ex992.htm

Quarterly Financial Supplement

For the Period Ended March 31, 2010

(NYSE: NFP)

Investor Relations Contact:

Abbe F. Goldstein, CFA

(212) 301-4011

ir@nfp.com

TABLE OF CONTENTS		PAGE

Corporate Overview		3
Segment Revenue, Adjusted EBITDA and Organic Revenue Growth		4
Adjusted EBITDA Reconciliation for Quarterly Periods		5
Calculation of Management Fees % for Quarterly & Year-to-Date Periods		6
Consolidated Statements of Financial Condition (Balance Sheet)		8
Consolidated Statement of Cash Flows for Quarterly and Year-to-Date Periods		9
Condensed Consolidated Statements of Operations for Quarterly and Year-to-Date Periods		11
Acquisition Statistics for Quarterly and Year-to-Date Periods		13
Intangibles and Goodwill Data		14
Defined Terms		15

This Quarterly Financial Supplement (“QFS”) includes historical and forward-looking non-GAAP measures called Adjusted EBITDA, cash earnings, cash earnings per diluted share, adjusted income before management fees and percentages or calculations using these measures. The Company believes these non-GAAP measures provide additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent under GAAP. Adjusted EBITDA is defined as net income excluding income tax expense, interest income, interest expense, other, net, amortization of intangibles, depreciation, impairment of goodwill and intangible assets, (gain) loss on sale of subsidiaries, and any change in estimated contingent consideration amounts recorded in accordance with purchase accounting that have been subsequently adjusted and recorded in the consolidated statement of operations. Adjusted EBITDA should not be viewed as a substitute for net income. Cash earnings is defined as net income excluding amortization of intangibles, depreciation, the after-tax impact of the impairment of goodwill and intangible assets and the after-tax impact of non-cash interest expense. Cash earnings per diluted share is calculated by dividing cash earnings by the number of weighted average diluted shares outstanding for the period indicated. Cash earnings and cash earnings per diluted share should not be viewed as substitutes for net income and net income per diluted share, respectively. Adjusted income before management fees is defined as income before management fees excluding corporate income before management fees. Adjusted income before management fees should not be viewed as a substitute for income from operations. A full reconciliation of these non-GAAP measures to their GAAP counterparts is provided in this QFS, which is available on the Investor Relations section of the Company’s Web site at www.nfp.com.

This QFS contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain the words "anticipate," "expect," "intend," "plan," "believe," "estimate," "may," "project," "will," "continue" and similar expressions of a future or forward-looking nature. Forward-looking statements may include discussions concerning revenue, expenses, earnings, cash flow, impairments, losses, dividends, capital structure, credit facilities, market and industry conditions, premium and commission rates, interest rates, contingencies, the direction or outcome of regulatory investigations and litigation, income taxes and NFP's operations or strategy. These forward-looking statements are based on management's current views with respect to future results, and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by a forward-looking statement include: (1) NFP’s ability, through its operating structure, to respond quickly to regulatory, operational or financial situations impacting its businesses; (2) the ability of the Company’s businesses to perform successfully following acquisition, including through cross-selling initiatives, and the Company’s ability to manage its business effectively and profitably through its reportable segments and the principals of its businesses; (3) any losses that NFP may take with respect to dispositions, restructures or otherwise; (4) an economic environment that results in fewer sales of financial products or services; (5) the occurrence of events or circumstances that could be indicators of impairment to goodwill and intangible assets which require the Company to test for impairment, and the impact of any impairments that the Company may take; (6) the impact of the adoption, modification or change in interpretation of certain accounting treatments or policies and changes in underlying assumptions relating to such treatments or policies, which may lead to adverse financial statement results; (7) NFP’s success in acquiring and retaining high-quality independent financial services businesses; (8) the financial impact of NFP’s incentive plans; (9) changes that adversely affect NFP’s ability to manage its indebtedness or capital structure, including changes in interest rates, credit market conditions and general economic factors; (10) securities and capital markets behavior, including fluctuations in the price of NFP’s common stock, continuing volatility in the U.S. financial markets, or the dilutive impact of any capital-raising efforts to finance operations or business strategy; (11) the continued availability of borrowings and letters of credit under NFP’s credit facility; (12) adverse results, market uncertainty in the financial services industry, or other consequences from litigation, arbitration, regulatory investigations or compliance initiatives, including those related to business practices, compensation agreements with insurance companies, policy rescissions or chargebacks, regulatory investigations or activities within the life settlements industry; (13) adverse developments in the markets in which the Company operates, resulting in fewer sales of financial products and services, including those related to compensation agreements with insurance companies and activities within the life settlements industry; (14) the impact of legislation or regulations in jurisdictions in which NFP’s subsidiaries operate, including the possible adoption of comprehensive and exclusive federal regulation over all interstate insurers and the uncertain impact of proposals for legislation regulating the financial services industry; (15) uncertainty regarding the impact of newly-adopted healthcare legislation or resulting changes in business practices of NFP’s subsidiaries that operate in the benefits market; (16) changes in laws, including the elimination or modification of the federal estate tax, changes in the tax treatment of life insurance products, or changes in regulations affecting the value or use of benefits programs, which may adversely affect the demand for or profitability of the Company’s services; (17) developments in the availability, pricing, design or underwriting of insurance products, revisions in mortality tables by life expectancy underwriters or changes in the Company’s relationships with insurance companies; (18) changes in premiums and commission rates or the rates of other fees paid to the Company’s businesses, including life settlements and registered investment advisory fees; (19) the reduction of the Company’s revenue and earnings due to the elimination or modification of compensation arrangements, including contingent compensation arrangements and the adoption of internal initiatives to enhance compensation transparency, including the transparency of fees paid for life settlements transactions; (20) the occurrence of adverse economic conditions or an adverse regulatory climate in New York, Florida or California; (21) the loss of services of key members of senior management; and (22) the Company’s ability to effect smooth succession planning.

Additional factors are set forth in NFP’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2009, filed with the SEC on February 12, 2010 and its Quarterly Report on Form 10-Q for the period ended March 31, 2010, filed with the SEC on May 10, 2010.

Forward-looking statements speak only as of the date on which they are made. NFP expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

NATIONAL FINANCIAL PARTNERS CORP.

