Duff & Phelps Corp - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - CURRENT REPORT - Duff & Phelps Corp	v229857_8k.htm

DUFF & PHELPS REPORTS 2011

SECOND QUARTER RESULTS

AND DECLARES QUARTERLY DIVIDEND

HIGHLIGHTS:

Quarterly revenues of $91.0 million including reimbursable expenses and $87.9 million excluding reimbursable expenses

Adjusted EBITDA(1) of $12.4 million, representing a 14.1% margin

Adjusted Pro Forma Net Income(1) of $0.15 per share

Acquired Growth Capital Partners, a Texas-based investment banking firm focusing on transactions in the middle market and complementing the firm's expertise in the energy, mining and infrastructure industries

Repurchased 550,798 shares of Class A common stock during the quarter for an aggregate purchase price of $7.8 million as part of our publicly announced program

Declares a quarterly dividend of $0.08 per share of Class A common stock

NEW YORK, July 27, 2011 – Duff & Phelps Corporation (NYSE: DUF), a leading independent financial advisory and investment banking firm, today announced its second quarter 2011 financial results and declared a quarterly dividend.

Results

For the quarter ended June 30, 2011, revenues excluding reimbursable expenses decreased $0.9 million or 1.0% to $87.9 million, compared to $88.7 million for the corresponding prior year quarter. Adjusted EBITDA(1) for the quarter was $12.4 million, representing 14.1% of revenues excluding reimbursable expenses, compared to $14.6 million for the corresponding prior year quarter, representing 16.5% of revenues excluding reimbursable expenses. Adjusted EBITDA excludes a $0.9 million restructuring charge incurred during the current period quarter related to office consolidations of underutilized space. Net income attributable to Duff & Phelps Corporation was $3.4 million, or $0.12 per share of Class A common stock on a fully diluted basis, compared to $2.5 million, or $0.09 per share for the corresponding prior year quarter. Adjusted Pro Forma Net Income(1) was $5.8 million, or $0.15 per share on a fully exchanged, fully diluted basis, compared to $7.2 million, or $0.19 per share, for the corresponding prior year quarter. Adjusted Pro Forma Net Income excludes a $0.01 per share restructuring charge incurred during the current period quarter related to office consolidations of underutilized space.

For the six months ended June 30, 2011, revenues excluding reimbursable expenses decreased $5.0 million or 2.8% to $172.9 million, compared to $177.9 million for the corresponding prior year period. Adjusted EBITDA(1) for the period was $25.1 million, representing 14.5% of revenues excluding reimbursable expenses, compared to $30.1 million for the corresponding prior year period, representing 16.9% of revenues excluding reimbursable expenses. Adjusted EBITDA excludes a $0.9 million restructuring charge incurred during the six months ended June 30, 2011 related to office consolidations of underutilized space. Net income attributable to Duff & Phelps Corporation was $7.5 million, or $0.26 per share of Class A common stock on a fully diluted basis, compared to $6.8 million, or $0.25 for the corresponding prior year period. Adjusted Pro Forma Net Income(1) was $11.8 million, or $0.30 per share on a fully exchanged, fully diluted basis, compared to $14.5 million, or $0.37 per share, for the corresponding prior year period. Adjusted Pro Forma Net Income excludes a $0.01 per share restructuring charge incurred during the six months ended June 30, 2011 related to office consolidations of underutilized space.

“We saw continued growth throughout our Alternative Asset Advisory segment and in our Dispute Consulting business, and a productive quarter for our Tax Services business,” said Noah Gottdiener, chief executive officer. “As anticipated, this was offset by a decline in restructuring activity and timing of M&A success fees, as well as lower international revenues. Looking to the rest of the year, we expect to see continued strength in several of our businesses and a more meaningful contribution from M&A success fees."

Declaration of Quarterly Dividend

The Company also announced today that its board of directors has declared a quarterly dividend of $0.08 per share on its outstanding Class A common stock. The dividend is payable on August 26, 2011 to shareholders of record on August 16, 2011. Concurrent with the payment of the dividend, the Company will also be distributing $0.08 per unit to holders of New Class A Units.

Earnings Call Webcast

As previously announced, Duff & Phelps will host a conference call today, July 27, 2011, at 5:00 p.m. EDT to discuss the Company’s financial results. Interested parties can access the webcast for this call through http://ir.duffandphelps.com/.

__________

(1)	Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per share are non-GAAP financial measures. See definitions and disclosures herein.

About Duff & Phelps

As a leading global provider of financial advisory and investment banking services, Duff & Phelps balances analytical skills, deep market insight and independence to help clients make sound decisions. The firm provides expertise in the areas of valuation, transactions, financial restructuring, alternative assets, disputes and taxation, with more than 1,000 employees serving clients from offices in North America, Europe and Asia. Investment banking services in the United States are provided by Duff & Phelps Securities, LLC. Investment banking services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd. Duff & Phelps Securities Ltd. is authorized and regulated by the Financial Services Authority. Investment banking services in France are provided by Duff & Phelps SAS. For more information, visit www.duffandphelps.com. (NYSE: DUF)

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted Pro Forma Net Income, and Adjusted Pro Forma Net Income per share are non-GAAP financial measures. We believe that Adjusted EBITDA provides a relevant and useful alternative measure of our ongoing profitability and performance, when viewed in conjunction with GAAP measures, as it adjusts net income or loss attributable to Duff & Phelps Corporation for (a) net income or loss attributable to noncontrolling interest, (b) provision for income taxes, (c) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred as the result of acquisitions and investments in stand-alone infrastructure which we do not expect to incur at the same levels in the future), (d) equity-based compensation associated with the Legacy Units of D&P Acquisitions, a significant portion of which is due to certain onetime grants associated with acquisitions prior to our IPO, and options to purchase shares of the Company's Class A common stock granted in connection with the IPO, (e) restructuring charges, impairment charges, acquisition retention expenses and other merger and acquisition costs, which are generally non-recurring in nature or are related to deferred payments associated with prior acquisitions, and (f) costs incurred from the realignment of our senior management which are generally non-recurring in nature and primarily include cash severance and charges from the accounting impact of the acceleration of vesting of restricted stock awards.

