)		(1,964	)		—			—
Adjustment for reset date		(331	)		—			—			—			—			(331	)		—			—
Crystallized incentive income		(79	)		—			—			(3	)		(76	)		—			—			—
Equity buyback		—			—			—			—			—			—			—			—
Net Client Flows		5,710			—			—			—			—			—			5,710			—
Income (loss) and foreign exchange		5,169			2,199			29			686			867			(63	)		1,451			—
AUM - Ending Balance		53,430			10,611			3,660			5,060			5,665			7,749			20,685			—
Third-Party Capital Raised	$	6,685		$	691		$	450		$	993		$	247		$	4,304		$	—		$	—
Segment Revenues
Management fee	$	479		$	120		$	56		$	77		$	101		$	98		$	27		$	—
Incentive income		278			11			—			68			130			69			—			—
Total		757			131			56			145			231			167			27			—
Segment Expenses
Operating expenses	$	(336	)	$	(41	)	$	(26	)	$	(74	)	$	(63	)	$	(95	)	$	(37	)	$	—
Profit sharing compensation expenses		(125	)		(4	)		—			(21	)		(63	)		(37	)		—			—
Unallocated Expenses	$	1		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Total		(460	)		(45	)		(26	)		(95	)		(126	)		(132	)		(37	)		—
Fund Management DE (before Principal Performance Payments)		297			86			30			50			105			35			(10	)		—
Principal Performance Payments		(20	)		—			(1	)		(5	)		(13	)		(1	)		—			—
Fund Management DE		277			86			29			45			92			34			(10	)		—
Investment Income		16																					16
Interest Expense		(15	)																				(15	)
Pre-tax Distributable Earnings	$	278		$	86		$	29		$	45		$	92		$	34		$	(10	)	$	1
Pre-tax Distributable Earnings per Dividend Paying Share	$	0.52

	Full Year Ended December 31, 2011
				Private Equity						Liquid Hedge Funds			Credit Funds									Principal
(in millions)	Total			Funds			Castles						Hedge Funds			PE Funds			Logan Circle			Investments
Assets Under Management
AUM - January 1, 2011	$	44,613		$	11,923		$	3,037		$	6,355		$	6,773		$	4,817		$	11,708		$	—
Capital raised		1,817			—			—			1,318			309			190			—			—
Equity raised		220			—			220			—			—			—			—			—
Increase in invested capital		3,492			237			—			25			107			3,123			—			—
Redemptions		(1,853	)		—			—			(1,708	)		(145	)		—			—			—
SPV distribution		—			—			—			—			—			—			—			—
RCA distributions 6		(1,222	)		—			—			—			(1,222	)		—			—			—
Return of capital distributions		(2,330	)		(317	)		(19	)		—			(140	)		(1,854	)		—			—
Adjustment for reset date		(1,997	)		(1,997	)		—			—			—			—			—			—
Crystallized Incentive Income		(160	)		—			—			(69	)		(91	)		—			—			—
Equity buyback		—			—			—			—			—			—			—			—
Net Client Flows		841			—			—			—			—			—			841			—
Income (loss) and foreign exchange transfers		292			(561	)		(57	)		(406	)		385			(44	)		975			—
AUM - Ending Balance	$	43,713		$	9,285		$	3,181		$	5,515		$	5,976		$	6,232		$	13,524		$	—
Third-Party Capital Raised	$	4,177		$	51		$	220		$	1,318		$	434		$	2,154		$	—		$	—
Segment Revenues
Management fees	$	509		$	132		$	53		$	109		$	122		$	73		$	20		$	—
Incentive income		198			(2	)		—			4			78			118			—			—
Total		707			130			53			113			200			191			20			—
Segment Expenses
Operating expenses	$	(343	)	$	(38	)	$	(28	)	$	(78	)	$	(128	)	$	(34	)	$	(37	)	$	—
Profit sharing compensation expenses		(111	)		1			—			(21	)		(35	)		(56	)		—			—
Total		(454	)		(37	)		(28	)		(99	)		(163	)		(90	)		(37	)		—
Fund Management DE		253			93			25			14			37			101			(17	)		—
Investment Income		8																					8
Interest Expense		(19	)																				(19	)
Pre-tax Distributable Earnings	$	242		$	93		$	25		$	14		$	37		$	101		$	(17	)	$	(11	)
Pre-tax Distributable Earnings per Dividend Paying Share	$	0.46

⁶  Represents distributions from (i) assets held by redeeming capital accounts in the Drawbridge Special Opportunities Funds, and (ii) the Value Recovery Funds.

16

Fortress Investment Group LLC

Exhibit 2-a

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Fortress	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
Private Equity & Castles	$	13,244		$	13,256		$	12,708		$	12,466		$	12,466		$	13,239		$	13,826		$	14,718		$	14,271		$	14,271
Liquid Hedge Funds		6,303			6,321			6,165			5,515			5,515			4,840			4,398			4,378			5,060			5,060
Credit Hedge Funds		6,545			6,374			6,214			5,976			5,976			6,011			5,859			5,663			5,665			5,665
Credit Private Equity Funds		4,531			4,941			5,619			6,232			6,232			6,258			5,593			6,090			7,749			7,749
Logan Circle		12,484			12,931			12,913			13,524			13,524			16,084			18,112			20,626			20,685			20,685
AUM - Ending Balance	$	43,107		$	43,823		$	43,619		$	43,713		$	43,713		$	46,432		$	47,788		$	51,475		$	53,430		$	53,430
Third-Party Capital Raised	$	649		$	811		$	899		$	1,818		$	4,177		$	2,914		$	1,103		$	1,183		$	1,485		$	6,685
Segment Revenues
Management fees	$	126		$	131		$	131		$	121		$	509		$	118		$	114		$	116		$	131		$	479
Incentive income		118			20			14			46			198			52			47			65			114			278
Total		244			151			145			167			707			170			161			181			245			757
Segment Expenses
Operating expenses		(93	)		(79	)		(83	)		(89	)		(344	)		(82	)		(81	)		(82	)		(91	)		(336	)
Profit sharing compensation expenses		(58	)		(17	)		(11	)		(25	)		(111	)		(28	)		(24	)		(31	)		(42	)		(125	)
Unallocated expenses		2			(1	)		—			—			1			—			—						1			1
Total		(149	)		(97	)		(94	)		(114	)		(454	)		(110	)		(105	)		(113	)		(132	)		(460	)
Fund Management DE (before Principal Performance Payments)		95			54			51			53			253			60			56			68			113			297
Principal Performance Payments		—			—			—			—			—			(4	)		(3	)		(5	)		(8	)		(20	)
Fund Management DE	$	95		$	54		$	51		$	53		$	253		$	56		$	53		$	63		$	105		$	277

17

Fortress Investment Group LLC

Exhibit 2-b

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Private Equity Funds & Castles	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
Private Equity Funds	$	10,016		$	9,979		$	9,471		$	9,285		$	9,285		$	10,029		$	10,436		$	11,113		$	10,611		$	10,611
Castles		3,228			3,277			3,237			3,181			3,181			3,210			3,390			3,605			3,660			3,660
AUM - Ending Balance	$	13,244		$	13,256		$	12,708		$	12,466		$	12,466		$	13,239		$	13,826		$	14,718		$	14,271		$	14,271
Third-Party Capital Raised	$	98		$	51		$	122		$	—		$	271		$	29		$	267		$	768		$	77		$	1,141
Segment Revenues
Management fees	$	47		$	50		$	44		$	44		$	185		$	44		$	42		$	45		$	45		$	176
Incentive income		1			—			(3	)		—			(2	)		5			3			1			2			11
Total		48			50			41			44			183			49			45			46			47			187
Segment Expenses
Operating expenses		(21	)		(15	)		(15	)		(15	)		(66	)		(18	)		(17	)		(17	)		(15	)		(67	)
Profit sharing compensation expenses		—			—			1			—			1			(2	)		(1	)		—			(1	)		(4	)
Total		(21	)		(15	)		(14	)		(15	)		(65	)		(20	)		(18	)		(17	)		(16	)		(71	)
Fund Management DE (before Principal Performance Payments)		27			35			27			29			118			29			27			29			31			116
Principal Performance Payments		—			—			—			—			—			—			—			(1	)		—			(1	)
Fund Management DE	$	27		$	35		$	27		$	29		$	118		$	29		$	27		$	28		$	31		$	115