CORPORATE OVERVIEW

(Unaudited - dollars in thousands, except per share data)

	At or for the Three Months Ended															For the Years Ended
	March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			December 31,
	2010			2009			2009			2009			2009			2009			2008
GAAP net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)	$	(493,386	)	$	8,471
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594			36,551			39,194
Depreciation		3,006			8,857			3,361			3,485			3,539			19,242			13,371
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337			618,465			41,257
Tax benefit of impairment of goodwill and intangible assets		(1,118	)		(1,133	)		(427	)		(902	)		(88,146	)		(90,608	)		(8,137	)
Non-cash interest, net of tax		1,866			1,559			1,966			1,732			1,557			6,814			6,364
Cash earnings	$	21,983		$	26,171		$	26,417		$	26,408		$	18,082		$	97,078		$	100,520


GAAP net income (loss) per share - diluted	$	0.16		$	0.04		$	0.24		$	0.23		$	(12.59	)	$	(12.02	)	$	0.21
Amortization of intangibles		0.19			0.20			0.21			0.21			0.23			0.87			0.96
Depreciation		0.07			0.21			0.08			0.08			0.09			0.46			0.33
Impairment of goodwill and intangible assets		0.07			0.14			0.05			0.07			14.73			14.78			1.01
Tax benefit of impairment of goodwill and intangible assets		(0.03	)		(0.03	)		(0.01	)		(0.02	)		(2.14	)		(2.16	)		(0.20	)
Non-cash interest, net of tax		0.04			0.04			0.05			0.04			0.04			0.16			0.16
Impact of diluted shares on cash earnings not reflected in GAAP net loss per share - diluted (1)		—			—			—			—			0.08			0.23			—
Cash earnings per share - diluted (2)	$	0.50		$	0.61		$	0.61		$	0.62		$	0.44		$	2.32		$	2.46


Shares outstanding, beginning of period		41,363			41,201			41,104			40,026			39,753			39,753			38,935
Common shares issued for acquisitions during period		—			—			—			—			—			—			669
Common shares issued for contingent consideration and escrow during period		—			106			—			978			—			1,084			89
Common shares issued for stock-based awards during period		627			42			12			31			181			266			451
Common shares repurchased during period		(95	)		(23	)		(21	)		(42	)		—			(91	)		(1,040	)
Common shares issued under ongoing incentive program		—			—			—			—			—			—			290
Other		31			37			106			111			92			351			359
Shares outstanding, end of period		41,926			41,363			41,201			41,104			40,026			41,363			39,753

Weighted average common shares outstanding		41,598			41,363			41,211			41,139			39,945			40,908			39,542
Dilutive effect of contingent consideration and ongoing incentive payments		649			593			393			390			1,009			593			176
Dilutive effect of stock-based awards		1,443			1,147			1,503			1,246			275			343			1,122
Dilutive effect of escrow, stock subscriptions and other		12			6			7			58			9			(2	)		93
Weighted average common shares outstanding - diluted (1)		43,702			43,109			43,114			42,833			41,238			41,842			40,933

Debt to total capitalization		41.0	%		41.8	%		45.2	%		49.4	%		52.8	%		41.8	%		29.3	%

Total NFP owned businesses at period end		148			154			160			169			176			154			181

(1)

For periods where the Company generated a GAAP net loss, weighted average common shares outstanding - diluted was used to calculate cash earnings per share - diluted only. To calculate GAAP net loss per share, weighted average common shares outstanding - diluted is the same as weighted average common shares outstanding - basic due to the antidilutive effects of other items caused by a GAAP net loss position.

(2)	The sum of the per-share components of cash earnings per share - diluted may not agree to cash earnings per share - diluted due to rounding.

NATIONAL FINANCIAL PARTNERS CORP.

SEGMENT REVENUE, ADJUSTED EBITDA AND ORGANIC REVENUE GROWTH

(Unaudited - dollars in thousands)

	For the Three Months Ended
	March 31,				December 31,				September 30,				June 30,				March 31,
	2010				2009				2009				2009				2009
Revenue
Corporate Client Group	$	95,247	42	%	$	106,971	39	%	$	90,665	39	%	$	89,832	40	%	$	92,511		43	%
Individual Client Group		78,694	35	%		122,383	44	%		97,428	42	%		92,432	41	%		85,072		39	%
Advisor Services Group		51,332	23	%		47,827	17	%		41,832	19	%		41,934	19	%		39,398		18	%
Consolidated	$	225,273	100	%	$	277,181	100	%	$	229,925	100	%	$	224,198	100	%	$	216,981		100	%

Adjusted EBITDA (1)
Corporate Client Group	$	19,466	71	%	$	17,785	66	%	$	15,262	50	%	$	14,969	53	%	$	18,775		77	%
Individual Client Group		6,101	22	%		7,821	29	%		14,323	46	%		11,847	42	%		6,315		26	%
Advisor Services Group		2,033	7	%		1,290	5	%		1,270	4	%		1,483	5	%		(841	)	-3	%
Consolidated	$	27,600	100	%	$	26,896	100	%	$	30,855	100	%	$	28,299	100	%	$	24,249		100	%

	For the Three Months Ended
	March 31,			December 31,		September 30,			June 30,			March 31,
	2010			2009		2009			2009			2009

Disposition metrics (2)
Revenue
Corporate Client Group	$	172		$	1,836	$	1,563		$	2,360		$	2,525
Individual Client Group		167			3,304		5,263			4,775			7,834
Advisor Services Group		—			—		—			—			—
Consolidated	$	339		$	5,140	$	6,826		$	7,135		$	10,359

Adjusted EBITDA
Corporate Client Group	$	69		$	400	$	471		$	263		$	443
Individual Client Group		(93	)		75		(519	)		(1,249	)		89
Advisor Services Group		—			—		—			—			—
Consolidated	$	(24	)	$	475	$	(48	)	$	(986	)	$	532

		For the Three Months Ended
		March 31, 2010
Organic revenue growth
	Corporate Client Group	5.7%
	Individual Client Group	1.6%
	Advisor Services Group	8.5%
	Consolidated	4.9%

(1)

The reconciliation of Adjusted EBITDA per reportable segment does not include the following items, which are not allocated to any of the Company’s reportable segments: income tax expense, interest income, interest expense, and other, net. These items are included in the reconciliation of Adjusted EBITDA to net income on a consolidated basis.

(2)	Represents revenue and Adjusted EBITDA for firms disposed during the period ending March 31, 2010 and for these firms for the prior periods. The reported figures may change in future periods as a result of the change in the set of firms disposed in future quarters.

NATIONAL FINANCIAL PARTNERS CORP.

