Unassociated Document

For the quarter ended September 30, 2010, Duff & Phelps generated revenues excluding reimbursable expenses of $84.4 million, compared to $93.2 million for the corresponding prior year quarter. Adjusted EBITDA(1) for the quarter was $12.2 million, representing 14.5% of revenues excluding reimbursable expenses, compared to $16.5 million for the corresponding prior year quarter, representing 17.7% of revenues excluding reimbursable expenses. Net income attributable to Duff & Phelps Corporation was $4.1 million, or $0.15 per share of Class A common stock on a fully diluted basis, compared to $3.5 million, or $0.14 for the corresponding prior year quarter. Adjusted Pro Forma Net Income(1) was $5.7 million, or $0.15 per share on a fully exchanged, fully diluted basis, compared to $8.4 million, or $0.22 per share, for the corresponding prior year quarter.

For the nine months ended September 30, 2010, Duff & Phelps generated revenues excluding reimbursable expenses of $262.3 million, compared to $272.6 million for the corresponding prior year period. Adjusted EBITDA(1) for the period was $42.4 million, representing 16.1% of revenues excluding reimbursable expenses, compared to $48.5 million for the corresponding prior year period, representing 17.8% of revenues excluding reimbursable expenses. Adjusted EBITDA for the nine months ended September 30, 2010 excludes a $3.6 million charge related to the departure of our former president and one of our segment leaders(2). Net income attributable to Duff & Phelps Corporation was $10.9 million, or $0.40 per share of Class A common stock on a fully diluted basis, compared to $7.0 million, or $0.35 for the corresponding prior year period. Adjusted Pro Forma Net Income(1) was $20.2 million, or $0.52 per share on a fully exchanged, fully diluted basis, compared to $23.4 million, or $0.64 per share, for the corresponding prior year period. Adjusted Pro Forma Net Income(1) per share excludes a $0.05 per share charge related to the departure of our former president and one of our segment leaders(2).

“During the third quarter, certain of our businesses experienced revenue challenges due to the recent economic environment and lower restructuring activity. In addition, we faced a difficult year-over-year comparison given the significant revenue contribution of last year’s Lehman Examiner assignment,” said Noah Gottdiener, chief executive officer. “Despite these challenges, we saw meaningful improvements in our M&A correlated businesses compared to last year. Based on increased levels of transaction activity, we anticipate improved business performance in the fourth quarter, in particular from our M&A correlated businesses.”

(2)

On April 22, 2010, the Company announced certain management changes related to the departure of our former president and one of our segment leaders. The Company incurred a onetime charge associated with these changes of approximately $3.6 million in its second quarter of 2010 related to cash severance and the accounting impact of accelerated vesting of equity-based awards. Of this amount, approximately $3.0 million primarily resulted from cash severance and a charge from the accelerated vesting of restricted stock awards which is added back to Adjusted EBITDA and Adjusted Pro Forma Net Income (as defined below). The remaining approximately $0.5 million related to a charge from the accelerated vesting of Legacy Units and IPO Options, which is also added back to Adjusted EBITDA and Adjusted Pro Forma Net Income (as defined below) consistent with prior presentation.

As a leading global independent provider of financial advisory and investment banking services, Duff & Phelps delivers trusted advice to our clients principally in the areas of valuation, transactions, financial restructuring, dispute and taxation. Our world class capabilities and resources, combined with an agile and responsive delivery, distinguish our clients' experience in working with us. With offices in North America, Europe and Asia, Duff & Phelps is committed to fulfilling its mission to protect, recover and maximize value for its clients. 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)

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) 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 this 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. A measure similar to Adjusted EBITDA is the principal measure that determines the compensation of our senior management team. 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) acquisition retention expenses, (h) cash severance and equity-compensation expense from the acceleration of vesting of restricted stock awards due to the realignment of our senior management, and (i) merger and acquisition costs:

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009
Revenues (excluding client reimbursables)	$	84,427		$	93,240		$	262,333		$	272,558

Net income attributable to Duff & Phelps Corporation	$	4,109		$	3,452		$	10,889		$	6,951
Net income attributable to noncontrolling interest		3,088			4,136			8,494			12,417
Provision for income taxes		2,010			2,999			8,166			7,532
Other expense/(income), net		(6	)		124			317			2,919
Depreciation and amortization		2,567			2,594			7,410			7,712
Charge from impairment of certain intangible assets		-			-			674			-
Equity-based compensation associated with Legacy Units and IPO Options		391			3,229			2,968			10,963
Charge from realignment of senior management (not included in equity-based compensation from Legacy Units and IPO Options above)		-			-			3,040			-
Merger and acquisition costs		76			-			397			-

Adjusted EBITDA	$	12,235		$	16,534		$	42,355		$	48,494

Adjusted EBITDA as a percentage of revenues		14.5	%		17.7	%		16.1	%		17.8	%

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) merger and acquisition costs, and less (g) 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.

