2Q15 Earnings Release Exhibit



	GAAP Basis				Non-GAAP Basis
	For the Three Months Ended				For the Three Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(unaudited)

Basic Net Income	$	1,922	$	2,124	$	1,951	$	1,767
Basic Earnings Per Share	$	0.15	$	0.17	$	0.15	$	0.15

Diluted Net Income	$	8,531	$	9,096	$	9,312	$	8,739
Diluted Earnings Per Share	$	0.13	$	0.13	$	0.14	$	0.13

	GAAP Basis				Non-GAAP Basis
	For the Six Months Ended				For the Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(unaudited)

Basic Net Income	$	3,544	$	3,572	$	3,557	$	3,153
Basic Earnings Per Share	$	0.27	$	0.29	$	0.27	$	0.26

Diluted Net Income	$	16,458	$	16,692	$	17,397	$	16,273
Diluted Earnings Per Share	$	0.24	$	0.25	$	0.26	$	0.24

The results for the three and six months ended June 30, 2015 and 2014 include adjustments related to the Company's deferred tax asset, valuation allowance and the associated liability to its selling and converting shareholders. Results for 2015 also include adjustments related to certain non-recurring charges recognized in operating expenses related to our new corporate headquarters. Management believes that these accounting adjustments add a measure of non-operational complexity which obscures the underlying performance of the business. In evaluating the financial condition and results of operations, management also reviews non-GAAP measures of earnings, which exclude these items. Excluding these adjustments, non-GAAP diluted net income and non-GAAP diluted earnings per share were $9.3 million and $0.14, respectively, for the three months ended June 30, 2015, and $8.7 million and $0.13, respectively, for the three months ended June 30, 2014. Non-GAAP diluted net income and non-GAAP diluted earnings per share were $17.4 million and $0.26, respectively, for the six months ended June 30, 2015, and $16.3 million and $0.24, respectively, for the six months ended June 30, 2014. GAAP and non-GAAP net income for diluted earnings per share generally assume all operating company membership units are converted into Company stock at the beginning of the reporting period, and the resulting change to Company GAAP and non-GAAP net income associated with its increased interest in the operating company is taxed at the Company's effective tax rate, exclusive of the adjustments noted above and other adjustments. When this conversion results in an increase in earnings per share or a decrease in loss per share, diluted net income and diluted earnings per share are assumed to be equal to basic net income and basic earnings per share for the reporting period.

Management uses the non-GAAP measures to assess the strength of the underlying operations of the business. It believes the non-GAAP measures provide information to better analyze the Company's operations between periods and over time. Investors should consider the non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.



Assets Under Management (unaudited)
($ billions)
	For the Three Months Ended									For the Twelve Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
	2015			2015			2014			2015			2014

Institutional Accounts
Assets
Beginning of Period	$	15.9		$	15.6		$	15.2		$	15.1		$	12.5
Inflows	0.3			1.1			0.4			3.3			2.5
Outflows	(0.6		)	(0.9		)	(0.9		)	(2.6		)	(3.1		)
Net Flows	(0.3		)	0.2			(0.5		)	0.7			(0.6		)
Market Appreciation/(Depreciation)	0.3			0.1			0.4			0.1			3.2
End of Period	$	15.9		$	15.9		$	15.1		$	15.9		$	15.1

Retail Accounts
Assets
Beginning of Period Assets	$	12.0		$	12.1		$	10.2		$	11.9		$	7.8
Inflows	0.3			0.4			1.4			1.8			3.3
Outflows	(0.6		)	(0.4		)	(0.2		)	(2.1		)	(1.1		)
Net Flows	(0.3		)	—			1.2			(0.3		)	2.2
Market Appreciation/(Depreciation)	0.4			(0.1		)	0.5			0.5			1.9
End of Period	$	12.1		$	12.0		$	11.9		$	12.1		$	11.9

Total
Assets
Beginning of Period	$	27.9		$	27.7		$	25.4		$	27.0		$	20.3
Inflows	0.6			1.5			1.8			5.1			5.8
Outflows	(1.2		)	(1.3		)	(1.1		)	(4.7		)	(4.2		)
Net Flows	(0.6		)	0.2			0.7			0.4			1.6
Market Appreciation/(Depreciation)	0.7			—			0.9			0.6			5.1
End of Period	$	28.0		$	27.9		$	27.0		$	28.0		$	27.0



