Duff & Phelps (DUF) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number 001-33693

DUFF & PHELPS CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	20-8893559
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

55 East 52^nd Street, 31^st Floor

New York, New York 10055

(Address of principal executive offices)

(Zip code)

(212) 871-2000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o    Accelerated filer o    Non-accelerated filer þ Smaller reporting company o

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o No þ

The number of shares outstanding of the registrant’s Class A common stock, par value $0.01 per share, was 14,592,270 as of November 1, 2008. The number of shares outstanding of the registrant’s Class B common stock, par value $0.0001 per share, was 21,033,964 as of November 1, 2008.

DUFF & PHELPS CORPORATION

AND SUBSIDIARIES

TABLE OF CONTENTS

Part I.	Financial Information
	Item 1.	Financial Statements	1
		Condensed Consolidated Statements of Operations	1
		Condensed Consolidated Balance Sheets	2
		Condensed Consolidated Statements of Cash Flows	3
		Condensed Consolidated Statement of Changes in Stockholders’ Equity and Comprehensive Income	4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	42
	Item 4.	Controls and Procedures.	42
Part II.	Other Information
	Item 1.	Legal Proceedings	42
	Item 1A.	Risk Factors	42
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 3.	Defaults Upon Senior Securities	43
	Item 4.	Submission of Matters to a Vote of Security Holders	43
	Item 5.	Other Information	43
	Item 6.	Exhibits	43
	Signatures		44

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2008			2007			2008			2007
Revenues	$	96,314		$	83,887		$	287,268		$	248,450
Reimbursable expenses		2,781			3,695			7,946			9,753
Total revenues		99,095			87,582			295,214			258,203
Direct client service costs
Compensation and benefits (including $7,551 and
$1,030 of equity-based compensation for the
three months ended September 30, 2008 and 2007,
respectively, and $17,181 and $23,071 for the nine months
ended September 30, 2008 and 2007, respectively)		57,280			46,303			166,276			156,353
Other direct client service costs		2,410			1,194			5,828			2,007
Acquisition retention expenses		206			696			782			2,026
Reimbursable expenses		2,813			3,740			7,926			9,825
Subtotal		62,709			51,933			180,812			170,211
Operating expenses
Selling, general and administrative expenses (including
$2,845 and $406 of equity-based compensation for
the three months ended September 30, 2008 and 2007,
respectively, and $8,164 and $8,204 for the nine months
ended September 30, 2008 and 2007, respectively)		29,538			20,720			83,301			69,882
Depreciation and amortization		2,446			2,284			6,903			6,683
Subtotal		31,984			23,004			90,204			76,565
Operating income		4,402			12,645			24,198			11,427
Other expense/(income)
Interest income		(90	)		(458	)		(654	)		(1,287	)
Interest expense		847			1,871			2,569			5,442
Other expense/(income)		(21	)		408			(92	)		215
Subtotal		736			1,821			1,823			4,370
Income before non-controlling interest and income taxes		3,666			10,824			22,375			7,057
Non-controlling interest		2,165			-			13,204			-
Provision for income taxes		1,348			88			6,343			1,034
Net income	$	153		$	10,736		$	2,828		$	6,023
Weighted average shares of Class A common stock outstanding
Basic		13,299						13,166
Diluted		13,673						13,397
Net income per share of Class A common stock
Basic	$	0.01					$	0.21
Diluted	$	0.01					$	0.21

See accompanying notes to the condensed consolidated financial statements.

1

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	September 30,			December 31,
	2008			2007
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	57,104		$	90,243
Accounts receivable, net		59,402			45,572
Unbilled services		25,581			23,075
Prepaid expenses and other current assets		6,299			6,275
Net deferred income taxes, current		4,487			9,551
Total current assets		152,873			174,716
Property and equipment, net		27,200			23,686
Goodwill		115,700			107,562
Intangible assets, net		33,363			28,233
Other assets		11,797			5,070
Net deferred income taxes, non-current		61,735			65,246
Total non-current assets		249,795			229,797
Total assets	$	402,668		$	404,513
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	6,711		$	2,899
Accrued expenses		3,161			12,238
Accrued compensation and benefits		43,693			72,713
Deferred revenue		5,208			7,931
Equity-based compensation liability, current		571			498
Current portion of long-term debt		794			794
Current portion due to non-controlling unitholders		783			3,114
Total current liabilities		60,921			100,187
Long-term debt, less current portion		41,409			42,387
Other long-term liabilities		16,836			15,260
Due to non-controlling unitholders, less current portion		64,436			65,196
Total non-current liabilities		122,681			122,843
Total liabilities		183,602			223,030
Commitments and contingencies (Note 11)
Non-controlling interest		133,247			111,979
Preferred stock (50,000 shares authorized; zero issued and outstanding)		-			-
Class A common stock, par value $0.01 per share (100,000 shares authorized; 14,597 and 13,125 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively)		146			131
Class B common stock, par value $0.0001 per share (50,000 shares authorized; 21,044 and 21,090 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively)		2			2
Additional paid-in capital		89,664			75,375
Accumulated other comprehensive income/(loss)		(469	)		348
Accumulated deficit		(3,524	)		(6,352	)
Total stockholders' equity		85,819			69,504
Total liabilities and stockholders' equity	$	402,668		$	404,513

See accompanying notes to the condensed consolidated financial statements.

2

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Successor			Predecessor
	Nine Months Ended
	September 30,			September 30,
	2008			2007
Cash flows from operating activities:
Net income	$	2,828		$	6,023
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization		6,903			6,683
Equity-based compensation		25,345			31,275
Bad debt expense		1,251			266
Non-controlling interest		13,204			-
Net deferred income taxes		8,575			385
Other		1,163			754
Changes in assets and liabilities providing/(using) cash:
Accounts receivable		(12,168	)		(10,209	)
Unbilled services		(2,216	)		(3,341	)
Prepaid expenses and other current assets		63			(1,850	)
Other assets		1,542			(8,278	)
Accounts payable and accrued expenses		(2,070	)		15,749
Accrued compensation and benefits		(29,998	)		1,967
Deferred revenues		(3,004	)		(164	)
Other liabilities		690			4,985
Due to non-controlling unitholders		(3,092	)		-
Due from affiliates		-			(20,063	)
Net cash provided by operating activities		9,016			24,182
Cash flows from investing activities:
Purchase of property and equipment		(8,093	)		(9,636	)
Purchase of investments for deferred compensation plan		(9,991	)		-
Proceeds from sale of investments in deferred compensation plan		1,692			-
Business acquisitions, net of cash acquired		(16,427	)		513
Net cash used in investing activities		(32,819	)		(9,123	)
Cash flows from financing activities:
Repurchase of equity units		-			(343	)
Repayments of debt		(595	)		(595	)
Principal payments under capital lease obligation		-			(187	)
Distributions to non-controlling unitholders		(7,888	)		(28,374	)
Net cash used in financing activities		(8,483	)		(29,499	)
Effect of exchange rate on cash and cash equivalents		(853	)		862
Net decrease in cash and cash equivalents		(33,139	)		(13,578	)
Cash and cash equivalents at beginning of period		90,243			59,132
Cash and cash equivalents at end of period	$	57,104		$	45,554

See accompanying notes to the condensed consolidated financial statements.