18

Fortress Investment Group LLC

Exhibit 2-c

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Credit Hedge Funds	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
Drawbridge Special Opportunities Funds 7	$	5,341		$	5,272		$	5,227		$	5,165		$	5,165		$	5,209		$	5,168		$	5,152		$	5,169		$	5,169
Value Recovery Funds 8		1,204			1,102			987			811			811			802			691			511			496			496
AUM - Ending Balance	$	6,545		$	6,374		$	6,214		$	5,976		$	5,976		$	6,011		$	5,859		$	5,663		$	5,665		$	5,665
Third-Party Capital Raised	$	149		$	204		$	60		$	21		$	434		$	67		$	49		$	100		$	31		$	247
Segment Revenues
Management fees	$	31		$	30		$	35		$	26		$	122		$	26		$	26		$	24		$	25		$	101
Incentive income		38			16			(4	)		28			78			30			26			36			38			130
Total		69			46			31			54			200			56			52			60			63			231
Segment Expenses
Operating expenses		(34	)		(28	)		(33	)		(33	)		(128	)		(16	)		(16	)		(15	)		(16	)		(63	)
Profit sharing compensation expenses		(17	)		(7	)		1			(12	)		(35	)		(14	)		(12	)		(19	)		(18	)		(63	)
Total		(51	)		(35	)		(32	)		(45	)		(163	)		(30	)		(28	)		(34	)		(34	)		(126	)
Fund Management DE (before Principal Performance Payments)		18			11			(1	)		9			37			26			24			26			29			105
Principal Performance Payments		—			—			—			—			—			(3	)		(3	)		(3	)		(4	)		(13	)
Fund Management DE	$	18		$	11		$	(1	)	$	9		$	37		$	23		$	21		$	23		$	25		$	92
Net Returns 9
Drawbridge Special Opportunities LP		4.9	%		2.2	%		-0.8	%		4.3	%		10.9	%		4.2	%		3.3	%		5.1	%		4.2	%		17.9	%
Drawbridge Special Opportunities Ltd.		5.8	%		2.9	%		0.2	%		2.2	%		11.5	%		4.8	%		3.0	%		4.0	%		3.9	%		16.6	%

⁷  Combined AUM for Drawbridge Special Opportunities Fund Ltd., Drawbridge Special Opportunities Fund LP, Drawbridge Special Opportunities Fund managed accounts, Worden Fund LP and Worden Fund II LP.

⁸  Fortress will receive management fees from these funds equal to 1% of cash receipts and may receive limited incentive income if aggregate realizations exceed an agreed threshold. Prior to October 1, 2012, Fortress also earned 1% per annum of AUM of certain managed assets.

⁹  The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations. Specific performance may vary based on, among other things, whether fund investors are invested in one or more special investments. The returns for the Drawbridge Special Opportunities Funds reflect the performance of each fund excluding the performance of the redeeming capital accounts which relate to December 31, 2008, December 31, 2009, December 31, 2010, and December 31, 2011 redemptions.

19

Fortress Investment Group LLC

Exhibit 2-d

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Credit Private Equity Funds	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
Long Dated Value Funds 10	$	619		$	575		$	574		$	563		$	563		$	564		$	555		$	555		$	483		$	483
Real Assets Funds		141			123			118			112			112			102			92			97			88			88
Fortress Credit Opportunities Funds 11		2,885			3,329			3,971			4,599			4,599			4,610			4,246			4,611			5,033			5,033
Japan Opportunity Funds 12		886			914			956			958			958			982			700			827			2,145			2,145
AUM - Ending Balance	$	4,531		$	4,941		$	5,619		$	6,232		$	6,232		$	6,258		$	5,593		$	6,090		$	7,749		$	7,749
Third-Party Capital Raised	$	72		$	37		$	425		$	1,620		$	2,154		$	2,719		$	606		$	148		$	831		$	4,304
Segment Revenues
Management fees	$	16		$	17		$	19		$	21		$	73		$	22		$	21		$	21		$	34		$	98
Incentive income		57			23			20			18			118			11			14			17			27			69
Total		73			40			39			39			191			33			35			38			61			167
Segment Expenses
Operating expenses		(7	)		(9	)		(7	)		(11	)		(34	)		(22	)		(23	)		(24	)		(26	)		(95	)
Profit sharing compensation expenses		(28	)		(12	)		(8	)		(8	)		(56	)		(8	)		(8	)		(8	)		(13	)		(37	)
Total		(35	)		(21	)		(15	)		(19	)		(90	)		(30	)		(31	)		(32	)		(39	)		(132	)
Fund Management DE (before Principal Performance Payments)		38			19			24			20			101			3			4			6			22			35
Principal Performance Payments		—			—			—			—			—			—			—			—			(1	)		(1	)
Fund Management DE	$	38		$	19		$	24		$	20		$	101		$	3		$	4		$	6		$	21		$	34

¹⁰  Combined AUM for Long Dated Value Fund I, Long Dated Value Fund II, Long Dated Value Fund III and LDVF Patent Fund.

¹¹  Combined AUM for Credit Opportunities Fund, Credit Opportunities Fund II, Credit Opportunities Fund III, FCO Managed Accounts, Net Lease Fund I, Global Opportunities Fund, Life Settlement Fund, Life Settlement Fund MA, SIP managed account, Real Estate Opportunities Fund and Real Estate Opportunities REOC Fund.

¹²  Combined AUM for Japan Opportunity Fund, Japan Opportunity Fund II (Dollar) and Japan Opportunity Fund II (Yen).

20

Fortress Investment Group LLC

Exhibit 2-e

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Liquid Hedge Funds	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
Fortress Macro Funds 13	$	3,258		$	3,143		$	3,086		$	2,584		$	2,584		$	2,429		$	2,417		$	2,250		$	2,746		$	2,746
Fortress Convex Asia Funds 14		—			—			—			—			—			—			26			25			50			50
Drawbridge Global Macro Funds 15		422			406			386			392			392			398			410			417			356			356
Fortress Commodities Funds 16		1,111			1,189			1,064			875			875			473			—			—			—			—
Fortress Asia Macro Funds 17		23			108			189			208			208			211			235			316			511			511
Fortress Partners Funds 18		1,489			1,475			1,440			1,456			1,456			1,329			1,310			1,370			1,397			1,397
AUM - Ending Balance	$	6,303		$	6,321		$	6,165		$	5,515		$	5,515		$	4,840		$	4,398		$	4,378		$	5,060		$	5,060
Third-Party Capital Raised	$	330		$	519		$	292		$	177		$	1,318		$	99		$	181		$	167		$	546		$	993
Segment Revenues
Management fees	$	27		$	29		$	28		$	25		$	109		$	20		$	19		$	19		$	19		$	77
Incentive income		22			(19	)		1			—			4			6			4			11			47			68
Total		49			10			29			25			113			26			23			30			66			145
Segment Expenses
Operating expenses		(21	)		(18	)		(19	)		(20	)		(78	)		(17	)		(17	)		(17	)		(23	)		(74	)
Profit sharing compensation expenses		(13	)		2			(5	)		(5	)		(21	)		(4	)		(3	)		(4	)		(10	)		(21	)
Total		(34	)		(16	)		(24	)		(25	)		(99	)		(21	)		(20	)		(21	)		(33	)		(95	)
Fund Management DE (before Principal Performance Payments)		15			(6	)		5			—			14			5			3			9			33			50
Principal Performance Payments		—			—			—			—			—			(1	)		—			(1	)		(3	)		(5	)
Fund Management DE	$	15		$	(6	)	$	5		$	—		$	14		$	4		$	3		$	8		$	30		$	45
Net Returns 19
Fortress Macro Fund Ltd		1.9	%		-5.4	%		-3.9	%		-2.2	%		-9.3	%		6.2	%		1.7	%		2.9	%		6.0	%		17.8	%
Drawbridge Global Macro Fund Ltd		1.7	%		-6.0	%		-4.0	%		-2.4	%		-10.5	%		5.8	%		1.4	%		2.8	%		5.9	%		16.9	%
Fortress Commodities Fund LP		3.0	%		-6.4	%		4.7	%		-8.9	%		-8.0	%		-8.7	%		-4.1	%		N/A			N/A			-12.5	%
Fortress Asia Macro Fund Ltd 20		3.5	%		-1.0	%		-3.6	%		5.0	%		3.6	%		5.8	%		0.9	%		3.6	%		9.5	%		21.2	%
Fortress Convex Asia Fund Ltd 21		N/A			N/A			N/A			N/A			N/A			N/A			-0.7	%		-2.5	%		-1.9	%		-5.0	%
Fortress Partners Fund LP 22		3.3	%		-0.1	%		-3.0	%		0.4	%		0.5	%		3.1	%		-1.3	%		5.1	%		1.0	%		8.0	%
Fortress Partners Offshore Fund LP 22		3.2	%		-0.1	%		-4.6	%		-0.5	%		-2.1	%		2.4	%		-0.3	%		5.7	%		-0.2	%		7.7	%