ADJUSTED EBITDA RECONCILIATION

FOR QUARTERLY PERIODS (1)

(Unaudited - in thousands)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009

Corporate Client Group
Income (loss) from operations	$	11,949		$	8,167		$	8,132		$	7,653		$	(343,815	)
Amortization of intangibles		5,348			5,615			5,678			5,760			5,906
Impairment of goodwill and intangible assets		1,931			-			-			110			354,298
Depreciation		1,559			4,126			1,657			1,688			1,806
(Gain) loss on sale of subsidiaries		(1,321	)		(123	)		(206	)		(244	)		580
Adjusted EBITDA	$	19,466		$	17,785		$	15,261		$	14,967		$	18,775

Individual Client Group
Income (loss) from operations	$	1,926		$	(5,894	)	$	8,568		$	5,121		$	(251,919	)
Amortization of intangibles		2,990			3,191			3,297			3,416			3,688
Impairment of goodwill and intangible assets		970			6,231			2,002			2,785			253,039
Depreciation		1,125			4,413			1,441			1,561			1,470
(Gain) loss on sale of subsidiaries		(910	)		(121	)		(984	)		(1,035	)		37
Adjusted EBITDA	$	6,101		$	7,820		$	14,324		$	11,848		$	6,315

Advisor Services Group
Income (loss) from operations	$	1,711		$	973		$	1,007		$	1,248		$	(1,104	)
Depreciation		322			318			263			236			263
Adjusted EBITDA	$	2,033		$	1,291		$	1,270		$	1,484		$	(841	)

Consolidated
GAAP net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)
Income tax expense (benefit)		5,563			(2,154	)		6,256			6,044			(84,530	)
Interest income		(888	)		(828	)		(703	)		(822	)		(724	)
Interest expense		4,579			4,849			5,001			5,386			5,331
Other, net		(658	)		(472	)		(3,387	)		(6,608	)		(1,116	)
Income (loss) from operations	$	15,586		$	3,246		$	17,707		$	14,022		$	(596,838	)
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
Depreciation		3,006			8,857			3,361			3,485			3,539
(Gain) loss on sale of subsidiaries		(2,231	)		(244	)		(1,190	)		(1,279	)		617
Adjusted EBITDA	$	27,600		$	26,896		$	30,855		$	28,299		$	24,249

(1)

NATIONAL FINANCIAL PARTNERS CORP.

CALCULATION OF MANAGEMENT FEES %

FOR QUARTERLY PERIODS

(Unaudited - dollars in thousands)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Corporate Client Group
Income from operations	$	11,949		$	8,167		$	8,132		$	7,653		$	(343,815	)
Basic management fees		13,676			19,235			15,786			16,048			11,538
Principal Incentive Plan (PIP) management fees		(483	)		2,041			—			—			—
Stock based compensation management fees		798			611			326			322			322
Incentive and other management fees		1,135			2,505			1,411			(351	)		712
Total management fees		15,126			24,392			17,523			16,019			12,572
Amortization of intangibles		5,348			5,615			5,678			5,760			5,906
Impairment of goodwill and intangible assets		1,931			—			—			110			354,298
Depreciation		1,559			4,126			1,657			1,688			1,806
(Gain) loss on sale of subsidiaries		(1,321	)		(123	)		(206	)		(244	)		580
Income before management fees		34,592			42,177			32,784			30,986			31,347
Corporate income before management fees		(6,541	)		(8,951	)		(5,907	)		(6,431	)		(7,802	)
Adjusted income before management fees	$	41,133		$	51,128		$	38,691		$	37,417		$	39,149

Basic management fees as % of adjusted income before management fees		33.2	%		37.6	%		40.8	%		42.9	%		29.5	%

Total management fees as % of adjusted income before management fees		36.8	%		47.7	%		45.3	%		42.8	%		32.1	%

Individual Client Group
Income from operations	$	1,926		$	(5,894	)	$	8,568		$	5,121		$	(251,919	)
Basic management fees		9,262			28,839			15,597			13,693			9,474
Principal Incentive Plan (PIP) management fees		(2,615	)		6,973			—			—			—
Stock based compensation management fees		525			325			80			79			80
Incentive and other management fees		1,352			(1,664	)		1,655			163			381
Total management fees		8,524			34,473			17,332			13,935			9,935
Amortization of intangibles		2,990			3,191			3,297			3,416			3,688
Impairment of goodwill and intangible assets		970			6,231			2,002			2,785			253,039
Depreciation		1,125			4,413			1,441			1,561			1,470
(Gain) loss on sale of subsidiaries		(910	)		(121	)		(984	)		(1,035	)		37
Income before management fees		14,625			42,293			31,656			25,783			16,250
Corporate income before management fees		(4,374	)		(6,324	)		(1,298	)		(2,382	)		(1,802	)
Adjusted income before management fees	$	18,999		$	48,617		$	32,954		$	28,165		$	18,052

Basic management fees as % of adjusted income before management fees		48.7	%		59.3	%		47.3	%		48.6	%		52.5	%

Total management fees as % of adjusted income before management fees		44.9	%		70.9	%		52.6	%		49.5	%		55.0	%

Advisor Services Group
Income from operations	$	1,711		$	973		$	1,007		$	1,248		$	(1,104	)
Basic management fees		—			—			—			—			—
Principal Incentive Plan (PIP) management fees		—			—			—			—			—
Stock based compensation management fees		—			—			—			—			—
Incentive and other management fees		—			—			—			—			—
Total management fees		—			—			—			—			—
Amortization of intangibles		—			—			—			—			—
Impairment of goodwill and intangible assets		—			—			—			—			—
Depreciation		322			318			263			236			263
(Gain) loss on sale of subsidiaries		—			—			—			—			—
Income before management fees		2,033			1,291			1,270			1,484			(841	)
Corporate income before management fees		2,033			1,291			1,270			1,484			(841	)
Adjusted income before management fees	$	—		$	—		$	—		$	—		$	—

Basic management fees as % of adjusted income before management fees	NM			NM			NM			NM			NM

Total management fees as % of adjusted income before management fees	NM			NM			NM			NM			NM

Consolidated
Income from operations	$	15,586		$	3,246		$	17,707		$	14,022		$	(596,838	)
Basic management fees		22,938			48,074			31,383			29,741			21,012
Principal Incentive Plan (PIP) management fees		(3,098	)		9,014			—			—			—
Stock based compensation management fees		1,323			936			406			401			402
Incentive and other management fees		2,487			841			3,066			(188	)		1,093
Total management fees		23,650			58,865			34,855			29,954			22,507
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
Depreciation		3,006			8,857			3,361			3,485			3,539
(Gain) loss on sale of subsidiaries		(2,231	)		(244	)		(1,190	)		(1,279	)		617
Income before management fees		51,250			85,761			65,710			58,253			46,756
Corporate income before management fees		(8,882	)		(13,984	)		(5,935	)		(7,329	)		(10,445	)
Adjusted income before management fees	$	60,132		$	99,745		$	71,645		$	65,582		$	57,201

Basic management fees as % of adjusted income before management fees		38.1	%		48.2	%		43.8	%		45.3	%		36.7	%

Total management fees as % of adjusted income before management fees		39.3	%		59.0	%		48.6	%		45.7	%		39.3	%

NM indicates metric not meaningful

NATIONAL FINANCIAL PARTNERS CORP.