3

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

														Accumulated			Retained
														Other			Earnings/			Total
	Common Stock - Class A					Common Stock - Class B					Additional			Comprehensive			(Accumulated			Stockholders'
SUCCESSOR	Shares			Dollars		Shares			Dollars		Paid-in-Capital			Income/(Loss)			Deficit)			Equity
Balance as of December 31, 2007		13,125		$	131		21,090		$	2	$	75,375		$	348		$	(6,352	)	$	69,504
Net income for the period
January 1 to September 30, 2008		-			-		-			-		-			-			2,828			2,828
Currency translation adjustment		-			-		-			-		-			(853	)		-			(853	)
Amortization of post-retirement benefits		-			-		-			-		-			36			-			36
Total comprehensive income		-			-		-			-		-			(817	)		2,828			2,011
Issuance of common stock		322			3		-			-		5,440			-			-			5,443
Issuance of restricted stock awards		1,156			12		-			-		-			-			-			12
Exercise of stock options		7			-		-			-		114			-			-			114
Forfeitures		(13	)		-		(46	)		-		-			-			-			-
Equity-based compensation		-			-		-			-		25,274			-			-			25,274
Income tax benefit on equity-based compensation		-			-		-			-		175			-			-			175
Distributions to non-controlling unitholders		-			-		-			-		(7,888	)		-			-			(7,888	)
Allocation of non-controlling interest		-			-		-			-		(8,064	)		-			-			(8,064	)
Other		-			-		-			-		(762	)		-			-			(762	)
Balance as of September 30, 2008		14,597		$	146		21,044		$	2	$	89,664		$	(469	)	$	(3,524	)	$	85,819

See accompanying notes to the condensed consolidated financial statements.

4

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 1  - DESCRIPTION OF BUSINESS

Duff & Phelps Corporation (the “Company”) is a leading provider of independent financial advisory and investment banking services. Its mission is to help its clients protect, maximize and recover value. The foundation of its services is its ability to provide independent advice on issues involving highly technical and complex assessments of value. The Company principally supports client needs in financial and tax valuation (especially in the context of business combinations and other corporate transactions), mergers and acquisitions (“M&A”), restructuring and litigation and disputes. The Company believes the Duff & Phelps brand is associated with a high level of professional service and integrity, knowledge leadership and independent, trusted advice. The Company serves a global client base through offices in 24 cities, comprised of offices in 18 U.S. cities, including New York, Chicago, Dallas and Los Angeles, and six international offices located in Amsterdam, London, Munich, Paris, Shanghai and Tokyo.

Note 2  - BASIS OF PRESENTATION

The Company is a Delaware corporation and was incorporated on April 23, 2007 as a holding company for the purpose of facilitating an initial public offering (“IPO”) of common equity and to become the sole managing member of Duff & Phelps Acquisitions, LLC and subsidiaries (“D&P Acquisitions”). The Company had not engaged in any business or other activities except in connection with its formation and the IPO. On September 27, 2007, a registration statement relating to shares of Class A common stock of the Company was declared effective and the price of such shares was set at $16.00 per share. The IPO closed on October 3, 2007.

Immediately prior to the closing of the IPO, D&P Acquisitions effectuated certain transactions intended to simplify the capital structure of D&P Acquisitions (“Recapitalization Transactions”). Prior to the Recapitalization Transactions, D&P Acquisitions' capital structure consisted of seven different classes of membership interests (Classes A through G, collectively “Legacy Units”), each of which had different capital accounts and amounts of aggregate distributions above which its holders share in future distributions. The net effect of the Recapitalization Transactions was to convert the multiple-class structure into a single new class of units called “New Class A Units.”

References to the “Company” and “Successor” refer to the period subsequent to the IPO and related transactions of the Company and its consolidated subsidiaries, as fully described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 26, 2008. References to “Predecessor” refer to the period prior to the IPO and related transactions of D&P Acquisitions.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with the rules and regulations of the SEC for interim financial reporting, and include all adjustments which are, in the opinion of management, necessary for a fair presentation. The financial statements require the use of management estimates and include the accounts of the Company, its controlled subsidiaries and other entities consolidated as required by GAAP. References to the “Company,” “Successor,” “its” and “itself,” refer to Duff & Phelps Corporation and its subsidiaries, unless the context requires otherwise. 

The balance sheet at December 31, 2007 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, all adjustments necessary for a fair presentation are reflected in the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation.

5

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

There have been no significant changes in new accounting pronouncements or in our critical accounting policies and estimates from those that were disclosed in our Annual Report on Form 10-K for the year ended December 31, 2007. The Company believes that the disclosures herein are adequate so that the information presented is not misleading; however, it is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2007. The financial data for the interim periods may not necessarily be indicative of results to be expected for the year.

Note 3 - ACQUISITIONS

The following table summarizes the Company’s recent acquisitions:

Effective
Date	Acquisition	Description
8/8/08	Financial and IP Analysis, Inc.	Financial consulting firm that specializes in intellectual
	(d/b/a The Lumin Expert Group)	property dispute support and expert testimony.
7/31/08	Kane Reece Associates, Inc.	Valuation, management and technical consulting firm with a
		focus on the communications, entertainment and media industries.
7/15/08	World Tax Service US, LLC	Tax advisory firm focused on the delivery of sophisticated
		international and domestic tax services.
4/11/08	Dubinsky & Company, PC	Specialty consulting primarily focused on litigation support
		and forensic services.
10/31/07	Rash & Associates, LP	Nationwide provider of property tax management services.

The purchase price of each of these acquisitions is immaterial to the Company’s consolidated financial statements, both individually and in the aggregate. Each of these acquisitions operates as part of the Financial Advisory segment.

Chanin Capital Partners LLC

On October 31, 2006, the D&P Acquisitions acquired the limited liability company units of Chanin Capital Partners LLC (“Chanin”), an investment bank providing restructuring advisory, merger & acquisition and corporate finance services. The purchase price totaled $21,187 and consisted of cash, the issuance of Legacy Units of D&P Acquisitions, earn-out payments of $3,463 paid in 2008 and professional fees. The sellers are eligible for two remaining earn-out payments equal up to $5,000 for each annual period ending on October 31, 2008 and 2009. Further information regarding this acquisition is detailed in our Annual Report on Form 10-K for the year ended December 31, 2007.

6

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 4  - EARNINGS PER SHARE

Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted earnings per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The treasury stock method is used to determine the dilutive potential of stock options, restricted stock awards, restricted stock units, and D&P Acquisitions’ units and Class B common stock that are exchangeable into D&P Class A common stock. The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations:

	Three Months		Nine Months
	Ended		Ended
	September 30,		September 30,
	2008		2008
Basic and diluted net income per share:
Numerator
Net income available to holders of Class A common stock	$	153	$	2,828
Denominator for basic net income per share of Class A common stock
Weighted average shares of Class A common stock		13,299		13,166
Denominator for diluted net income per share of Class A common stock
Weighted average shares of Class A common stock		13,299		13,166
Add dilutive effect of the following:
Restricted stock awards and units		374		231
Assumed conversion of New Class A Units for Class A common stock(a)		-		-
Dilutive weighted average shares of Class A common stock		13,673		13,397
Basic income per share of Class A common stock	$	0.01	$	0.21
Diluted income per share of Class A common stock	$	0.01	$	0.21
______________________________
(a) The following shares were anti-dilutive and excluded from this calculation:
Weighted average New Class A Units outstanding		20,684		20,693
Weighted average IPO Options outstanding		2,032		2,048

Anti-dilution is the result of (i) the allocation of income or loss associated with the exchange of New Class A Units for Class A common stock and (ii) options listed above exceeding those outstanding under the treasury stock method.