Given the level of acquisition activity during the period prior to our IPO, and related capital investments and one time equity grants associated with acquisitions during the period (which we do not expect to incur at the same levels post IPO) and the IPO, and our belief that, as a professional services organization, our operations are not capital intensive on an ongoing basis, we believe the Adjusted EBITDA measure, in addition to GAAP financial measures, provides a relevant and useful benchmark for investors, in order to assess our financial performance and comparability to other companies in our industry. The Adjusted EBITDA measure is utilized by our senior management to evaluate our overall performance and operating expense characteristics and to compare our performance to that of certain of our competitors. In addition, a measure similar to Adjusted EBITDA is a key measure that determines compliance with certain financial covenants under our credit facility. Management compensates for the inherent limitations associated with using the Adjusted EBITDA measure through disclosure of such limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income or loss. Furthermore, management also reviews GAAP measures, and evaluates individual measures that are not included in Adjusted EBITDA such as our level of capital expenditures, equity issuance and interest expense, among other measures.

Adjusted EBITDA, as defined by the Company and reconciled below, consists of net income or loss attributable to Duff & Phelps Corporation before (a) net income or loss attributable to the noncontrolling interest, (b) provision for income taxes, (c) other expense/(income), net, (d) depreciation and amortization, (e) charges from impairment of intangible assets, (f) equity-based compensation associated with Legacy Units and IPO Options included in both compensation and benefits and in selling, general and administrative expenses, (g) cash severance and equity-compensation expense from the acceleration of vesting of restricted stock awards due to the realignment of our senior management, (h) acquisition retention expenses, (i) restructuring charges and (j) merger and acquisition costs:

Reconciliation of Adjusted EBITDA

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Net income attributable to Duff & Phelps Corporation	$	3,424	$	2,507	$	7,537	$	6,780
Net income attributable to noncontrolling interest		2,223		2,111		4,601		5,406
Provision for income taxes		2,556		2,506		5,620		6,156
Other expense/(income), net		64		270		86		323
Depreciation and amortization		2,567		2,350		5,056		4,843
Equity-based compensation associated with Legacy Units and IPO Options		56		1,494		473		2,577
Acquisition retention expenses		297		-		379		-
Restructuring charges		904		-		904		-
Merger and acquisition costs		272		321		466		321
Charge from realignment of senior management		-		3,040		-		3,040
Charge from impairment of certain intangible assets		-		-		-		674
Adjusted EBITDA	$	12,363	$	14,599	$	25,122	$	30,120

Adjusted Pro Forma Net Income, as defined by Duff & Phelps and reconciled below, consists of net income or loss attributable to Duff & Phelps Corporation before (a) net income or loss attributable to the noncontrolling interest, (b) a non-recurring charge from the repayment and subsequent termination of our former credit agreement, (c) equity-based compensation associated with Legacy Units and IPO Options included in both compensation and benefits and in selling, general and administrative expenses, (d) acquisition retention expenses, (e) cash severance and equity-compensation expense from the acceleration of vesting of restricted stock awards due to the realignment of our senior management, (f) restructuring charges, (g) merger and acquisition costs, and less (h) pro forma corporate income tax applied at an assumed rate as specified in the applicable footnote (such assumed pro forma corporate income tax rate may fluctuate between periods and may include true-ups relating to prior periods, based on management estimates and judgments). Adjusted Pro Forma Net Income per share, as defined by Duff & Phelps, consists of Adjusted Pro Forma Net Income divided by the weighted average number of the Company's Class A and Class B shares for the applicable period, giving effect to the dilutive impact, if any, of stock options and restricted stock awards and units and performance-vesting restricted stock awards and units issued in connection with the Company's ongoing long-term compensation program (“Ongoing RSAs”).

Reconciliation of Adjusted Pro Forma Net Income

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Net income attributable to Duff & Phelps Corporation	$	3,424		$	2,507		$	7,537		$	6,780
Net income attributable to noncontrolling interest(a)		2,223			2,111			4,601			5,406
Equity-based compensation associated with Legacy Units and IPO Options(b)		56			1,494			473			2,577
Acquisition retention expenses(c)		297			-			379			-
Restructuring charges(d)		904			-			904			-
Merger and acquisition costs(d)		272			321			466			321
Charge from realignment of senior management(d)		-			3,040			-			3,040
Adjustment to provision for income taxes(e)		(1,405	)		(2,270	)		(2,512	)		(3,639	)

Adjusted Pro Forma Net Income, as defined	$	5,771		$	7,203		$	11,848		$	14,485

Fully diluted weighted average shares of Class A common stock		28,067			25,754			28,095			25,903
Weighted average New Class A Units outstanding		10,947			12,927			11,038			12,947
Pro forma fully exchanged, fully diluted shares outstanding(f)		39,014			38,681			39,133			38,850

Adjusted Pro Forma Net Income per fully exchanged, fully diluted share outstanding	$	0.15		$	0.19		$	0.30		$	0.37

__________________________

(a)

Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company.