CALCULATION OF MANAGEMENT FEES %

FOR YEAR-TO-DATE PERIODS

(Unaudited - dollars in thousands)

	For the Year-to-Date Period Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Corporate Client Group
Income from operations	$	11,949		$	(319,863	)	$	(328,030	)	$	(336,162	)	$	(343,815	)
Basic management fees		13,676			62,607			43,372			27,586			11,538
Principal Incentive Plan (PIP) management fees		(483	)		2,041			—			—			—
Stock based compensation management fees		798			1,581			970			644			322
Incentive and other management fees		1,135			4,277			1,772			361			712
Total management fees		15,126			70,506			46,114			28,591			12,572
Amortization of intangibles		5,348			22,959			17,344			11,666			5,906
Impairment of goodwill and intangible assets		1,931			354,408			354,408			354,408			354,298
Depreciation		1,559			9,277			5,151			3,494			1,806
(Gain) loss on sale of subsidiaries		(1,321	)		7			130			336			580
Income before management fees		34,592			137,294			95,117			62,333			31,347
Corporate income before management fees		(6,541	)		(29,091	)		(20,140	)		(14,233	)		(7,802	)
Adjusted income before management fees	$	41,133		$	166,385		$	115,257		$	76,566		$	39,149

Basic management fees as % of adjusted income before management fees		33.2	%		37.6	%		37.6	%		36.0	%		29.5	%

Total management fees as % of adjusted income before management fees		36.8	%		42.4	%		40.0	%		37.3	%		32.1	%

Individual Client Group
Income from operations	$	1,926		$	(244,124	)	$	(238,230	)	$	(246,798	)	$	(251,919	)
Basic management fees		9,262			67,603			38,764			23,167			9,474
Principal Incentive Plan (PIP) management fees		(2,615	)		6,973			—			—			—
Stock based compensation management fees		525			564			239			159			80
Incentive and other management fees		1,352			535			2,199			544			381
Total management fees		8,524			75,675			41,202			23,870			9,935
Amortization of intangibles		2,990			13,592			10,401			7,104			3,688
Impairment of goodwill and intangible assets		970			264,057			257,826			255,824			253,039
Depreciation		1,125			8,885			4,472			3,031			1,470
(Gain) loss on sale of subsidiaries		(910	)		(2,103	)		(1,982	)		(998	)		37
Income before management fees		14,625			115,982			73,689			42,033			16,250
Corporate income before management fees		(4,374	)		(11,806	)		(5,482	)		(4,184	)		(1,802	)
Adjusted income before management fees	$	18,999		$	127,788		$	79,171		$	46,217		$	18,052

Basic management fees as % of adjusted income before management fees		48.7	%		52.9	%		49.0	%		50.1	%		52.5	%

Total management fees as % of adjusted income before management fees		44.9	%		59.2	%		52.0	%		51.6	%		55.0	%

Advisor Services Group
Income from operations	$	1,711		$	2,124		$	1,151		$	144		$	(1,104	)
Basic management fees		—			—			—			—			—
Principal Incentive Plan (PIP) management fees		—			—			—			—			—
Stock based compensation management fees		—			—			—			—			—
Incentive and other management fees		—			—			—			—			—
Total management fees		—			—			—			—			—
Amortization of intangibles		—			—			—			—			—
Impairment of goodwill and intangible assets		—			—			—			—			—
Depreciation		322			1,080			762			499			263
(Gain) loss on sale of subsidiaries		—			—			—			—			—
Income before management fees		2,033			3,204			1,913			643			(841	)
Corporate income before management fees		2,033			3,204			1,913			643			(841	)
Adjusted income before management fees	$	—		$	—		$	—		$	—		$	—

Basic management fees as % of adjusted income before management fees	NM			NM			NM			NM			NM

Total management fees as % of adjusted income before management fees	NM			NM			NM			NM			NM

Consolidated
Income from operations	$	15,586		$	(561,863	)	$	(565,109	)	$	(582,816	)	$	(596,838	)
Basic management fees		22,938			130,210			82,136			50,753			21,012
Principal Incentive Plan (PIP) management fees		(3,098	)		9,014			—			—			—
Stock based compensation management fees		1,323			2,145			1,209			803			402
Incentive and other management fees		2,487			4,812			3,971			905			1,093
Total management fees		23,650			146,181			87,316			52,461			22,507
Amortization of intangibles		8,338			36,551			27,745			18,770			9,594
Impairment of goodwill and intangible assets		2,901			618,465			612,234			610,232			607,337
Depreciation		3,006			19,242			10,385			7,024			3,539
(Gain) loss on sale of subsidiaries		(2,231	)		(2,096	)		(1,852	)		(662	)		617
Income before management fees		51,250			256,480			170,719			105,009			46,756
Corporate income before management fees		(8,882	)		(37,693	)		(23,709	)		(17,774	)		(10,445	)
Adjusted income before management fees	$	60,132		$	294,173		$	194,428		$	122,783		$	57,201

Basic management fees as % of adjusted income before management fees		38.1	%		44.3	%		42.2	%		41.3	%		36.7	%

Total management fees as % of adjusted income before management fees		39.3	%		49.7	%		44.9	%		42.7	%		39.3	%

NM indicates metric not meaningful

NATIONAL FINANCIAL PARTNERS CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (BALANCE SHEET)

(Unaudited - in thousands)

	At
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
ASSETS
Current assets:
Cash and cash equivalents	$	50,961		$	55,994		$	60,084		$	49,822		$	42,319
Fiduciary funds - restricted relating to premium trust accounts		74,221			75,931			75,838			79,258			71,321
Commissions, fees and premiums receivable, net		100,255			129,833			100,930			104,049			107,506
Due from principals and/or certain entities they own		14,125			14,075			21,787			21,334			15,022
Notes receivable, net		7,412			9,731			7,161			7,860			7,747
Deferred tax assets		14,008			14,779			8,322			8,926			9,351
Other current assets		15,412			14,435			18,368			18,897			18,008
Total current assets		276,394			314,778			292,490			290,146			271,274
Property and equipment, net		37,182			37,291			44,341			46,107			49,498
Deferred tax assets		106,311			106,495			110,561			109,983			109,661
Intangibles, net		365,576			379,513			399,265			410,789			427,090
Goodwill, net		66,122			63,887			57,018			57,914			52,532
Notes receivable, net		30,261			28,714			32,410			32,191			33,507
Other non-current assets		40,768			39,744			29,793			30,078			28,804
Total assets	$	922,614		$	970,422		$	965,878		$	977,208		$	972,366