EPS information is not applicable for reporting periods prior to the Successor period beginning on October 4, 2007. In addition, the shares of Class B common stock do not share in the earnings of the Company and are therefore not participating securities. Accordingly, basic and diluted earnings per share of Class B common stock have not been presented.

7

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 5 -NON-CONTROLLING INTEREST

Although the Company has a majority voting interest (100%) in and controls the management of D&P Acquisitions, it holds a minority ownership interest in D&P Acquisitions totaling 41%. As a result, the Company consolidates the financial results of D&P Acquisitions and records non-controlling interest for the ownership interest in D&P Acquisitions held by the existing unitholders to the extent the book value of their interest in D&P Acquisitions is greater than zero.

Non-controlling interest on the statement of operations represents the portion of earnings or loss attributable to the ownership interest in D&P Acquisitions held by the non-controlling unitholders. Non-controlling interest on the balance sheet represents the portion of net assets of D&P Acquisitions attributable to the non-controlling unitholders based on the portion of total New Class A Units owned by such unitholders. The ownership of the New Class A Units is summarized as follows:

	Duff &			Non-
	Phelps			Controlling
	Corporation			Unitholders			Total
As of December 31, 2007		13,125			21,090			34,215
Issuance of Class A common stock		329			-			329
Issuance of restricted stock awards		1,156			-			1,156
Forfeitures		(13	)		(46	)		(59	)
As of September 30, 2008		14,597			21,044			35,641
Percent of total New Class A Units		41.0	%		59.0	%		100	%

The change in non-controlling interest is calculated as follows:

As of December 31, 2007	$	111,979
Allocation of non-controlling interest associated with:
D&P Acquisitions' tax distribution		(4,728	)
Equity-based compensation		14,856
Change in ownership interests		(5,098	)
Acquisitions		3,219
Other items		(185	)
Subtotal		8,064
Allocation of income of D&P Acquisitions		13,204
As of September 30, 2008	$	133,247

8

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 6  - EQUITY-BASED COMPENSATION

For a detailed description of past equity-based compensation activity, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. Except for adjustments to our estimated forfeiture rates based on the most recent available information, there have been no significant changes in the Company’s equity-based compensation accounting policies and assumptions from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Equity-based compensation with respect to (a) grants of Legacy Units, (b) options to purchase shares of the Company’s Class A common stock granted in connection with the IPO (“IPO Options”) and (c) restricted stock awards and units issued in connection with the Company’s ongoing long-term compensation program (“Ongoing RSAs”) is detailed in the following table:

	Successor						Predecessor
	Three Months Ended						Three Months Ended
	September 30, 2008						September 30, 2007
	Client						Client
	Service		SG&A		Total		Service		SG&A		Total
Legacy Units	$	5,237	$	1,548	$	6,785	$	1,030	$	406	$	1,436
IPO Options		1,348		572		1,920		-		-		-
Ongoing RSAs		966		725		1,691		-		-		-
Total	$	7,551	$	2,845	$	10,396	$	1,030	$	406	$	1,436

	Successor						Predecessor
	Nine Months Ended						Nine Months Ended
	September 30, 2008						September 30, 2007
	Client						Client
	Service		SG&A		Total		Service		SG&A		Total
Legacy Units	$	11,350	$	4,273	$	15,623	$	23,071	$	8,204	$	31,275
IPO Options		3,740		1,657		5,397		-		-		-
Ongoing RSAs		2,091		2,234		4,325		-		-		-
Total	$	17,181	$	8,164	$	25,345	$	23,071	$	8,204	$	31,275

Restricted stock units are granted as a form of incentive compensation and are accounted for similarly to restricted stock awards.  Corresponding expense is recognized based on the fair market value on the date of grant.  Restricted stock units are generally contingent on continued employment and are converted to common stock when restrictions on transfer lapse after three years.

During the nine months ended September 30, 2008, the Company issued 1,249 Ongoing RSAs related to annual bonus incentive compensation, performance incentive initiatives and recruiting efforts. Expense is recognized based on the fair market value on the date of grant over the service period. The restrictions on transfer and forfeiture provisions are eliminated after three years for all awards granted to non-executives. The restrictions on transfer and forfeiture provisions are eliminated annually over three years based on ratable vesting for grants made to executives and four years for non-employee members of our Board of Directors. Of the 1,249 Ongoing RSAs granted, 233 awards were granted to executives on March 19, 2008, and 18 were granted to non-employee members of our Board of Directors on May 15, 2008.

9

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

The following table summarizes activity for IPO Options during the nine months ended September 30, 2008:

	IPO
	Options
Balance as of January 1, 2008		2,066
Granted		-
Exercised		(7	)
Forfeited		(36	)
Balance as of September 30, 2008		2,023
Vested		500
Unvested		1,523
Fair value on grant date	$	7.33
Weighted average exercise price	$	16.00
Weighted average remaining contractual term (years)		9.0
Aggregate intrinsic value	$	10,174
Options expected to vest		1,846
Intrinsic value of options expected to vest	$	9,284

The following table summarizes activity for Ongoing RSAs during the nine months ended September 30, 2008:

	Restricted			Weighted		Restricted			Weighted
	Stock			Average		Stock			Average
	Awards			Fair Value		Units			Fair Value
Balance as of January 1, 2008		61		$	19.34		-		$	-
Granted		1,156			13.83		93			13.92
Forfeited		(13	)		11.98		(1	)		11.98
Balance as of September 30, 2008		1,204		$	14.13		92		$	13.94
Vested		-					-
Unvested		1,204					92

The following table summarizes activity for New Class A Units attributable to equity-based compensation during the nine months ended September 30, 2008:

	New
	Class A Units
	Attributable to
	Equity-Based
	Compensation
Balance as of January 1, 2008		6,746
Granted		-
Forfeited		(46	)
Balance as of September 30, 2008		6,700
Vested		3,091
Unvested		3,609

As of September 30, 2008, the total unamortized compensation cost related to all non-vested awards was $32,357. The weighted-average period over which this is expected to be recognized is 1.01 years. A tax benefit of $1,121 has been recognized for certain Legacy Units and IPO Options as a result of an increase in deferred tax assets during the nine months ended September 30, 2008.

10

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 7 -FAIR VALUE MEASUREMENTS

Effective January 1, 2008, the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”) as they relate to our financial assets and liabilities.

SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States and enhances disclosures about fair value measurements. SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The adoption of SFAS 157 did not change our fair value measurements.

The following table presents assets and liabilities measured at fair value on a recurring basis at September 30, 2008:

	Quoted Prices
	in Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
Cash surrender value related to deferred compensation plan(1)	$	-	$	8,837	$	-	$	8,837
Total assets	$	-	$	8,837	$	-	$	8,837
Interest rate swap(2)	$	-	$	492	$	-	$	492
Total liabilities	$	-	$	492	$	-	$	492

⁽¹⁾The fair value of the investments in rabbi trust relates to the Company’s deferred compensation plan and was based on quoted prices for similar assets in active markets. The Company’s investments in rabbi trust are further discussed in Note 10.

⁽²⁾The fair value of the interest rate swap was based on quoted prices for similar assets or liabilities in active markets. The Company’s interest rate swap is further discussed in Note 8.

The Company does not have any material financial assets in a market that is not active.

The Company is currently evaluating the potential impact of adopting the remaining provisions of SFAS 157 on its consolidated financial position and results of operations as they relate to its nonfinancial assets and liabilities.

