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):



	Year Ended December 31, 2013
										Adjustments
	Alternative Investment			Broker-Dealer (1)			Total Economic Income/(Loss)			Funds Consolidation			Other Adjustments				US GAAP
	(dollars in thousands)
Revenues
Investment banking	$	—		$	105,333		$	105,333		$	—		$	—			$	105,333
Brokerage	—			121,065			121,065			—			(6,472		)	(e)	114,593
Management fees	56,984			—			56,984			(1,146		)	(18,535		)	(a)	37,303
Incentive income	21,933			—			21,933			—			(9,347		)	(a)	12,586
Investment Income	30,713			5,947			36,660			—			(36,660		)	(c)	—
Interest and dividends	—			—			—			—			39,454			(c)	39,454
Reimbursement from affiliates	—			—			—			(99		)	9,260			(b)	9,161
Other revenue	524			2,010			2,534			—			2,884			(c)	5,418
Consolidated Funds revenues	—			—			—			3,398			—				3,398
Total revenues	110,154			234,355			344,509			2,153			(19,416		)		327,246
Expenses
Employee compensation and benefits	54,656			150,180			204,836			—			2,412				207,248
Interest and dividends	231			119			350			—			26,949			(c)	27,299
Non-compensation expenses—Fixed	33,986			61,538			95,524			—			(95,524		)	(c)(d)	—
Non-compensation expenses—Variable	4,520			26,123			30,643			—			(30,643		)	(c)(d)	—
Non-compensation expenses	—			—			—			—			124,331			(c)(d)	124,331
Reimbursement from affiliates	(6,380		)	—			(6,380		)	—			6,380			(b)	—
Consolidated Funds expenses	—			—			—			2,039			—				2,039
Total expenses	87,013			237,960			324,973			2,039			33,905				360,917
Other income (loss)
Net gains (losses) on securities, derivatives and other investments	—			—			—			—			40,924			(c)	40,924
Consolidated Funds net gains (losses)	—			—			—			2,618			8,426				11,044
Total other income (loss)	—			—			—			2,618			49,350				51,968
Income (loss) before income taxes and non-controlling interests	23,141			(3,605		)	19,536			2,732			(3,971		)		18,297
Income taxes expense / (benefit)	—			—			—			—			457			(b)	457
Economic Income (Loss) / Net income (loss) before non-controlling interests	23,141			(3,605		)	19,536			2,732			(4,428		)		17,840
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries	(12,995		)	—			(12,995		)	(2,732		)	2,534				(13,193		)
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders	$	10,146		$	(3,605	)	$	6,541		$	—		$	(1,894	)		$	4,647

(1) For the year ended December 31, 2013, the Company has reflected $7.6 million of investment income and related compensation expense of $2.5 million within the broker-dealer segment in proportion to its capital.



	Year Ended December 31, 2012
										Adjustments
	Alternative Investment			Broker-Dealer (1)			Total Economic Income/(Loss)			Funds Consolidation			Other Adjustments				US GAAP
	(dollars in thousands)
Revenues
Investment banking	$	—		$	71,762		$	71,762		$	—		$	—			$	71,762
Brokerage	—			93,903			93,903			—			(2,736		)	(e)	91,167
Management fees	56,381			—			56,381			(1,474		)	(16,791		)	(a)	38,116
Incentive income	15,205			—			15,205			—			(9,794		)	(a)	5,411
Investment Income	40,374			9,742			50,116			—			(50,116		)	(c)	—
Interest and dividends	—			—			—			—			24,608			(c)	24,608
Reimbursement from affiliates	—			—			—			(288		)	5,527			(b)	5,239
Other revenue	844			404			1,248			—			2,420			(c)	3,668
Consolidated Funds revenues	—			—			—			509			—				509
Total revenues	112,804			175,811			288,615			(1,253		)	(46,882		)		240,480
Expenses
Employee compensation and benefits	59,647			128,508			188,155			—			5,879				194,034
Interest and dividends	151			188			339			—			11,798			(c)	12,137
Non-compensation expenses—Fixed	32,575			62,887			95,462			—			(95,462		)	(c)(d)	—
Non-compensation expenses—Variable	4,941			20,334			25,275			—			(25,275		)	(c)(d)	—
Non-compensation expenses	—			—			—			—			119,053			(c)(d)	119,053
Reimbursement from affiliates	(5,527		)	—			(5,527		)	—			5,527			(b)	—
Consolidated Funds expenses	—			—			—			1,676			—				1,676
Total expenses	91,787			211,917			303,704			1,676			21,520				326,900
Other income (loss)
Net gains (losses) on securities, derivatives and other investments	—			—			—			—			55,665			(c)	55,665
Consolidated Funds net gains (losses)	—			—			—			2,556			4,690				7,246
Total other income (loss)	—			—			—			2,556			60,355				62,911
Income (loss) before income taxes and non-controlling interests	21,017			(36,106		)	(15,089		)	(373		)	(8,047		)		(23,509		)
Income taxes expense / (benefit)	—			—			—			—			448			(b)	448
Economic Income (Loss) / Net income (loss) before non-controlling interests	21,017			(36,106		)	(15,089		)	(373		)	(8,495		)		(23,957		)
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries	(2,480		)	—			(2,480		)	373			2,179				72
Economic Income (Loss) / Net Income (loss) attributable to Cowen Group, Inc. stockholders	$	18,537		$	(36,106	)	$	(17,569	)	$	—		$	(6,316	)		$	(23,885	)

