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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  ________  to ________
Commission File Number: 001-33805
SCULPTOR CAPITAL MANAGEMENT, INC.
(Exact name of Registrant as specified in its charter)
 
Delaware   26-0354783
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
9 West 57th Street, New York, New York 10019
(Address of principal executive offices)
(212) 790-0000
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class   Trading symbol(s) Name of each exchange on which registered
Class A Shares   SCU New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer    Accelerated filer
   
Non-accelerated filer    Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 
As of August 2, 2021, there were 25,216,458 Class A Shares and 32,887,882 Class B Shares outstanding.
 




SCULPTOR CAPITAL MANAGEMENT, INC.
TABLE OF CONTENTS
 
    Page
PART I — FINANCIAL INFORMATION
 
Item 1.
6
 
 
6
7
 
 
8
 
 
9
 
 
11
 
 
13
 
Item 2.
38
 
Item 3.
75
 
Item 4.
77
 
PART II — OTHER INFORMATION  
 
Item 1.
79
 
Item 1A.
79
 
Item 2.
79
 
Item 3.
79
 
Item 4.
79
 
Item 5.
79
 
Item 6.
80
 
81

i


Defined Terms
2007 Offerings
Refers collectively to our IPO and the concurrent private offering of approximately 38.1 million Class A Shares to DIC Sahir Limited, a wholly owned indirect subsidiary of Dubai Holdings LLC
active executive managing directors
Executive managing directors who remain active in our business
Annual Report
Our annual report on Form 10-K for the year ended December 31, 2020, dated February 23, 2021 and filed with the SEC
Class A Shares
Our Class A Shares, representing Class A common stock of Sculptor Capital Management, Inc., which are publicly traded and listed on the NYSE
Class B Shares
Class B Shares of Sculptor Capital Management, Inc., which are not publicly traded, are currently held solely by our executive managing directors and have no economic rights but entitle the holders thereof to one vote per share together with the holders of our Class A Shares
CLOs
Collateralized loan obligations
the Company, Sculptor Capital, the firm, we, us, our
Refers, unless the context requires otherwise, to the Registrant and its consolidated subsidiaries, including the Sculptor Operating Group
Distribution Holiday The Sculptor Operating Partnerships initiated a distribution holiday (the “Distribution Holiday”) on the Group A Units, Group D Units, Group E Units and Group P Units and on certain RSUs that will terminate on the earlier of (x) 45 days after the last day of the first calendar quarter as of which the achievement of $600.0 million of Distribution Holiday Economic Income is realized and (y) April 1, 2026. Holders of Group A Units, Group D Units, Group E Units and Group P Units and certain RSUs, do not receive distributions during the Distribution Holiday
Distribution Holiday Economic Income Distribution Holiday Economic Income is the cumulative amount of Economic Income earned since October 1, 2018, less any dividends paid to Class A Shareholders or on the now-retired Preferred Units. Distribution Holiday Economic Income is a non-GAAP measure that is defined in the agreements of limited partnership of the Sculptor Operating Partnerships and is being presented to provide an update on the progress made toward the $600.0 million target required to exit the Distribution Holiday.
Exchange Act
Securities Exchange Act of 1934, as amended
executive managing directors
The current executive managing directors of the Company, and, except where the context requires otherwise, also includes certain executive managing directors who are no longer active in our business
funds
The multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles for which we provide asset management services
GAAP
U.S. generally accepted accounting principles
Group A Units
Refers collectively to one Class A operating group unit in each of the Sculptor Operating Partnerships. Group A Units are limited partner interests held by our executive managing directors
1


Group A-1 Units
Refers collectively to one Class A-1 operating group unit in each of the Sculptor Operating Partnerships. Group A-1 Units are limited partner interests held by our executive managing directors
Group B Units
Refers collectively to one Class B operating group unit in each of the Sculptor Operating Partnerships. Group B Units are limited partner interests held by Sculptor Corp
Group E Units
Refers collectively to one Class E operating group unit in each of the Sculptor Operating Partnerships. Group E Units are limited partner interests held by our executive managing directors
Group P Units
Refers collectively to one Class P operating group unit in each of the Sculptor Operating Partnerships. Group P Units are limited partner interests held by our executive managing directors
Institutional Credit Strategies
Our asset management platform that invests in performing credits, including leveraged loans, high-yield bonds, private credit/bespoke financing and investment grade credit via CLOs, aircraft securitization vehicles, collateralized bond obligations, and other customized solutions
IPO
Our initial public offering of 3.6 million Class A Shares that occurred in November 2007
NYSE
New York Stock Exchange
Partner Equity Units
Refers collectively to the Group A Units, Group E Units and Group P Units
Preferred Units
One Class A cumulative preferred unit in each of the Sculptor Operating Partnerships collectively represents one “Preferred Unit.” Certain of our executive managing directors collectively owned 100% of the Preferred Units. Preferred Units issued in 2016 and 2017 are, collectively, referred to as “2016 Preferred Units.” Preferred Units issued in 2019 are referred to as “2019 Preferred Units.” We redeemed in full the Preferred Units in the fourth quarter of 2020, and as of June 30, 2021 there were no Preferred Units outstanding.
PSUs
Class A performance-based RSUs
Recapitalization
Refers to the recapitalization of our business that occurred in February 2019. As part of the Recapitalization, a portion of the interests held by our active and former executive managing directors were reallocated to existing members of senior management. In addition, we restructured the previously outstanding senior debt and Preferred Units
Registrant
Sculptor Capital Management, Inc., a Delaware corporation
RSUs
Class A restricted share units
Sculptor Corp
Sculptor Capital Holding Corporation, a Delaware corporation
Sculptor Operating Group
Refers collectively to the Sculptor Operating Partnerships and their consolidated subsidiaries
Sculptor Operating Group Units
Refers collectively to Sculptor Operating Group A, B, D, E, and P Units
Sculptor Operating Partnerships
Refers collectively to Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP
SEC
U.S. Securities and Exchange Commission
2


Securities Act
Securities Act of 1933, as amended
Special Investments
Investments that we, as investment manager, believe lack a readily ascertainable market value, are illiquid or should be held until the resolution of a special event or circumstance

3


Available Information
We file annual, quarterly and current reports, proxy statements and other information required by the Exchange Act with the SEC. We make available free of charge on our website (www.sculptor.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those filings as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. We also use our website to distribute company information, including assets under management by investment strategy, and such information may be deemed material. Accordingly, investors should monitor our website, in addition to our press releases, SEC filings and public conference calls and webcast. The contents of our website are not, however, a part of this report.
Also posted on our website in the “Investor Relations—Corporate Governance” section are charters for our Audit Committee; Compensation Committee; Nominating, Corporate Governance and Conflicts Committee and Corporate Responsibility and Compliance Committee, as well as our Corporate Governance Guidelines and Code of Business Conduct and Ethics governing our directors, officers and employees. Information on, or accessible through, our website is not a part of, and is not incorporated into, this report or any other SEC filing. Copies of our SEC filings or corporate governance materials are available without charge upon written request to Sculptor Capital Management, Inc., 9 West 57th Street, New York, New York 10019, Attention: Office of the Secretary. Any materials we file with the SEC are also publicly available through the SEC’s website (www.sec.gov).
No statements herein, available on our website or in any of the materials we file with the SEC constitute, or should be viewed as constituting, an offer of any fund.
Forward-Looking Statements
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that reflect our current views with respect to, among other things, future events, our operations and our financial performance. We generally identify forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.
Any forward-looking statements contained herein are based upon historical information and on our current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved.
We caution that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions, including the impact of public health crises, such as the ongoing COVID-19 pandemic; United States (“U.S.”) and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving us; the consequences of the Foreign Corrupt Practices Act settlements with the SEC and the U.S. Department of Justice (the “DOJ”) and any claims arising therefrom; whether the Company realizes all or any of the anticipated benefits from the Recapitalization and other related transactions; whether the Recapitalization and other related transactions result in any increased or unforeseen costs, indemnification obligations or have an impact on our ability to retain or compete for professional talent or investor capital; conditions impacting the alternative asset management industry; our ability to retain existing investor capital; our ability to successfully compete for fund investors, assets, professional talent and investment opportunities; our ability to retain our active executive managing directors, managing directors and other investment professionals; our successful formulation and execution of our business and growth strategies; our ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to our business; the anticipated benefits of changing the Registrant’s tax classification from a partnership to a corporation and subsequently converting from a limited liability company to a corporation; and assumptions relating to our operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if our assumptions or estimates prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors are not and should not be
4




construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in our filings with the SEC, including but not limited to our Annual Report.
There may be additional risks, uncertainties and factors that we do not currently view as material or that are not known. The forward-looking statements contained in this report are made only as of the date of this report. We do not undertake to update any forward-looking statement because of new information, future developments or otherwise.
5

SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED BALANCE SHEETS — UNAUDITED
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
  June 30, 2021 December 31, 2020
  (dollars in thousands)
Assets    
Cash and cash equivalents $ 153,827  $ 183,815 
Restricted cash 1,635  3,162 
Investments (includes assets measured at fair value of $356,449 and $309,805, including assets sold under agreements to repurchase of $159,534 and $123,616 as of June 30, 2021 and December 31, 2020, respectively)
523,421  414,974 
Income and fees receivable 75,975  539,623 
Due from related parties 18,604  14,086 
Deferred income tax assets 232,610  240,288 
Operating lease assets 101,696  104,729 
Other assets, net 79,147  82,500 
Assets of consolidated funds:  
Other assets of consolidated funds — 
Total Assets $ 1,186,918  $ 1,583,177 
Liabilities and Shareholders’ Equity  
Liabilities    
Compensation payable $ 48,656  $ 234,006 
Unearned income and fees 67,204  61,880 
Tax receivable agreement liability 183,053  190,292 
Operating lease liabilities 111,458  115,237 
Debt obligations 119,761  334,972 
Warrant liabilities, at fair value 76,002  37,827 
Securities sold under agreements to repurchase 157,934  122,638 
Other liabilities 29,554  51,445 
Liabilities of consolidated funds:  
Other liabilities of consolidated funds — 
Total Liabilities 793,624  1,148,297 
Commitments and Contingencies (Note 16)
Shareholders’ Equity    
Class A Shares, par value $0.01 per share, 100,000,000 and 100,000,000 shares authorized, 25,101,187 and 22,903,571 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
251  229 
Class B Shares, par value $0.01 per share, 75,000,000 and 75,000,000 shares authorized, 32,887,882 and 32,824,538 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
329  328 
Additional paid-in capital 200,733  166,917 
Accumulated deficit (247,058) (178,674)
Accumulated other comprehensive income 419  732 
Shareholders’ deficit attributable to Class A Shareholders (45,326) (10,468)
Shareholders’ equity attributable to noncontrolling interests 438,620  445,348 
Total Shareholders’ Equity 393,294  434,880 
Total Liabilities and Shareholders’ Equity $ 1,186,918  $ 1,583,177 
See notes to consolidated financial statements.
6


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
  Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
  (dollars in thousands)
Revenues        
Management fees $ 76,610  $ 60,383  $ 150,571  $ 127,336 
Incentive income 59,544  38,238  107,348  47,560 
Other revenues 1,778  2,424  3,359  5,377 
Income of consolidated funds —  32  32 
Total Revenues 137,932  101,077  261,281  180,305 

Expenses        
Compensation and benefits 59,447  65,290  148,681  132,709 
Interest expense 4,135  4,674  9,003  10,456 
General, administrative and other 25,022  142,615  52,398  177,321 
Expenses of consolidated funds —  19  19 
Total Expenses 88,604  212,598  210,084  320,505 

Other (Loss) Income        
Changes in fair value of warrant liabilities (13,231) —  (38,175) — 
Changes in tax receivable agreement liability (559) —  21  278 
Net losses on retirement of debt (6,525) (170) (30,198) (693)
Net gains (losses) on investments 6,255  29,178  11,617  (4,891)
Total Other (Loss) Income (14,060) 29,008  (56,735) (5,306)

Income (Loss) Before Income Taxes 35,268  (82,513) (5,538) (145,506)
Income taxes 13,047  (17,400) 11,332  (27,368)
Consolidated Net Income (Loss) 22,221  (65,113) (16,870) (118,138)
Less: Net (income) loss attributable to noncontrolling interests (407) 41,860  18,391  67,945 
Net Income (Loss) Attributable to Sculptor Capital Management, Inc. 21,814  (23,253) 1,521  (50,193)
Change in redemption value of Preferred Units —  (1,986) —  (3,313)
Net Income (Loss) Attributable to Class A Shareholders $ 21,814  $ (25,239) $ 1,521  $ (53,506)
Earnings (Loss) per Class A Share        
Earnings (Loss) per Class A Share - basic $ 0.87  $ (1.12) $ 0.06  $ (2.38)
Earnings (Loss) per Class A Share - diluted $ 0.40  $ (1.77) $ (0.32) $ (3.04)
Weighted-average Class A Shares outstanding - basic 25,025,974  22,590,084  24,442,940  22,447,399 
Weighted-average Class A Shares outstanding - diluted 55,191,693  38,609,590  54,229,693  38,464,470 

See notes to consolidated financial statements.

7


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) — UNAUDITED
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Consolidated net income (loss) $ 22,221  $ (65,113) $ (16,870) $ (118,138)
Other Comprehensive Income (Loss), Net of Tax
Other comprehensive income (loss) - currency translation adjustment 185  —  (683) — 
Comprehensive Income (Loss) 22,406  (65,113) (17,553) (118,138)
Less: Comprehensive (income) loss attributable to noncontrolling interests (523) 41,860  18,761  67,945 
Comprehensive Income (Loss) Attributable to Sculptor Capital Management, Inc. $ 21,883  $ (23,253) $ 1,208  $ (50,193)

See notes to consolidated financial statements.
8


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) — UNAUDITED
Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
(dollars in thousands)
Number of Class A Shares
Beginning balance
23,899,777  21,946,639  22,903,571  21,284,945 
Equity-based compensation
1,201,410  364,793  2,197,616  1,026,487 
Ending Balance
25,101,187  22,311,432  25,101,187  22,311,432 
Number of Class B Shares
Beginning balance
32,887,883  32,845,414  32,824,538  29,208,952 
Equity-based compensation
(1) (25,000) 63,344  3,611,462 
Ending Balance
32,887,882  32,820,414  32,887,882  32,820,414 
Class A Shares Par Value
Beginning balance
$ 239  $ 219  $ 229  $ 213 
Equity-based compensation
12  22  10 
Ending Balance
$ 251  $ 223  $ 251  $ 223 
Class B Shares Par Value
Beginning balance
$ 329  $ 328  $ 328  $ 292 
Equity-based compensation
—  —  36 
Ending Balance
$ 329  $ 328  $ 329  $ 328 
Additional Paid-in Capital
Beginning balance
$ 185,961  $ 130,968  $ 166,917  $ 117,936 
Dividend equivalents on Class A restricted share units 5,887  —  6,477  875 
Equity-based compensation, net of taxes 8,885  13,306  27,339  26,790 
Change in redemption value of Preferred Units —  (1,986) —  (3,313)
Ending Balance
$ 200,733  $ 142,288  $ 200,733  $ 142,288 
9


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) — UNAUDITED — (continued)

Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
(dollars in thousands)
Accumulated Deficit
Beginning balance
$ (255,522) $ (383,187) $ (178,674) $ (343,759)
Cash dividends declared on Class A Shares (7,463) —  (63,428) (11,613)
Dividend equivalents on Class A restricted share units (5,887) —  (6,477) (875)
Consolidated net income (loss) 21,814  (23,253) 1,521  (50,193)
Ending Balance
$ (247,058) $ (406,440) $ (247,058) $ (406,440)
Accumulated Other Comprehensive Income
Beginning balance $ 350  $ —  $ 732  $ — 
Currency translation adjustment 69  —  (313) — 
Ending Balance $ 419  $   $ 419  $  
Shareholders’ Deficit Attributable to Class A Shareholders $ (45,326) $ (263,601) $ (45,326) $ (263,601)
Shareholders’ Equity Attributable to Noncontrolling Interests
Beginning balance
$ 435,590  $ 425,768  $ 445,348  $ 440,779 
Currency translation adjustment 116  —  (370) — 
Capital contributions 2,496  2,059  2,964  3,549 
Capital distributions (1,467) (2,962) (2,483) (3,248)
Equity-based compensation, net of taxes 1,478  3,681  11,552  13,551 
Consolidated net income (loss) 407  (41,860) (18,391) (67,945)
Ending Balance
$ 438,620  $ 386,686  $ 438,620  $ 386,686 
Total Shareholders’ Equity $ 393,294  $ 123,085  $ 393,294  $ 123,085 
Cash dividends paid on Class A Shares $ 0.30  $ —  $ 2.65  $ 0.53 