¹³  Combined AUM for Fortress Macro Onshore Fund LP, Fortress Macro Fund Ltd, Fortress Macro MA1 and Fortress Macro managed accounts.

¹⁴  Combined AUM for Fortress Convex Asia Fund LP and Fortress Convex Asia Fund Ltd.

¹⁵  Combined AUM for Drawbridge Global Macro Fund LP and Drawbridge Global Macro Intermediate Fund LP.

¹⁶  Combined AUM for Fortress Commodities Fund LP, Fortress Commodities Fund Ltd, Fortress Commodities MA1 LP and Fortress Commodities managed accounts. The Fortress Commodities Funds were closed in May 2012.

¹⁷ Combined AUM for Fortress Asia Macro Fund Ltd, Fortress Asia Macro Fund LP and Fortress Asia Macro managed accounts.

¹⁸ Combined AUM for Fortress Partners Fund LP and Fortress Partners Offshore Fund LP.

¹⁹  The performance data contained herein reflects returns for a “new issue eligible,” single investor class as of the close of business on the last day of the relevant period. Net returns reflect performance data after taking into account management fees borne by the Fund and incentive allocations.

²⁰  The 2011 returns represent returns for Class B investors; Class B is now closed to new investors. The 2012 returns represent returns for Class A investors. Certain fees payable by investors in Class B differ from the fees payable by the investors in Class A that remains open, and the returns for the different classes will vary.

²¹ The Fortress Convex Asia Funds were launched on May 1, 2012. Accordingly, the three months ended June 30, 2012 returns represent the two month period from May 1, 2012 to June 30, 2012 and the full year 2012 returns represent the eight month period from May 1, 2012 to December 31, 2012.

²² The returns for the Fortress Partners Funds include gains and losses from special investments. Investors’ specific performance may vary dependent upon their ownership in one or more special investments.

21

Fortress Investment Group LLC

Exhibit 2-f

Assets Under Management and Fund Management DE

(dollars in millions)

	Three Months Ended															Three Months Ended
Logan Circle	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Full Year 2011			March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Full Year 2012
Assets Under Management
AUM - Ending Balance	$	12,484		$	12,931		$	12,913		$	13,524		$	13,524		$	16,084		$	18,112		$	20,626		$	20,685		$	20,685
Net Client Flows	$	545		$	162		$	(231	)	$	365		$	841		$	2,256		$	1,699		$	1,980		$	(202	)	$	5,733
Segment Revenues
Management fees	$	5		$	5		$	5		$	5		$	20		$	6		$	6		$	7		$	8		$	27
Incentive income		—			—			—			—			—			—			—			—			—			—
Total		5			5			5			5			20			6			6			7			8			27
Segment Expenses
Operating expenses		(10	)		(9	)		(9	)		(10	)		(38	)		(9	)		(8	)		(9	)		(11	)		(37	)
Profit sharing compensation expenses		—			—			—			—			—			—			—			—			—			—
Total		(10	)		(9	)		(9	)		(10	)		(38	)		(9	)		(8	)		(9	)		(11	)		(37	)
Fund Management DE	$	(5	)	$	(4	)	$	(4	)	$	(5	)	$	(18	)	$	(3	)	$	(2	)	$	(2	)	$	(3	)	$	(10	)

22

Fortress Investment Group LLC

Exhibit 3

Reconciliation of GAAP Net Income (Loss) to Pre-tax Distributable Earnings and Fund Management DE,

Reconciliation of GAAP Revenues to Segment Revenues and Reconciliation of GAAP Expenses to Segment Expenses

(dollars in millions)

	Three Months Ended												Full Year 2011			Three Months Ended												Full Year 2012
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011						March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012
GAAP Net Income (Loss)	$	(255	)	$	(246	)	$	(382	)	$	(234	)	$	(1,117	)	$	(24	)	$	14		$	7		$	222		$	219
Principals’ and Others’ Interests in Income (Losses) of Consolidated Subsidiaries		152			151			240			142			685			(6	)		(9	)		(6	)		(120	)		(141	)
GAAP Net Income (Loss) Attributable to Class A Shareholders	$	(103	)	$	(95	)	$	(142	)	$	(92	)	$	(432	)	$	(30	)	$	5		$	1		$	102		$	78
Private Equity incentive income		47			9			7			(19	)		44			3			(7	)		14			(12	)		(2	)
Hedge Fund incentive income		53			(3	)		(4	)		(46	)		—			36			26			46			(108	)		—
Reserve for clawback		—			—			(5	)		—			(5	)		4			2			—			2			8
Distributions of earnings from equity method investees		7			1			2			1			11			2			—			2			2			6
Losses (earnings) from equity method investees		(66	)		(17	)		62			(13	)		(34	)		(31	)		(21	)		(48	)		(42	)		(142	)
Losses (gains) on options		1			1			6			(3	)		5			(4	)		—			6			(8	)		(6	)
Losses (gains) on other Investments		5			4			9			5			23			(20	)		(7	)		(4	)		(10	)		(41	)
Impairment of investments		—			(1	)		(2	)		(1	)		(4	)		—			—			(1	)		—			(1	)
Adjust income from the receipt of options		(7	)		—			(6	)		—			(13	)		—			(13	)		(9	)		—			(22	)
Mark-to-market of contingent consideration in business combination		(1	)		(2	)		—			—			(3	)		—			—			—			—			—
Amortization of intangible assets and impairment of goodwill		1			—			21			—			22			—			—			—			—			—
Employee, Principal and director compensation		64			59			58			54			235			58			55			49			57			219
Principals’ forfeiture agreement expense (expired in 2011)		235			237			280			299			1,051			—			—			—			—			—
Adjust non-controlling interests related to Fortress Operating Group units		(154	)		(153	)		(240	)		(144	)		(691	)		4			7			4			118			133
Tax receivable agreement liability reduction		—			—			—			(3	)		(3	)		7			—			—			2			9
Taxes		21			6			(3	)		12			36			28			3			4			4			39
Pre-tax Distributable Earnings	$	103		$	46		$	43		$	50		$	242		$	57		$	50		$	64		$	107		$	278
Investment Loss (income)		(12	)		3			3			(2	)		(8	)		(5	)		(1	)		(4	)		(6	)		(16	)
Interest Expense		4			5			5			5			19			4			4			3			4			15
Fund Management DE	$	95		$	54		$	51		$	53		$	253		$	56		$	53		$	63		$	105		$	277
GAAP Revenues	$	197		$	190		$	195		$	277		$	859		$	172		$	199		$	181		$	418		$	970
Adjust management fees		—			—			—			(1	)		(1	)		—			—			—			—			—
Adjust incentive income		102			6			(1	)		(66	)		41			43			21			60			(119	)		5
Adjust income from the receipt of options		(7	)		—			(6	)		—			(13	)		—			(13	)		(9	)		—			(22	)
Other revenues		(48	)		(45	)		(43	)		(43	)		(179	)		(45	)		(46	)		(51	)		(54	)		(196	)
Segment Revenues	$	244		$	151		$	145		$	167		$	707		$	170		$	161		$	181		$	245		$	757
GAAP Expenses	$	498		$	442		$	501		$	514		$	1,955		$	221		$	212		$	221		$	254		$	908
Adjust interest expense		(4	)		(5	)		(5	)		(5	)		(19	)		(4	)		(4	)		(3	)		(5	)		(16	)
Adjust employee, Principal and director compensation		(64	)		(59	)		(58	)		(54	)		(235	)		(58	)		(55	)		(49	)		(57	)		(219	)
Adjust Principals’ forfeiture agreement expense (expired in 2011)		(235	)		(237	)		(280	)		(299	)		(1,051	)		—			—			—			—			—
Adjust amortization of intangible assets and impairment of goodwill		(1	)		—			(21	)		—			(22	)		—			—			—			—			—
Adjust expense reimbursements from affiliates		(44	)		(44	)		(42	)		(42	)		(172	)		(44	)		(45	)		(49	)		(50	)		(188	)
Adjust Principal Performance Payments		—			—			—			—			—			(4	)		(3	)		(5	)		(14	)		(26	)
Other		(1	)		—			(1	)		—			(2	)		(1	)		—			(2	)		4			1
Segment Expenses	$	149		$	97		$	94		$	114		$	454		$	110		$	105		$	113		$	132		$	460