(1) For the year ended December 31, 2012, the Company has reflected $10.2 million of investment income and related compensation expense of $3.4 million within the broker-dealer segment in proportion to its capital.



	Year Ended December 31, 2011
										Adjustments
	Alternative Investment			Broker-Dealer (1)			Total Economic Income/(Loss)			Funds Consolidation			Other Adjustments				US GAAP
	(dollars in thousands)
Revenues
Investment banking	$	—		$	50,976		$	50,976		$	—		$	—			$	50,976
Brokerage	—			99,611			99,611			—			—				99,611
Management fees	67,309			—			67,309			(1,809		)	(13,034		)	(a)	52,466
Incentive income	10,366			—			10,366			—			(7,101		)	(a)	3,265
Investment Income	33,599			7,748			41,347			—			(41,347		)	(c)	—
Interest and dividends	—			—			—			—			22,306			(c)	22,306
Reimbursement from affiliates	—			—			—			(280		)	4,602			(b)	4,322
Other revenue	622			(7		)	615			—			968			(c)	1,583
Consolidated Funds revenues	—			—			—			749			—				749
Total revenues	111,896			158,328			270,224			(1,340		)	(33,606		)		235,278
Expenses
Employee compensation and benefits	46,757			145,801			192,558			—			11,209				203,767
Interest and dividends	184			551			735			—			8,498			(c)	9,233
Non-compensation expenses—Fixed	33,954			69,227			103,181			—			(103,181		)	(c)(d)	—
Non-compensation expenses—Variable	17,085			24,412			41,497			—			(41,497		)	(c)(d)	—
Non-compensation expenses	—			—			—			—			152,722			(c)(d)	152,722
Goodwill impairment	—			—			—			—			7,151			(h)	7,151
Reimbursement from affiliates	(4,602		)	—			(4,602		)	—			4,602			(b)	—
Consolidated Funds expenses	—			—			—			2,782			—				2,782
Total expenses	93,378			239,991			333,369			2,782			39,504				375,655
Other income (loss)
Net gains (losses) on securities, derivatives and other investments	—			—			—			—			15,128			(c)	15,128
Bargain purchase gain	—			—			—			—			22,244			(f)	22,244
Consolidated Funds net gains (losses)	—			—			—			2,947			1,448				4,395
Total other income (loss)	—			—			—			2,947			38,820				41,767
Income (loss) before income taxes and non-controlling interests	18,518			(81,663		)	(63,145		)	(1,175		)	(34,290		)		(98,610		)
Income taxes expense / (benefit)	—			—			—			—			(20,073		)	(b)	(20,073		)
Economic Income (Loss) / Net income (loss) before non-controlling interests	18,518			(81,663		)	(63,145		)	(1,175		)	(14,217		)		(78,537		)
Net income (loss) from discontinued operations, net of tax	—			—			—			—			(23,646		)	(g)	(23,646		)
(Income) loss attributable to redeemable non-controlling interests in consolidated subsidiaries	(8,292		)	—			(8,292		)	1,175			1,290				(5,827		)
Economic Income (Loss) / Net income (loss) attributable to Cowen Group, Inc. stockholders	$	10,226		$	(81,663	)	$	(71,437	)	$	—		$	(36,573	)		$	(108,010	)

(1) For the year ended December 31, 2011, the Company has reflected $5.6 million of investment income and related compensation expense of $1.8 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.

(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.

(f) Economic Income (Loss) excludes the bargain purchase gain which resulted from the LaBranche acquisition.

(g) Economic Income (Loss) excludes discontinued operations.

(h) Economic Income (Loss) excludes goodwill impairment.