See notes to consolidated financial statements.
10


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED



  Six Months Ended June 30,
  2021 2020
  (dollars in thousands)
Cash Flows from Operating Activities    
Consolidated net loss $ (16,870) $ (118,138)
Adjustments to reconcile consolidated net loss to net cash provided by operating activities:    
Amortization of equity-based compensation 42,919  42,370 
Depreciation, amortization and net gains and losses on fixed assets 3,309  3,606 
Changes in fair value of warrant liabilities 38,175  — 
Net losses on retirement of debt 30,198  693 
Deferred income taxes 8,131  (30,726)
Non-cash lease expense 10,748  10,656 
Net (gains) losses on investments, net of dividends (9,140) 6,565 
Operating cash flows due to changes in:    
Income and fees receivable 463,605  142,291 
Due from related parties (4,502) (5,080)
Other assets, net 5,839  6,391 
Compensation payable (187,537) (143,037)
Unearned income and fees 5,324  3,810 
Tax receivable agreement liability (7,239) (10,024)
Operating lease liabilities (11,076) (11,900)
Other liabilities (20,260) 103,199 
Consolidated funds related items:    
Other assets of consolidated funds (3) — 
Other liabilities of consolidated funds 19 
Net Cash Provided by Operating Activities 351,623  695 
Cash Flows from Investing Activities    
Purchases of fixed assets (4,243) (984)
Purchases of United States government obligations (164,523) (224,525)
Maturities and sales of United States government obligations 131,690  165,218 
Investments in funds (97,887) (11,620)
Return of investments in funds 24,692  4,202 
Net Cash Used in Investing Activities (110,271) (67,709)
11


SCULPTOR CAPITAL MANAGEMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED — (continued)

  Six Months Ended June 30,
  2021 2020
  (dollars in thousands)
Cash Flows from Financing Activities    
Contributions from noncontrolling interests 2,964  3,549 
Distributions to noncontrolling interests (2,483) (3,248)
Dividends on Class A Shares (63,428) (11,613)
Proceeds from debt obligations, net of issuance costs 3,219  2,746 
Repayment of debt obligations, including prepayment costs (249,731) (36,667)
Proceeds from securities sold under agreements to repurchase, net of issuance costs 41,004  — 
Other, net (3,838) (952)
Net Cash Used in Financing Activities (272,293) (46,185)
Effect of exchange rate changes on cash and cash equivalents and restricted cash (574) — 
Net change in cash and cash equivalents and restricted cash (31,515) (113,199)
Cash and cash equivalents and restricted cash, beginning of period 186,977  245,439 
Cash and Cash Equivalents and Restricted Cash, End of Period $ 155,462  $ 132,240 
Supplemental Disclosure of Cash Flow Information    
Cash paid during the period:    
Interest $ 8,236  $ 7,099 
Income taxes $ 4,179  $ 4,771 
Reconciliation of cash and cash equivalents and restricted cash:
Cash and cash equivalents $ 153,827  $ 127,702 
Restricted cash 1,635  4,538 
Total Cash and Cash Equivalents and Restricted Cash $ 155,462  $ 132,240 

See notes to consolidated financial statements.

12


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021


1. ORGANIZATION
Sculptor Capital Management, Inc. (the “Registrant”), a Delaware corporation, together with its consolidated subsidiaries (collectively, the “Company” or “Sculptor Capital”), is a global alternative asset management firm providing investment products in a range of areas, including multi-strategy, credit and real estate. With offices in New York, London, Hong Kong and Shanghai, the Company serves global clients through commingled funds, separate accounts and specialized products (collectively, the “funds”). Sculptor Capital’s distinct investment process seeks to generate attractive and consistent risk-adjusted returns across market cycles through a combination of bottom-up fundamental analysis, a high degree of flexibility, a collaborative team and integrated risk management. The Company’s capabilities span all major geographies, in strategies including fundamental equities, corporate credit, real estate debt and equity, merger arbitrage and structured credit.
The Company manages multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Through Institutional Credit Strategies, the Company’s asset management platform that invests in performing credits, the Company manages collateralized loan obligations (“CLOs”), aircraft securitization vehicles, collateralized bond obligations (“CBOs”), commingled products and other customized solutions for clients.
The Company’s primary sources of revenues are management fees, which are generally based on the amount of the Company’s assets under management, and incentive income, which is based on the investment performance of its funds. Accordingly, for any given period, the Company’s revenues will be driven by the combination of assets under management and the investment performance of the funds.
The Company conducts its business and generates substantially all of its revenues primarily in the United States (the “U.S.”) through one operating and reportable segment. The single reportable segment reflects how the Company’s chief operating decision makers allocate resources, make operating decisions and assess financial performance on a consolidated basis under the Company’s ‘one-firm approach,’ which includes operating collaboratively across business lines, with predominantly a single expense pool. The Company conducts its operations through Sculptor Capital LP, Sculptor Capital Advisors LP and Sculptor Capital Advisors II LP (collectively, the “Sculptor Operating Partnerships” and collectively with their consolidated subsidiaries, the “Sculptor Operating Group”). The Registrant holds its interests in the Sculptor Operating Group indirectly through Sculptor Capital Holding Corporation (“Sculptor Corp”), a wholly owned subsidiary of the Registrant.
References to the Company’s “executive managing directors” include the current executive managing directors of the Company, and, except where the context requires otherwise, also include certain executive managing directors who are no longer active in the Company’s business. References to the Company’s “active executive managing directors” refer to executive managing directors who remain active in the Company’s business.
Company Structure
The Registrant is a holding company that, through Sculptor Corp, holds equity ownership interests in the Sculptor Operating Group. The Registrant had issued and outstanding the following share classes:
Class A Shares—Class A Shares are publicly traded and entitle the holders thereof to one vote per share on matters submitted to a vote of shareholders. The holders of Class A Shares are entitled to any distributions declared on the Class A Shares by the Registrant’s Board of Directors.
Class B Shares—Class B Shares are held by executive managing directors, as further discussed below. These shares are not publicly traded but rather entitle the executive managing directors to one vote per share on matters submitted to a vote of shareholders. These shares do not participate in the earnings of the Registrant, as the
13


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

executive managing directors participate in the related economics of the Sculptor Operating Group through their direct ownership in the Sculptor Operating Group, subject to the Distribution Holiday discussed below.
The Company conducts its operations through the Sculptor Operating Group. The following is a list of the outstanding units of the Sculptor Operating Partnerships as of June 30, 2021:
Group A Units—Group A Units are limited partner interests issued to certain executive managing directors. In connection with the Recapitalization, as defined below, the Sculptor Operating Partnerships initiated a distribution holiday (the “Distribution Holiday”). Holders of Group A Units do not receive distributions on such units during the Distribution Holiday. Beginning on the final day of the Distribution Holiday, each executive managing director may exchange his or her vested and booked-up (as defined below) Group A Units for an equal number of Class A Shares (or the cash equivalent thereof) over a period of two years in three equal installments commencing upon the final day of the Distribution Holiday and on each of the first and second anniversary thereof (or, for units that become vested and booked-up Group A Units after the final day of the Distribution Holiday, from the later of the date on which they would have been exchangeable in accordance with the foregoing and the date on which they become vested and booked-up Group A Units) (and thereafter such units will remain exchangeable), in each case, subject to certain restrictions. A “book-up” is achieved when sufficient appreciation has occurred to meet a prescribed capital account book-up target under the terms of the Sculptor Operating Partnership limited partnership agreements.
Group A Unit grants are accounted for as equity-based compensation. See Note 13 in the Company’s Annual Report for additional information. The Company completed a recapitalization in February 2019 (“Recapitalization”). See Note 3 in the Company’s Annual Report for additional details. In connection with the Recapitalization each Group A Unit outstanding on the Recapitalization date was recapitalized into 0.65 Group A Units and 0.35 Group A-1 Units.
Group A-1 Units—Group A-1 Units are limited partner interests into which 0.35 of each Group A Unit was recapitalized in connection with the reallocation that was effectuated by the Recapitalization. The Group A-1 Units will be canceled at such time and to the extent that the Group E Units granted in connection with the Recapitalization vest and achieve a book-up. Group A-1 Units are not eligible to receive distributions at any time and do not participate in the net income (loss) of the Sculptor Operating Group. However, the holders of Group A-1 Units shall participate in any sale, change of control or other liquidity event that takes place prior to cancellation of the Group A-1 Units. In the Recapitalization, the holders of the 2016 Preferred Units, as defined below, forfeited an additional 749,813 Group A Units, which were recapitalized into Group A-1 Units.
Group B Units—Sculptor Corp holds a general partner interest and Group B Units in each Sculptor Operating Partnership. Sculptor Corp owns all of the Group B Units, which represent equity interest in the Sculptor Operating Partnerships. Except during the Distribution Holiday as described above, the Group B Units are economically identical to the Group A Units held by executive managing directors but are not exchangeable for Class A Shares and are not subject to vesting, forfeiture or minimum retained ownership requirements.
Group E Units—Group E Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group E Unit converts into a Group A Unit and becomes exchangeable for one Class A Share (or the cash equivalent thereof) to the extent there has been a sufficient amount of appreciation for a Group E Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group E Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent of their relative positive capital accounts (if any). Holders of Group E Units do not receive distributions during the Distribution Holiday. See Note 3 in the
14