11

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 8 -LONG-TERM DEBT

The Company’s long-term obligations are summarized in the following table:

	September 30,			December 31,
	2008			2007
Outstanding balance of credit facility	$	42,962		$	43,557
Less: current amounts due in following year		(794	)		(794	)
Long-term portion		42,168			42,763
Debt discount and interest rate swap		(759	)		(376	)
Long-term debt, less current portion	$	41,409		$	42,387

The Company has a seven-year credit facility, which expires October 1, 2012. As of June 30, 2008, the facility consisted of a $65,000 seven-year term loan, a $15,000 delayed draw term loan and a $20,000 six-year revolver loan. On July 30, 2008, the Company entered into an Amended and Restated Credit Agreement pursuant to which changes were made to certain terms of its credit facility, including, among other things, (i) replacing an interest coverage ratio and maximum capital expenditure covenant with a fixed charge coverage ratio; (ii) allowing for a $75,000 incremental term loan facility, which is currently uncommitted by the lenders and would require additional approval at the time of request; and (iii) providing additional capacity for permitted acquisitions and investments.

At September 30, 2008, $42,962 was outstanding under the term loan facility (before debt discount and interest rate swap) and no amount was outstanding under the revolving credit facility. Borrowings under the credit facility bear interest at a rate based on LIBOR plus a margin of 2.75%. The Company incurs an annual commitment fee of 1% on the unused portion of the term loan facility and 0.5% of the unused portion of the revolving credit facility.

Pursuant to the terms of the credit facility, letters of credit in the amount of $4,108 have been issued on the account of the Company as of September 30, 2008, primarily in connection with real estate leases. This amount reduces availability under the revolver.

As of September 30, 2008, the credit facility included customary events of default and covenants for maximum net debt to EBITDA, minimum interest coverage ratio and maximum capital expenditures. Based on a review conducted by the Company, management believes that the Company was in compliance with all of its covenants as of September 30, 2008.

The credit facility requires a mandatory prepayment in an amount equal to half of the Excess Cash Flow (as defined in the credit agreement) for each year. In the event that the consolidated senior leverage ratio on the last day of such fiscal year is less than 1.50 to 1.00, there will be no mandatory prepayment. Excess Cash Flow was negative for the years 2007 and 2006. As of September 30, 2008, the Company has not had to make any mandatory prepayments.

12

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

The Company has a $24,200 notional amount interest rate swap that effectively converted floating rate LIBOR payments to fixed payments at 4.94%. The swap agreement terminates September 30, 2010. The Company elected not to apply hedge accounting to this instrument. The estimated fair value of the interest rate swap is based on quoted market prices. The following table summarizes the estimated fair value and the gain or loss recorded for the change in fair value of the interest rate swap. The gain or loss is recorded in “Other expense” and has a non-cash impact on the Company’s Consolidated Statement of Operations:

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2008			2007			2008			2007
Gain/(loss) resulting from change in fair value of interest rate swap	$	125		$	(447	)	$	71		$	(299	)
Estimated fair value – asset/(liability)	$	(492	)	$	(170	)	$	(492	)	$	(170	)

13

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 9 - INCOME TAXES

The Company’s effective tax rate is summarized in the following table:

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2008			2007			2008			2007
Income tax provision	$	1,348		$	88		$	6,343		$	1,034
Effective income tax rate		36.8	%		0.8	%		28.3	%		14.7	%

The tax provision for the current year period is based on our estimate of the Company’s annualized income tax rate. The effective tax rate is calculated by dividing the provision for income taxes by net income before non-controlling interest and income taxes.

The effective income tax rates for the periods presented were significantly reduced primarily due to the fact that the Company’s subsidiaries operate as a series of limited liability companies and other flow-through entities which are not subject to federal income tax. Accordingly, a portion of the Company's earnings are not subject to corporate level taxes. This favorable impact is partially offset by the impact of certain permanent items, primarily attributable to certain compensation related expenses that are not deductible for tax purposes.

Prior to October 4, 2007, the Company had not been subject to U.S. federal income taxes as the Predecessor entity is an LLC, but had been subject to the New York City Unincorporated Business Tax and certain other state and local taxes, including certain non-income tax fees in other jurisdictions where the Company had registered offices and conducted business. As a result of the IPO, the operating business entities of the Company were restructured and a portion of the Company’s income will be subject to U.S. federal, state, local and foreign income taxes and taxed at the prevailing corporate tax rates.

The Company adopted the provisions of FIN 48 on January 1, 2007. The adoption did not have a material impact on the Company’s consolidated financial statements. The Company’s unrecognized tax benefit is not material. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties as a component of selling, general and administrative expenses.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. Duff & Phelps, LLC is open for federal income tax purposes from 2004 forward and D&P Acquisitions is open from 2005 forward. These entities are not subject to federal income taxes as they are flow-through entities. D&P Corporation is open for federal income tax purposes beginning in 2007.

With respect to state and local jurisdictions and countries outside of the United States, the Company and its subsidiaries are typically subject to examination for four to five years after the income tax returns have been filed. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that might be incurred due to state, local or foreign audits.

14

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 10 -DEFERRED COMPENSATION PLAN

The Company maintains the Duff & Phelps Deferred Compensation Plan (“Deferred Compensation Plan”) for key employees. This plan is detailed further in our Annual Report on Form 10-K for the year ended December 31, 2007.

Under the terms of the plan, the Company established a “rabbi trust” as a vehicle for accumulating assets to pay benefits under the plan. Payments under the plan may be paid from the general assets of the Company or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the participant or beneficiary. The rabbi trust invests in an investment vehicle structured as a corporate owned life insurance policy with a cash surrender value that mirrors the payable to the participants of the plan and tracks the value of the plan assets. The policy is redeemable on demand in an amount equal to the cash surrender value. The following table summarizes the fair market value of the rabbi trust and the corresponding liability owed to participants:

	September 30,		December 31,
	2008		2007
Fair market value of investments in rabbi trust	$	8,837	$	1,789
Payable to participants of the plan		9,289		3,782

The fair market value of the investments in the rabbi trust is included in “Cash and cash equivalents” and “Other assets” on the consolidated balance sheet.

Note 11 - COMMITMENTS AND CONTINGENCIES

The Company is involved in various claims or disputes arising in the normal course of business. Management does not believe that these matters would have a material adverse effect on the Company's financial position, results of operations or liquidity.

15

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note 12 -SEGMENT INFORMATION

The Company provides services through two segments: Financial Advisory and Investment Banking. The Financial Advisory segment provides valuation advisory services, corporate finance consulting, dispute and legal management consulting and specialty tax advisory services; the revenue model associated with this segment is generally based on time and materials. The Investment Banking segment provides merger and acquisition advisory services, transaction opinions and financial restructuring advisory services; the revenue model associated with this segment is generally based on fixed retainers, fixed fees and contingent fees upon the successful completion of a transaction.