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009
Net income attributable to Duff & Phelps Corporation	$	4,109		$	3,452		$	10,889		$	6,951
Net income attributable to noncontrolling interest(a)		3,088			4,136			8,494			12,417
Loss on early extinguishment of debt(b)		-			-			-			1,737
Equity-based compensation associated with Legacy Units and IPO Options(c)		391			3,229			2,968			10,963
Charge from realignment of senior management (not included in equity-based compensation from Legacy Units and IPO Options above)(d)		-			-			3,040			-
Merger and acquisition costs		76			-			397			-
Adjustment to provision for income taxes(e)		(1,967	)		(2,458	)		(5,606	)		(8,625	)

Adjusted Pro Forma Net Income, as defined	$	5,697		$	8,359		$	20,182		$	23,443

Pro forma fully exchanged, fully diluted shares outstanding(f)		37,857			38,694			38,673			36,781

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding	$	0.15		$	0.22		$	0.52		$	0.64

	(e)	Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% and 40.8% for the full year, as applied to the three and nine months ended September 30, 2010 and 2009, 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. For the three months ended September 30, 2010 and 2009, the pro forma tax rates of 41.1% and 39.5% reflect a true-up adjustment relating to the six months ended June 30, 2010 and 2009, respectively. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.
	(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 for the three and nine months ended September 30, 2010 and 2009, respectively. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

Both Adjusted EBITDA and Adjusted Pro Forma Net Income 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.

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, 2009 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.

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009

Revenues	$	84,427		$	93,240		$	262,333		$	272,558
Reimbursable expenses		2,403			3,394			7,163			8,057
Total revenues		86,830			96,634			269,496			280,615

Direct client service costs
Compensation and benefits (includes $3,430 and $4,294 of equity-based compensation for the three months ended September 30, 2010 and 2009, respectively, and $11,362 and $13,631 for the nine months ended September 30, 2010 and 2009, respectively)		47,829			52,287			146,842			155,115
Other direct client service costs		1,342			2,954			5,211			5,801
Reimbursable expenses		2,330			3,468			7,223			8,120
		51,501			58,709			159,276			169,036

Operating expenses
Selling, general and administrative (includes $1,004 and $2,018 of equity-based compensation for the three months ended September 30, 2010 and 2009, respectively, and $4,462 and $5,574 for the nine months ended September 30, 2010 and 2009, respectively)		23,485			24,620			73,873			74,048
Depreciation and amortization		2,567			2,594			7,410			7,712
Charge from impairment of certain intangible assets		-			-			674			-
Merger and acquisition costs		76			-			397			-
		26,128			27,214			82,354			81,760

Operating income		9,201			10,711			27,866			29,819

Other expense/(income), net
Interest income		(29	)		(17	)		(106	)		(34	)
Interest expense		66			91			234			1,079
Loss on early extinguishment of debt		-			-			-			1,737
Other expense		(43	)		50			189			137
		(6	)		124			317			2,919

Income before income taxes		9,207			10,587			27,549			26,900

Provision for income taxes		2,010			2,999			8,166			7,532

Net income		7,197			7,588			19,383			19,368

Less: Net income attributable to noncontrolling interest		3,088			4,136			8,494			12,417

Net income attributable to Duff & Phelps Corporation	$	4,109		$	3,452		$	10,889		$	6,951

Weighted average shares of Class A common stock outstanding
Basic		24,873			21,625			24,972			17,517
Diluted		24,954			22,448			25,741			18,197

Net income per share attributable to stockholders of Class A common stock of Duff & Phelps Corporation
Basic	$	0.15		$	0.15		$	0.41		$	0.37
Diluted	$	0.15		$	0.14		$	0.40		$	0.35