Revenue (unaudited)
($ thousands)
	For the Three Months Ended
	June 30,		March 31,		June 30,
	2015		2015		2014

Institutional Accounts	$	21,492	$	20,969	$	20,506
Retail Accounts	8,018		7,684		7,439
Total	$	29,510	$	28,653	$	27,945


			For the Six Months Ended
			June 30,		June 30,
			2015		2014

Institutional Accounts			$	42,461	$	40,802
Retail Accounts			15,702		13,544
Total			$	58,163	$	54,346

Included in these amounts were performance fees recognized of $0.3 million for the second quarter of 2015, compared to $0.4 million for the first quarter of 2015, and $0.2 million for the second quarter of 2014. In general, performance fees are calculated on an annualized basis over the contract's measurement period, which, for the majority of our performance fee arrangements, extends to three years.

Average assets under management for the second quarter of 2015 were $28.3 billion, an increase of 2.5% from $27.6 billion for the first quarter of 2015 and an increase of 7.6% from $26.3 billion for the second quarter of 2014. The increase from the first quarter of 2015 and from the second quarter of 2014 primarily reflects market appreciation. The increase from the second quarter of 2014 was also driven by net inflows.

The weighted average fee rate for institutional accounts was 0.535% for the second quarter of 2015, decreasing from 0.536% for the first quarter of 2015, and from 0.542% for the second quarter of 2014. The decrease from last quarter primarily reflects the decrease in performance fees recognized during the second quarter of 2015, partially offset by an increase in assets in certain of our non-U.S. strategies which generally carry higher fee rates. The decrease from the second quarter of 2014 primarily reflects a shift in mix toward our expanded value strategies which generally carry lower fee rates, partially offset by the increase in non-U.S. strategies.

The weighted average fee rate for retail accounts was 0.263% for the second quarter of 2015, increasing from 0.256% for the first quarter of 2015, and decreasing from 0.267% for the second quarter of 2014. The increase from the first quarter of 2015 reflects an increase in assets in certain of our non-U.S. strategies, which generally carry higher fee rates. The decrease from the second quarter of 2014 primarily reflects an increase in retail performance fees recognized in the second quarter of 2015 offset by a shift in mix toward our expanded value strategies, which generally carry lower fee rates.

Total operating expenses were $16.3 million for the second quarter of 2015, increasing from $15.7 million for the first quarter of 2015 and from $12.4 million for the second quarter of 2014. The increases in operating expenses from the first quarter of 2015 and year-over-year were primarily due to one-time and non-recurring charges associated with the move to our new headquarters during the second quarter of 2015. During the first quarter of 2015, one-time charges reflected the lease expense associated with our former headquarters that we did not expect to recur. The increase from the second quarter of 2014 is also driven by an increase in compensation and headcount, and expenses associated with our mutual funds. Details of operating expenses and a reconciliation of GAAP to non-GAAP operating expenses are shown below:



Operating Expenses (unaudited)
($ thousands)
	For the Three Months Ended
	June 30,			March 31,			June 30,
	2015			2015			2014

Compensation and Benefits Expense	$	11,800		$	12,070		$	9,899
General and Administrative Expense	4,490			3,603			2,505
GAAP Operating Expenses	16,290			15,673			12,404
One-Time Adjustments	(1,488		)	(346		)	—
Non-GAAP Operating Expenses	$	14,802		$	15,327		$	12,404

				For the Six Months Ended
				June 30,			June 30,
				2015			2014

Compensation and Benefits Expense				$	23,870		$	19,949
General and Administrative Expense				8,093			4,825
GAAP Operating Expenses				31,963			24,774
One-Time Adjustments				(1,834		)	—
Non-GAAP Operating Expenses				$	30,129		$	24,774