23

“Distributable earnings” is Fortress’s supplemental measure of operating performance. It reflects the value created which management considers available for distribution during any period. As compared to generally accepted accounting principles (“GAAP”) net income, distributable earnings excludes the effects of unrealized gains (or losses) on illiquid investments, reflects contingent revenue which has been received as income to the extent it is not expected to be reversed, and disregards expenses which do not require an outlay of assets, whether currently or on an accrued basis. Distributable earnings is reflected on an unconsolidated and pre-tax basis, and, therefore, the interests in consolidated subsidiaries related to Fortress Operating Group units (held by the principals) and income tax expense are added back in its calculation. Distributable earnings is not a measure of cash generated by operations which is available for distribution nor should it be considered in isolation or as an alternative to cash flow or net income and it is not necessarily indicative of liquidity or cash available to fund the Company’s operations. For a complete discussion of distributable earnings and its reconciliation to GAAP, as well as an explanation of the calculation of distributable earnings impairment, see note 11 to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Fortress’s management uses distributable earnings:

• in its determination of periodic distributions to equity holders;

• in making operating decisions and assessing the performance of each of the Company’s core businesses;

• for planning purposes, including the preparation of annual operating budgets; and

• as a valuation measure in strategic analyses in connection with the performance of its funds and the performance of its employees.

Growing distributable earnings is a key component to the Company’s business strategy and distributable earnings is the supplemental measure used by management to evaluate the economic profitability of each of the Company’s businesses and total operations. Therefore, Fortress believes that it provides useful information to investors in evaluating its operating performance. Fortress’s definition of distributable earnings is not based on any definition contained in its amended and restated operating agreement.

“Fund Management DE” is equal to pre-tax distributable earnings excluding our direct investment-related results. It is comprised of “Segment Revenues” net of “Segment Expenses” and “Principal Performance Payments.” Fund management DE and its components are used by the Company to analyze and measure the performance of our management business on a stand-alone basis. We define our segment operating margin to be equal to fund management DE divided by segment revenues. We believe that it is useful to provide investors with the opportunity to review our management business using the same metrics. Fund management DE and its components are subject to the same limitations as pre-tax distributable earnings, as described above.

24

Fortress Investment Group LLC

Exhibit 4

Reconciliation of Weighted Average Class A Shares Outstanding (Used for Basic EPS) to Weighted Average Dividend Paying Shares and Units Outstanding (Used for DEPS)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2012			2011			2012			2011
Weighted Average Class A Shares Outstanding (Used for Basic EPS)		220,660,135			190,487,829			214,399,422			186,662,670
Weighted average fully vested restricted Class A share units with dividend equivalent rights		(589,698	)		(740,964	)		(3,194,380	)		(4,082,385	)
Weighted average fully vested restricted Class A shares		(828,211	)		(540,353	)		(737,309	)		(480,777	)
Weighted Average Class A Shares Outstanding		219,242,226			189,206,512			210,467,733			182,099,508
Weighted average restricted Class A shares23		828,211			570,293			749,007			522,365
Weighted average fully vested restricted Class A share units which are entitled to dividend equivalent payments		589,698			740,964			3,194,380			4,082,385
Weighted average nonvested restricted Class A share units which are entitled to dividend equivalent payments		6,434,147			13,667,930			6,609,155			13,994,757
Weighted average Fortress Operating Group units		292,842,502			305,857,751			299,559,853			304,832,761
Weighted average Fortress Operating Group RPUs24		10,333,334			20,666,667			12,817,851			22,563,471
Weighted Average Class A Shares Outstanding (Used for DEPS)		530,270,118			530,710,117			533,397,979			528,095,247
Weighted average vested and nonvested restricted Class A share units which are not entitled to dividend equivalent payments		16,056,771			21,081,078			18,419,024			23,439,170
Weighted Average Fully Diluted Shares and Units Outstanding (Used for Diluted DEPS)		546,326,889			551,791,195			551,817,003			551,534,417

“Dividend Paying Shares and Units” represents the number of shares and units outstanding at the end of the period which were entitled to receive dividends or related distributions. It is useful in computing the aggregate amount of cash required to make a current per share distribution of a given amount per share. It excludes certain potentially dilutive equity instruments, primarily non-dividend paying restricted Class A share units, and, therefore, is limited in its usefulness in computing per share amounts. Accordingly, Dividend Paying Shares and Units should be considered only as a supplement to GAAP basic and diluted shares outstanding. The Company’s calculation of Dividend Paying Shares and Units may be different from the calculation used by other companies and, therefore, comparability may be limited.

²³  Includes both fully vested and nonvested restricted Class A shares.

²⁴  Includes both fully vested and nonvested Fortress Operating Group RPUs.

25

Fortress Investment Group LLC

Exhibit 5

Reconciliation of GAAP Book Value Per Share to Net Cash and Investments Per Share

(dollars and shares in thousands)

	As of December 31, 2012				As of December 31, 2011
	GAAP Book Value		Net Cash and Investments		GAAP Book Value		Net Cash and Investments
Cash and Cash equivalents	$	104,242	$	104,242	$	333,166	$	333,166
Investments		1,249,761		1,249,761		1,079,777		1,079,777
Due from Affiliates		280,557		—		298,689		—
Deferred Tax Asset		402,135		—		400,196		—
Other Assets		124,798		—		108,858		—
Assets		2,161,493		1,354,003		2,220,686		1,412,943
Debt Obligations Payable	$	149,453	$	149,453	$	261,250	$	261,250
Accrued Compensation and Benefits		146,911		—		247,024		—
Due to Affiliates		357,407		—		354,158		—
Deferred Incentive Income		231,846		—		238,658		—
Other Liabilities		59,226		—		57,204		—
Liabilities		944,843		149,453		1,158,294		261,250
Net	$	1,216,650	$	1,204,550	$	1,062,392	$	1,151,693
	GAAP Basic Shares		Dividend Paying Shares and Units		GAAP Basic Shares		Dividend Paying Shares and Units
Class A Shares		217,458		217,458		189,254		189,254
Restricted Class A Shares		828		828		570		570
Fortress Operating Group Units		249,535		249,535		305,858		305,858
Fully Vested Class A Shares - Dividend Paying		—		556		—		692
Nonvested Class A Shares - Dividend Paying		—		6,434		—		13,668
Fortress Operating Group RPUs		—		10,333		—		20,666
Shares Outstanding		467,821		485,144		495,682		530,708
Per Share	$	2.60	$	2.48	$	2.14	$	2.17

Fortress believes that Net Cash and Investments is a useful supplemental measure because it provides investors with information regarding Fortress’s net investment assets. Net Cash and Investments excludes certain assets (due from affiliates, deferred tax asset, other assets) and liabilities (due to affiliates, accrued compensation and benefits, deferred incentive income and other liabilities), its utility as a measure of financial position is limited. Accordingly, Net Cash and Investments should be considered only as a supplement to GAAP Book Value as a measure of the Company’s financial position. The Company’s calculation of Net Cash and Investments may be different from the calculation used by other companies and, therefore, comparability may be limited.