Cash dividends declared per common share	$	0.06		$	0.05		$	0.17		$	0.10

																			Variance						Variance
	2009										2010								Q3 2010 vs Q3 2009						YTD 2010 vs YTD 2009
	Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		Total		Dollar			Percent			Dollar			Percent
Financial Advisory
Valuation Advisory	$	40,370	$	33,772	$	29,692	$	34,676	$	138,510	$	35,020	$	32,829	$	31,173	$	99,022	$	1,481			5.0	%	$	(4,812	)		(4.6	)%
Tax Services		10,878		11,972		15,045		10,007		47,902		9,447		12,089		11,157		32,693		(3,888	)		(25.8	)%		(5,202	)		(13.7	)%
Dispute & Legal Management Consulting		9,643		12,162		12,897		12,518		47,220		9,415		9,316		10,571		29,302		(2,326	)		(18.0	)%		(5,400	)		(15.6	)%
		60,891		57,906		57,634		57,201		233,632		53,882		54,234		52,901		161,017		(4,733	)		(8.2	)%		(15,414	)		(8.7	)%

Corporate Finance Consulting
Portfolio Valuation		6,295		4,338		5,858		5,662		22,153		5,482		4,642		4,455		14,579		(1,403	)		(24.0	)%		(1,912	)		(11.6	)%
Financial Engineering		4,148		5,159		5,201		4,663		19,171		4,126		3,355		2,481		9,962		(2,720	)		(52.3	)%		(4,546	)		(31.3	)%
Strategic Value Advisory		2,620		3,588		4,034		3,208		13,450		3,158		2,883		2,840		8,881		(1,194	)		(29.6	)%		(1,361	)		(13.3	)%
Due Diligence		1,553		1,893		2,352		2,384		8,182		2,170		2,439		3,072		7,681		720			30.6	%		1,883			32.5	%
		14,616		14,978		17,445		15,917		62,956		14,936		13,319		12,848		41,103		(4,597	)		(26.4	)%		(5,936	)		(12.6	)%

Investment Banking
Global Restructuring Advisory		5,578		8,614		11,038		12,164		37,394		9,841		12,004		7,363		29,208		(3,675	)		(33.3	)%		3,978			15.8	%
Transaction Opinions		6,101		6,180		2,714		6,081		21,076		6,823		6,041		6,711		19,575		3,997			147.3	%		4,580			30.5	%
M&A Advisory		2,079		2,375		4,409		6,982		15,845		3,682		3,144		4,604		11,430		195			4.4	%		2,567			29.0	%
		13,758		17,169		18,161		25,227		74,315		20,346		21,189		18,678		60,213		517			2.8	%		11,125			22.7	%

Total Revenues	$	89,265	$	90,053	$	93,240	$	98,345	$	370,903	$	89,164	$	88,742	$	84,427	$	262,333	$	(8,813	)		(9.5	)%	$	(10,225	)		(3.8	)%

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009
Financial Advisory
Revenues (excluding reimbursables)	$	52,901		$	57,634		$	161,017		$	176,431
Segment operating income	$	5,743		$	8,855		$	21,730		$	29,543
Segment operating income margin		10.9	%		15.4	%		13.5	%		16.7	%

Corporate Finance Consulting
Revenues (excluding reimbursables)	$	12,848		$	17,445		$	41,103		$	47,039
Segment operating income	$	2,754		$	5,389		$	6,913		$	11,819
Segment operating income margin		21.4	%		30.9	%		16.8	%		25.1	%

Investment Banking
Revenues (excluding reimbursables)	$	18,678		$	18,161		$	60,213		$	49,088
Segment operating income	$	3,665		$	2,364		$	13,772		$	7,195
Segment operating income margin		19.6	%		13.0	%		22.9	%		14.7	%

Total
Revenues (excluding reimbursables)	$	84,427		$	93,240		$	262,333		$	272,558

Segment operating income	$	12,162		$	16,608		$	42,415		$	48,557
Net client reimbursable expenses		73			(74	)		(60	)		(63	)
Equity-based compensation from Legacy Units and IPO Options		(391	)		(3,229	)		(2,968	)		(10,963	)
Depreciation and amortization		(2,567	)		(2,594	)		(7,410	)		(7,712	)
Charge from impairment of certain intangible assets		-			-			(674	)		-
Charge from realignment of senior management		-			-			(3,040	)		-
Merger and acquisition costs		(76	)		-			(397	)		-
Operating income	$	9,201		$	10,711		$	27,866		$	29,819


Average Client Service Professionals
Financial Advisory		546			642			574			668
Corporate Finance Consulting		107			133			115			133
Investment Banking		124			130			128			134
Total		777			905			817			935

