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CONFIDENTIAL
Cowen Group, Inc. Financial Highlights 1Q 2011 vs 1Q 2010: Economic Income(1)
CONFIDENTIAL (1) Economic Income/(Loss) and Economic Income/(Loss) excluding
certain non-cash items are non-GAAP measures. The Company believes that these
non-GAAP measures, viewed in addition to and not in lieu of the Company's
reported GAAP results, provide useful information to investors regarding its
performance and overall results of operations. These metrics are an integral
part of the Company's internal reporting to measure the performance of its
business and the overall effectiveness of senior management. Reconciliations
to comparable GAAP measures are available in the Companys First Quarter
Earnings Release which has been filed on Form 8-K with the Securities
Exchange Commission on May 6, 2011. The non-GAAP measures presented herein
may not be comparable to similarly titled measures presented by other
companies, and are not identical to corresponding measures used in our
various agreements or public filings. In 1Q11, Cowen Group, Inc. achieved its
second consecutive profitable quarter 25 Three Months Ended March 31, 2011
2010 % Inc/Dec Revenues Investment banking $ 14,682 $ 6,005 144% Brokerage
27,591 29,575 (7) Management fees 14,047 12,615 11 Incentive income 5,163
1,982 160 Investment income 17,209 11,421 51 Other revenue 1,054 73 NM Total
revenues 79,746 61,671 29% Expenses Employee compensation and benefits 42,737
41,279 4% Interest and dividends 217 116 87 Fixed non-compensation expenses
21,587 24,465 (12) Variable non-compensation expenses 8,948 8,786 2
Reimbursement from affiliates (1,169) (1,887) (38) Total expenses 72,320
72,759 (1) Net Economic Income (Loss) before non-controlling Interests 7,426
(11,088) NA Non-controlling interests (475) (41) NA Economic Income (Loss) $ 6,951 $ (11,129) NA Economic Income (Loss) Excluding Certain Non-cash Items
Economic Income (Loss) $ 6,951 $ (11,129) NA Exclusion of depreciation and
amortization expense 2,058 2,494 (17%) Exclusion of share-based and other
non-cash deferred compensation expense 4,070 2,049 99 Exclusion of real
estate related incentive fee (gain) loss (782) 111 NA Economic Income (Loss)
Excluding Certain Non-cash Items $12,297 $ (6,475) NA
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