26

EX-99.2

Exhibit 99.2

  Fortress Investment Group LLC   Company p     FIG   Ticker p     Q4 2012 Earnings Call   Event Type p     Feb. 27, 2013   Date p  

PARTICIPANTS

Corporate Participants

Gordon E. Runté – Managing Director, Head of Investor Relations and Corporate Commuications

Randy A. Nardone – Interim Chief Executive Officer, Co-Founder, Principal and Director

Daniel N. Bass – Chief Financial Officer

Peter L. Briger, Jr. – Principal and Co-Chairman

Wes R. Edens – Co-Chairman & Principal

Other Participants

Craig Siegenthaler – Analyst, Credit Suisse Securities (USA) LLC (Broker)

Marc S. Irizarry – Analyst, Goldman Sachs & Co.

Chris M. Kotowski – Analyst, Oppenheimer Securities

Robert Lee – Analyst, Keefe, Bruyette & Woods, Inc.

Gerald E. O’Hara – Analyst, Jefferies & Co., Inc.

MANAGEMENT DISCUSSION SECTION

Operator: Good morning. My name is Christie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fortress Year End Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. It is now my pleasure to hand the program over to Mr. Gordon Runté. Please go ahead.

Gordon E. Runté, Managing Director, Head of Investor Relations and Corporate Commuications

Okay. Thank you, Christie. Good morning, everyone, and welcome to the Fortress Investment Group fourth quarter and full year 2012 earnings conference call. We’ll begin our call today with opening remarks from Fortress Interim Chief Executive Officer Randy Nardone, and Chief Financial Officer, Dan Bass. And after these remarks, we’ll save most of our time this morning for your questions.

Joining us for that portion of our call, we have Co-Chairman and Head of Credit, Pete Briger, Co-Chairman and Head of Private Equity, Wes Edens; Principal and Head of Liquid Markets, Mike Novogratz; along with other members of our management team.

Before we begin, I’d like to point out that we posted a new Investor Presentation to our website two weeks ago. This presentation addresses many of the business dynamics and initiatives that we’ll be discussing this morning and I believe it goes a long way towards simplifying the Fortress story and our value proposition. We’ll be posting an updated presentation with fourth quarter numbers, which we encourage you to review. And of course, we value your feedback on how we can further improve our materials. So please contact me directly with any thoughts on that.

Just a few housekeeping items before we begin. Let me remind you that statements made today that are not historical facts may be forward-looking statements. These statements are, by their nature, uncertain and may differ materially from actual results. We encourage you to read the forward-looking statements disclaimer in today’s earnings release, in addition to the risk factors described in our quarterly and annual filings.

With that, let me hand off to Randy.

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  Fortress Investment Group LLC   Company p     FIG   Ticker p     Q4 2012 Earnings Call   Event Type p     Feb. 27, 2013   Date p  

Randy A. Nardone, Interim Chief Executive Officer, Co-Founder, Principal and Director

Thanks, Gordon, and thanks everyone for joining us today. We went into 2012 with high expectations and aggressive objectives, our investment performance for capital raising, for building further on the scope and reach of our business, and for delivering strong financial results and creating value for our shareholders. I’d say we met those objectives. And we finished strong, with pre-tax distributable earnings of $107 million in the fourth quarter. That’s our highest quarter of DE in the last two years. This performance reflects strength across all of our businesses. We believe it’s only an indication of what this company can deliver and we’re firing on all cylinders. And we had a good start to 2013. If we can multiply by six the results of the first two months of the year, we’ll have a very good year.

Here’s the highlights for 2012. Our AUM increased to over $53 billion, an all-time high. In our alternatives businesses, we raised over $1.5 billion of capital in the fourth quarter and over $6.5 billion for the year. That’s more than we’ve raised in any year since the financial crisis. On top of that, we had over $6 billion in net flows at Logan Circle, our fixed income manager.

We delivered strong investment performance in all of our businesses. Our main Credit and Macro Funds were up each nearly 18% net for the year. Asia Macro topped 21%. Investment valuations rose by over 25% in private equity and Logan Circle continued to outperform benchmarks in virtually all strategies.

Looking at our balance sheet, net cash and investments reached almost $2.50 a share or approximately 40% of our share price today.

With strong capital raising and expectations for further growth in AUM, we have visibility of higher management fees going forward, which I’ll get to in a minute. This provided the basis for a 20% increase in our regular quarterly dividend to $0.06 a share. The increase is effective for the fourth quarter of 2012 bringing distributions for the year to $0.21 in total. A pro forma of $0.24 per base dividend in 2013, represents a dividend yield of approximately 4%.

As you know, we invested $180 million in December to repurchase about 10% of our outstanding shares. The purchase price of $3.50 was nearly a 20% discount at the time and about a 40% discount today. At a cost of about $0.36 a share, we paid out more than our DE for the year with this transaction plus our regular dividends.

Looking more closely in our financial results, our fourth quarter management fees were $131 million, up from $121 million in the third quarter. With anticipated growth in AUM, we expect to see a corresponding increase in management fees going forward.

Let me give some color on the key drivers here. We’re in the market raising additional capital in every Fortress business. In just the first two months of 2013, we’ve raised over $1.5 billion dollars in new alternative capital. So a very strong start for the year. Nearly half of that was permanent equity raised by Newcastle. Wes is here and he can talk about how we think about opportunities for permanent capital and sector specific funds in a few minutes.

AUM rose by over 50% to nearly $21 billion at Logan Circle, leading to a 60% increase in management fees. Logan’s investment performance and pipeline remains strong. The platform is highly scalable. Our expectations for business growth here are high and we’re getting closer to our goal of Logan becoming a meaningful contributor.

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Last point on potential management fee growth. We finished the quarter with over $6 billion in dry powder, most of it in newer vintage funds. I should point out that there are no guarantees about the pace or extent to which this gets invested, but the arithmetic is approximately $15 million in management fees on each $1 billion invested. So a good quarter for building on management fees, and catalysts are in place for growth in near and longer terms.

As I mentioned earlier, investment performance is strong for the quarter and the full year. This had a positive impact on incentive income, particularly in Q4, when we had a full quarter of AUM above high watermarks in Macro. Incentive income totaled $114 million in the fourth quarter, up from $65 million in the third quarter, and $46 million in Q4 last year.

As with management fees, a number of factors point to potential incentive income growth. One, our gross undistributed incentive income grew to nearly $650 million in total, or about $1.30 a share. Over $500 million of that amount is in our credit PE Funds, which are well above incentive thresholds. So, even with no assumption about further investment gains, there’s visibility of higher incentive income as investments are realized.

Two, we began 2013 above high watermarks in our main Macro Fund. This means we have over $3 billion in liquid markets AUM, able to generate incentive income on each incremental dollar gain. Year-to-date, Macro is already up about 4% net. Three, with over $8 billion of new alternative capital raised over the last 14 months, incentive eligible AUM will increase to the extent this capital is invested. Four, looking further out, we’ve had valuation gains of over $6 billion in our private equity main funds since 2009. We’ve made a lot of progress in closing the incentive threshold gap in our most recent vintage funds, and realization activity has picked up. The key drivers for future growth here are companies like Nationstar and Florida East Coast, Springleaf and Holiday. These are companies we believe have strong prospects for future business growth, increased profitability and valuation gains.

So I’ve covered a lot of ground today, fourth quarter results that included our highest DE in two years, strong investment performance across all of our businesses, and our most successful year for attracting new capital since 2008. On all fronts, we met our objectives for the year.