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

Company’s Annual Report for additional details. Group E Unit grants are accounted for as equity-based compensation. See Note 13 in the Company’s Annual Report for additional information.
Group P Units—Group P Units are limited partner interests issued to certain executive managing directors that are only entitled to future profits and gains. Each Group P Unit becomes exchangeable for one Class A Share (or the cash equivalent thereof), in each case upon satisfaction of certain service and performance conditions at such time and, with respect to exchanges, to the extent there has been sufficient appreciation for a Group P Unit to achieve a book-up target and, subject to other conditions contained in the limited partnership agreements of the Sculptor Operating Partnerships, the Distribution Holiday has ended (or an earlier exchange date is established by the Exchange Committee). The Group P Units are entitled to share in residual assets upon liquidation, dissolution or winding up and become eligible to participate in any tag along right, in a change of control transaction or other liquidity event only to the extent that certain performance conditions are met and to the extent of their relative positive capital accounts (if any). The terms of the Group P Units may be varied for certain executive managing directors. Group P Unit grants are accounted for as equity-based compensation. See Note 13 in the Company’s Annual Report for additional information.
Preferred Units— The Preferred Units were non-voting preferred equity interests in the Sculptor Operating Partnerships. Preferred Units issued in 2016 and 2017 are collectively referred to as the “2016 Preferred Units.” The 2016 Preferred Units were redeemed in full as a part of the Recapitalization. The Preferred Units issued in 2019 are referred to as the “2019 Preferred Units.” The 2019 Preferred Units were redeemed in full at a 25% discount in the fourth quarter of 2020.
Executive managing directors hold a number of Class B Shares equal to the number of Group A Units, vested Group E Units, Group A-1 Units (to the extent the corresponding Class B Shares have not been canceled in connection with the vesting of certain Group E Units issued in connection with the Recapitalization, as further discussed in Note 3 in the Company’s Annual Report) and Group P Units held. Upon the exchange of a Group A Unit or a Group P Unit for a Class A Share, the corresponding Class B Share is canceled and a Group B Unit is issued to Sculptor Corp. Class B Shares that relate to Group A-1 Units will be voted pro rata in accordance with the vote of the Class A Shares.
The following table presents the number of shares and units of the Registrant and the Sculptor Operating Partnerships, respectively, that were outstanding as of June 30, 2021:
  As of June 30, 2021
Sculptor Capital Management, Inc.
Class A Shares 25,101,187
Class B Shares 32,887,882
Warrants to purchase Class A Shares (Note 7)
4,338,015 
Sculptor Operating Partnerships
Group A Units 16,019,506
Group A-1 Units 9,779,446
Group B Units 25,101,187
Group E Units 13,009,152
Group P Units 3,385,000
In addition, the Company grants Class A restricted share units (“RSUs”) and performance-based RSUs (“PSUs”) to its employees and executive managing directors as a form of compensation. RSU and PSU grants are accounted for as equity-based compensation. See Note 13 in the Company’s Annual Report for additional information.
15


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These unaudited, interim, consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”), and should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s unaudited, interim, consolidated financial statements have been included and are of a normal and recurring nature. All significant intercompany transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.
The results of operations presented for the interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. For example, incentive income for the majority of the Company’s multi-strategy assets under management is recognized in the fourth quarter each year, based on full year investment performance.
Recently Adopted Accounting Pronouncements
No changes to GAAP that went into effect in the six months ended June 30, 2021, had a material effect on the Company’s consolidated financial statements.
Future Adoption of Accounting Pronouncements
No changes to GAAP that are not yet effective are expected to have a material effect on the Company’s consolidated financial statements.
3. NONCONTROLLING INTERESTS
Noncontrolling interests represent ownership interests in the Company’s subsidiaries held by parties other than the Company, and primarily relate to the Group A Units held by executive managing directors.
Prior to the Recapitalization, the attribution of net income (loss) of each Sculptor Operating Partnership was based on the relative ownership percentages of the Group A Units (noncontrolling interests) and the Group B Units (indirectly held by the Registrant). In applying the substantive profit-sharing arrangements in the Sculptor Operating Partnerships’ limited partnership agreements to the Company’s consolidated financial statements, for periods subsequent to the Recapitalization and for the duration of the Distribution Holiday, the Company will allocate net income of each Sculptor Operating Partnership in any fiscal year solely to the Group B Units and any net loss on a pro rata basis based on the relative ownership percentages of the Group A Units and Group B Units. To the extent a Sculptor Operating Partnership incurs a net loss in an interim period, any net income recognized in a subsequent interim period in the same fiscal year is allocated on a pro rata basis to the extent of previously allocated net loss. Conversely, to the extent a Sculptor Operating Partnership recognizes net income in an interim period, any net loss incurred in a subsequent interim period in the same fiscal year is allocated solely to the Group B Units to the extent of previously allocated net income.
16


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The table below sets forth the calculation of noncontrolling interests related to the Group A Units for each Sculptor Operating Partnership (rounding differences may occur). The blended participation percentages presented below take into account ownership changes throughout the periods presented.
Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (dollars in thousands)
Sculptor Capital LP
Net income (loss) $ 19,669  $ (100,963) $ (27,794) $ (142,140)
Blended participation percentage 42  % 42  % 39  % 42  %
Net Income (Loss) Attributable to Group A Units $ 8,220  $ (42,031) $ (10,827) $ (59,405)
Sculptor Capital Advisors LP
Net loss $ (22,681) $ (9,353) $ (23,194) $ (19,291)
Blended participation percentage 39  % 41  % 39  % 42  %
Net Loss Attributable to Group A Units $ (8,830) $ (3,869) $ (9,036) $ (8,062)
Sculptor Capital Advisors II LP
Net income $ 36,368  $ 25,712  $ 41,583  $ 16,779 
Blended participation percentage % 15  % % %
Net Income Attributable to Group A Units $   $ 3,770  $   $  
Total Sculptor Operating Group
Net income (loss) $ 33,356  $ (84,604) $ (9,405) $ (144,652)
Blended participation percentage -2  % 50  % 211  % 47  %
Net Loss Attributable to Group A Units $ (610) $ (42,130) $ (19,863) $ (67,467)
The following table presents the components of the net income (loss) attributable to noncontrolling interests:
Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
(dollars in thousands)
Group A Units $ (610) $ (42,130) $ (19,863) $ (67,467)
Other 1,017  270  1,472  (478)
  $ 407  $ (41,860) $ (18,391) $ (67,945)
The following table presents the components of the shareholders’ equity attributable to noncontrolling interests:
  June 30, 2021 December 31, 2020
(dollars in thousands)
Group A Units $ 425,079  $ 433,756 
Other 13,541  11,592 
  $ 438,620  $ 445,348 