Other income/ (expense) was income of approximately $0.2 million for the second quarter of 2015, and expenses of $0.3 million and $1.4 million for the first quarter of 2015 and second quarter of 2014, respectively. Other income/ (expense) includes the gains/ (losses) and other investment income recognized by the Company on its direct investments, as well as those recognized by the Company's external investors on their investments in investment partnerships that the Company consolidates. A portion of gains/ (losses) and other investment income associated with the investments of the Company's outside interests are offset in net income attributable to non-controlling interests. For the second quarter of 2015, other income/ (expense) also includes an expense of $0.7 million reflecting an increase in the Company's liability to its selling and converting shareholders resulting from an increase in expected future tax benefits described in income tax expense below. Changes in the liability to selling and converting shareholders associated with changes in the realizability of the deferred tax asset generated expenses of $0.2 million and $2.0 million in the first quarter of 2015 and the second quarter of 2014, respectively. Details of other income/ (expense) , as well as a reconciliation of the related GAAP and non-GAAP measures, are shown below:



Other Income/ (Expense) (unaudited)
($ thousands)
	Three Months Ended
	June 30,			March 31,			June 30,
	2015			2015			2014

Net Interest and Dividend Income	$	308		$	120		$	115
Gains and Other Investment Income	460			15			410
Change in Liability to Selling and Converting Shareholders¹	(672		)	(245		)	(1,996		)
Other Income/ (Expense)	65			(179		)	63
GAAP Other Income/ (Expense)	161			(289		)	(1,408		)
Change in Liability to Selling and Converting Shareholders¹	672			245			1,996
Outside Interests of Investment Partnerships²	(370		)	60			(57		)
Non-GAAP Other Income, Net of Outside Interests	$	463		$	16		$	531

				For the Six Months Ended
				June 30,			June 30,
				2015			2014

Net Interest and Dividend Income				$	428		$	180
Gains and Other Investment Income				475			514
Change in Liability to Selling and Converting Shareholders¹				(917		)	(2,123		)
Other Expense				(114		)	(26		)
GAAP Other Expense				(128		)	(1,455		)
Change in Liability to Selling and Converting Shareholders¹				917			2,123
Outside Interests of Investment Partnerships²				(310		)	(130		)
Non-GAAP Other Income, Net of Outside Interests				$	479		$	538


1 Reflects the change in the liability to the Company’s selling and converting shareholders associated with
the deferred tax asset generated by the Company’s initial public offering and subsequent unit conversions.

2 Represents the non-controlling interest allocation of the (income)/ loss of the Company's consolidated
investment partnerships to its external investors.

The Company recognized income tax expense of $0.6 million for the second quarter of 2015 and $1.1 million for the first quarter of 2015, and an income tax benefit of $0.3 million for the second quarter of 2014. Income taxes for the second quarter of 2015 included a $0.8 million income tax benefit associated with a decrease to the valuation allowance recorded against the Company's deferred tax asset related to the basis step ups created by operating company unit exchanges. This adjustment generated $0.3 million and $2.4 million in income tax benefits in the first quarter of 2015 and second quarter of 2014, respectively. Details of the income tax expense, as well as a reconciliation of the related GAAP and non-GAAP measures, are shown below:



Income Tax Expense/ (Benefit) (unaudited)
($ thousands)
	For the Three Months Ended
	June 30,			March 31,			June 30,
	2015			2015			2014

Non-GAAP Corporate Income Tax Expense	$	925		$	886		$	1,244
Non-GAAP Unincorporated Business Tax Expense	575			531			835
Non-GAAP Income Tax Expense	1,500			1,417			2,079
Change in Valuation Allowance¹	(790		)	(297		)	(2,353		)
Less: Effects of One-Time Adjustments²	(144		)	(32		)	—
GAAP Income Tax Expense/ (Benefit)	$	566		$	1,088		$	(274	)

				For the Six Months Ended
				June 30,			June 30,
				2015			2014

Non-GAAP Corporate Income Tax Expense				$	1,811		$	2,334
Non-GAAP Unincorporated Business Tax Expense				1,106			1,617
Non-GAAP Income Tax Expense				2,917			3,951
Change in Valuation Allowance¹				(1,087		)	(3,144		)
Less: Effects of One-Time Adjustments²				(176		)	—
Net Adjustment to Deferred Tax Asset³				—			602
GAAP Income Tax Expense				$	1,654		$	1,409

1 Reflects the change in the valuation allowance assessed against the deferred tax asset established
as part of the Company's initial public offering and subsequent unit conversions.
2 Reflects the tax effect of non-recurring lease expenses on Corporate Income Tax Expense and Unincorporated
Business Tax Expense for the second quarter of 2015 of $108 thousand and $36 thousand, respectively, and $25 thousand
and $7 thousand for the first quarter of 2015, respectively, which are excluded from Non-GAAP results.
3 Reflects the net impact of the changes in the Company's deferred tax asset and valuation allowance
assessed against the deferred tax asset associated with the changes in expected future tax benefits.