More importantly, we believe that our performance is only beginning to reflect the inherent potential of our company. The embedded value, the momentum and the specific catalyst I’ve described in each of our businesses point to the potential for substantial earnings and valuation upside. We are pleased with our performance to date and optimistic about our prospects going forward.

With that, let me hand it off to Dan.

Daniel N. Bass, Chief Financial Officer

Thanks, Randy. Good morning, everyone. Today, I’ll provide details around our fourth quarter and full year 2012 results, as well as the key metrics that drove our financial performance last year. A strong fourth quarter capped what was a strong year here at Fortress, pre-tax DE of $107 million or $0.20 per share was up nearly 70% quarter-over-quarter. Management fees were up 13% and incentive fees were up 75% in the quarter alone. For the full year, pre-tax DE was $278 million or $0.52 per share. This is a 15% year-on-year growth. Growth was driven by a 7% increase in total revenues including a 40% increase in incentive income.

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  Fortress Investment Group LLC   Company p     FIG   Ticker p     Q4 2012 Earnings Call   Event Type p     Feb. 27, 2013   Date p  

Our AUM continued to climb in the quarter as well. AUM increased by nearly $2 billion or 4% in the fourth quarter and ended the year at $53.4 billion. For the full year, AUM grew by nearly $10 billion or 22%. Driving this was alternative asset growth of 8% and traditional asset growth of over 50%. The 22% annual growth is inclusive of returning $3 billion of capital to our investors and paying out another $3 billion of redemptions and scheduled payments in our hedge funds.

Within AUM, we deployed $3 billion of dry powder, $900 million coming from in the fourth quarter alone. At the end of the year, over $6 billion in dry powder remains, of which $5 billion is in newer vintage funds and available for general investment purposes.

Additionally, in the first quarter, we expect approximately $350 million of this capital to be called in our MSR fund relating to Nationstar’s acquisition of MSRs from the Bank of America. On to capital raising, which continued to be a strength. The $6.7 billion of capital raised during the year represents a 60% increase over 2011 and brings our three-year total to $16 billion. This was the first post – first year post crisis that all of our businesses together have seen significant momentum. In fact, every business raised $1 billion of capital for the first time since 2008.

Additionally, the fourth quarter raise of $1.5 billion marked the fifth consecutive quarter in which we raised over $1 billion of capital. And since we’ve already raised $1.6 billion of capital in the first quarter of 2013, it now makes it six straight quarters.

Now, let me turn to investment performance, where strong returns continued across all of our funds. In our traditional PE Funds, fund depreciation of over 25% for the year outpaced major indices by a significant margin. Our private company valuations were up 11% and public company valuations, which account for about 30% of our portfolio were up 65% for the year. Nationstar, one of the top IPO’s in 2012 and GAGFAH were the two main drivers, up 60% and 130% respectively.

In our liquid hedge funds, top-tier returns allowed us to generate $47 million of incentive income in this segment during the fourth quarter alone. This was over two-thirds of the total recorded in the liquid business for the entire year. It clearly demonstrates the earning potential of our liquid business when our funds are in excess of high watermarks for a full quarter.

In our credit hedge funds, annual net returns of 18% in our DBSO funds generated $130 million of incentive income in this segment. This segment now has nearly $5 billion of capital eligible for incentive income and an 11% net annualized track record over the last 10-plus years.

In our credit PE Funds, outstanding fund performance is demonstrated by the stockpiling of embedded value in our funds, which will become DE when it is realized. In these funds, we have $509 million or over $1 per share of gross embedded incentive income. This is more than double the value at the end of last year despite recognizing nearly $70 million of incentive income during the year.

Switching to the balance sheet, where we had several positive developments. First, as previously stated, we paid down all $180 million of our outstanding long-term debt in the first few days of the fourth quarter. Second, we financed the share buyback transaction using $30 million in cash and $150 million note carrying a 5% interest rate which will be paid off approximately one year from now. After these events, our balance sheet value measured by net cash and investments was still up 5%, ending the year at $2.48. This is up 14% from the end of 2011, and up 36% over the last two years.

Finally, yesterday we upsized and extended our revolving debt facility. Our new facility is $150 million with a three-year maturity and is fully undrawn as of now. As I look back on 2012, not only that we have strong performance, but we created additional shareholder value in three fundamental ways: paying off long-term debt, executing the stock repurchase, and completing our first full-year dividends. Taken together, these actions created significant value for our shareholders.

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  Fortress Investment Group LLC   Company p     FIG   Ticker p     Q4 2012 Earnings Call   Event Type p     Feb. 27, 2013   Date p  

Two additional points in this regard. One, on a pro forma basis, the stock repurchase would’ve added $0.05 of pre-tax earnings per share to our 2012 results. And, on a go-forward basis, our dividend paying share count is now down approximately 10% or 51 million shares lower which will positively affect future year’s earnings per share as well. Two, increasing the quarterly base dividend by 20% underscores our confidence and the strength of our business and our prospects for future growth.

Finally, before I close, a few comments on taxes. For the full year 2012, our DE tax rate was 8%. Again, let me remind you, equity-based reductions will continue to keep our tax rate low through the end of this year. In closing, let me revisit three key points. First, raising capital has been a key area of strength. Positive sector tailwinds, strong underlying fund performance and new offerings are all expected to help our capital raising momentum.

Second, the fourth quarter results offer a clear snapshot of our earnings potential when we have all of our businesses contributing significantly to the bottom line. And as Randy mentioned there are number of earnings growth catalyst across all of our businesses that are just now coming to fruition.

And finally, creating value for our shareholders continues to be priority number one here at Fortress. Example to this include double-digit EPS growth, raising our quarterly dividend by 20%, long term debt management and a stock buyback transaction that looks even better at today’s prices.

With that, we will now take your questions.

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QUESTION AND ANSWER SECTION

Operator: [Operator Instructions] Your first question comes from the line of Craig Siegenthaler with Credit Suisse.

<Q – Craig Siegenthaler – Credit Suisse Securities (USA) LLC (Broker)>: Thanks, guys, good morning.

<A – Randy Nardone – Fortress Investment Group LLC>: Good morning.

<A – Dan Bass – Fortress Investment Group LLC>: Good morning.

<Q – Craig Siegenthaler – Credit Suisse Securities (USA) LLC (Broker)>: Just to first touch on the liquid hedge fund business, had a really nice turnaround in 2012, really – especially in this fourth quarter we had massive inflows, low redemptions and strong performance, now we probably shouldn’t annualize the fourth quarter of capital raise number, but can you provide some commentary around your capital raise outlook, and also the redemption outlook for this year?

<A – Dan Bass – Fortress Investment Group LLC>: Yeah, we did raise – we raised significant dollars in the first quarter and capital raising outlook looks pretty good. Redemptions have slowed significantly, and we’re very positive about it.

<Q – Craig Siegenthaler – Credit Suisse Securities (USA) LLC (Broker)>: Got it. Got it. Okay. And then maybe turn it over to Credit PE business. A significant level of capital is pulled in, in the fourth quarter. I was wondering if Pete could kind of share his some perspective on the investment environment because he sounded pretty bearish on the last few calls just given where credit spreads were and also given where government stimulus was sort of masking underlying fundamentals. Maybe if you can provide us a quick update.

<A – Pete Briger – Fortress Investment Group LLC>: I think the current environment for opportunistic credit investing is lousy, and it’s probably gotten worse over time, to this point where thematically, I don’t think that there is a great credit environment anywhere in the world. We are still making investments in our Credit PE business and certainly in our Drawbridge Special Opportunities Fund which has the ability to be long and short, et cetera.

But all of the credit investments that we are making today are idiosyncratic in nature, meaning that they’re good investments based upon the specific circumstances, and almost all of the investments that we’re making today on the long side are not purchased from the broker/dealer community where the money center banking community if you will, we’re not able to make investments in terms of buying at the supermarkets.