(b)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(c)	Represents elimination of acquisition retention expenses which resulted from expense incurred from certain restricted stock awards that were granted in conjunction with the closing of certain of our acquisitions.

(d)	Represents elimination of the following: restructuring charges, merger and acquisition costs or the charge incurred from the realignment of senior management.

(e)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.7% and 40.3% for the full year, respectively, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company, (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates and (iii) all deferred tax assets related to foreign operations are fully realizable.

(f)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and the dilutive effect of Ongoing RSAs. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

Adjusted EBITDA, Adjusted Pro Forma Net Income and Adjusted Pro Forma Net Income per share are non-GAAP financial measures which are not prepared in accordance with, and should not be considered alternatives to measurements required by GAAP, such as operating income, net income or loss, net income or loss per share, cash flow from continuing operating activities or any other measure of performance or liquidity derived in accordance with GAAP. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, it should be noted that companies calculate Adjusted EBITDA and Adjusted Pro Forma Net Income differently and, therefore, Adjusted EBITDA and Adjusted Pro Forma Net Income as presented for us may not be comparable to Adjusted EBITDA and Adjusted Pro Forma Net Income reported by other companies.

Disclosure Regarding Forward-Looking Statements

Statements in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this discussion are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this 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. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, 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 underlying assumptions prove to be incorrect, our actual results may vary materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and the risk factors section that are included in our Annual Report on Form 10-K for the year ended December 31, 2010 and any subsequent filings of our Quarterly Reports on Form 10-Q. The forward-looking statements included in this press release are made only as of the date this press release was issued. The Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Investor Relations

Marty Dauer

+1 212 871 7700

investor.relations@duffandphelps.com

Media Relations

Alex Wolfe

+1 212 871 9087

alex.wolfe@duffandphelps.com

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Revenues	$	87,886		$	88,742		$	172,932		$	177,906
Reimbursable expenses		3,074			1,962			4,966			4,760
Total revenues		90,960			90,704			177,898			182,666

Direct client service costs
Compensation and benefits (includes $4,130 and $4,215 of equity-based
compensation for the three months ended June 30, 2011 and 2010,
respectively, and $9,065 and $7,932 for the six months ended June 30,
2011 and 2010, respectively)		49,059			50,415			95,967			99,013
Other direct client service costs		1,480			1,881			2,909			3,869
Acquisition retention expenses (includes $297 and $379 of equity-based
compensation for the three and six months ended June 30, 2011)		297			-			379			-
Reimbursable expenses		3,132			2,039			5,069			4,893
		53,968			54,335			104,324			107,775

Operating expenses
Selling, general and administrative (includes $769 and $2,005 of equity-
based compensation for the three months ended June 30, 2011 and
2010, respectively, and $2,292 and $3,458 for the six months ended
June 30, 2011 and 2010, respectively)		24,982			26,304			49,304			50,388
Depreciation and amortization		2,567			2,350			5,056			4,843
Restructuring charges		904			-			904			-
Merger and acquisition costs		272			321			466			321
Charge from impairment of certain intangible assets		-			-			-			674
		28,725			28,975			55,730			56,226

Operating income		8,267			7,394			17,844			18,665

Other expense/(income), net
Interest income		(27	)		(53	)		(55	)		(77	)
Interest expense		91			76			148			168
Other expense/(income)		-			247			(7	)		232
		64			270			86			323

Income before income taxes		8,203			7,124			17,758			18,342

Provision for income taxes		2,556			2,506			5,620			6,156

Net income		5,647			4,618			12,138			12,186

Less: Net income attributable to noncontrolling interest		2,223			2,111			4,601			5,406

Net income attributable to Duff & Phelps Corporation	$	3,424		$	2,507		$	7,537		$	6,780

Weighted average shares of Class A common stock outstanding
Basic		27,296			25,058			27,104			25,022
Diluted		28,067			25,754			28,095			25,903

Net income per share attributable to stockholders of Class A
common stock of Duff & Phelps Corporation
Basic	$	0.12		$	0.10		$	0.27		$	0.26
Diluted	$	0.12		$	0.09		$	0.26		$	0.25

Cash dividends declared per common share	$	0.08		$	0.06		$	0.16		$	0.11

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

YEAR-OVER-YEAR SUMMARY OF REVENUES BY SEGMENT

(In thousands)

(Unaudited)

																											Variance						Variance
	2009										2010										2011						Q2 2011 vs Q2 2010						H1 2011 vs H1 2010
		Q1		Q2		Q3		Q4	Total			Q1		Q2		Q3		Q4	Total			Q1		Q2	Total		Dollar			Percent			Dollar			Percent
Financial Advisory
Valuation Advisory	$	42,990	$	37,360	$	33,726	$	37,884	$	151,960	$	38,178	$	35,712	$	34,013	$	38,992	$	146,895	$	37,614	$	32,604	$	70,218	$	(3,108	)		(8.7	%)	$	(3,672	)		(5.0	%)
Tax Services		10,878		11,972		15,045		10,007		47,902		9,447		12,089		11,157		10,631		43,324		7,547		15,128		22,675		3,039			25.1	%		1,139			5.3	%
Dispute & Legal
Management Consulting		9,643		12,162		12,897		12,518		47,220		9,415		9,316		10,571		11,760		41,062		13,436		13,005		26,441		3,689			39.6	%		7,710			41.2	%
		63,511		61,494		61,668		60,409		247,082		57,040		57,117		55,741		61,383		231,281		58,597		60,737		119,334		3,620			6.3	%		5,177			4.5	%