End of Period Client Service Professionals
Financial Advisory		555			641			555			641
Corporate Finance Consulting		106			131			106			131
Investment Banking		128			130			128			130
Total		789			902			789			902

Revenue per Client Service Professional
Financial Advisory	$	97		$	90		$	281		$	264
Corporate Finance Consulting	$	120		$	131		$	357		$	354
Investment Banking	$	151		$	140		$	470		$	366
Total	$	109		$	103		$	321		$	292

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2010			2009			2010			2009
Utilization(1)
Financial Advisory		66.3	%		62.4	%		65.1	%		64.0	%
Corporate Finance Consulting		62.0	%		70.0	%		58.9	%		62.0	%

Rate-Per-Hour(2)
Financial Advisory	$	346		$	336		$	343		$	322
Corporate Finance Consulting	$	428		$	402		$	444		$	407


Revenues (excluding reimbursables)
Financial Advisory	$	52,901		$	57,634		$	161,017		$	176,431
Corporate Finance Consulting		12,848			17,445			41,103			47,039
Investment Banking		18,678			18,161			60,213			49,088
Total	$	84,427		$	93,240		$	262,333		$	272,558

Average Number of Managing Directors
Financial Advisory		92			95			92			98
Corporate Finance Consulting		29			31			30			30
Investment Banking		40			40			41			38
Total		161			166			163			166

End of Period Managing Directors
Financial Advisory		90			93			90			93
Corporate Finance Consulting		28			29			28			29
Investment Banking		40			40			40			40
Total		158			162			158			162

Revenue per Managing Director
Financial Advisory	$	575		$	607		$	1,750		$	1,800
Corporate Finance Consulting	$	443		$	563		$	1,370		$	1,568
Investment Banking	$	467		$	454		$	1,469		$	1,292
Total	$	524		$	562		$	1,609		$	1,642

(1)

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. Financial Advisory utilization excludes client service professionals associated with Rash & Associates, L.P. (“Rash”), a wholly-owned subsidiary, due to the nature of the work performed, and client service professionals from our acquisition of Cole Valuation Partners Limited prior to their transition to the Company’s financial system.

	2009										2010
	Q1		Q2		Q3		Q4		YTD		Q1		Q2		Q3		YTD
Average Client Service Professionals
Financial Advisory		700		658		642		627		657		607		566		546		574
Corporate Finance Consulting		131		134		133		130		132		124		113		107		115
Investment Banking		136		135		130		131		133		131		127		124		128
		967		927		905		888		922		862		806		777		817

End of Period Client Service Professionals
Financial Advisory		681		640		641		618				585		548		555
Corporate Finance Consulting		130		136		131		129				117		109		106
Investment Banking		137		131		130		131				128		125		128
		948		907		902		878				830		782		789

	September 30,		December 31,
	2010		2009
ASSETS
Current assets
Cash and cash equivalents	$	98,798	$	107,311
Accounts receivable (net of allowance for doubtful accounts of $1,332 at September 30, 2010 and $1,690 at December 31, 2009)		52,043		55,079
Unbilled services		27,518		22,456
Prepaid expenses and other current assets		6,357		6,100
Net deferred income taxes, current		1,687		4,601
Total current assets		186,403		195,547

Property and equipment (net of accumulated depreciation of $24,836 at September 30, 2010 and $20,621 at December 31, 2009)		28,484		27,413
Goodwill		132,894		122,876
Intangible assets (net of accumulated amortization of $19,670 at September 30, 2010 and $16,881 at December 31, 2009)		29,936		27,907
Other assets		2,880		3,218
Investments related to deferred compensation plan		21,780		17,807
Net deferred income taxes, non-current		108,780		112,265
Total non-current assets		324,754		311,486

Total assets	$	511,157	$	507,033

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	2,996	$	2,459
Accrued expenses		8,226		11,609
Accrued compensation and benefits		21,611		35,730
Liability related to deferred compensation plan, current portion		1,537		-
Deferred revenues		3,692		3,633
Other current liabilities		127		993
Due to noncontrolling unitholders, current portion		4,303		4,303
Total current liabilities		42,492		58,727

Liability related to deferred compensation plan, less current portion		20,386		18,051
Other long-term liabilities		15,387		15,400
Due to noncontrolling unitholders, less current portion		102,499		101,098
Total non-current liabilities		138,272		134,549