So our flows in PE credit have slowed substantially. To put this in perspective, in 2012 and year-to-date 2013, we’ve distributed about $3.5 billion to investors, and called about $2.7 billion. And if you look at just 2013, we’ve distributed about $1.3 billion to investors and called less than $400 million. And so, I would describe the credit markets right now as lousy. Investments that we’re making are only on an idiosyncratic basis. And what you really have out there is the optionality of European deleveraging beginning to occur at a quicker pace.

But at least right now, government intervention all around the world, U.S., Europe, Asia has put us in a bad place from a credit investing perspective, where the perception of risk is actually lower than the actual risk. And that’s a metric that we actually focus on very closely. So thematically, we are not making investments in credit, risk of higher interest rates in the U.S., and an essentially free money environment.

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I would say that we’re not terrified of credit. And I would say that because we’re not in an 2006 or 2007 period, where the whole financial services system was leveraged. The U.S. banking system is continuing to deleverage, and believe it or not, the European financial services system is deleveraging albeit at a much slower pace.

So that is a big point in terms of the safety of the system. I don’t think that we have the risk in the system because the financial services industry, the financial institutions themselves are deleveraging. But you are in a very easy money environment especially if you’re a middle-market company and somebody needs to borrow money.

<Q – Craig Siegenthaler – Credit Suisse Securities (USA) LLC (Broker)>: Got it. Thanks, Pete. And then maybe Dan Bass, you can just chime in. Given kind of the more negative outlook in the investment side, should we expect the undrawn capital levels in the Credit PE business remain quite high, it looks like over the near-term?

<A – Dan Bass – Fortress Investment Group LLC>: I mean, it’s a Pete question. I’ll let Pete address it.

<A – Pete Briger – Fortress Investment Group LLC>: Yes. I think in the current environment we’re investing at a much slower pace. And the types of return levels that we’re looking to make investments in the liquid credit, we do not see by and large other than in idiosyncratic circumstances.

<Q – Craig Siegenthaler – Credit Suisse Securities (USA) LLC (Broker)>: Great. Thanks for taking my questions.

Operator: Your next question comes from the line of Marc Irizarry with Goldman Sachs.

<Q – Marc Irizarry – Goldman Sachs & Co.>: Great. A question for Wes, if you can just talk a little bit about the strategic evolution of the PE model for you, the use of permanent capitals in that business, and just how we should think about the mix of management fees? Maybe this is more for Dan Bass for management fees versus realizations going forward?

<A – Wes Edens – Fortress Investment Group LLC>: Sure. Well, our total capital in the private equity business was about $15 billion at the end of the year. I think $14.3 billion is the specific number. And of that, we have about $3.5 billion from – that is permanent capital specifically. In the first quarter of the year, we’ve raised almost $1 billion in permanent capital, and we have a bunch of different initiatives for those different strategies as well as some other ones and also some funds that kind of supplement that.

And I guess the way that we are thinking about it is that, we can continue to grow our – the kind of listed or publicly capitalized vehicles in sectors where we think there are great opportunities, and they have real scalable opportunities, as we’ve done in financial services space, with all the MSRs and the non-agency stuff with Newcastle and then New Residential spin-off. We have a significant closing on a private capital raise for worldwide transportation and infrastructure which we think be a public vehicle on all probability later this year, but certainly in the next 12 months, and that’s a gigantic sector there, a $2.4 trillion in transportation assets worldwide, so we have broad aspirations for that and there are a handful of other things.

I think what worked very well in those contexts are asset-heavy businesses where you can buy them at good yields and use very modest amounts of leverage to generate well returns. I mean, the MSR space we have not deployed any leverage, we’ve been able to generate kind of 20%-ish returns in the transportation infrastructure space we’re getting kind of low-teens on leverage returns so modest leverage gets you to a good place.

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Incremental to that, though, there are significant private equity opportunities in those spaces as well. Transportation infrastructure is a good example of that, so having a private equity vehicle kind of sector-specific private equity vehicle side-by-side with that, gives you great overflow capacity, and also the capacity to do corporate private equity-like transactions.

So, we did raise the fund last year and in the MSR space, that’s something that has – we’ve made a good – very good start in getting that capital deployed and look I think aspirationally for the year, I’d like to see us raise $5 plus billion between the permanent and the sector-specific funds were $1 billion kind of towards that goal right now.

And we – obviously that will be – that’ll have to be concurrent with investment opportunities, but we see – and our – the spaces where we’ve got significant exposure which is really in the senior housing business, and the transportation business has been of course financial services here in the U.S. between the servicer Nationstar and then also this now a very large consumer finance business we have at Springleaf. We think there is and is going to be a ton to do. And so and that’s how we think about it. So I think that matching up those permanent vehicles with sector specific stuff I think is a great way to run the business.

<Q – Marc Irizarry – Goldman Sachs & Co.>: Okay. And then just on realizations, particularly from some of the older vintage funds. Can you give us some perspective on how we should think about the promote that you guys might earn in PE?

<A – Wes Edens – Fortress Investment Group LLC>: Yeah, we’ve got – we’ve had advanced that we had a great year last year. So the fourth consecutive year of very material returns in the Private Equity of the business. So on the last four years in total have been kind of 21%, 16%, 9% and now 25%. So it’s a big step in the right direction in terms of returns of all those. And we expect all of the significant funds to generate meaningful amounts of promote, and some of the older vintage funds were closer to the end of the beginning for sure.

So hard to predict the timing of these, they could be very lumpy. There’s obviously a couple things that we have a – we are very specifically targeted on for the year that I – and I can’t detail because they’re going to advance about a third of our assumptions in PE funds are in public stocks. So I don’t want to get offside on that. But I think at with a little bit of good fortune in these markets, we think – it’s kind of the opposite of the PE problem is that it’s a tough time to find opportunistic investment, maybe a great time to find opportunistic sales, right. As the asset prices go up and as the markets do a little better. So I think it should be a good complement to the rest of the business.

And we can take the first two months of the year and multiply it times six, I think we’ll all be very satisfied with what the outcomes have been. So, we’ll have to wait and see.

<Q – Marc Irizarry – Goldman Sachs & Co.>: Okay, great. And then just quickly on Pete, you mentioned it’s there’s no great environment globally it seems like for your business. But just can you give us some commentary on Europe and the opportunistic investing environment there? Maybe it’s nonperforming loans in Italy, as Wes as you cited the PE business, like where is Fortress taking advantage of dislocations there?

<A – Pete Briger – Fortress Investment Group LLC>: Well, as you know, there’s been tremendous amount of intervention in Europe over the last two years, government intervention across all markets certainly, Greece, Spain, Italy being the most intense. And so Europe has also been the most highly articulated opportunity in credit over the last 24 months and there’s been a ton of capital raised to invest in European credit opportunities. I don’t think that any serious credit investor is interested in the credit opportunity in Europe right now. The sales that are taking place of assets that are being sold out of banking systems are highly competitive. And as I say, the metric of perceived risk to actual risk is most distorted in Europe.

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So there is a tremendous amount of money that’s been dedicated to Europe. People have itchy trigger fingers, and they are occasionally pulling triggers. We saw one sale in a UK bank, commercial mortgage portfolio, where the winner ended up being somebody who was not asked into the final round, who threw in a bid 20% higher than all of the other bidders. And so we’re seeing some crazy things with capital being allocated to Europe right now.

The opportunity is big, but it is, to-date, potential. Every financial institution in Europe would love to sell loans off its balance sheet, but there are no sales that are taking place that are actually accretive to capital, so what you have in Europe is a huge price gap and a tremendous amount of capital that’s been dedicated to buying distressed debt and buying NPLs in particular. I think we have great assets on the ground in terms of collection companies and servicers that we’ve set up, both recently and over the long term, so I think that we have lots of feet on the street if you will, but the time to be investing in Europe in my judgment is certainly not now.

<Q – Marc Irizarry – Goldman Sachs & Co.>: Okay. And then just one more, if I can, on the distribution decision, not to have a sizable true-up this quarter, was sort of the buyback in place for that and how should we think about the capital management strategy?

