Fortress reports $171 million net loss

Parent of ski area's parent company reported second-quarter financials today

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— Fortress Investment Group reported a $171 million net loss for the second quarter, which ended June 30. The company saw a net loss of $250 million in the second quarter of 2008.

Fortress released its financial report today.

The private-equity and hedge fund manager is the parent company of Intrawest, which is the parent company of Steamboat Ski and Resort Corp. Some Fortress funds are invested in development at the base area of Mount Werner in Steamboat Springs.

The company reported that its net loss attributable to shareholders was $45 million, or 41 cents per share. That compares with a loss of 67 cents per share in the second quarter of 2008.

Excluding compensation for principals, Fortress' net second-quarter income was $66 million.

The company announced in June that it wouldn't pay second-quarter dividends.

Fortress' losses improved compared with the first quarter, when it reported a net loss of $287 million.

Fortress ran into issues in December, finding itself in a position where it had to hold back redemptions from some of its funds. Investors requested $3.5 billion of their money in November and December. The amount would have wiped out the funds, so Fortress suspended redemptions.

News has improved for the company. Fortress raised $219.5 million in net proceeds by selling 46 million shares in an offering this year. Daniel Mudd, former chief executive officer of mortgage giant Fannie Mae, will take over as CEO on Tuesday. Fortress also elected a new board member, George Wellde.

Fortress was trading at $4.85 a share, up 55 cents, when the market closed today.

To reach Blythe Terrell, call 871-4234 or e-mail bterrell@steamboatpilot.com

Comments

toboyle105 5 years, 3 months ago

Sounds like Les Otten and Oak Hill Partners revisited.

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Jamie Morgan 5 years, 3 months ago

2Q net income of $66MM w/o pricipals compensation and 2Q net loss of $171MM--looks like they are really earning their principals compensation of $237,000,000 during the 2Q. Did I read these numbers wrong--this seems way off.

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Blythe Terrell 5 years, 3 months ago

Jamie, you read them correctly. Fortress' news release says this: "Excluding principals agreement compensation, second quarter GAAP net income was $66 million." It lists the quarter's GAAP net loss as $171 million. (GAAP stands for Generally Accepted Accounting Principles.)

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