LIABILITIES
Current liabilities:
Premiums payable to insurance carriers	$	75,614		$	77,941		$	82,583		$	81,126		$	72,122
Borrowings		35,000			40,000			75,000			115,000			148,000
Income taxes payable		525			6,325			—			—			1,231
Deferred tax liabilities		494			496			239			7			3
Due to principals and/or certain entities they own		10,463			34,106			22,779			17,000			9,863
Accounts payable		17,488			24,337			21,381			18,369			23,893
Accrued liabilities		54,208			73,105			47,531			47,127			36,636
Total current liabilities		193,792			256,310			249,513			278,629			291,748
Deferred tax liabilities		104,453			105,055			116,825			115,977			116,142
Convertible senior notes		207,455			204,548			201,767			198,984			196,200
Other non-current liabilities		67,966			64,472			62,037			61,427			60,832
Total liabilities		573,666			630,385			630,142			655,017			664,922

STOCKHOLDERS' EQUITY
Preferred stock at par value		—			—			—			—			—
Common stock at par value		4,477			4,414			4,410			4,409			4,406
Additional paid-in capital		879,300			876,563			874,839			872,031			879,331
Accumulated deficit		(432,397	)		(438,109	)		(434,316	)		(440,230	)		(418,672	)
Treasury stock		(102,572	)		(102,930	)		(109,373	)		(114,117	)		(157,530	)
Accumulated other comprehensive income		140			99			176			98			(91	)
Total stockholders' equity		348,948			340,037			335,736			322,191			307,444
Total liabilities and stockholders' equity	$	922,614		$	970,422		$	965,878		$	977,208		$	972,366

NATIONAL FINANCIAL PARTNERS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR QUARTERLY PERIODS

(Unaudited - in thousands)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Cash flow from operating activities:
Net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)

Adjustments to reconcile to net cash provided by (used in) operating activities:
Deferred taxes		351			(14,514	)		1,106			(58	)		(88,048	)
Stock-based compensation		2,951			3,083			2,456			2,499			2,488
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Depreciation		3,006			8,857			3,361			3,485			3,539
Accretion of senior convertible notes discount		2,907			2,781			2,783			2,784			2,725
(Gain) loss on sale of subsidiaries		(2,231	)		(244	)		(1,190	)		(1,279	)		617
(Gain) loss on sublease		1,766			8,201			—			—			—
Bad debt expense		24			1,854			718			(76	)		126
Other, net		(402	)		—			—			—			—

(Increase) decrease in operating assets:
Fiduciary funds - restricted relating to premium trust accounts		1,710			(93	)		3,420			(7,937	)		3,788
Commissions, fees and premiums receivable, net		29,632			(28,538	)		3,847			3,436			31,637
Due from principals and/or certain entities they own		(60	)		7,906			1,615			(6,312	)		1,307
Notes receivable, net - current		2,319			(2,570	)		659			(113	)		(1,251	)
Other current assets		(1,003	)		3,837			(816	)		(869	)		1,289
Notes receivable, net - non-current		(2,547	)		3,988			1,060			3,044			(7,081	)
Other non-current assets		(1,024	)		479			(700	)		(777	)		(355	)

Increase (decrease) in operating liabilities:
Premiums payable to insurance carriers		(2,327	)		(4,642	)		1,457			9,004			(1,037	)
Income taxes payable		(5,800	)		6,325			—			(1,231	)		1,220
Due to principals and/or certain entities they own		(24,381	)		10,129			26			7,118			(29,216	)
Accounts payable		(6,284	)		3,119			3,038			(5,524	)		(4,639	)
Accrued liabilities		(14,112	)		19,672			1,081			6,751			(16,307	)
Other non-current liabilities		2,179			(5,692	)		4,983			(1,899	)		(3,500	)
Total adjustments		(2,087	)		38,975			39,881			24,117			514,233
Net cash provided by (used in) operating activities		4,903			40,826			50,421			34,139			(1,566	)

Cash flow from investing activities:
Proceeds from disposal of subsidiaries		5,031			5,109			1,935			6,962			2,100
Purchases of property and equipment, net		(2,933	)		(2,177	)		(1,801	)		(1,538	)		(1,604	)
Payments for acquired firms, net of cash, and contingent consideration		(6,804	)		(1,448	)		(627	)		1,278			(2,257	)
Restricted cash		—			(10,000	)		—			—			—
Net cash (used in) provided by investing activities		(4,706	)		(8,516	)		(493	)		6,702			(1,761	)

Cash flow from financing activities:
Repayments of borrowings		(5,000	)		(35,000	)		(40,000	)		(33,000	)		—
Proceeds from stock-based awards, including tax benefit		1,694			(1,236	)		385			(327	)		(2,777	)
Shares cancelled to pay withholding taxes		(1,858	)		(164	)		(51	)		(12	)		(147	)
Payments for treasury stock repurchase		—			—			—			—			—
Dividends paid		(66	)		—			—			1			(51	)
Net cash used in financing activities		(5,230	)		(36,400	)		(39,666	)		(33,338	)		(2,975	)
Net (decrease) increase in cash and cash equivalents		(5,033	)		(4,090	)		10,262			7,503			(6,302	)
Cash and cash equivalents, beginning of period		55,994			60,084			49,822			42,319			48,621
Cash and cash equivalents, end of the period	$	50,961		$	55,994		$	60,084		$	49,822		$	42,319

Supplemental disclosures of cash flow information
Cash paid for income taxes	$	11,436		$	5,719		$	4,332		$	10,306		$	3,372
Cash paid for interest	$	1,384		$	854		$	1,975		$	1,411		$	2,385

NATIONAL FINANCIAL PARTNERS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS - YEAR-TO-DATE

(Unaudited - dollars in thousands)

	For the Year-to-Date Period Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Cash flow from operating activities:
Net income (loss)	$	6,990		$	(493,386	)	$	(495,237	)	$	(505,777	)	$	(515,799	)