Alternative Asset Advisory
Portfolio Valuation		6,295		4,338		5,858		5,662		22,153		5,482		4,642		4,455		5,216		19,795		6,519		6,220		12,739		1,578			34.0	%		2,615			25.8	%
Complex Asset Solutions		4,148		5,159		5,201		4,663		19,171		4,126		3,355		2,481		3,512		13,474		5,321		4,125		9,446		770			23.0	%		1,965			26.3	%
Due Diligence		1,553		1,893		2,352		2,384		8,182		2,170		2,439		3,072		3,085		10,766		1,645		4,070		5,715		1,631			66.9	%		1,106			24.0	%
		11,996		11,390		13,411		12,709		49,506		11,778		10,436		10,008		11,813		44,035		13,485		14,415		27,900		3,979			38.1	%		5,686			25.6	%

Investment Banking
M&A Advisory		2,079		2,375		4,409		6,982		15,845		3,682		3,144		4,604		11,289		22,719		1,450		1,853		3,303		(1,291	)		(41.1	%)		(3,523	)		(51.6	%)
Transaction Opinions		6,101		6,180		2,714		6,081		21,076		6,823		6,041		6,711		9,328		28,903		8,231		7,266		15,497		1,225			20.3	%		2,633			20.5	%
Global Restructuring Advisory		5,578		8,614		11,038		12,164		37,394		9,841		12,004		7,363		9,400		38,608		3,283		3,615		6,898		(8,389	)		(69.9	%)		(14,947	)		(68.4	%)
		13,758		17,169		18,161		25,227		74,315		20,346		21,189		18,678		30,017		90,230		12,964		12,734		25,698		(8,455	)		(39.9	%)		(15,837	)		(38.1	%)

Total Revenues	$	89,265	$	90,053	$	93,240	$	98,345	$	370,903	$	89,164	$	88,742	$	84,427	$	103,213	$	365,546	$	85,046	$	87,886	$	172,932	$	(856	)		(1.0	%)	$	(4,974	)		(2.8	%)

Note: Effective January 1, 2011, we renamed our Corporate Finance Consulting segment Alternative Asset Advisory. This new name more appropriately defines the services offered by this segment. Concurrent with this change, our Financial Engineering service line was renamed Complex Asset Solutions to more clearly describe the nature of services offered. In addition, our Alternative Asset Advisory segment previously included services associated with Strategic Value Advisory. This service line was primarily integrated into Valuation Advisory. As a result, prior period results have been restated to reflect this change.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In thousands, except headcount data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Financial Advisory
Revenues (excluding reimbursables)	$	60,737		$	57,117		$	119,334		$	114,157
Segment operating income	$	9,787		$	7,931		$	19,369		$	15,637
Segment operating income margin		16.1	%		13.9	%		16.2	%		13.7	%

Alternative Asset Advisory
Revenues (excluding reimbursables)	$	14,415		$	10,436		$	27,900		$	22,214
Segment operating income	$	3,302		$	1,695		$	6,524		$	4,509
Segment operating income margin		22.9	%		16.2	%		23.4	%		20.3	%

Investment Banking
Revenues (excluding reimbursables)	$	12,734		$	21,189		$	25,698		$	41,535
Segment operating income	$	(668	)	$	5,050		$	(668	)	$	10,107
Segment operating income margin		(5.2	)%		23.8	%		(2.6	)%		24.3	%

Total
Revenues (excluding reimbursables)	$	87,886		$	88,742		$	172,932		$	177,906

Segment operating income	$	12,421		$	14,676		$	25,225		$	30,253
Net client reimbursable expenses		(58	)		(77	)		(103	)		(133	)
Equity-based compensation from
Legacy Units and IPO Options		(56	)		(1,494	)		(473	)		(2,577	)
Depreciation and amortization		(2,567	)		(2,350	)		(5,056	)		(4,843	)
Acquisition retention expenses		(297	)		-			(379	)		-
Restructuring charges		(904	)		-			(904	)		-
Merger and acquisition costs		(272	)		(321	)		(466	)		(321	)
Charge from realignment of senior management		-			(3,040	)		-			(3,040	)
Charge from impairment of certain intangible assets		-			-			-			(674	)
Operating income	$	8,267		$	7,394		$	17,844		$	18,665

______________________________________________________________


Average Client Service Professionals(1)
Financial Advisory		562			594			567			617
Alternative Asset Advisory		94			85			90			88
Investment Banking		128			127			129			129
Total		784			806			786			834

End of Period Client Service Professionals(1)
Financial Advisory		552			576			552			576
Alternative Asset Advisory		97			81			97			81
Investment Banking		131			125			131			125
Total		780			782			780			782

Revenue per Client Service Professional
Financial Advisory	$	108		$	96		$	210		$	185
Alternative Asset Advisory	$	153		$	123		$	310		$	252
Investment Banking	$	99		$	167		$	199		$	322
Total	$	112		$	110		$	220		$	213

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT – CONTINUED

(In thousands, except utilization, rate-per-hour and headcount data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Utilization(2)
Financial Advisory		67.6	%		63.4	%		71.3	%		64.0	%
Alternative Asset Advisory		61.5	%		56.9	%		61.7	%		58.4	%

Rate-Per-Hour(3)
Financial Advisory	$	363		$	358		$	338		$	343
Alternative Asset Advisory	$	515		$	460		$	522		$	489

______________________________________________________________


Revenues (excluding reimbursables)
Financial Advisory	$	60,737		$	57,117		$	119,334		$	114,157
Alternative Asset Advisory		14,415			10,436			27,900			22,214
Investment Banking		12,734			21,189			25,698			41,535
Total	$	87,886		$	88,742		$	172,932		$	177,906