17


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

4. INVESTMENTS AND FAIR VALUE DISCLOSURES
The following table presents the components of the Company’s investments as reported in the consolidated balance sheets:
June 30, 2021 December 31, 2020
(dollars in thousands)
U.S. government obligations, at fair value $ 137,016  $ 104,295 
CLOs, at fair value 219,433  205,510 
Equity method investments 166,972  105,169 
Total Investments $ 523,421  $ 414,974 
Fair Value Disclosures
Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date (i.e., an exit price). The Company and the funds it manages hold a variety of investments, certain of which are not publicly traded or that are otherwise illiquid. Significant judgement and estimation go into the assumptions that drive the fair value of these investments. The fair value of these investments may be estimated using a combination of observed transaction prices, prices from third parties (including independent pricing services and relevant broker quotes), models or other valuation methodologies based on pricing inputs that are neither directly nor indirectly market observable. Due to the inherent uncertainty of valuations of investments that are determined to be illiquid or do not have readily ascertainable fair values, the estimates of fair value may differ from the values ultimately realized, and those differences can be material.
GAAP prioritizes the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is impacted by a number of factors, including the type of assets and liabilities and the specific characteristics of the financial assets and liabilities. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from actively-quoted prices generally will have a higher degree of market price observability and lesser degree of judgment used in measuring fair value.
Financial assets and liabilities measured at fair value are classified and disclosed into one of the following categories based on the observability of inputs used in the determination of fair values:
Level I – Quoted prices that are available in active markets for identical financial assets or liabilities as of the reporting date. The types of financial assets and liabilities that would generally be included in this category are certain listed equities, U.S. government obligations and certain listed derivatives.
Level II – Quotations received from dealers making a market for these financial assets or liabilities (“broker quotes”), valuations obtained from independent third-party pricing services, the use of models or other valuation methodologies based on pricing inputs that are either directly or indirectly market observable as of the measurement date. The types of financial assets and liabilities that would generally be included in this category are certain corporate bonds, certain credit default swap contracts, certain bank debt securities, certain commercial real estate debt, less liquid equity securities, forward contracts and certain over the-counter (“OTC”) derivatives where the fair value is based on observable inputs. These financial assets and liabilities exhibit higher levels of liquid market observability as compared to Level III financial assets and liabilities.
Level III – Pricing inputs that are unobservable in the market and includes situations where there is little, if any, market activity for the financial asset or liability. The inputs into the determination of fair value of financial assets and liabilities in this category may require significant management judgment or estimation. The fair value of these financial assets and liabilities may be estimated using a combination of observed transaction prices, independent
18


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

pricing services, relevant broker quotes, models or other valuation methodologies based on pricing inputs that are neither directly or indirectly market observable (e.g., cash flows, implied yields, EBITDA multiples). The types of financial assets and liabilities that would generally be included in this category include CLOs, warrant liabilities, certain credit default swap contracts, certain bank debt securities, certain OTC derivatives, asset-backed securities, collateralized debt obligations and investments in affiliated credit funds.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial asset or liability when the fair value is based on unobservable inputs.
Fair Value Measurements Categorized within the Fair Value Hierarchy
The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of June 30, 2021:
  As of June 30, 2021
  Level I Level II Level III Total
  (dollars in thousands)
Assets, at Fair Value
Included within investments:
U.S. government obligations $ 137,016  $ —  $ —  $ 137,016 
CLOs(1)
$ —  $ —  $ 219,433  $ 219,433 
Liabilities, at Fair Value
Warrants $ —  $ —  $ 76,002  $ 76,002 
_______________
(1) As of June 30, 2021, investments in CLOs had contractual principal amounts of $206.3 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments.
19


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The following table summarizes the Company’s investments measured at fair value on a recurring basis within the fair value hierarchy as of December 31, 2020:
  As of December 31, 2020
  Level I Level II Level III Total
  (dollars in thousands)
Assets, at Fair Value
Included within cash and cash equivalents:
U.S. government obligations $ 29,999  $ —  $ —  $ 29,999 
Included within investments:
U.S. government obligations $ 104,295  $ —  $ —  $ 104,295 
CLOs(1)
$ —  $ —  $ 205,510  $ 205,510 
Liabilities, at Fair Value
Warrants $ —  $ —  $ 37,827  $ 37,827 
_______________
(1) As of December 31, 2020, investments in CLOs had contractual principal amounts of $194.5 million outstanding, which excludes the Company’s investments in subordinated tranches of the notes, as these do not have contractual principal payments.
Reconciliation of Fair Value Measurements Categorized within Level III
Gains and losses, excluding those related to foreign currency translation adjustments, are recorded within net gains (losses) on investments in the consolidated statements of operations. Gains and losses related to foreign currency translation adjustments are recorded in the statements of comprehensive income (loss). Amortization of premium, accretion of discount and foreign exchange gains and losses on non-U.S. dollar investments are also included within gains and losses in the tables below.
The following table summarizes the changes in the Company’s Level III assets and liabilities for the three months ended June 30, 2021:
March 31, 2021 Purchases / Issuances Investment Sales / Settlements Gains / (Losses) Included in Earnings Gains / (Losses) Included in Other Comprehensive Income June 30, 2021
(dollars in thousands)
Assets, at Fair Value
Included within investments:
CLOs $ 202,842  $ 30,846  $ (16,125) $ 330  $ 1,540  $ 219,433 
Liabilities, at Fair Value
Warrants $ 62,771  $ —  $ —  $ 13,231  $ —  $ 76,002 



20


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The following table summarizes the changes in the Company’s Level III assets for the three months ended June 30, 2020:
March 31, 2020 Purchases / Issuances Investment Sales / Settlements Gains / (Losses) Included in Earnings Gains / (Losses) Included in Other Comprehensive Income June 30, 2020
(dollars in thousands)
Assets, at Fair Value
Included within investments:
CLOs $ 155,287  $ 1,074  $ (185) $ 22,666  $ —  $ 178,842 
The following table summarizes the changes in the Company’s Level III assets and liabilities for the six months ended June 30, 2021:
December 31, 2020 Purchases / Issuances Investment Sales / Settlements Gains / (Losses) Included in Earnings Gains / (Losses) Included in Other Comprehensive Income June 30, 2021
(dollars in thousands)
Assets, at Fair Value
Included within investments:
CLOs $ 205,510  $ 33,294  $ (16,145) $ 1,753  $ (4,979) $ 219,433 
Liabilities, at Fair Value
Warrants $ 37,827  $ —  $ —  $ 38,175  $ —  $ 76,002 
The following table summarizes the changes in the Company’s Level III assets for the six months ended June 30, 2020:
December 31, 2019 Purchases / Issuances Investment Sales / Settlements Gains / (Losses) Included in Earnings Gains / (Losses) Included in Other Comprehensive Income June 30, 2020
(dollars in thousands)
Assets, at Fair Value
Included within investments:
CLOs $ 182,870  $ 4,407  $ (185) $ (8,250) $ —  $ 178,842 
21