Adjustments to reconcile to net cash provided by (used in) operating activities:
Deferred taxes		351			(101,514	)		(87,000	)		(88,106	)		(88,048	)
Stock-based compensation		2,951			10,526			7,443			4,987			2,488
Impairment of goodwill and intangible assets		2,901			618,465			612,234			610,232			607,337
Amortization of intangibles		8,338			36,551			27,745			18,770			9,594
Depreciation		3,006			19,242			10,385			7,024			3,539
Accretion of senior convertible notes discount		2,907			11,073			8,292			5,509			2,725
(Gain) loss on sale of subsidiaries		(2,231	)		(2,096	)		(1,852	)		(662	)		617
(Gain) loss on sublease		1,766			8,201			—			—			—
Bad debt expense		24			2,622			768			50			126
Other, net		(402	)		—			—			—			—

(Increase) decrease in operating assets:
Fiduciary funds - restricted relating to premium trust accounts		1,710			(822	)		(729	)		(4,149	)		3,788
Commissions, fees and premiums receivable, net		29,632			10,382			38,920			35,073			31,637
Due from principals and/or certain entities they own		(60	)		4,516			(3,390	)		(5,005	)		1,307
Notes receivable, net - current		2,319			(3,275	)		(705	)		(1,364	)		(1,251	)
Other current assets		(1,003	)		3,441			(396	)		420			1,289
Notes receivable, net - non-current		(2,547	)		1,011			(2,977	)		(4,037	)		(7,081	)
Other non-current assets		(1,024	)		(1,353	)		(1,832	)		(1,132	)		(355	)

Increase (decrease) in operating liabilities:
Premiums payable to insurance carriers		(2,327	)		4,782			9,424			7,967			(1,037	)
Income taxes payable		(5,800	)		6,314			(11	)		(11	)		1,220
Due to principals and/or certain entities they own		(24,381	)		(11,943	)		(22,072	)		(22,098	)		(29,216	)
Accounts payable		(6,284	)		(4,006	)		(7,125	)		(10,163	)		(4,639	)
Accrued liabilities		(14,112	)		11,197			(8,475	)		(9,556	)		(16,307	)
Other non-current liabilities		2,179			(6,108	)		(416	)		(5,399	)		(3,500	)
Total adjustments		(2,087	)		617,206			578,231			538,350			514,233
Net cash provided by (used in) operating activities		4,903			123,820			82,994			32,573			(1,566	)

Cash flow from investing activities:
Proceeds from disposal of subsidiaries		5,031			16,106			10,997			9,062			2,100
Purchases of property and equipment, net		(2,933	)		(7,120	)		(4,943	)		(3,142	)		(1,604	)
Payments for acquired firms, net of cash, and contingent consideration		(6,804	)		(3,054	)		(1,606	)		(979	)		(2,257	)
Restricted cash		—			(10,000	)		—			—			—
Net cash (used in) provided by investing activities		(4,706	)		(4,068	)		4,448			4,941			(1,761	)

Cash flow from financing activities:
Repayments of borrowings		(5,000	)		(108,000	)		(73,000	)		(33,000	)		—
Proceeds from stock-based awards, including tax benefit		1,694			(3,955	)		(2,719	)		(3,104	)		(2,777	)
Shares cancelled to pay withholding taxes		(1,858	)		(374	)		(210	)		(159	)		(147	)
Payments for treasury stock repurchase		—			—			—			—			—
Dividends paid		(66	)		(50	)		(50	)		(50	)		(51	)
Net cash used in financing activities		(5,230	)		(112,379	)		(75,979	)		(36,313	)		(2,975	)
Net (decrease) increase in cash and cash equivalents		(5,033	)		7,373			11,463			1,201			(6,302	)
Cash and cash equivalents, beginning of period		55,994			48,621			48,621			48,621			48,621
Cash and cash equivalents, end of the period	$	50,961		$	55,994		$	60,084		$	49,822		$	42,319

Supplemental disclosures of cash flow information
Cash paid for income taxes	$	11,436		$	23,729		$	18,010		$	13,678		$	3,372
Cash paid for interest	$	1,384		$	6,625		$	5,771		$	3,796		$	2,385

NATIONAL FINANCIAL PARTNERS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR QUARTERLY PERIODS

(Unaudited - in thousands)

	For the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Revenue:
Commissions and fees	$	225,273		$	277,181		$	229,925		$	224,198		$	216,981

Operating expenses:
Commissions and fees		68,306			76,013			63,059			62,474			62,401
Compensation expense		65,268			68,879			64,649			66,164			68,643
Non-compensation expense		40,449			46,528			36,507			37,307			39,181
Management fees		23,650			58,865			34,855			29,954			22,507
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Depreciation		3,006			8,857			3,361			3,485			3,539
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
(Gain) loss on sale of subsidiaries		(2,231	)		(244	)		(1,190	)		(1,279	)		617
Total operating expenses		209,687			273,935			212,218			210,176			813,819
Income from operations		15,586			3,246			17,707			14,022			(596,838	)

Non-operating income and expenses
Interest income		888			828			703			822			724
Interest expense		(4,579	)		(4,849	)		(5,001	)		(5,386	)		(5,331	)
Other, net		658			472			3,387			6,608			1,116
Non-operating income and expenses, net		(3,033	)		(3,549	)		(911	)		2,044			(3,491	)
Income (loss) before income taxes		12,553			(303	)		16,796			16,066			(600,329	)

Income tax expense (benefit)		5,563			(2,154	)		6,256			6,044			(84,530	)
Net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)

Cash Earnings Reconciliation
GAAP net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Depreciation		3,006			8,857			3,361			3,485			3,539
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
Tax benefit of impairment of goodwill and intangible assets		(1,118	)		(1,133	)		(427	)		(902	)		(88,146	)
Non-cash interest, net of tax		1,866			1,559			1,966			1,732			1,557
Cash earnings	$	21,983		$	26,171		$	26,417		$	26,408		$	18,082

Adjusted EBITDA Reconciliation
GAAP net income (loss)	$	6,990		$	1,851		$	10,540		$	10,022		$	(515,799	)
Income tax expense (benefit)		5,563			(2,154	)		6,256			6,044			(84,530	)
Interest income		(888	)		(828	)		(703	)		(822	)		(724	)
Interest expense		4,579			4,849			5,001			5,386			5,331
Other, net		(658	)		(472	)		(3,387	)		(6,608	)		(1,116	)
Income (loss) from operations	$	15,586		$	3,246		$	17,707		$	14,022		$	(596,838	)
Amortization of intangibles		8,338			8,806			8,975			9,176			9,594
Depreciation		3,006			8,857			3,361			3,485			3,539
Impairment of goodwill and intangible assets		2,901			6,231			2,002			2,895			607,337
(Gain) loss on sale of subsidiaries		(2,231	)		(244	)		(1,190	)		(1,279	)		617
Adjusted EBITDA	$	27,600		$	26,896		$	30,855		$	28,299		$	24,249