Average Managing Directors(1)
Financial Advisory		93			97			93			98
Alternative Asset Advisory		25			25			25			25
Investment Banking		41			41			40			41
Total		159			163			158			164

End of Period Managing Directors(1)
Financial Advisory		91			99			91			99
Alternative Asset Advisory		25			24			25			24
Investment Banking		43			40			43			40
Total		159			163			159			163

Revenue per Managing Director
Financial Advisory	$	653		$	589		$	1,283		$	1,165
Alternative Asset Advisory	$	577		$	417		$	1,116		$	889
Investment Banking	$	311		$	517		$	642		$	1,013
Total	$	553		$	544		$	1,095		$	1,085

____________________________________

(1)	Headcount figures exclude 22 client service professionals of which seven are managing directors added in conjunction with our acquisition of Growth Capital Partners effective June 30, 2011.

(2)

The utilization rate for any given period is calculated by dividing the number of hours incurred by client service professionals who worked on client assignments (including internal projects for the Company) during the period by the total available working hours for all of such client service professionals during the same period, assuming a 40 hour work week, less paid holidays and vacation days. Utilization excludes client service professionals associated with certain property tax services due to the nature of the work performed and client service professionals from certain acquisitions prior to their transition to the Company’s financial system.

(3)

Average billing rate-per-hour is calculated by dividing revenues for the period by the number of hours worked on client assignments (including internal projects for the Company) during the same period. Financial Advisory revenues used to calculate rate-per-hour exclude revenues associated with certain property tax engagements. The average billing rate excludes certain hours from our acquisitions prior to their transition to the Company’s financial system.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In thousands, except utilization, rate-per-hour and headcount data)

(Unaudited)

	2009															2010															2011
	Q1			Q2			Q3			Q4			Total			Q1			Q2			Q3			Q4			Total			Q1			Q2			Total
Financial Advisory
Revenues (excluding reimbursables)	$	63,511		$	61,494		$	61,668		$	60,409		$	247,082		$	57,040		$	57,117		$	55,741		$	61,383		$	231,281		$	58,597		$	60,737		$	119,334
Segment operating income	$	10,209		$	10,800		$	9,601		$	7,330		$	37,940		$	7,706		$	7,931		$	6,568		$	7,614		$	29,819		$	9,582		$	9,787		$	19,369
Segment operating income margin		16.1	%		17.6	%		15.6	%		12.1	%		15.4	%		13.5	%		13.9	%		11.8	%		12.4	%		12.9	%		16.4	%		16.1	%		16.2	%

Alternative Asset Advisory
Revenues (excluding reimbursables)	$	11,996		$	11,390		$	13,411		$	12,709		$	49,506		$	11,778		$	10,436		$	10,008		$	11,813		$	44,035		$	13,485		$	14,415		$	27,900
Segment operating income	$	3,392		$	2,717		$	4,643		$	2,719		$	13,471		$	2,814		$	1,695		$	1,929		$	2,770		$	9,208		$	3,222		$	3,302		$	6,524
Segment operating income margin		28.3	%		23.9	%		34.6	%		21.4	%		27.2	%		23.9	%		16.2	%		19.3	%		23.4	%		20.9	%		23.9	%		22.9	%		23.4	%

Investment Banking
Revenues (excluding reimbursables)	$	13,758		$	17,169		$	18,161		$	25,227		$	74,315		$	20,346		$	21,189		$	18,678		$	30,017		$	90,230		$	12,964		$	12,734		$	25,698
Segment operating income	$	1,543		$	3,288		$	2,364		$	8,038		$	15,233		$	5,057		$	5,050		$	3,665		$	8,289		$	22,061		$	-		$	(668	)	$	(668	)
Segment operating income margin		11.2	%		19.2	%		13.0	%		31.9	%		20.5	%		24.9	%		23.8	%		19.6	%		27.6	%		24.4	%		0.0	%		(5.2	)%		(2.6	)%

Total
Revenues (excluding reimbursables)	$	89,265		$	90,053		$	93,240		$	98,345		$	370,903		$	89,164		$	88,742		$	84,427		$	103,213		$	365,546		$	85,046		$	87,886		$	172,932

Segment operating income	$	15,144		$	16,805		$	16,608		$	18,087		$	66,644		$	15,577		$	14,676		$	12,162		$	18,673		$	61,088		$	12,804		$	12,421		$	25,225
Net client reimbursable expenses		22			(11	)		(74	)		(12	)		(75	)		(56	)		(77	)		73			(2	)		(62	)		(45	)		(58	)		(103	)
Equity-based compensation from Legacy Units and IPO Options		(3,253	)		(4,481	)		(3,229	)		(1,474	)		(12,437	)		(1,083	)		(1,494	)		(391	)		(431	)		(3,399	)		(417	)		(56	)		(473	)
Depreciation and amortization		(2,562	)		(2,556	)		(2,594	)		(2,532	)		(10,244	)		(2,493	)		(2,350	)		(2,567	)		(2,506	)		(9,916	)		(2,489	)		(2,567	)		(5,056	)
Acquisition retention expenses		-			-			-			-			-			-			-			-			(11	)		(11	)		(82	)		(297	)		(379	)
Restructuring charges		-			-			-			-			-			-			-			-			-			-			-			(904	)		(904	)
Merger and acquisition costs		-			-			-			-			-			-			(321	)		(76	)		(307	)		(704	)		(194	)		(272	)		(466	)
Charge from realignment of senior management		-			-			-			-			-			-			(3,040	)		-			(60	)		(3,100	)		-			-			-
Charge from impairment of certain intangible assets		-			-			-			-			-			(674	)		-			-			-			(674	)		-			-			-
Operating income	$	9,351		$	9,757		$	10,711		$	14,069		$	43,888		$	11,271		$	7,394		$	9,201		$	15,356		$	43,222		$	9,577		$	8,267		$	17,844