<A – Randy Nardone – Fortress Investment Group LLC>: I think if you look at the buyback of $0.36 a share and coupled with the regular quarterly dividends of $0.21 a share, we distributed to shareholders more than our DE for last year. And so what we end up doing for 2013, we’ll take everything into account whether there are opportunities to buyback stocks cheap or pay out a top up or whatever. We’ll make the decision at the end of the year and the board – it’d be a board matter as well.

<Q – Marc Irizarry – Goldman Sachs & Co.>: Okay, great. Thanks.

Operator: Your next question comes from the line of Chris Kotowski with Oppenheimer.

<Q – Chris Kotowski – Oppenheimer Securities>: Yeah, just a follow-up for Pete on the Private Equity fund – or credit funds – is that looking at pages 15 and 17 of the press release, though, despite your caution, it sounds like you put $1.4 billion, $1.4 billion to $1.7 billion to work. Is that just the new Japan fund or is that the amount of – that you were able to put to work in what you call the idiosyncratic manner?

<A – Dan Bass – Fortress Investment Group LLC>: Yeah. No, the Japan fund is primarily in the capital raised number, which is not in the $1.4 billion. The $1.4 billion is sometimes there is a lag on the call of capital versus the commitment of capital and so, the numbers shown here are a function of that. I think Pete’s comment stand on the pace of investing.

<Q – Chris Kotowski – Oppenheimer Securities>: Okay. And then secondly, just going back to Wes’s comments about the promote and the funds doing better, and I’m thinking back to the disclosure you always have in your 10-Q on page 11. It still showed for – it showed Funds III and IV certainly being above cost, but still a long way away from generating carry and Fund V still being below cost at September 30. I’m curious. Are all those funds above cost now? And did you mean just that they were in good shape for returning more than cost, or did you think they can actually generate carry at some point in the future?

<A – Wes Edens – Fortress Investment Group LLC>: I definitely think we will generate carry. I mean the big numbers from the private equity business is the paid-in capital is about $20 billion. We returned about $10 billion and there were mark-to-market of about $15 billion, where we think

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the potential for appreciation is substantial. So, I mean those are very gross numbers, but it gives you some sense of kind of the big picture of what we think it means, and the disclosure is accurate. It reflects – I mean the Fund V is like 97% of cost so it’s basically there and we think that the underlying investments have got a tremendous amount of the right things.

I mean, our biggest exposures are there’ll be on the transportation side, particularly the railroads business and the related real estate in Florida. We own about a third of the development land, industrial development land in Dade and Broward counties in what is probably the hottest market in the United States right now. Our railroad down there has had a tremendous run of it and seems poised to very, very substantial things. We’re working hard and building a passenger railway down there; there’s a lot of good stuff going on there.

Financial services space in the U.S. I think as a firm, I really believe we have by far the best exposures across the firm for these things, right, we own one of the biggest mortgage servicers in the country, we own one of the biggest standalone consumer finance franchises. We own the largest commercial loans special servicer. We own a big chunk of a company that’s the largest multi-family lenders, so you add all those things up if you think that those sectors have got real appreciation of potential which we do, then we’re incredibly well-positioned to take advantage of that.

So, all those things will result in kind of a leveraged return on our investments. And much like we’ve had whatever X billions of dollars of appreciation last couple of years. We think that there’s a substantial amount of upside and thus we have the ability to pay promotes. So…

<Q – Chris Kotowski – Oppenheimer Securities>: All right. And when you suggested you were hoping to raise up to $5 billion this year or aspirationally $5 billion, does that include a sort of general purpose go-anywhere major flagship fund that’s a successor to Fund V, or is it going to be more of these targeted kinds of investments?

<A – Wes Edens – Fortress Investment Group LLC>: Unclear. We can’t really comment on the specific capital formation for the private funds that we’re looking for. But I think the – I think they’re a combination of the underlying permanent vehicles as well as private equity funds. I think that we think that the year is going to be a very good one whatever the form of them is. So, like I said we’ve managed to raise about $1 billion in capital for those listed vehicles thus far and it’s early. So…

<Q – Chris Kotowski – Oppenheimer Securities>: Okay, all right. That’s it for me. Thank you.

Operator: Your next question comes from the line of Robert Lee with KBW.

<Q – Robert Lee – Keefe, Bruyette & Woods, Inc.>: Good morning, everyone. I’d like to go back to the distribution and frankly, I’m still kind of little confused as to why there wasn’t the true-up in the fourth quarter. I understand you bought back the stock, but only $30 million of that was funded with cash; the rest was with notes. So, if you add $0.50-odd of pre-tax DE and 8% tax rate on that, I mean, you distributed $0.21 and granted $30 million, few – some pennies were used for – to fund the share buyback. It’s still not clear to me why there wasn’t more of a true-up. So, maybe you can kind of walk us through that. And then how should we think about it reconciling to a true-up going forward, particularly since, next year, you have to pay the notes down for the share buyback. So, is that going to impact the distribution or not?

<A – Randy Nardone – Fortress Investment Group LLC>: Well, we have – we financed $150 million of $180 million of the stock buyback price. Our plan obviously is to pay back that $150 million. Like I said earlier, to the extent we have, we generate a substantial incentive income this year, we’ll take a look at what the opportunities are at the end of the year. I’m talking about it with the board and with management here. And I would say if we could buyback a bunch of stock cheap again at the end of the year, that will definitely get serious consideration here.

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<A – Dan Bass – Fortress Investment Group LLC>: Quickly to your financing point, I mean, we had a short term financing. It was – we received a lot of our incentive income in the first part of the year. So, we view the financing as really related to 2012 and that’s why we characterize it as that.

<Q – Robert Lee – Keefe, Bruyette & Woods, Inc.>: So, we’re – so, a year from now, we’re going to assume that having to pay back that is not going to affect your potential true-up in 2013?

<A – Dan Bass – Fortress Investment Group LLC>: Yes.

<Q – Robert Lee – Keefe, Bruyette & Woods, Inc.>: Okay. Thanks for taking my question.

Operator: [Operator Instructions] Your next question comes from the line of Daniel Fannon with Jefferies.

<Q – Jerry O’Hara – Jefferies & Co., Inc.>: Good morning. This is actually Jerry O’Hara sitting in for Dan this morning. He is on the road. Just a quick one on management fees, you called out the increase in private equity I believe in the credit fund segment of management fees. And it’s a fairly notable increase quarter-over-quarter, at least per our model, and there may be some variances here. But is that – was that driven by anything in particular, the capital is put to use to? Obviously, an increase in overall AUM, but perhaps management fee-wise or anything along those lines?

<A – Dan Bass – Fortress Investment Group LLC>: No, management fees just are directly tied to our core of capital and there’s nothing out of the ordinary, just additional AUM or AUM increased by $10 billion over the year and $2 billion in the fourth quarter. So, those are the main drivers.

<Q – Jerry O’Hara – Jefferies & Co., Inc.>: Okay. Fair enough. And then just a clarifying point. The $3.1 billion above high water marks on the liquid hedge fund, that’s of the total, right, over the total $5.1 billion or was that just any particular fund?

<A – Dan Bass – Fortress Investment Group LLC>: No, that’s mostly in the – it’s mostly in the Macro funds, the Fortress Partners Fund largely doesn’t generate incentive. And so that’s the biggest difference between the $3.1 billion and the $5.1 billion.

<Q – Jerry O’Hara – Jefferies & Co., Inc.>: Right, got it. Okay. Thanks for taking my questions.

Operator: That does conclude our question-and-answer session for today. It is my pleasure to hand the program back over to management for any further comments or closing remarks.

Randy A. Nardone, Interim Chief Executive Officer, Co-Founder, Principal and Director

Thanks, everybody. Just a quick recap before we go. Pleased with our results for 2012 most of all because they reflect the strength and momentum across every one of our businesses. Investment performance, capital formation both strong in 2012 and it’s carried into 2013. Embedded value continues to build and there are catalysts in place for potential earnings upside across the house. So, we’re pleased to have met our objectives for 2012 and we believe our performance only begins to reflect the inherent potential of our company.

Thanks again for joining us today and look forward to providing an update on our next call.

Operator: That does conclude today’s conference call. You may now disconnect.

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