December 31,

2007

September 30,

2008

Assumed issuance of 2008 Senior Convertible Notes shares

Dilutive impact of 2008 Senior Convertible Notes shares

Assumed issuance of 2008 Senior Convertible Notes shares

Dilutive impact of 2008 Senior Convertible Notes shares

Statement of Changes - Quarter to Date

Mutual
Fund

Mutual
Fund

Three
 Months
Ended
9/30/07

Percent
of Total

Three
 Months
Ended
9/30/08

Percent

of Total

115,170

34,007

Nine
 Months
Ended
9/30/07

Nine
 Months
Ended
9/30/08

Percent

of Total

Ended

141,342

(85,364

199,036

(14,295

Investment (income) loss from Affiliate investments in partnerships (H)

Income before minority interest and taxes

Minority
 interest (G)

2007

241,369

12,347

118,464

47,412

1,894,435

1,201,751

11,181

16,833

3,866

(2,790

)

(130

)

16,887

433

9,544

(1,019

)

(87,280

)

141,342

199,036

238,781

1,263

(1,667

)

1,989

76,025

150,344

Cash Net Income is defined as Net Income plus amortization and
deferred taxes related to intangible assets plus Affiliate
depreciation. This supplemental non-GAAP performance measure is
provided in addition to, but not as a substitute for, Net Income.
The Company considers Cash Net Income an important measure of its
financial performance, as management believes it best represents
operating performance before non-cash expenses relating to the
acquisition of interests in its affiliated investment management
firms. Since acquired assets do not generally depreciate or
require replacement, and since they generate deferred tax
expenses that are unlikely to reverse, the Company adds back
these non-cash expenses. Cash Net Income is used by the Company’s
management and Board of Directors as a principal performance
benchmark.

The Company adds back amortization attributable to acquired
client relationships because this expense does not correspond to
the changes in value of these assets, which do not diminish
predictably over time. The Company adds back the portion of
deferred taxes generally attributable to intangible assets
(including goodwill) that it no longer amortizes but which
continues to generate tax deductions. These deferred tax expense
accruals would be used in the event of a future sale of an
Affiliate or an impairment charge, which the Company considers
unlikely. The Company adds back the portion of consolidated
depreciation expense incurred by Affiliates because under its
Affiliate operating agreements, the Company is generally not
required to replenish these depreciating assets.

EBITDA is defined as earnings before interest expense,
income taxes, depreciation and amortization. This supplemental
non-GAAP liquidity measure is provided in addition to, but not as
a substitute for, cash flow from operations. As a measure of
liquidity, the Company believes EBITDA is useful as an indicator
of its ability to service debt, make new investments and meet
working capital requirements. EBITDA, as calculated by the
Company, may not be consistent with computations of EBITDA by
other companies. In reporting EBITDA by segment, Affiliate
expenses are allocated to a particular segment on a pro rata
basis with respect to the revenue generated by that Affiliate in
such segment.

Cash earnings per share represents Cash Net Income divided by the
adjusted diluted average shares outstanding. In this calculation,
the potential share issuance in connection with the Company’s
convertible securities is measured using a “treasury stock”
method. Under this method, only the net number of shares of
common stock equal to the value of the contingently convertible
securities and the junior convertible trust preferred securities
in excess of par, if any, are deemed to be outstanding. The
Company believes the inclusion of net shares under a treasury
stock method best reflects the benefit of the increase in
available capital resources (which could be used to repurchase
shares of common stock) that occurs when these securities are
converted and the Company is relieved of its debt obligation.
This method does not take into account any increase or decrease
in the Company’s cost of capital in an assumed conversion.

Convertible securities interest expense, net, includes the
interest expense, net of tax, associated with the Company’s
contingently convertible securities and junior convertible trust
preferred securities (but excludes the interest expense
associated with the Company’s mandatory convertible securities).

(E)

In the first and third quarters of 2008, the Company agreed to
transfer its interests in certain Affiliates, and also during
the first quarter of 2008, reclassified approximately $100
million of assets under management from the High Net Worth
distribution channel to each of the Mutual Fund and Institutional
distribution channels, respectively.  The financial
effect of these items is not material to the Company’s ongoing
results.

(F)

The Company is required to use the equity method of accounting
for certain of its investments (“equity method investments”).  
Consistent with this method, the Company has not consolidated the
operating results (including the revenue) of its equity method
investments in its income statement. The Company’s share of its
equity method investments’ profits, net of intangible
amortization, is reported in “Income from equity method
investments.” Income tax attributable to these profits is
reported within the Company’s consolidated income tax provision.  
The assets under management of equity method investments are
included in the Company’s reported assets under management.

(G)

Minority interest on the Company’s income statement represents
the profits allocated to Affiliate management
owners for that period.  Minority interest on the Company’s
balance sheet represents the undistributed profits

and capital owned by Affiliate management, who retain a
conditional right to sell their interests to the Company.

(H)

EITF Issue No. 04-05, “Determining Whether a General Partner, or
the General Partners as a Group, Controls a Limited Partnership
or Similar Entity When the Limited Partners Have Certain Rights”
(“EITF 04-05”), became effective January 1, 2006.  EITF 04-05
requires the Company to consolidate certain Affiliate
investment partnerships (including interests in the partnerships
in which the Company does not have ownership rights) in its
consolidated financial statements.  For the nine months ended
September 30, 2008, the total non-operating loss associated with
those partnerships was $31.8 million, while the portion
attributable to the underlying investors unrelated to the Company
(the “outside owners”) was $30.2 million; as of September 30,
2008, the total assets attributable to these investment
partnerships was $107.4 million, while the portion owned by the
outside owners was $98.4 million.