Utilization
Financial Advisory		66.1	%		62.4	%		63.0	%		71.0	%		65.5	%		64.6	%		63.4	%		65.9	%		76.0	%		67.3	%		75.0	%		67.6	%		71.3	%
Alternative Asset Advisory		57.8	%		59.3	%		69.2	%		71.4	%		64.3	%		60.1	%		56.9	%		63.3	%		68.4	%		62.0	%		62.0	%		61.5	%		61.7	%


Rate-Per-Hour
Financial Advisory	$	305		$	326		$	332		$	313		$	319		$	329		$	358		$	344		$	346		$	344		$	315		$	363		$	338
Alternative Asset Advisory	$	487		$	434		$	458		$	428		$	451		$	517		$	460		$	478		$	468		$	481		$	529		$	515		$	522

Note:

Effective January 1, 2011, we renamed our Corporate Finance Consulting segment Alternative Asset Advisory. This new name more appropriately defines the services offered by this segment. Concurrent with this change, our Financial Engineering service line was renamed Complex Asset Solutions to more clearly describe the nature of services offered. In addition, our Alternative Asset Advisory segment previously included services associated with Strategic Value Advisory. This service line was primarily integrated into Valuation Advisory. As a result, prior period results have been restated to reflect this change.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT – CONTINUED

(In thousands, except utilization, rate-per-hour and headcount data)

(Unaudited)

	2009										2010										2011
	Q1		Q2		Q3		Q4		YTD		Q1		Q2		Q3		Q4		YTD		Q1		Q2		YTD
Average Client Service Professionals
Financial Advisory		732		692		678		663		692		640		594		574		572		596		574		562		567
Alternative Asset Advisory		98		100		98		94		97		92		85		79		78		83		87		94		90
Investment Banking		136		135		130		131		133		131		127		124		129		128		129		128		129
		966		927		906		888		922		863		806		777		779		807		790		784		786

End of Period Client Service Professionals
Financial Advisory		714		675		677		654				614		576		583		572				571		552
Alternative Asset Advisory		97		101		95		93				88		81		78		85				90		97
Investment Banking		137		131		130		131				128		125		128		128				127		131
		948		907		902		878				830		782		789		785				788		780

	2009										2010										2011
	Q1		Q2		Q3		Q4		YTD		Q1		Q2		Q3		Q4		YTD		Q1		Q2		YTD
Average Managing Directors
Financial Advisory		107		105		102		100		103		98		97		97		94		96		94		93		93
Alternative Asset Advisory		24		24		24		22		23		25		25		24		24		24		26		25		25
Investment Banking		36		39		40		40		39		40		41		40		39		40		39		41		40
		167		168		166		162		165		163		163		161		157		160		159		159		158

End of Period Managing Directors
Financial Advisory		107		103		100		100				94		99		95		93				94		91
Alternative Asset Advisory		24		24		22		23				25		24		23		26				26		25
Investment Banking		38		38		40		40				39		40		40		38				39		43
		169		165		162		163				158		163		158		157				159		159



Revenues
Financial Advisory	$	63,511	$	61,494	$	61,668	$	60,409	$	247,082	$	57,040	$	57,117	$	55,741	$	61,383	$	231,281	$	58,597	$	60,737	$	119,334
Alternative Asset Advisory		11,996		11,390		13,411		12,709		49,506		11,778		10,436		10,008		11,813		44,035		13,485		14,415		27,900
Investment Banking		13,758		17,169		18,161		25,227		74,315		20,346		21,189		18,678		30,017		90,230		12,964		12,734		25,698
Total	$	89,265	$	90,053	$	93,240	$	98,345	$	370,903	$	89,164	$	88,742	$	84,427	$	103,213	$	365,546	$	85,046	$	87,886	$	172,932


Revenue per Client Service Professional
Financial Advisory	$	87	$	89	$	91	$	91	$	357	$	89	$	96	$	97	$	107	$	388	$	102	$	108	$	210
Alternative Asset Advisory	$	122	$	114	$	137	$	135	$	510	$	128	$	123	$	127	$	151	$	531	$	155	$	153	$	310
Investment Banking	$	101	$	127	$	140	$	193	$	559	$	155	$	167	$	151	$	233	$	705	$	100	$	99	$	199
Total	$	92	$	97	$	103	$	111	$	402	$	103	$	110	$	109	$	132	$	453	$	108	$	112	$	220


Revenue per Managing Director
Financial Advisory	$	594	$	586	$	605	$	604	$	2,399	$	582	$	589	$	575	$	653	$	2,409	$	623	$	653	$	1,283
Alternative Asset Advisory	$	500	$	475	$	559	$	578	$	2,152	$	471	$	417	$	417	$	492	$	1,835	$	519	$	577	$	1,116
Investment Banking	$	382	$	440	$	454	$	631	$	1,906	$	509	$	517	$	467	$	770	$	2,256	$	332	$	311	$	642
Total	$	535	$	536	$	562	$	607	$	2,248	$	547	$	544	$	524	$	657	$	2,285	$	535	$	553	$	1,095

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

	June 30,		December 31,
	2011		2010
ASSETS
Current assets
Cash and cash equivalents	$	69,475	$	113,328
Accounts receivable (net of allowance for doubtful accounts of $1,750 and $1,347
at June 30, 2011 and December 31, 2010, respectively)		60,243		60,358
Unbilled services		41,418		23,101
Prepaid expenses and other current assets		11,634		7,479
Net deferred income taxes, current		485		2,555
Total current assets		183,255		206,821