Non-Controlling Interests (unaudited)
($ thousands)

	For the Three Months Ended
	June 30,			March 31,			June 30,
	2015			2015			2014

Operating Company Allocation	$	10,523		$	10,041		$	12,226
Add Back: Effects of One-Time Adjustments¹	1,197			278			—
Non-GAAP Operating Company Allocation	11,720			10,319			12,226
Outside Interests of Investment Partnerships²	370			(60		)	57
Less: Effects of One-Time Adjustments¹	(1,197		)	(278		)	—
GAAP Net Income Attributable to Non-Controlling Interests	$	10,893		$	9,981		$	12,283

				For the Six Months Ended
				June 30,			June 30,
				2015			2014

Operating Company Allocation				$	20,564		$	23,006
Add Back: Effects of One-Time Adjustments¹				1,475			—
Non-GAAP Operating Company Allocation				22,039			23,006
Outside Interests of Investment Partnerships²				310			130
Less: Effects of One-Time Adjustments¹				(1,475		)	—
GAAP Net Income Attributable to Non-Controlling Interests				$	20,874		$	23,136


1 Reflects the effects of non-recurring lease expenses on non-controlling interests.

2 Represents the non-controlling interest allocation of the (loss)/ income of the Company's consolidated
investment partnerships to its external investors.

This press release may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Company's current assumptions, expectations and projections about future events. Words like “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” and similar expressions are used to identify forward-looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessarily estimates reflecting the best judgment of the Company's management and involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

Among the factors that could cause actual results to differ from those expressed or implied by a forward-looking statement are those described in the sections entitled “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's Annual Report on Form 10-K, as filed with the SEC on March 13, 2015 and in the Company's Quarterly Reports on Form 10-Q as filed with the SEC. In light of these risks, uncertainties, assumptions, and factors, actual results could differ materially from those expressed or implied in the forward-looking statements.

The Company is not under any obligation and does not intend to make publicly available any update or other revisions to any forward-looking statements to reflect circumstances existing after the date of this release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.



PZENA INVESTMENT MANAGEMENT, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)

		As of
		June 30,		December 31,
		2015		2014
		(unaudited)
ASSETS
	Cash and Cash Equivalents	$	24,441	$	39,109
	Restricted Cash	3,769		2,810
	Due from Broker	529		94
	Advisory Fees Receivable	23,790		22,939
	Investments	33,143		27,945
	Prepaid Expenses and Other Assets	1,717		1,599
	Deferred Tax Asset, Net of Valuation Allowance
	of $42,900 and $44,239, respectively	13,967		14,618
	Property and Equipment, Net of Accumulated
	Depreciation of $664 and $3,072, respectively	7,639		2,772
	TOTAL ASSETS	$	108,995	$	111,886

LIABILITIES AND EQUITY
	Liabilities:
	Accounts Payable and Accrued Expenses	$	14,061	$	5,974
	Due to Broker	1,248		698
	Securities Sold Short, at Fair Value	2,406		1,572
	Liability to Selling and Converting Shareholders	16,275		15,358
	Deferred Compensation Liability	1,550		2,211
	Lease Liability	743		354
	Other Liabilities	819		686
	TOTAL LIABILITIES	37,102		26,853

	Equity:
	Total Pzena Investment Management, Inc.'s Equity	15,119		18,401
	Non-Controlling Interests	56,774		66,632
	TOTAL EQUITY	71,893		85,033
	TOTAL LIABILITIES AND EQUITY	$	108,995	$	111,886



PZENA INVESTMENT MANAGEMENT, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per-share amounts)


