The following tables set forth operating results for the Company's alternative investment and broker dealer segments and related adjustments necessary to reconcile the Company's Economic Income (Loss) measure to arrive at the Company's consolidated US GAAP net income (loss):



	Three Months Ended March 31, 2013
										Adjustments
	Alternative Investment			Broker-Dealer (1)			Total Economic Income/(Loss)			Funds Consolidation			Other Adjustments				US GAAP
	(dollars in thousands)
Revenues
Investment banking	$	—		$	17,166		$	17,166		$	—		$	—			$	17,166
Brokerage	—			28,017			28,017			—			(1,417		)	(e)	26,600
Management fees	14,144			—			14,144			(311		)	(4,340		)	(a)	9,493
Incentive income	5,126			—			5,126			—			(2,515		)	(a)	2,611
Investment Income	8,304			2,568			10,872			—			(10,872		)	(c)	—
Interest and dividends	—			—			—			—			9,321			(c)	9,321
Reimbursement from affiliates	—			—			—			65			1,420			(b)	1,485
Other revenue	113			(553		)	(440		)	—			918			(c)	478
Consolidated Funds revenues	—			—			—			87			—				87
Total revenues	27,687			47,198			74,885			(159		)	(7,485		)		67,241
Expenses
Employee compensation and benefits	13,913			30,608			44,521			—			(298		)		44,223
Interest and dividends	81			43			124			—			6,294			(c)	6,418
Non-compensation expenses—Fixed	9,138			14,640			23,778			—			(23,778		)	(c)(d)	—
Non-compensation expenses—Variable	1,006			6,345			7,351			—			(7,351		)	(c)(d)	—
Non-compensation expenses	—			—			—			—			32,037			(c)(d)	32,037
Reimbursement from affiliates	(1,420		)	—			(1,420		)	—			1,420			(b)	—
Consolidated Funds expenses	—			—			—			434			—				434
Total expenses	22,718			51,636			74,354			434			8,324				83,112
Other income (loss)
Net gains (losses) on securities, derivatives and other investments	—			—			—			—			11,807			(c)	11,807
Consolidated Funds net gains (losses)	—			—			—			2,293			2,866				5,159
Total other income (loss)	—			—			—			2,293			14,673				16,966
Income (loss) before income taxes and non-controlling interests	4,969			(4,438		)	531			1,700			(1,136		)		1,095
Income taxes expense / (benefit)	—			—			—			—			176			(b)	176
Economic Income (Loss) / Net income (loss) before non-controlling interests	4,969			(4,438		)	531			1,700			(1,312		)		919
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries	(1,800		)	—			(1,800		)	(1,700		)	5				(3,495		)
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders	$	3,169		$	(4,438	)	$	(1,269	)	$	—		$	(1,307	)		$	(2,576	)

(1) For the three months ended March 31, 2013, the Company has reflected $2.3 million of investment income and related compensation expense of $0.8 million within the broker-dealer segment in proportion to its capital.



	Three Months Ended March 31, 2012
										Adjustments
	Alternative Investment			Broker-Dealer (1)			Total Economic Income/(Loss)			Funds Consolidation			Other Adjustments				US GAAP
	(dollars in thousands)
Revenues
Investment banking	$	—		$	15,630		$	15,630		$	—		$	—			$	15,630
Brokerage	—			24,013			24,013			—			—				24,013
Management fees	14,020			—			14,020			(393		)	(3,910		)	(a)	9,717
Incentive income	4,022			—			4,022			—			(3,331		)	(a)	691
Investment Income	16,803			4,302			21,105			—			(21,105		)	(c)	—
Interest and dividends	—			—			—			—			5,372			(c)	5,372
Reimbursement from affiliates	—			—			—			(71		)	1,116			(b)	1,045
Other revenue	124			260			384			—			483			(c)	867
Consolidated Funds revenues	—			—			—			145			—				145
Total revenues	34,969			44,205			79,174			(319		)	(21,375		)		57,480
Expenses
Employee compensation and benefits	17,488			28,421			45,909			—			774				46,683
Interest and dividends	19			69			88			—			1,636			(c)	1,724
Non-compensation expenses—Fixed	6,969			14,274			21,243			—			(21,243		)	(c)(d)	—
Non-compensation expenses—Variable	1,309			5,566			6,875			—			(6,875		)	(c)(d)	—
Non-compensation expenses	—			—			—			—			27,957			(c)(d)	27,957
Reimbursement from affiliates	(1,116		)	—			(1,116		)	—			1,116			(b)	—
Consolidated Funds expenses	—			—			—			375			—				375
Total expenses	24,669			48,330			72,999			375			3,365				76,739
Other income (loss)
Net gains (losses) on securities, derivatives and other investments	—			—			—			—			19,671			(c)	19,671
Consolidated Funds net gains (losses)	—			—			—			2,641			3,325				5,966
Total other income (loss)	—			—			—			2,641			22,996				25,637
Income (loss) before income taxes and non-controlling interests	10,300			(4,125		)	6,175			1,947			(1,744		)		6,378
Income taxes expense / (benefit)	—			—			—			—			142			(b)	142
Economic Income (Loss) / Net income (loss) before non-controlling interests	10,300			(4,125		)	6,175			1,947			(1,886		)		6,236
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries	(300		)	—			(300		)	(1,947		)	6				(2,241		)
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders	$	10,000		$	(4,125	)	$	5,875		$	—		$	(1,880	)		$	3,995

(1) For the three months ended March 31, 2012, the Company has reflected $4.2 million of investment income and related compensation expense of $1.4 million within the broker-dealer segment in proportion to its capital.

The following is a summary of the adjustments made to US GAAP net income (loss) for the segment to arrive at

Economic Income (Loss):

Funds Consolidation: The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustments to reconcile to US GAAP net income (loss) include elimination of incentive income and management fees earned from the Consolidated Funds and addition of fund expenses excluding management fees paid, fund revenues and investment income (loss).

Other Adjustments:

(a) Economic Income (Loss) recognizes revenues (i) net of distribution fees paid to agents and (ii) our proportionate share

of management and incentive fees of certain real estate operating entities and the activist business (2012 and 2011 only).

(b) Economic Income (Loss) excludes income taxes as management does not consider this item when evaluating the

performance of the segment. Also, reimbursement from affiliates is shown as a reduction of Economic Income

expenses, but is included as a part of revenues under US GAAP.

(d) Economic Income (Loss) recognizes the Company's proportionate share of expenses for certain real estate and other

operating entities for which the investments are recorded under the equity method of accounting for investments.

(e) Economic Income (Loss) recognizes stock borrow/loan activity and other brokerage dividends as brokerage revenue.