Property and equipment (net of accumulated depreciation of $29,511 and $26,375
at June 30, 2011 and December 31, 2010, respectively)		31,071		29,250
Goodwill		147,150		139,170
Intangible assets (net of accumulated amortization of $22,705 and $20,656
at June 30, 2011 and December 31, 2010, respectively)		30,786		30,407
Other assets		4,453		2,638
Investments related to deferred compensation plan		25,124		23,151
Net deferred income taxes, non-current		114,464		116,789
Total non-current assets		353,048		341,405

Total assets	$	536,303	$	548,226

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	2,866	$	2,397
Accrued expenses		8,208		11,254
Accrued compensation and benefits		12,746		39,875
Liability related to deferred compensation plan, current portion		540		1,314
Deferred revenues		3,949		2,427
Other current liabilities		-		430
Due to noncontrolling unitholders, current portion		5,640		5,640
Total current liabilities		33,949		63,337

Liability related to deferred compensation plan, less current portion		24,986		21,764
Other long-term liabilities		18,720		16,676
Due to noncontrolling unitholders, less current portion		105,638		103,885
Total non-current liabilities		149,344		142,325

Total liabilities		183,293		205,662

Commitments and contingencies

Stockholders' equity
Preferred stock (50,000 shares authorized; zero issued and outstanding)		-		-
Class A common stock, par value $0.01 per share (100,000 shares authorized; 31,648 and 30,166
shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively)		316		302
Class B common stock, par value $0.0001 per share (50,000 shares authorized; 10,818 and 11,151
shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively)		1		1
Additional paid-in capital		240,782		232,644
Accumulated other comprehensive income		3,049		1,400
Retained earnings		19,491		16,923
Total stockholders' equity of Duff & Phelps Corporation		263,639		251,270
Noncontrolling interest		89,371		91,294
Total stockholders' equity		353,010		342,564
Total liabilities and stockholders' equity	$	536,303	$	548,226

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,			June 30,
	2011			2010
Cash flows from operating activities:
Net income	$	12,138		$	12,186

Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization		5,056			4,843
Equity-based compensation		11,736			11,390
Bad debt expense		1,347			809
Net deferred income taxes		6,151			5,364
Other		359			801
Changes in assets and liabilities providing/(using) cash:
Accounts receivable		(1,148	)		5,316
Unbilled services		(18,317	)		(4,823	)
Prepaid expenses and other current assets		(285	)		(1,699	)
Other assets		(381	)		728
Accounts payable and accrued expenses		(7,312	)		(6,901	)
Accrued compensation and benefits		(22,674	)		(18,704	)
Deferred revenues		1,520			(121	)
Other liabilities		83			(27	)
Net cash provided by/(used in) operating activities		(11,727	)		9,162

Cash flows from investing activities:
Purchase of property and equipment		(4,012	)		(3,561	)
Business acquisitions, net of cash acquired		(5,891	)		(11,807	)
Purchase of investments		(3,250	)		(2,975	)
Net cash used in investing activities		(13,153	)		(18,343	)

Cash flows from financing activities:
Repurchases of Class A common stock		(13,649	)		(8,177	)
Dividends		(5,012	)		(3,141	)
Distributions and other payments to noncontrolling unitholders		(2,378	)		(2,135	)
Proceeds from exercises of IPO Options		267			82
Increase in restricted cash		-			(3,156	)
Other		-			(3	)
Net cash used in financing activities		(20,772	)		(16,530	)

Effect of exchange rate on cash and cash equivalents		1,799			(2,369	)

Net decrease in cash and cash equivalents		(43,853	)		(28,080	)
Cash and cash equivalents at beginning of period		113,328			107,311
Cash and cash equivalents at end of period	$	69,475		$	79,231

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30, 2011
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	87,886		$	-			$	87,886
Reimbursable expenses		3,074			-				3,074
Total revenues		90,960			-				90,960

Direct client service costs
Compensation and benefits		49,059			55		(a)		49,114
Other direct client service costs		1,480			-				1,480
Acquisition retention expenses		297			(297	)	(b)		-
Reimbursable expenses		3,132			-				3,132
		53,968			(242	)			53,726

Operating expenses
Selling, general and administrative		24,982			(111	)	(a)		24,871
Depreciation and amortization		2,567			-				2,567
Restructuring charges		904			(904	)	(c)		-
Merger and acquisition costs		272			(272	)	(d)		-
		28,725			(1,287	)			27,438

Operating income		8,267			1,529				9,796

Other expense/(income), net
Interest income		(27	)		-				(27	)
Interest expense		91			-				91
Other expense		-			-				-
		64			-				64

Income before income taxes		8,203			1,529				9,732
									-
Provision for income taxes		2,556			1,405		(e)		3,961

Net income		5,647			124				5,771

Less: Net income attributable to the noncontrolling interest		2,223			(2,223	)	(f)		-

Net income attributable to Duff & Phelps Corporation	$	3,424		$	2,347			$	5,771

Pro forma fully exchanged, fully diluted shares outstanding							(g)		39,014

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding								$	0.15

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)	Represents elimination of acquisition retention expenses which resulted from expense incurred from certain restricted stock awards that were granted in conjunction with the closing of certain acquisitions.

(c)	Represents elimination of restructuring charges.

(d)	Represents elimination of merger and acquisitions costs.