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2008			2007			2008			2007
Financial Advisory
Revenues (excluding reimbursables)	$	80,233		$	63,362		$	234,721		$	187,795
Segment operating income		11,797			10,083			39,521			30,783
Segment operating income margin		14.7	%		15.9	%		16.8	%		16.4	%
Investment Banking
Revenues (excluding reimbursables)	$	16,081		$	20,525		$	52,547		$	60,655
Segment operating income		3,994			7,023			13,361			20,700
Segment operating income margin		24.8	%		34.2	%		25.4	%		34.1	%
Total
Revenues (excluding reimbursables)	$	96,314		$	83,887		$	287,268		$	248,450
Segment operating income	$	15,791		$	17,106		$	52,882		$	51,483
Net client reimbursable expenses		(32	)		(45	)		20			(72	)
Equity-based compensation
from Legacy Units and IPO Options		(8,705	)		(1,436	)		(21,019	)		(31,275	)
Depreciation and amortization		(2,446	)		(2,284	)		(6,903	)		(6,683	)
Acquisition retention expense		(206	)		(696	)		(782	)		(2,026	)
Operating income		4,402			12,645			24,198			11,427
Other income/(expense), net		(736	)		(1,821	)		(1,823	)		(4,370	)
Non-controlling interest		(2,165	)		-			(13,204	)		-
Provision for income taxes		(1,348	)		(88	)		(6,343	)		(1,034	)
Net income	$	153		$	10,736		$	2,828		$	6,023

Revenues excluding reimbursable expenses attributable to geographic area are summarized as follows:

		Successor		Predecessor		Successor		Predecessor
		Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
		2008		2007		2008		2007
United States		$	86,783	$	78,692	$	258,464	$	234,454
Europe	��		7,663		4,398		24,838		12,799
Asia			1,868		797		3,966		1,197
Total revenues		$	96,314	$	83,887	$	287,268	$	248,450

There were no intersegment revenues during the periods presented. The Company does not maintain separate balance sheet information by segment.

16

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share amounts)

(Unaudited)

Note13 -RELATED PARTY TRANSACTIONS

During 2007, the Company paid advisory and management fees to Vestar Capital Partners and Duff & Phelps Holdings, LLC, unitholders in D&P Acquisitions during such period. The total of such fees is included in selling, general and administrative expenses and is summarized as follows:

	Successor		Predecessor		Successor		Predecessor
	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2008		2007		2008		2007
Related party advisory fees	$	-	$	213	$	-	$	638

The fees were discontinued in October 2007 upon completion of the IPO and related transactions.

Shinsei Bank, Ltd., a shareholder of the Company, engaged the Company to provide certain consulting services. As a result of services provided, the Company recorded $775 and $1,675 of revenues resulting from the engagement during the three and nine months ended September 30, 2008, respectively.

An affiliate of Lovell Minnick Partners, a shareholder of the Company, engaged the Company to provide certain consulting services. As a result of services provided, the Company recorded $4 and $512 of revenues resulting from the engagement during the three and nine months ended September 30, 2008, respectively.

17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Disclosure Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of 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 the historical performance of us and our subsidiaries 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 Form 10-K as filed with the SEC on March 26, 2008 and in subsequent filings of our Form 10-Q. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this filing with the SEC. 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.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are deemed to be necessary. Significant estimates made in the accompanying consolidated financial statements include, but are not limited to the following:

· proportional performance under client engagements for the purpose of determining revenue recognition,

· accounts receivable and unbilled services valuation,

· incentive compensation,

· useful lives of intangible assets,

· the carrying value of goodwill and intangible assets,

· allowances for doubtful accounts,

· gains and losses on engagements,

· amounts due to non-controlling unitholders,

· reserves for estimated tax liabilities, and

· certain estimates and assumptions used in the calculation of the fair value of equity compensation issued to employees.

During the nine months ended September 30, 2008, there were no significant changes in our critical accounting policies and estimates. A summary of these policies and estimates may be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC on March 26, 2008.

18

Results of Operations

Duff & Phelps Corporation (the “Company”) is a Delaware corporation and was incorporated on April 23, 2007 as a holding company for the purpose of facilitating an initial public offering (“IPO”) of common equity and to become the sole managing member of Duff & Phelps Acquisitions, LLC and subsidiaries (“D&P Acquisitions”). The Company has not engaged in any business or other activities except in connection with its formation and the IPO. On September 27, 2007, a registration statement relating to shares of Class A common stock of the Company was declared effective and the price of such shares was set at $16.00 per share. The IPO closed on October 3, 2007.

References to the “Company” and “Successor” refer to the period subsequent to the IPO and related transactions of the Company and its consolidated subsidiaries, as fully described in the Company’s 10-K filed with the Securities and Exchange Commission (“SEC”) on March 26, 2008. References to “Predecessor” refer to the period prior to the IPO and related transactions of D&P Acquisitions. The IPO and related transactions are detailed in our Annual Report on Form 10-K for the year ended December 31, 2007.

Equity-based compensation discussed herein includes (a) grants of Legacy Units, (b) options to purchase shares of the Company’s Class A common stock granted in connection with the IPO (“IPO Options”) and (c) restricted stock awards and units issued in connection with the Company’s ongoing long-term compensation program (“Ongoing RSAs”).

Amounts are reported in thousands, except for per share amounts, headcount or where the context requires otherwise.

Overview

The Company is a leading provider of independent financial advisory and investment banking services. Our mission is to help our clients protect, maximize and recover value. The foundation of our services is our ability to provide independent advice on issues involving highly technical and complex assessments of value, which typically support client needs in financial and tax valuation (especially in the context of business combinations and other corporate transactions), M&A, restructuring and litigation and disputes. We believe we are one of the leading independent valuation services firms in the world.

We provide services through two segments: Financial Advisory and Investment Banking.

  

19

Three months ended September 30, 2008 versus three months ended September 30, 2007

The results of operations are summarized as follows:

Results of Operations

(Dollars in thousands)

	Successor			Predecessor
	Three Months Ended
	September 30,			September 30,			Unit			Percent
	2008			2007			Change			Change
Revenues	$	96,314		$	83,887		$	12,427			14.8	%
Reimbursable expenses		2,781			3,695			(914	)		(24.7	)%
Total revenues		99,095			87,582			11,513			13.1	%
Direct client service costs
Compensation and benefits(1)		57,280			46,303			10,977			23.7	%
Other direct client service costs		2,410			1,194			1,216			101.8	%
Acquisition retention expenses		206			696			(490	)		(70.4	)%
Reimbursable expenses		2,813			3,740			(927	)		(24.8	)%
		62,709			51,933			10,776			20.7	%
Operating expenses
Selling, general and administrative(2)		29,538			20,720			8,818			42.6	%
Depreciation and amortization		2,446			2,284			162			7.1	%
		31,984			23,004			8,980			39.0	%
Operating income		4,402			12,645			(8,243	)		(65.2	)%
Other expense/(income)
Interest income		(90	)		(458	)		368			(80.3	)%
Interest expense		847			1,871			(1,024	)		(54.7	)%
Other expense/(income)		(21	)		408			(429	)		(105.1	)%
		736			1,821			(1,085	)		(59.6	)%
Income before non-controlling interest
and income taxes		3,666			10,824			(7,158	)		(66.1	)%
Non-controlling interest		2,165			-			2,165			-
Provision for income taxes		1,348			88			1,260			1431.8	%
Net income	$	153		$	10,736		$	(10,583	)		(98.6	)%
Other financial and operating data
Adjusted EBITDA(3)	$	15,759		$	17,061		$	(1,302	)		(7.6	)%
End of period managing directors		168			126			42			33.3	%
End of period client service professionals		993			763			230			30.1	%

⁽¹⁾ Compensation and benefits include $7,551 and $1,030 of equity-based compensation expense for the three months ended September 30, 2008 and 2007, respectively.