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The table below summarizes the net change in unrealized gains and losses on the Company’s Level III investments held and warrant liabilities outstanding as of the reporting date:
  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (dollars in thousands)
Assets, at Fair Value
Included within investments:
CLOs $ 2,625  $ 22,667  $ (2,470) $ (8,250)
Liabilities, at Fair Value
Warrants $ 13,231  $ —  $ 38,175  $ — 
Valuation Methodologies for Fair Value Measurements Categorized within Level III
Investments in CLOs are valued using independent pricing services, and therefore the Company does not have transparency into the significant inputs used by such services. Warrant liabilities are valued using a Black-Scholes model by independent pricing services, for which the Company’s Class A Share price, exercise price, risk free rate, volatility and term to expiry are the primary inputs to the valuation.
Fair Value of Other Financial Instruments
Management estimates that the carrying value of the Company’s other financial instruments, including its debt obligations and repurchase agreements, approximated their fair values as of June 30, 2021. The fair value measurements for the Company’s repurchase agreements are categorized as Level III within the fair value hierarchy and were determined using independent pricing services. The fair value measurements for the Company’s debt obligations are categorized as Level III within the fair value hierarchy and for the 2020 Term Loan is determined using a discounted cash flow model and for CLO Investments Loans are determined using independent pricing services.
Loans Sold to CLOs Managed by the Company
From time to time the Company sells loans to CLOs managed by the Company. These loans are purchased by the Company in the open market and simultaneously sold for cash to the CLOs. The loans are accounted for as transfers of financial assets as they meet the criteria for derecognition under GAAP. No loans were sold in each of the six months ended June 30, 2021 and 2020. The Company invests in senior secured and subordinated notes issued by certain CLOs to which it sold loans in the past. These investments represent retained interests to the Company and are in the form of a 5% vertical strip (i.e., 5% of each of the senior and subordinated tranches of notes issued by each CLO). The retained interests are reported within investments on the Company’s consolidated balance sheet. As of June 30, 2021 and December 31, 2020, the Company’s investments in these retained interests had a fair value of $89.9 million and $90.3 million, respectively.
The Company is subject to risks associated with the performance of the underlying collateral and the market yield of the assets. The Company’s risk of loss from retained interest is limited to its investments in these interests. The Company receives quarterly payments of interest and principal, as applicable, on these retained interests. In the six months ended June 30, 2021 and 2020, the Company received $1.3 million and $1.6 million, respectively, of interest and principal payments related to the retained interests.
The Company uses independent pricing services to value its investments in the CLOs, including the retained interests, and therefore the only key assumption is the price provided by such service. A corresponding adverse change of 10% or 20% on price would have a corresponding impact on the fair value of the Company’s investments in CLOs.
22


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

5. VARIABLE INTEREST ENTITIES
In the ordinary course of business, the Company sponsors the formation of funds that are considered VIEs. See Note 2 in the Company's Annual Report for a discussion of entities that are VIEs and the evaluation of those entities for consolidation by the Company. The assets and liabilities of consolidated VIEs were not material as of June 30, 2021 and December 31, 2020.
The Company’s direct involvement with funds that are VIEs and not consolidated by the Company is generally limited to providing asset management services and, in certain cases, insignificant investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned income and fees, primarily incentive income subject to clawback, in the event of any future fund losses. The Company has commitments to certain funds that are VIEs as discussed in Note 16. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated.
The table below presents the net assets of unconsolidated VIEs in which the Company has variable interests along with the maximum risk of loss as a result of the Company’s involvement with VIEs:
June 30, 2021 December 31, 2020
(dollars in thousands)
Net assets of unconsolidated VIEs in which the Company has a variable interest $ 10,770,717  $ 10,481,312 
Maximum risk of loss as a result of the Company’s involvement with VIEs:
Unearned income and fees 67,204  61,880 
Income and fees receivable 11,685  192,826 
Investments 246,590  233,638 
Maximum Exposure to Loss $ 325,479  $ 488,344 

23


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

6. LEASES
The Company has non-cancelable operating leases for its headquarters in New York and its offices in London, Hong Kong, Shanghai, and various other locations and data centers. The Company does not have renewal options for any of its current leases. The Company also subleases a portion of its office space in London through the end of the lease term. In addition, the Company has finance leases for computer hardware. As of June 30, 2021, the Company has pledged collateral related to its lease obligations of $6.2 million, which is included within investments in the consolidated balance sheets.
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Lease Cost
Operating lease cost $ 4,896  $ 5,141  $ 10,333  $ 10,288 
Short-term lease cost 12  22  25 
Finance lease cost - amortization of leased assets 198  193  397  330 
Finance lease cost - imputed interest on lease liabilities 24  17  38 
Less: Sublease income (415) (370) (826) (754)
Net Lease Cost $ 4,691  $ 5,000  $ 9,943  $ 9,927 

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(dollars in thousands)
Supplemental Lease Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases $ 5,356  $ 5,601  $ 11,165  $ 11,203 
Operating cash flows for finance leases $ —  $ $ $
Finance cash flows for finance leases $ —  $ 192  $ 624  $ 651 
Right-of-use assets obtained in exchange for lease obligations
Operating leases $ —  $ —  $ 2,893  $
Finance leases $ —  $ 745  $ —  $ 745 
June 30, 2021 December 31, 2020
Lease Term and Discount Rate
Weighted average remaining lease term
Operating leases 8.0 years 8.5 years
Finance leases 1.6 years 1.6 years
Weighted average discount rate
Operating leases 7.8  % 7.9  %
Finance leases 6.7  % 7.2  %
24


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

Operating
Leases
Finance
Leases
(dollars in thousands)
Maturity of Lease Liabilities
July 1, 2021 to December 31, 2021 $ 10,809  $ 242 
2022 20,858  248 
2023 20,084  — 
2024 16,134  — 
2025 14,330  — 
Thereafter 68,042  — 
Total Lease Payments 150,257  490 
Imputed interest (38,799) (12)
Total Lease Liabilities $ 111,458  $ 478 
Operating Leases
  (dollars in thousands)
Sublease Rent Payments Receivable
July 1, 2021 to December 31, 2021 $ 822 
2022 1,645 
2023 1,288 
2024 — 
2025 — 
Thereafter — 
Total Sublease Rent Payments Receivable $ 3,755 

25


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

7. DEBT OBLIGATIONS AND WARRANTS
2020 Term Loan CLO Investments Loans Total
(dollars in thousands)
Maturity of Debt Obligations
July 1, 2021 to December 31, 2021 $ —  $ —  $ — 
2022 —  —  — 
2023 —  —  — 
2024 —  —  — 
2025 —  —  — 
2026 —  —  — 
Thereafter 95,000  39,035  134,035 
Total Payments 95,000  39,035  134,035 
Unamortized discounts & deferred financing costs (14,037) (237) (14,274)
Total Debt Obligations $ 80,963  $ 38,798  $ 119,761 
2020 Credit Agreement
On September 25, 2020, Sculptor Capital LP, as borrower, (the “Borrower”), and certain other subsidiaries of the Company, as guarantors, entered into a credit and guaranty agreement (the “2020 Credit Agreement”), consisting of (i) a senior secured term loan facility in an initial aggregate principal amount of $320.0 million (the “2020 Term Loan”) and (ii) a senior secured revolving credit facility in an initial aggregate principal amount of $25.0 million (the “2020 Revolving Credit Facility”). The proceeds from the 2020 Term Loan were first allocated to the full fair value of the warrants issued in connection with the 2020 Credit Agreement (which establishes both a liability and a debt discount, as described below), and the residual proceeds, net of deferred offering costs and discounts, of $275.8 million was then recognized as the initial carrying value of the 2020 Term Loan. On June 21, 2021, the Company entered into a letter agreement amending the 2020 Credit Agreement to increase the amount of voluntary prepayments for which the Call Premium shall not apply from $175.0 million to $225.0 million in exchange for an amendment fee of $1.75 million. As such, no Call Premium was due on the first $225.0 million prepaid by the Company. The amendment fee was recorded as an additional discount to the 2020 Term Loan in the second quarter of 2021. In the six months ended June 30, 2021, the Company prepaid $224.4 million of the 2020 Term Loan, resulting in an outstanding balance of $95.0 million, which is due at maturity. The Company recognized a $30.2 million loss on this retirement of debt. As a result of the $175.0 million of aggregate prepayments made through March 31, 2021, the Company is no longer subject to the cash sweep or financial maintenance covenants, other than the covenant requiring $20.0 billion minimum fee-paying assets under management described below.
The 2020 Term Loan and the 2020 Revolving Credit Facility mature on the seventh and sixth anniversary, respectively, of the initial funding of the 2020 Term Loan, which occurred on November 13, 2020 (the “Closing Date”). Proceeds from the 2020 Term Loan, together with cash on hand, were used to repay the Debt Securities and the 2018 Term Loan, as well as to redeem the 2019 Preferred Units in full.
Borrowings under the 2020 Credit Agreement bear interest at a per annum rate equal to, at the Company’s option, one, two, three or six-month LIBOR (subject to a 0.75% floor) plus 6.25%, or a base rate (subject to a 1.75% floor) plus 5.25%. The Borrower is also required to pay an undrawn commitment fee at a rate per annum equal to 0.50% of the undrawn portion of the 2020 Revolving Credit Facility.
26