(e)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.7% for the full year which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company, (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates and (iii) all deferred tax assets related to foreign operations are fully realizable.

(f)

(g)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and the dilutive effect of Ongoing RSAs. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30, 2010
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	88,742		$	-			$	88,742
Reimbursable expenses		1,962			-				1,962
Total revenues		90,704			-				90,704

Direct client service costs
Compensation and benefits		50,415			(1,176	)	(a)		49,239
Other direct client service costs		1,881			-				1,881
Reimbursable expenses		2,039			-				2,039
		54,335			(1,176	)			53,159

Operating expenses
Selling, general and administrative		26,304			(3,358	)	(b)		22,946
Depreciation and amortization		2,350			-				2,350
Merger and acquisition costs		321			(321	)	(c)		-
		28,975			(3,679	)			25,296

Operating income		7,394			4,855				12,249

Other expense/(income), net
Interest income		(53	)		-				(53	)
Interest expense		76			-				76
Other expense		247			-				247
		270			-				270

Income before income taxes		7,124			4,855				11,979
									-
Provision for income taxes		2,506			2,270		(d)		4,776

Net income		4,618			2,585				7,203

Less: Net income attributable to the noncontrolling interest		2,111			(2,111	)	(e)		-

Net income attributable to Duff & Phelps Corporation	$	2,507		$	4,696			$	7,203

Pro forma fully exchanged, fully diluted shares outstanding							(f)		38,681

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding								$	0.19

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options totaling $636 and a charge from the departure of our former president and one of our segment leaders totaling $540.

(b)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options totaling $858 and a charge from the departure of our former president and one of our segment leaders totaling $2,500.

(c)	Represents elimination of merger and acquisition costs.

(d)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.3% for the full year which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. For the quarter ended June 30, 2010, the pro forma tax rate of 39.9% reflects a true-up adjustment relating to the three months ended March 31, 2010. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company and (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates.

(e)

(f)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Six Months Ended June 30, 2011
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	172,932		$	-			$	172,932
Reimbursable expenses		4,966			-				4,966
Total revenues		177,898			-				177,898

Direct client service costs
Compensation and benefits		95,967			(178	)	(a)		95,789
Other direct client service costs		2,909			-				2,909
Acquisition retention expenses		379			(379	)	(b)		-
Reimbursable expenses		5,069			-				5,069
		104,324			(557	)			103,767

Operating expenses
Selling, general and administrative		49,304			(295	)	(a)		49,009
Depreciation and amortization		5,056			-				5,056
Restructuring charges		904			(904	)	(c)		-
Merger and acquisition costs		466			(466	)	(d)		-
		55,730			(1,665	)			54,065

Operating income		17,844			2,222				20,066

Other expense/(income), net
Interest income		(55	)		-				(55	)
Interest expense		148			-				148
Other expense		(7	)		-				(7	)
		86			-				86

Income before income taxes		17,758			2,222				19,980
									-
Provision for income taxes		5,620			2,512		(e)		8,132

Net income		12,138			(290	)			11,848

Less: Net income attributable to the noncontrolling interest		4,601			(4,601	)	(f)		-

Net income attributable to Duff & Phelps Corporation	$	7,537		$	4,311			$	11,848

Pro forma fully exchanged, fully diluted shares outstanding							(g)		39,133

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding								$	0.30

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)	Represents elimination of acquisition retention expenses which resulted from expense incurred from certain restricted stock awards that were granted in conjunction with the closing of certain acquisitions.

(c)	Represents elimination of restructuring charges.

(d)	Represents elimination of merger and acquisitions costs.

(e)

(f)

(g)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and the dilutive effect of Ongoing RSAs. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Six Months Ended June 30, 2010
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	177,906		$	-			$	177,906
Reimbursable expenses		4,760			-				4,760
Total revenues		182,666			-				182,666

Direct client service costs
Compensation and benefits		99,013			(1,774	)	(a)		97,239
Other direct client service costs		3,869			-				3,869
Acquisition retention expenses		-			-				-
Reimbursable expenses		4,893			-				4,893
		107,775			(1,774	)			106,001

Operating expenses
Selling, general and administrative		50,388			(3,843	)	(b)		46,545
Depreciation and amortization		4,843			-				4,843
Merger and acquisition costs		321			(321	)	(c)		-
Charge from impairment of certain intangible assets		674			-				674
		56,226			(4,164	)			52,062

Operating income		18,665			5,938				24,603

Other expense/(income), net
Interest income		(77	)		-				(77	)
Interest expense		168			-				168
Other expense		232			-				232
		323			-				323

Income before income taxes		18,342			5,938				24,280
									-
Provision for income taxes		6,156			3,639		(d)		9,795

Net income		12,186			2,299				14,485

Less: Net income attributable to the noncontrolling interest		5,406			(5,406	)	(e)		-

Net income attributable to Duff & Phelps Corporation	$	6,780		$	7,705			$	14,485

Pro forma fully exchanged, fully diluted shares outstanding							(f)		38,850

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding								$	0.37

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options totaling $1,234 and a charge from the departure of our former president and one of our segment leaders totaling $540.

(b)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options totaling $1,343 and a charge from the departure of our former president and one of our segment leaders totaling $2,500.

(c)	Represents elimination of merger and acquisition costs.

(d)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.3% for the full year which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. The pro forma tax rate has changed from prior levels as a result of true-up adjustments. Assumes (i) full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company and (ii) the Company has adopted a conventional corporate tax structure and is taxed as a C Corporation in the U.S. at prevailing corporate rates.

(e)

(f)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding, excluding Ongoing RSAs, and dilutive effect of Ongoing RSAs. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

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