⁽²⁾ Selling, general and administrative expenses include $2,845 and $406 of equity-based compensation expense for the three months ended September 30, 2008 and 2007, respectively.

⁽³⁾ Adjusted EBITDA is a non-GAAP financial measure and is calculated as follows:

20

____________

⁽³⁾ Continued

Reconciliation of Adjusted EBITDA

(Dollars in thousands)

	Successor		Predecessor
	Three Months Ended
	September 30,		September 30,
	2008		2007
Net income	$	153	$	10,736
Provision for income taxes		1,348		88
Non-controlling interest		2,165		-
Other expense, net		736		1,821
Depreciation and amortization		2,446		2,284
Acquisition retention expenses		206		696
Equity-based compensation associated with
with Legacy Units and IPO Options		8,705		1,436
Adjusted EBITDA	$	15,759	$	17,061

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 for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred recently 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), (b) equity-based compensation associated with the Legacy Units (a significant portion of which is due to certain one-time grants associated with recent acquisitions) and the IPO Options, (c) 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 (d) non-controlling interest.

Given our recent level of acquisition activity and related capital investments and one time equity grants associated with acquisitions (which we do not expect to incur at the same levels in the future) 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 substantially 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 senior secured 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, consists of net income or loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation associated with Legacy Units of D&P Acquisitions, and IPO Options included in compensation and benefits, (g) equity-based compensation associated with Legacy Units of D&P Acquisitions and IPO Options included in selling, general & administrative expenses, (h) merger & acquisition costs and (i) non-controlling interest.

21

____________

⁽³⁾ Continued

This non-GAAP financial measure is not prepared in accordance with, and should not be considered an alternative 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 differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.

22

Revenues

Revenues excluding reimbursable expenses increased $12,427, or 14.8%, to $96,314 for the three months ended September 30, 2008, compared to $83,887 for the three months ended September 30, 2007. Revenues attributable to the Financial Advisory segment increased by 26.6%, partially offset by a 21.7% decrease in revenues from our Investment Banking segment.

Growth attributable to our Financial Advisory segment was driven by demand from our Corporate Finance Consulting, Specialty Tax, and Dispute and Legal business units. The results from our Investment Banking segment were impacted by the general economic environment and dislocation in the credit markets which have led to a lower volume of M&A transactions. In addition, our Investment Banking results reflect the inherently episodic nature of this business as a result of the timing of success fees, particularly with respect to M&A Advisory and to a lesser extent Restructuring Advisory. Accordingly, we tend to look at overall annual performance, as opposed to quarters, to assess key trends in this business.

Our client service headcount increased to 993 client service professionals at September 30, 2008, compared to 763 client service professionals at September 30, 2007, as we added 152 professionals from targeted domestic and international hiring in both segments and 78 professionals from recent acquisitions. Our revenue per client service professional was $100 for three months ended September 30, 2008, compared to $114 for the three months ended September 30, 2007, impacted by a change in mix, particularly as a result of (i) continued hiring and development of our international business and (ii) the Rash acquisition whose business generates lower revenue per client service professional.

Direct Client Service Costs

Direct client service costs were $62,709 for the three months ended September 30, 2008, compared to $51,933 for the three months ended September 30, 2007. The following table adjusts direct client service costs for equity-based compensation associated with Legacy Units and IPO Options, acquisition retention expenses and reimbursable expenses. Adjusted direct client service costs as a percentage of revenues (excluding reimbursable expenses) slightly decreased between periods.

Direct Client Service Costs

(Dollars in thousands)

	Successor			Predecessor
	Three Months Ended
	September 30,			September 30,
	2008			2007
Revenues (excluding reimbursables)	$	96,314		$	83,887
Total direct client service costs	$	62,709		$	51,933
Less: equity-based compensation associated with
Legacy Units and IPO Options		(6,585	)		(1,030	)
Less: acquisition retention expenses		(206	)		(696	)
Less: reimbursable expenses		(2,813	)		(3,740	)
Direct client service costs, as adjusted	$	53,105		$	46,467
Direct client service costs, as adjusted, as a percentage of revenues		55.1	%		55.4	%

The increase in direct client service costs, as adjusted, primarily resulted from the addition of 230 client service professionals between periods. This increase includes 78 professionals hired in conjunction with our acquisitions and the direct hiring of 99 client service professionals domestically and 53 professionals internationally.

Equity-based compensation increased primarily as a result of (i) the application of the accelerated attribution of expense on Legacy Units which was not generally applicable in the prior year period, (ii) adjustments to our estimated forfeiture rates and (iii) expense for IPO Options and Ongoing RSAs which had not been granted in the prior year period. Expenses related to retention payments associated with the acquisition of Standard & Poor’s Corporate Value Consulting business in 2005 decreased as a result of the graded-tranche nature of the expense methodology.

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Operating Expenses

Operating expenses were $31,984 for the three months ended September 30, 2008, compared to $23,004 for the three months ended September 30, 2007. The following table adjusts operating expenses for depreciation and amortization and equity-based compensation associated with Legacy Units and IPO Options. Adjusted operating expenses as a percentage of revenues (excluding reimbursable expenses) increased between periods.

Operating Expenses

(Dollars in thousands)

	Successor			Predecessor
	Three Months Ended
	September 30,			September 30,
	2008			2007
Revenues (excluding reimbursables)	$	96,314		$	83,887
Total operating expenses	$	31,984		$	23,004
Less: equity-based compensation associated with
Legacy Units and IPO Options		(2,120	)		(406	)
Less: depreciation and amortization		(2,446	)		(2,284	)
Operating expenses, as adjusted	$	27,418		$	20,314
Operating expenses, as adjusted, as a percentage of revenues		28.5	%		24.2	%

The increase in operating expenses, as adjusted, was driven by our growth and investment in infrastructure to support the increase in client service professionals, the costs of being a publicly traded company, and additional resources allocated to professional development of new hires and existing management focused on sales, marketing and collaboration within the Company to take advantage of opportunities arising in part from the current economic environment.

Equity-based compensation increased primarily as a result of (i) the application of the accelerated attribution of expense on Legacy Units which was not generally applicable in the prior year period, (ii) adjustments to our estimated forfeiture rates and (iii) expense for IPO Options and Ongoing RSAs which had not been granted in the prior year period.

Operating Income

Operating income was $4,402 for the three months ended September 30, 2008, compared to $12,645 for the three months ended September 30, 2007. The decrease in operating income was primarily due to increases in equity-based compensation and operating expenses, partially offset by the increase in revenues.

Other Income and Expenses

Other income and expenses include interest income, interest expense and other expense. Interest expense decreased primarily as a result of our lower average debt balance during the three months ended September 30, 2008 when compared to the three months ended September 30, 2007.

Non-Controlling Interest

Non-controlling interest represents the portion of net income or loss before income taxes attributable to the majority ownership interest in D&P Acquisitions held by the existing unitholders to the extent the book value of their interest in D&P Acquisitions is greater than zero. This interest totaled 59.0% at September 30, 2008.

24

Provision for Income Taxes

The provision for income taxes was $1,348 or 36.8% of net income before non-controlling interest and income taxes for the three months ended September 30, 2008, compared to $88 or 0.8% of net income before non-controlling interest and income taxes for the three months ended September 30, 2007.

Prior to October 4, 2007, the Company had not been subject to U.S. federal income taxes as the Predecessor entity is an LLC, but had been subject to the New York City Unincorporated Business Tax and certain other state and local taxes, including certain non-income tax fees in other jurisdictions where the Company had registered offices and conducted business.