NATIONAL FINANCIAL PARTNERS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR YEAR-TO-DATE PERIODS

(Unaudited - in thousands)

	For the Year-to-Date Period Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2010			2009			2009			2009			2009
Revenue:
Commissions and fees	$	225,273		$	948,285		$	671,104		$	441,179		$	216,981

Operating expenses:
Commissions and fees		68,306			263,947			187,934			124,875			62,401
Compensation expense		65,268			268,335			199,456			134,807			68,643
Non-compensation expense		40,449			159,523			112,995			76,488			39,181
Management fees		23,650			146,181			87,316			52,461			22,507
Amortization of intangibles		8,338			36,551			27,745			18,770			9,594
Depreciation		3,006			19,242			10,385			7,024			3,539
Impairment of goodwill and intangible assets		2,901			618,465			612,234			610,232			607,337
(Gain) loss on sale of subsidiaries		(2,231	)		(2,096	)		(1,852	)		(662	)		617
Total operating expenses		209,687			1,510,148			1,236,213			1,023,995			813,819
Income from operations		15,586			(561,863	)		(565,109	)		(582,816	)		(596,838	)

Non-operating income and expenses
Interest income		888			3,077			2,249			1,546			724
Interest expense		(4,579	)		(20,567	)		(15,718	)		(10,717	)		(5,331	)
Other, net		658			11,583			11,111			7,724			1,116
Non-operating income and expenses, net		(3,033	)		(5,907	)		(2,358	)		(1,447	)		(3,491	)
Income (loss) before income taxes		12,553			(567,770	)		(567,467	)		(584,263	)		(600,329	)

Income tax expense (benefit)		5,563			(74,384	)		(72,230	)		(78,486	)		(84,530	)
Net income (loss)	$	6,990		$	(493,386	)	$	(495,237	)	$	(505,777	)	$	(515,799	)

Cash Earnings Reconciliation
GAAP net income (loss)	$	6,990		$	(493,386	)	$	(495,237	)	$	(505,777	)	$	(515,799	)
Amortization of intangibles		8,338			36,551			27,745			18,770			9,594
Depreciation		3,006			19,242			10,385			7,024			3,539
Impairment of goodwill and intangible assets		2,901			618,465			612,234			610,232			607,337
Tax benefit of impairment of goodwill and intangible assets		(1,118	)		(90,608	)		(89,475	)		(89,048	)		(88,146	)
Non-cash interest, net of tax		1,866			6,814			5,255			3,289			1,557
Cash earnings	$	21,983		$	97,078		$	70,907		$	44,490		$	18,082

Adjusted EBITDA Reconciliation
GAAP net income (loss)	$	6,990		$	(493,386	)	$	(495,237	)	$	(505,777	)	$	(515,799	)
Income tax expense (benefit)		5,563			(74,384	)		(72,230	)		(78,486	)		(84,530	)
Interest income		(888	)		(3,077	)		(2,249	)		(1,546	)		(724	)
Interest expense		4,579			20,567			15,718			10,717			5,331
Other, net		(658	)		(11,583	)		(11,111	)		(7,724	)		(1,116	)
Income (loss) from operations	$	15,586		$	(561,863	)	$	(565,109	)	$	(582,816	)	$	(596,838	)
Amortization of intangibles		8,338			36,551			27,745			18,770			9,594
Depreciation		3,006			19,242			10,385			7,024			3,539
Impairment of goodwill and intangible assets		2,901			618,465			612,234			610,232			607,337
(Gain) loss on sale of subsidiaries		(2,231	)		(2,096	)		(1,852	)		(662	)		617
Adjusted EBITDA	$	27,600		$	110,299		$	83,403		$	52,548		$	24,249

NATIONAL FINANCIAL PARTNERS CORP.

ACQUISITION STATISTICS FOR QUARTERLY AND YEAR-TO-DATE PERIODS

(Unaudited - dollars in thousands)

	For the Three Months Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
	2010		2009		2009		2009		2009
Number of acquisitions closed		—		2		—		—		1
Consideration:
Cash	$	—	$	—	$	—	$	—	$	279
Common stock		—		—		—		—		—
Other		—		—		—		—		186
Total consideration paid (1)	$	—	$	—	$	—	$	—	$	465

Target earnings of acquired firms	$	—	$	—	$	—	$	—	$	148
Base earnings of acquired firms	$	—	$	—	$	—	$	—	$	88

	For the Year-to-Date Period Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
	2010		2009		2009		2009		2009
Number of acquisitions closed		—		3		1		1		1
Consideration:
Cash	$	—	$	279	$	279	$	279	$	279
Common stock		—		—		—		—		—
Other		—		186		186		186		186
Total consideration paid (1)	$	—	$	465	$	465	$	465	$	465

Target earnings of acquired firms	$	—	$	148	$	148	$	148	$	148
Base earnings of acquired firms	$	—	$	88	$	88	$	88	$	88

(1)	Total consideration paid may not sum sequentially due to post-closing adjustments made relating to prior period acquisitions. Total consideration includes amounts paid by both NFP and the principals for acquisitions and sub-acquisitions.

NATIONAL FINANCIAL PARTNERS CORP.

INTANGIBLES AND GOODWILL DATA

(Unaudited - in thousands)

	At or for the Three Months Ended
	March 31,		December 31,		September 30,		June 30,		March 31,
	2010		2009		2009		2009		2009
Intangible Assets:
Book of business	$	99,265	$	104,669	$	110,974	$	116,795	$	123,796
Management contracts		250,152		258,456		271,550		276,971		285,996
Trade name		4,820		4,831		4,966		5,030		5,087
Institutional customer relationships		11,339		11,557		11,775		11,993		12,211
Goodwill		66,122		63,887		57,018		57,914		52,532
Total intangible assets and goodwill	$	431,698	$	443,400	$	456,283	$	468,703	$	479,622

Amortization Expense & Impairment Loss:
Book of business	$	4,863	$	5,102	$	5,234	$	5,480	$	7,482
Management contracts		6,158		9,342		4,209		4,910		20,843
Trade name		—		83		64		57		5,164
Institutional customer relationships		218		218		218		218		218
Goodwill		—		292		1,252		1,406		583,224
Total amortization expense & impairment loss	$	11,239	$	15,037	$	10,977	$	12,071	$	616,931

NATIONAL FINANCIAL PARTNERS CORP.