		For the Three Months Ended					For the Six Months Ended
		June 30,					June 30,
		2015		2014			2015			2014

REVENUE		$	29,510	$	27,945		$	58,163		$	54,346

EXPENSES
Compensation and Benefits Expense		11,800		9,899			23,870			19,949
General and Administrative Expense		4,490		2,505			8,093			4,825
	TOTAL OPERATING EXPENSES	16,290		12,404			31,963			24,774
Operating Income		13,220		15,541			26,200			29,572

Other Income/ (Expense)		161		(1,408		)	(128		)	(1,455		)

Income Before Taxes		13,381		14,133			26,072			28,117

Income Tax Expense/ (Benefit)		566		(274		)	1,654			1,409
Consolidated Net Income		12,815		14,407			24,418			26,708

Less: Net Income Attributable to Non-Controlling Interests		10,893		12,283			20,874			23,136

Net Income Attributable to Pzena Investment Management, Inc.		$	1,922	$	2,124		$	3,544		$	3,572

Earnings per Share - Basic and Diluted Attributable to
Pzena Investment Management, Inc. Common Stockholders:

Net Income for Basic Earnings per Share		$	1,922	$	2,124		$	3,544		$	3,572
Basic Earnings per Share		$	0.15	$	0.17		$	0.27		$	0.29
Basic Weighted Average Shares Outstanding		12,946,168		12,180,192			13,001,633			12,178,402

Net Income for Diluted Earnings per Share		$	8,531	$	9,096		$	16,458		$	16,692
Diluted Earnings per Share		$	0.13	$	0.13		$	0.24		$	0.25
Diluted Weighted Average Shares Outstanding		68,223,560		67,998,237			68,109,058			68,021,135



	PZENA INVESTMENT MANAGEMENT, INC.

	UNAUDITED NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
	(in thousands, except share and per-share amounts)


		Non-GAAP Basis					Non-GAAP Basis
		For the Three Months Ended					For the Six Months Ended
		June 30,					June 30,
		2015			2014		2015			2014

REVENUE		$	29,510		$	27,945	58,163			$	54,346

EXPENSES
Compensation and Benefits Expense		11,800			9,899		23,870			19,949
General and Administrative Expense		3,002			2,505		6,259			4,825
	TOTAL OPERATING EXPENSES	14,802			12,404		30,129			24,774
Operating Income		14,708			15,541		28,034			29,572

Other Income, Net of Outside Interests		463			531		479			538

Income Before Taxes and Operating Company Allocation		15,171			16,072		28,513			30,110

Unincorporated Business Tax Expense		575			835		1,106			1,617
Allocable Income		14,596			15,237		27,407			28,493

Operating Company Allocation		11,720			12,226		22,039			23,006
Income Before Corporate Income Taxes		2,876			3,011		5,368			5,487

Corporate Income Tax Expense		925			1,244		1,811			2,334
Non-GAAP Net Income		$	1,951		$	1,767	$	3,557		$	3,153
Effect of One-Time Adjustments		(147		)	—		(183		)	—
Tax Receivable Agreement Income, Net of Taxes		118			357		170			419
GAAP Net Income		$	1,922		$	2,124	$	3,544		$	3,572

Earnings Per Share - Basic and Diluted Attributable to
Pzena Investment Management, Inc. Common Stockholders:

	Net Income for Basic Earnings per Share	$	1,951		$	1,767	$	3,557		$	3,153
	Basic Earnings per Share	$	0.15		$	0.15	$	0.27		$	0.26
	Basic Weighted Average Shares Outstanding	12,946,168			12,180,192		13,001,633			12,178,402

	Net Income for Diluted Earnings per Share	$	9,312		$	8,739	$	17,397		$	16,273
	Diluted Earnings per Share	$	0.14		$	0.13	$	0.26		$	0.24
	Diluted Weighted Average Shares Outstanding	68,223,560			67,998,237		68,109,058			68,021,135


•	2015 GAAP operating income was $13.2 million for the second quarter. For the same period, non-GAAP operating income was $14.7 million.


•	2015 GAAP diluted earnings per share was $0.13 for the second quarter. For the same period, non-GAAP diluted earnings per share was $0.14.


•	Declared a quarterly dividend of $0.03 per share.