As a result of the IPO, the operating business entities of the Company were restructured and a portion of the Company’s income will be subject to U.S. federal, state, local and foreign income taxes and taxed at the prevailing corporate tax rates. The Company’s effective tax rate may change year to year based on recurring factors such as the geographical mix of earnings in tax jurisdictions that have a broad range of enacted tax rates, the timing and amount of foreign dividends, state and local taxes, the ratio of permanent items to pretax book income, and the implementation of various global tax strategies, as well as nonrecurring factors.

25

Segment Results –Three months ended September 30, 2008 versus Three months ended September 30, 2007

The following table sets forth selected segment operating results:

Results of Operations by Segment

(Dollars in thousands)

	Successor			Predecessor
	Three Months Ended
	September 30,			September 30,			Unit			Percent
	2008			2007			Change			Change
Financial Advisory
Revenues (excluding reimbursables)	$	80,233		$	63,362		$	16,871			26.6	%
Segment operating income		11,797			10,083			1,714			17.0	%
Segment operating income margin		14.7	%		15.9	%		(1.2	)%		N/A
Investment Banking
Revenues (excluding reimbursables)	$	16,081		$	20,525		$	(4,444	)		(21.7	)%
Segment operating income		3,994			7,023			(3,029	)		(43.1	)%
Segment operating income margin		24.8	%		34.2	%		(9.4	)%		N/A
Average Client Service Professionals
Financial Advisory		838			640			198			30.9	%
Investment Banking		125			99			26			26.3	%
Total		963			739			224			30.3	%
End of Period Client Service Professionals
Financial Advisory		864			663			201			30.3	%
Investment Banking		129			100			29			29.0	%
Total		993			763			230			30.1	%
Revenue per Client Service Professional
Financial Advisory	$	96		$	99		$	(3	)		(3.0	)%
Investment Banking		129			207			(78	)		(37.7	)%
Total professionals		100			114			(14	)		(12.3	)%
Financial Advisory Utilization Rate(1)		61.2	%		66.7	%		(5.5	)%		(8.2	)%
Financial Advisory Rate-per-Hour(2)	$	350		$	315		$	35			11.1	%
Total
Revenues (excluding reimbursables)	$	96,314		$	83,887
Segment operating income	$	15,791		$	17,106
Net client reimbursable expenses		(32	)		(45	)
Equity-based compensation from Legacy Units and IPO Options		(8,705	)		(1,436	)
Depreciation and amortization		(2,446	)		(2,284	)
Acquisition retention expense		(206	)		(696	)
Total operating income	$	4,402		$	12,645

⁽¹⁾ The utilization rate for any given period is calculated by dividing the number of hours Financial Advisory client service professionals (excluding approximately 60 client service professionals associated with Rash, the Company’s wholly owned subsidiary, and certain acquisitions prior to the transition to the Company’s financial system) worked on client assignments 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.

⁽²⁾ Average billing rate per hour is calculated by dividing applicable revenues for the period by the number of hours worked on client assignments during the same period. The average billing rate excludes approximately $2,799 of revenues associated with Rash in the three months ended September 30, 2008. The average billing rate also excludes certain hours from certain acquisitions prior to their transition to the Company’s financial system.

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Other Operating Data

(Dollars in thousands)

	Successor		Predecessor
	Three Months Ended
	September 30,		September 30,		Unit			Percent
	2008		2007		Change			Change
Revenues (excluding reimbursables)
Financial Advisory	$	80,233	$	63,362	$	16,871			26.6	%
Investment Banking		16,081		20,525		(4,444	)		(21.7	)%
Total	$	96,314	$	83,887	$	12,427			14.8	%
Average Number of Managing Directors
Financial Advisory		130		95		35			36.8	%
Investment Banking		33		30		3			10.0	%
Total		163		125		38			30.4	%
End of Period Managing Directors
Financial Advisory		134		95		39			41.1	%
Investment Banking		34		31		3			9.7	%
Total		168		126		42			33.3	%
Revenue per Managing Director
Financial Advisory	$	617	$	667	$	(50	)		(7.5	)%
Investment Banking		487		684		(197	)		(28.8	)%
Total Managing Directors		591		671		(80	)		(12.0	)%

Financial Advisory

Revenues

Revenues from the Financial Advisory segment increased $16,871, or 26.6%, to $80,233 for the three months ended September 30, 2008, compared to $63,362 for the three months ended September 30, 2007. Growth was driven by demand from the Corporate Finance Consulting, Specialty Tax, and Dispute and Legal business units, as summarized in the following table:

	Successor		Predecessor
	Three Months Ended
	September 30,		September 30,		Dollar		Percent
	2008		2007		Change		Change
Financial advisory revenues
Valuation advisory	$	43,777	$	43,751	$	26		0.1	%
Corporate finance consulting		15,211		8,692		6,519		75.0	%
Specialty tax		12,700		6,398		6,302		98.5	%
Dispute and legal management consulting		8,545		4,521		4,024		89.0	%
	$	80,233	$	63,362	$	16,871		26.6	%

The increase in revenues resulted from an increase in client service professionals and rate-per-hour, offset by a decrease in utilization. Improvements in rate-per-hour benefited largely from a change in mix of services provided. Utilization was impacted by a 30.3% increase in client service professionals, compared to only a 26.6% increase in revenues during the quarter. Of the overall increase in revenues, approximately 37% is attributable to a higher number of chargeable hours as a result of the increase in the number of client service professionals, 31% from a higher rate-per-hour and 32% from our recent acquisitions⁽¹⁾.

⁽¹⁾ Valuation Advisory includes the results of the Kane Reece acquisition effective July 31, 2008. Specialty Tax includes the results of Rash & Associates effective April 11, 2008 and World Tax Service US effective July 15, 2008. Dispute and Legal Management Consulting includes the acquisitions of Dubinsky & Company effective April 11, 2008, and the Lumin Expert Group effective August 8, 2008.

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End of period client service professionals increased by 201 during the period. Approximately 49% of the growth in headcount resulted from targeted domestic hiring, 12% from hiring in our international offices and 39% from our recent acquisitions.

Our revenue per client service professional was $96 in the three months ended September 30, 2008, compared to $99 in the three months ended September 30, 2007. The change was driven by an increase in headcount due to the Rash acquisition whose business generates lower revenue per client service professional and lower utilization, offset by a higher rate-per-hour.

The number of client service managing directors increased by 39 between periods to 134. Of the total increase 23 resulted from hiring, lift-outs and acquisitions with the remaining 16 from promotions within the Company. Our revenue per managing director was $617 in the three months ended September 30, 2008, compared to $667 in the three months ended September 30, 2007.

Segment Operating Income

Financial Advisory segment operating income increased $1,714, or 17.0%, to $11,797 for the three months ended September 30, 2008, compared to $10,083 for the three months ended September 30, 2007. Segment operating income margin, defined as segment operating income expressed as a percentage of segment revenues, was 14.7% for the three months ended September 30, 2008, compared to 15.9% for the three months ended September 30, 2007.

Investment Banking

Revenues

Revenues from the Investment Banking segment were $16,081 for the three months ended September 30, 2008, compared to $20,525 for the three months ended September 30, 2007. The results were impacted by the general economic environment and dislocation in the credit markets which have led to a lower volume of M&A transactions. Although Restructuring Advisory has benefited from our international restructuring practice which we launched in the second quarter of 2008, domestic restructuring continues to see softness in spite of the current economic environment. In addition, the results reflect the inherently episodic nature of this business as a result of the timing of success fees, particularly with respect to M&A Advisory and to a lesser extent Restructuring Advisory. Accordingly, we tend to look at overall annual performance, as opposed to quarters, to assess key trends in this business.