DEFINED TERMS

Adjusted EBITDA:	Net income excluding income tax expense, interest income, interest expense, other, net, amortization of intangibles, depreciation, impairment of goodwill and intangible assets, (gain) loss on sale of subsidiaries, and any change in estimated contingent consideration amounts recorded in accordance with purchase accounting that have been subsequently adjusted and recorded in the consolidated statement of operations.

Adjusted Income before Management Fees:	Income before management fees excluding corporate income before management fees.

Base Earnings of Acquired Firms:	Represents the cumulative preferred portion of Target Earnings of Acquired Firms that NFP capitalizes at the time of acquisition of a firm.

Basic Management Fees:	Represents the expense incurred for payments made or amounts owed to NFP principals and/or certain entities they own based on the financial performance of the firms they manage. Basic management fees largely consist of: firm earnings in excess of base earnings up to target earnings, plus a portion of the earnings in excess of target earnings in accordance with the ratio of base earnings to target earnings.

Basic Management Fees Percentage:	Basic Management Fees as a percentage of gross margin before management fees.

Cash Earnings:	Net income excluding amortization of intangibles, depreciation, the after-tax impact of the impairment of goodwill and intangible assets and the after-tax impact of non-cash interest expense.

Cash Earnings per Share - Diluted:	Represents Cash Earnings divided by weighted average diluted shares outstanding.

Common Shares Issued for Acquisitions:	Represents the portion of consideration paid in the form of shares of NFP common stock for acquisitions closed during the period presented.

Common Shares Issued for Contingent Consideration and Escrow:	Represents the portion held in escrow or contingent consideration paid in the form of shares of NFP common stock during the period presented.

Common Shares Issued for Stock-Based Awards:	Represents the number of shares of NFP common stock issued under NFP's various Stock Incentive Plans during the period presented.

Common Shares Issued under Ongoing Incentive Program:	Represents the number of shares of NFP common stock issued under NFP's ongoing incentive program.

Common Shares Repurchased:	Represents shares of NFP common stock repurchased during the period, whether in an open market transaction or privately from a firm principal or other stockholder.

Corporate Income before Management Fees:	Includes revenue and expense allocations for corporate shared services and the Advisor Services Group, entities for which no management fees are paid. Since the Advisor Services Group is primarily comprised of NFPSI, an entity for which no management fees are paid, and earnings are not being shared with principals, all revenue and expenses from the Advisor Services Group are considered a component of Corporate Income before Management Fees.

Debt to Total Capitalization:	Calculated as debt outstanding at the end of the period divided by the sum of debt outstanding and total stockholders' equity at the end of the same period.

Incentive and Other Management Fees:	Largely represents the portion of management fees expense due to accruals for certain performance-based incentive amounts payable under NFP’s ongoing incentive plan, BIP plan (business incentive plan) and other management fee amounts due to principals.

Income before Management Fees:	The Company defines income before management fees as income from operations excluding management fees, amortization, depreciation, impairment of intangible assets and the (gain) loss on sale of subsidiaries. Income before management fees is a metric management utilizes in its evaluation of the profitability of an NFP-owned business before principals receive participation in the earnings.

Intangible Assets - Book of Business:	A portion of the purchase price of acquisitions made by NFP is allocated to book of business. The amount allocated to this component is largely determined by the amount of recurring revenue of the acquired firm. The book of business is amortized on a straight-line basis over a ten-year period.

NATIONAL FINANCIAL PARTNERS CORP.

DEFINED TERMS

Intangible Assets - Goodwill:	The residual amount of the purchase price not allocated to book of business, management contracts and trade name is allocated to goodwill. In accordance with GAAP, goodwill and intangible assets deemed to have indefinite lives are not amortized but are reviewed annually (or more frequently if impairment indicators arise) for impairment. Goodwill amortization after January 1, 2002 is entirely related to impairment losses or firms that NFP disposed.

Intangible Assets - Institutional Customer Relationships:	A portion of the purchase price of an acquisition made by NFP is allocated to institutional customer relationships. The value of the asset is derived from recurring revenue generated from these institutional customers in place at the time of the acquisition, net of an allocation of expenses and is assumed to decrease over the life of the asset due to the attrition of the institutional relationships acquired. Institutional customer relationships are amortized on a straight-line basis over an eighteen-year period.

Intangible Assets - Management Contracts:	A portion of the purchase price of acquisitions made by NFP is allocated to management contracts. The amount allocated to this component is largely determined by the amount of non-recurring revenue of the acquired firm as well as an assumption for the lost production of the principal(s) of the firm at retirement. The management contract is amortized on a straight-line basis over a twenty-five year period.

Intangible Assets - Trade Name:	NFP generally allocates approximately 1% of the purchase price of an acquisition to trade name, which is determined to have an indefinite life and, therefore, is not amortized.

Management Fees:	Represents the payments made to NFP principals and/or certain entities they own based on the financial performance of the firms they manage. Management Fees include: Basic Management Fees, Principal Incentive Plan (PIP) Management Fees and Incentive and Other Management Fees.

Management Fees Percentage:	Management Fees as a percentage of adjusted income before management fees.

Organic Revenue Growth:	The Company refers to organic revenue in order to establish a comparable measurement (that will be associated with the revenue sources) that will continue in future periods. The Company excludes the first twelve months of revenue generated from new acquisitions and the revenue derived from businesses fully disposed of in each period presented. With respect to Sub-Acquisitions, the Company establishes an internal revenue generation expectation (the “acquired revenue”) of a new Sub-Acquisition. During the first twelve months immediately following the Sub-Acquisition, the Company reduces the acquired revenue amount from the actual revenue generated by the Sub-Acquisition and includes the revenue growth above or below acquired revenue within the organic growth percentage. With respect to situations where a significant portion of a business' assets have been disposed, the Company reduces the prior year’s comparable revenue proportionally to the percentage of assets that have been disposed to facilitate an equitable organic growth comparison.

Principal Incentive Plan (PIP) Management Fees:	Represents the expense incurred due to accruals for certain performance-based incentive amounts payable under NFP’s Principal Incentive Plan (PIP).

Stock-based Compensation Management Fees:	Represents the portion of management fee expense for stock awards issued to NFP’s principals.

Sub-Acquisitions:	A transaction in which an existing NFP-owned business acquires a new entity or book of business.

Target Earnings of Acquired Firms:	Represents the target business’s annual earnings, before interest, taxes, depreciation and amortization, and adjusted for expenses that will not continue post-acquisition, such as compensation to former owners who become principals (“Target EBITDA”). The target business’s Target EBITDA is considered “target earnings,” typically two times “base earnings.”