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

Certain prepayments of the 2020 Term Loan are subject to a prepayment premium (the “Call Premium”) equal to (a) prior to the second anniversary of the Closing Date, a customary “make-whole” premium equal to the present value of all required interest payments that would be due from the date of prepayment through and including the second anniversary of the Closing Date plus a premium of 3.0% of the principal amount of loans prepaid, (b) on or after the second anniversary of the Closing Date but prior to the third anniversary of the Closing Date, a premium of 3.0% of the principal amount of loans prepaid, (c) on or after the third anniversary of the Closing Date but prior to the four anniversary of the Closing Date, a premium of 2.0% of the principal amount of loans prepaid and (d) thereafter, 0%. On June 21, 2021, the Company entered into an amendment to the 2020 Credit Agreement that increased the amount of voluntary prepayments for which the Call Premium shall not apply from $175.0 million to $225.0 million. As such, no Call Premium was due on the first $225.0 million prepaid by the Company.
The 2020 Credit Agreement prohibits the total fee-paying assets under management, subject to certain exclusions, of the Borrower, the guarantors and their consolidated subsidiaries as of the last day of any fiscal quarter to be less than $20.0 billion. The 2020 Credit Agreement contains customary events of default for a transaction of this type, after which obligations under the 2020 Credit Agreement may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Borrower, the guarantors or any of the material subsidiaries of the foregoing after which the obligations under the 2020 Credit Agreement become automatically due and payable.
Warrants
In connection with the 2020 Credit Agreement, the Company has issued and outstanding warrants to purchase 4,338,015 Class A Shares. The warrants have a 10-year term from the Closing Date and an initial exercise price per share equal to $11.93. The exercise price is subject to reduction by an amount equal to any dividends paid on Class A Shares. As a result, the exercise price was $9.28 per share as of June 30, 2021. The warrants provide for customary adjustments in the event of a stock split, stock dividend, recapitalization or similar event. In lieu of making a cash payment otherwise contemplated upon exercise, the holder may exercise the warrants in whole or in part to receive a net number of Class A Shares. In addition, one of the warrants provides that, upon exercise in whole or in part by the holder, the Company may decide in its sole discretion whether the holder’s exercise of such warrant will be settled by delivery of Class A Shares (which shares may be reduced to a net number of Class A Shares in accordance with the procedure described in the preceding sentence) or by the Company’s payment to the holder of an amount in cash equal to the Black-Scholes value as provided for in the applicable warrant agreement. If the Company undergoes a change of control prior to the expiration date, the holder will have the right to require the Company to repurchase any remaining portion of the warrants not yet exercised at their Black-Scholes value as provided for in the applicable agreement. The warrants restrict transfers and other dispositions for 18 months from the Closing Date, subject to certain exceptions.
CLO Investments Loans
The Company entered into loans to finance portions of investments in certain CLOs (collectively, the “CLO Investments Loans”). In general, the Company will make interest payments on the loans at such time interest payments are received on its investments in the CLOs, and will make principal payments on the loans to the extent principal payments are received on its investments in the CLOs, with any remaining balance due upon maturity.
The loans are subject to customary events of default and covenants and also include terms that require the Company’s continued involvement with the CLOs. In addition to customary events of default included in financing arrangements of this type, an event of default would also be triggered if there is an event of default at the CLO level. Prior to the relevant CLO’s maturity date, this would include certain material covenant breaches, regulatory and insolvency events for the relevant CLO issuer, as well as a payment default, where the relevant CLO is unable to make interest payments on the senior, non-deferrable interest notes issued by the CLO. The CLO Investments Loans do not have any financial maintenance covenants and are secured by the related investments in CLOs, which investments had fair values of $43.1 million and $66.5 million as of June 30, 2021 and December 31, 2020, respectively.
27


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

Carrying amounts presented in the table below are net of discounts, if any, and unamortized deferred financing costs. The interest rates on the CLO Investments Loans are variable based on LIBOR or EURIBOR (subject to a floor of zero percent). The maturity date for each CLO Investments Loan is the earlier of the final maturity date presented in the table below or the date at which the Company no longer holds a risk retention investment in the respective CLO.
Initial Borrowing Date Contractual Rate Final Maturity Date Carrying Value
June 30, 2021 December 31, 2020
(dollars in thousands)
June 7, 2017
LIBOR plus 1.48%
November 16, 2029 $ 17,211  $ 17,200 
August 2, 2017
LIBOR plus 1.41%
January 21, 2030 21,587  21,584 
September 14, 2017
EURIBOR plus 2.21%
September 14, 2024 —  19,868 
February 27, 2020
EURIBOR plus 0.80%
January 11, 2022 —  505 
$ 38,798  $ 59,157 

8. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
The Company has a €200.0 million master credit facility agreement (the “CLO Financing Facility”) to finance portions of the risk retention investments in certain CLOs managed by the Company. Subject to the terms and conditions of the CLO Financing Facility, the Company and the counterparty may enter into repurchase agreements on such terms agreed upon by the parties. Each transaction entered into under the CLO Financing Facility will bear interest at a rate based on the weighted average effective interest rate of each class of securities that have been sold plus a spread to be agreed upon by the parties. As of June 30, 2021, €65.6 million of the CLO Financing Facility remained available.
Each transaction entered into under the CLO Financing Facility provides for payment netting and, in the case of a default or similar event with respect to the counterparty to the CLO Financing Facility, provides for netting across transactions. Generally, upon a counterparty default, the Company can terminate all transactions under the CLO Financing Facility and offset amounts it owes in respect of any one transaction against collateral it has received in respect of any other transactions under the CLO Financing Facility; provided, however, that in the case of certain defaults, the Company may only be able to terminate and offset solely with respect to the transaction affected by the default. During the term of a transaction entered into under the CLO Financing Facility, the Company will deliver cash or additional securities acceptable to the counterparty if the securities sold are in default. In addition to customary events of default included in financing arrangements of this type, an event of default would also be triggered if there is an event of default at the CLO level. Prior to the relevant CLO’s maturity date, this would include certain material covenant breaches, regulatory and insolvency events for the relevant CLO issuer, as well as a payment default where the relevant CLO is unable to make interest payments on the senior, non-deferrable interest notes issued by the CLO. Upon termination of a transaction, the Company will repurchase the previously sold securities from the counterparty at a previously determined repurchase price. The CLO Financing Facility may be terminated at any time upon certain defaults or circumstances agreed upon by the parties.
The repurchase agreements may result in credit exposure in the event the counterparty to the transaction is unable to fulfill its contractual obligations. The Company minimizes the credit risk associated with these activities by monitoring counterparty credit exposure and collateral values. Other than margin requirements, the Company is not subject to additional terms or contingencies which would expose the Company to additional obligations based upon the performance of the securities pledged as collateral.
28


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The table below presents securities sold under agreements to repurchase that are offset, if any, as well as securities transferred to counterparties related to such transactions (capped so that the net amount presented will not be reduced below zero). No other material financial instruments were subject to master netting agreements or other similar agreements:
Securities Sold under Agreements to Repurchase Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts of Liabilities in the Consolidated Balance Sheet Securities Transferred Net Amount
  (dollars in thousands)
As of June 30, 2021 $ 157,934  $ —  $ 157,934  $ 157,934  $ — 
As of December 31, 2020 $ 122,638  $ —  $ 122,638  $ 122,638  $ — 
The securities sold under agreements to repurchase have a set scheduled maturity date that corresponds to the maturities of the securities sold under such transaction. The table below presents the remaining final contractual maturity of the securities sold under agreement to repurchase by class of collateral pledged:
Investments in CLOs
Securities Sold under Agreements to Repurchase Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total
(dollars in thousands)
As of June 30, 2021 $ —  $ —  $ —  $ 157,934  $ 157,934 
As of December 31, 2020 $ —  $ —  $ —  $ 122,638  $ 122,638 

9. OTHER ASSETS, NET
The following table presents the components of other assets, net as reported in the consolidated balance sheets:
June 30, 2021 December 31, 2020
(dollars in thousands)
Fixed Assets:    
  Leasehold improvements $ 52,562  $ 52,801 
  Computer hardware and software 53,615  50,085 
  Furniture, fixtures and equipment 8,429  8,411 
  Accumulated depreciation and amortization (82,883) (80,833)
Fixed assets, net 31,723  30,464 
Goodwill 22,691  22,691 
Prepaid expenses 16,156  19,229 
Other 8,577  10,116 
Total Other Assets, Net $ 79,147  $ 82,500 