Total liabilities		180,764		193,276

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; 28,120 and 27,290 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively)		281		273
Class B common stock, par value $0.0001 per share (50,000 shares authorized; 12,898 and 12,974 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively)		1		1
Additional paid-in capital		212,834		207,210
Accumulated other comprehensive income		564		693
Retained earnings		12,820		6,709
Total stockholders' equity of Duff & Phelps Corporation		226,500		214,886
Noncontrolling interest		103,893		98,871
Total stockholders' equity		330,393		313,757
Total liabilities and stockholders' equity	$	511,157	$	507,033

	Nine Months Ended
	September 30,			September 30,
	2010			2009
Cash flows from operating activities:
Net income	$	19,383		$	19,368

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,410			7,712
Equity-based compensation		15,824			19,205
Bad debt expense		1,141			1,698
Net deferred income taxes		4,741			4,637
Charge from impairment of certain intangible assets		674			-
Loss on early extinguishment of debt		-			1,674
Other		(570	)		(582	)
Changes in assets and liabilities providing/(using) cash:
Accounts receivable		4,765			(8,065	)
Unbilled services		(4,544	)		(9,012	)
Prepaid expenses and other current assets		(31	)		973
Other assets		(597	)		(2,396	)
Accounts payable and accrued expenses		(3,506	)		4,668
Accrued compensation and benefits		(14,507	)		(10,019	)
Deferred revenues		(113	)		1,219
Other liabilities		395			(1,399	)
Net cash provided by operating activities		30,465			29,681

Cash flows from investing activities:
Purchase of property and equipment		(4,998	)		(4,744	)
Business acquisitions, net of cash acquired		(11,807	)		(61	)
Purchase of investments for deferred compensation plan		(3,175	)		(6,409	)
Net cash used in investing activities		(19,980	)		(11,214	)

Cash flows from financing activities:
Repurchases of Class A common stock		(8,608	)		(821	)
Distributions and other payments to noncontrolling unitholders		(5,480	)		(15,510	)
Dividends		(4,828	)		(2,394	)
Net proceeds from sale of Class A common stock		(3	)		111,808
Proceeds from exercises of IPO Options		82			456
Redemption of noncontrolling unitholders		-			(67,112	)
Repayments of debt		-			(42,763	)
Increase in restricted cash		-			(689	)
Fees associated with early extinguishment of debt		-			(63	)
Net cash used in financing activities		(18,837	)		(17,088	)

Effect of exchange rate on cash and cash equivalents		(161	)		1,436

Net increase/(decrease) in cash and cash equivalents		(8,513	)		2,815
Cash and cash equivalents at beginning of period		107,311			81,381
Cash and cash equivalents at end of period	$	98,798		$	84,196

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

Revenues	$	84,427		$	-		$	84,427
Reimbursable expenses		2,403			-			2,403
Total revenues		86,830			-			86,830

Direct client service costs
Compensation and benefits		47,829			84	(a)		47,913
Other direct client service costs		1,342			-			1,342
Reimbursable expenses		2,330			-			2,330
		51,501			84			51,585

Operating expenses
Selling, general and administrative		23,485			(475	)(a)		23,010
Depreciation and amortization		2,567			-			2,567
Merger and acquisition costs		76			(76	)(b)		-
		26,128			(551	)		25,577

Operating income		9,201			467			9,668

Other expense/(income), net
Interest income		(29	)		-			(29	)
Interest expense		66			-			66
Other expense		(43	)		-			(43	)
		(6	)		-			(6	)

Income before income taxes		9,207			467			9,674
								-
Provision for income taxes		2,010			1,967	(c)		3,977

Net income		7,197			(1,500	)		5,697

Less: Net income attributable to the noncontrolling interest		3,088			(3,088	)(d)		-

Net income attributable to Duff & Phelps Corporation	$	4,109		$	1,588		$	5,697

Pro forma fully exchanged, fully diluted shares outstanding						(e)		37,857

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

(c)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% 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 three months ended September 30, 2010, the pro forma tax rate of approximately 41.1% reflects a true-up adjustment relating to the six months ended June 30, 2010. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.