29


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

10. OTHER LIABILITIES
The following table presents the components of other liabilities as reported in the consolidated balance sheets:
  June 30, 2021 December 31, 2020
  (dollars in thousands)
Accrued expenses $ 10,939  $ 16,904 
Uncertain tax positions 8,250  8,250 
Unused trade commissions 2,171  3,494 
Due to funds1
1,909  11,933 
Other 6,285  10,864 
Total Other Liabilities $ 29,554  $ 51,445 
_______________
(1) To the extent that a fee-paying fund is an investor in another fee-paying fund, the Company rebates a corresponding portion of the management fees charged in the investee fund. Due to funds amounts also reflect certain incentive income and management fee waivers.
11. REVENUES
The following table presents management fees and incentive income recognized as revenues for the three months ended June 30, 2021 and 2020:
Three Months Ended June 30,
2021 2020
Management Fees Incentive Income Management Fees Incentive Income
(dollars in thousands)
Multi-strategy funds $ 38,252  $ 55,129  $ 29,214  $ 34,540 
Credit
    Opportunistic credit funds 12,677  3,492  11,233  2,750 
    Institutional Credit Strategies 16,401  —  8,085  — 
Real estate funds 9,280  923  11,851  948 
Total $ 76,610  $ 59,544  $ 60,383  $ 38,238 
The following table presents management fees and incentive income recognized as revenues for the six months ended June 30, 2021 and 2020:
Six Months Ended June 30,
2021 2020
Management Fees Incentive Income Management Fees Incentive Income
(dollars in thousands)
Multi-strategy funds $ 74,600  $ 81,113  $ 61,587  $ 36,364 
Credit
    Opportunistic credit funds 25,924  12,259  20,796  7,420 
    Institutional Credit Strategies 31,504  —  23,351  — 
Real estate funds 18,543  13,976  21,594  3,776 
Other —  —  — 
Total $ 150,571  $ 107,348  $ 127,336  $ 47,560 
30


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The following table presents the composition of the Company’s income and fees receivable as of June 30, 2021 and December 31, 2020:
June 30, 2021 December 31, 2020
(dollars in thousands)
Management fees $ 24,213  $ 25,937 
Incentive income 51,762  513,686 
Income and Fees Receivable $ 75,975  $ 539,623 
The Company recognizes management fees over the period in which the performance obligation is satisfied. The Company records incentive income when it is probable that a significant reversal of income will not occur. The majority of management fees and incentive income receivable at each balance sheet date is generally collected during the following quarter.
The following table presents the Company’s unearned income and fees as of June 30, 2021 and December 31, 2020:
June 30, 2021 December 31, 2020
(dollars in thousands)
Management fees $ 79  $ 78 
Incentive income 67,125  61,802 
Unearned Income and Fees $ 67,204  $ 61,880 
A liability for unearned incentive income is generally recognized when the Company receives incentive income distributions from its funds, primarily its real estate funds, whereby the distributions received have not yet met the recognition threshold of being probable that a significant reversal of cumulative revenue will not occur. A liability for unearned management fees is generally recognized when management fees are paid to the Company on a quarterly basis in advance, based on the amount of assets under management at the beginning of the quarter. In the six months ended June 30, 2021, and 2020, the Company recognized $9.8 million and $2.5 million, respectively, of the beginning balance of unearned incentive income for each respective year. The Company recognized all of the beginning balances of unearned management fees during the respective quarter.
12. INCOME TAXES
The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in foreign jurisdictions, permanent differences, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as tax laws and regulations change. Accordingly, the effective tax rate for interim periods is not indicative of the tax rate expected for a full year.
31


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

The following is a reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate: 
  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
Statutory U.S. federal income tax rate 21.00  % 21.00  % 21.00  % 21.00  %
Income passed through to noncontrolling interests -0.37  % 4.76  % 4.16  % -1.22  %
Foreign income taxes 3.58  % -4.70  % -46.09  % -0.93  %
RSU excess income tax benefit or expense -0.69  % -0.45  % -10.49  % 0.01  %
State and local income taxes 2.85  % 5.60  % -6.38  % 3.80  %
Nondeductible amortization of Partner Equity Units 2.27  % -3.00  % -24.59  % -2.70  %
Nondeductible interest expense —  % -0.50  % —  % -0.47  %
Change in fair value of warrants 7.88  % —  % -144.77  % —  %
Other, net 0.47  % -1.62  % 2.54  % -0.68  %
Effective Income Tax Rate 36.99  % 21.09  % -204.62  % 18.81  %
The Company recognizes tax benefits for amounts that are “more likely than not” to be sustained upon examination by tax authorities. For uncertain tax positions in which the benefit to be realized does not meet the “more likely than not” threshold, the Company establishes a liability, which is included within other liabilities in the consolidated balance sheets. As of June 30, 2021 and December 31, 2020, the Company had a liability for unrecognized tax benefits of $8.3 million. As of and for the six months ended June 30, 2021, the Company did not accrue interest or penalties related to uncertain tax positions. As of June 30, 2021, the Company does not believe that there will be a significant change to the uncertain tax positions during the next 12 months. The Company’s total unrecognized tax benefits if recognized, would affect its tax expense by $4.8 million as of June 30, 2021.
13. GENERAL, ADMINISTRATIVE AND OTHER
The following table presents the components of general, administrative and other expenses as reported in the consolidated statements of operations:
  Three Months Ended June 30, Six Months Ended June 30,
  2021 2020 2021 2020
  (dollars in thousands)
Occupancy and equipment $ 7,311  $ 7,531  $ 15,343  $ 15,136 
Information processing and communications 5,500  5,634  10,857  10,658 
Recurring placement and related service fees 5,243  3,680  9,594  10,172 
Professional services 3,261  5,196  7,689  14,945 
Insurance 2,270  2,126  4,492  4,256 
Business development 158  303  310  1,363 
Other expenses 1,412  1,526  4,465  4,201 
25,155  25,996  52,750  60,731 
Legal provisions —  116,900  —  116,900 
Foreign currency transaction gains (133) (281) (352) (310)
Total General, Administrative and Other $ 25,022  $ 142,615  $ 52,398  $ 177,321 

32


SCULPTOR CAPITAL MANAGEMENT, INC. — UNAUDITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2021

14. EARNINGS (LOSS) PER CLASS A SHARE
Basic earnings (loss) per Class A Share is computed by dividing the net income (loss) attributable to Class A Shareholders by the weighted-average number of Class A Shares outstanding for the period.
For the three months ended June 30, 2021 and 2020, the Company included 167,904 and 557,070 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted earnings (loss) per Class A Share. For the six months ended June 30, 2021 and 2020, the Company included 199,893 and 561,603 RSUs respectively, that have vested but have not been settled in Class A Shares in the weighted-average Class A Shares outstanding used to calculate basic and diluted earnings (loss) per Class A Share.
When calculating dilutive earnings (loss) per Class A Share, the Company applies the treasury stock method to outstanding warrants and unvested RSUs. At the Sculptor Operating Group Level, the Company applies the if-converted method to vested Group A Units and vested Group E Units. For unvested Group A Units and unvested Group E Units, the Company applies the treasury stock method first to determine the number of incremental units that would be issuable and then applies the if-converted method to those resulting incremental units. The Company did not include the Group P Units or unvested PSUs in the calculation of dilutive earnings (loss) per Class A Share, as the applicable market performance conditions had not yet been met as of the end of each reporting period presented below. Certain PSUs vested in the second quarter of 2021 at which time they were converted into Class A Shares. The effect of dilutive securities on net income (loss) attributable to Class A Shareholders is presented net of tax.
The following tables present the computation of basic and diluted earnings (loss) per Class A Share:
Three Months Ended June 30, 2021 Net Income Attributable to Class A Shareholders Weighted- Average Class A Shares Outstanding Earnings Per Class A Share Number of Antidilutive Units and Warrants Excluded from Diluted Calculation
(dollars in thousands, except per share amounts)
Basic $ 21,814  25,025,974  $ 0.87 
Effect of dilutive securities:
Group A Units 283  16,019,506  — 
Group E Units —  12,387,325  — 
RSUs —  1,758,888  — 
Warrants —  —  4,338,015 
Diluted