	Three Months Ended September 30, 2009
	As						Adjusted
	Reported			Adjustments			Pro Forma

Revenues	$	93,240		$	-		$	93,240
Reimbursable expenses		3,394			-			3,394
Total revenues		96,634			-			96,634

Direct client service costs
Compensation and benefits		52,287			(2,124	)(a)		50,163
Other direct client service costs		2,954			-			2,954
Reimbursable expenses		3,468			-			3,468
		58,709			(2,124	)		56,585

Operating expenses
Selling, general and administrative		24,620			(1,105	)(a)		23,515
Depreciation and amortization		2,594			-			2,594
		27,214			(1,105	)		26,109

Operating income		10,711			3,229			13,940

Other expense/(income), net
Interest income		(17	)		-			(17	)
Interest expense		91			-			91
Other expense		50			-			50
		124			-			124

Income before income taxes		10,587			3,229			13,816
								-
Provision for income taxes		2,999			2,458	(b)		5,457

Net income		7,588			771			8,359

Less: Net income attributable to the noncontrolling interest		4,136			(4,136	)(c)		-

Net income attributable to Duff & Phelps Corporation	$	3,452		$	4,907		$	8,359

Pro forma fully exchanged, fully diluted shares outstanding						(d)		38,694

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding							$	0.22

(b)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.8% 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 September 30, 2009, the pro forma tax rate of 39.5% reflects a true-up adjustment relating to the six months ended June 30, 2009. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.

	Nine Months Ended September 30, 2010
	As						Adjusted
	Reported			Adjustments			Pro Forma

Revenues	$	262,333		$	-		$	262,333
Reimbursable expenses		7,163			-			7,163
Total revenues		269,496			-			269,496

Direct client service costs
Compensation and benefits		146,842			(1,690	)(a)		145,152
Other direct client service costs		5,211			-			5,211
Reimbursable expenses		7,223			-			7,223
		159,276			(1,690	)		157,586

Operating expenses
Selling, general and administrative		73,873			(4,318	)(a)		69,555
Depreciation and amortization		7,410			-			7,410
Charge from impairment of certain intangible assets		674			-			674
Merger and acquisition costs		397			(397	)(b)		-
		82,354			(4,715	)		77,639

Operating income		27,866			6,405			34,271

Other expense/(income), net
Interest income		(106	)		-			(106	)
Interest expense		234			-			234
Other expense		189			-			189
		317			-			317

Income before income taxes		27,549			6,405			33,954
								-
Provision for income taxes		8,166			5,606	(c)		13,772

Net income		19,383			799			20,182

Less: Net income attributable to the noncontrolling interest		8,494			(8,494	)(d)		-

Net income attributable to Duff & Phelps Corporation	$	10,889		$	9,293		$	20,182

Pro forma fully exchanged, fully diluted shares outstanding						(e)		38,673

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding							$	0.52

(c)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.6% 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 full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.

	Nine Months Ended September 30, 2009
	As						Adjusted
	Reported			Adjustments			Pro Forma

Revenues	$	272,558		$	-		$	272,558
Reimbursable expenses		8,057			-			8,057
Total revenues		280,615			-			280,615

Direct client service costs
Compensation and benefits		155,115			(8,004	)(a)		147,111
Other direct client service costs		5,801			-			5,801
Reimbursable expenses		8,120			-			8,120
		169,036			(8,004	)		161,032

Operating expenses
Selling, general and administrative		74,048			(2,959	)(a)		71,089
Depreciation and amortization		7,712			-			7,712
		81,760			(2,959	)		78,801

Operating income		29,819			10,963			40,782

Other expense/(income), net
Interest income		(34	)		-			(34	)
Interest expense		1,079			-			1,079
Loss on early extinguishment of debt		1,737			(1,737	)(b)		-
Other expense		137			-			137
		2,919			(1,737	)		1,182

Income before income taxes		26,900			12,700			39,600
								-
Provision for income taxes		7,532			8,625	(c)		16,157

Net income		19,368			4,075			23,443

Less: Net income attributable to the noncontrolling interest		12,417			(12,417	)(d)		-

Net income attributable to Duff & Phelps Corporation	$	6,951		$	16,492		$	23,443

Pro forma fully exchanged, fully diluted shares outstanding						(e)		36,781

Adjusted Pro Forma Net Income per fully exchanged, fully diluted shares outstanding							$	0.64

	2009										2010
	Q1		Q2		Q3		Q4		YTD		Q1		Q2		Q3		YTD
Average Managing Directors
Financial Advisory		101		99		95		93		97		91		91		92		92
Corporate Finance Consulting		30		30		31		29		30		32		30		29		30
Investment Banking		36		39		40		40		39		40		41		40		41
		167		168		166		162		166		163		162		161		163

End of Period Managing Directors
Financial Advisory		101		96		93		93				88		94		90
Corporate Finance Consulting		30		31		29		30				31		29		28
Investment Banking		38		38		40		40				39		40		40
		169		165		162		163				158		163		158