	Successor		Predecessor
	Three Months Ended
	September 30,		September 30,		Dollar			Percent
	2008		2007		Change			Change
Investment banking revenues
Transaction opinions	$	6,367	$	10,195	$	(3,828	)		(37.5	)%
M&A advisory		4,889		5,230		(341	)		(6.5	)%
Restructuring advisory		4,825		5,100		(275	)		(5.4	)%
	$	16,081	$	20,525	$	(4,444	)		(21.7	)%

End of period client service professional headcount increased by 29 to 129 client service professionals at September 30, 2008, compared to 100 client service professionals at September 30, 2007. The increase primarily resulted from the addition of professionals in our international restructuring practice at the beginning of our second quarter.

Our revenue per client service professional decreased to $129 in the three months ended September 30, 2008 from $207 in the three months ended September 30, 2007, directly impacted by the decrease in segment revenues and continued ramp-up of our international restructuring practice.

The number of client service managing directors increased by 3 between periods to 34, as a result of hiring in our international restructuring practice. Our revenue per managing director was $487 in the three months ended September 30, 2008, compared to $684 in the three months ended September 30, 2007.

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Segment Operating Income

Operating income from the Investment Banking segment was $3,994 for the three months ended September 30, 2008 from $7,023 for the three months ended September 30, 2007. Operating income margin was 24.8% for the three months ended September 30, 2008, compared to 34.2% for the three months ended September 30, 2007.

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Nine months ended September 30, 2008 versus nine months ended September 30, 2007

The results of operations are summarized as follows:

Results of Operations

(Dollars in thousands)

	Successor			Predecessor
	Nine Months Ended
	September 30,			September 30,			Unit			Percent
	2008			2007			Change			Change
Revenues	$	287,268		$	248,450		$	38,818			15.6	%
Reimbursable expenses		7,946			9,753			(1,807	)		(18.5	)%
Total revenues		295,214			258,203			37,011			14.3	%
Direct client service costs
Compensation and benefits(1)		166,276			156,353			9,923			6.3	%
Other direct client service costs		5,828			2,007			3,821			190.4	%
Acquisition retention expenses		782			2,026			(1,244	)		(61.4	)%
Reimbursable expenses		7,926			9,825			(1,899	)		(19.3	)%
		180,812			170,211			10,601			6.2	%
Operating expenses
Selling, general and administrative(2)		83,301			69,882			13,419			19.2	%
Depreciation and amortization		6,903			6,683			220			3.3	%
		90,204			76,565			13,639			17.8	%
Operating income		24,198			11,427			12,771			111.8	%
Other expense/(income)
Interest income		(654	)		(1,287	)		633			(49.2	)%
Interest expense		2,569			5,442			(2,873	)		(52.8	)%
Other expense/(income)		(92	)		215			(307	)		(142.8	)%
		1,823			4,370			(2,547	)		(58.3	)%
Income before non-controlling interest and income taxes		22,375			7,057			15,318			217.1	%
Non-controlling interest		13,204			-			13,204			-
Provision for income taxes		6,343			1,034			5,309			513.4	%
Net income	$	2,828		$	6,023		$	(3,195	)		(53.0	)%
Other financial and operating data
Adjusted EBITDA(3)	$	52,903		$	51,411		$	1,492			2.9	%
End of period managing directors		168			126			42			33.3	%
End of period client service professionals		993			763			230			30.1	%

⁽¹⁾ Compensation and benefits include $17,181 and $23,071 of equity-based compensation expense for the nine months ended September 30, 2008 and 2007, respectively.

⁽²⁾ Selling, general and administrative expenses include $8,164 and $8,204 of equity-based compensation expense for the nine months ended September 30, 2008 and 2007, respectively.

⁽³⁾ Adjusted EBITDA is a non-GAAP financial measure and is calculated as follows:

30

⁽³⁾ Continued

Reconciliation of Adjusted EBITDA

(Dollars in thousands)

	Successor		Predecessor
	Nine Months Ended
	September 30,		September 30,
	2008		2007
Net income	$	2,828	$	6,023
Provision for income taxes		6,343		1,034
Non-controlling interest		13,204		-
Other expense, net		1,823		4,370
Depreciation and amortization		6,903		6,683
Acquisition retention expenses		782		2,026
Equity-based compensation associated with with Legacy Units and IPO Options		21,020		31,275
Adjusted EBITDA	$	52,903	$	51,411

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 for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred recently 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), (b) equity-based compensation associated with the Legacy Units (a significant portion of which is due to certain one-time grants associated with recent acquisitions) and the IPO Options, (c) 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 (d) non-controlling interest.

Given our recent level of acquisition activity and related capital investments and one time equity grants associated with acquisitions (which we do not expect to incur at the same levels in the future) 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 substantially 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 senior secured 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, consists of net income or loss before (a) interest income and expense, (b) provision/(benefit) for income taxes, (c) other (income)/expense, (d) depreciation and amortization, (e) acquisition retention expenses, (f) equity-based compensation associated with Legacy Units of D&P Acquisitions, and IPO Options included in compensation and benefits, (g) equity-based compensation associated with Legacy Units of D&P Acquisitions and IPO Options included in selling, general & administrative expenses, (h) merger & acquisition costs and (i) non-controlling interest.

31

⁽³⁾ Continued

This non-GAAP financial measure is not prepared in accordance with, and should not be considered an alternative 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 differently and, therefore, Adjusted EBITDA as presented for us may not be comparable to Adjusted EBITDA reported by other companies.

32

Revenues

Revenues excluding reimbursable expenses increased $38,818, or 15.6%, to $287,268 for the nine months ended September 30, 2008, compared to $248,450 for the nine months ended September 30, 2007. Revenues attributable to the Financial Advisory segment increased by 25.0%, partially offset by a 13.4% decrease in revenues from our Investment Banking segment.

Growth attributable to our Financial Advisory segment was driven by demand across all business units. The results from our Investment Banking segment were impacted by the general economic environment and dislocation in the credit markets which have led to a lower volume of M&A transactions. In addition, our Investment Banking results reflect the inherently episodic nature of this business as a result of the timing of success fees, particularly with respect to M&A Advisory and to a lesser extent Restructuring Advisory. Accordingly, we tend to look at overall annual performance, as opposed to quarters, to assess key trends in this business.

Our client service headcount increased to 993 client service professionals at September 30, 2008, compared to 763 client service professionals at September 30, 2007, as we added 152 professionals from targeted domestic and international hiring in both segments and 78 professionals from recent acquisitions. Our revenue per client service professional was $312 for nine months ended September 30, 2008, compared to $352 for the nine months ended September 30, 2007, impacted by a change in mix, particularly as a result of (i) continued hiring and development of our international business and (ii) the Rash acquisition whose business generates lower revenue per client service professional.

Direct Client Service Costs

Direct client service costs were $180,812 for the nine months ended September 30, 2008, compared to $170,211 for the nine months ended September 30, 2007. The following table adjusts direct client service costs for equity-based compensation associated with Legacy Units and IPO Options, acquisition retention expenses and reimbursable expenses. Adjusted direct client service costs as a percentage of revenues (excluding reimbursable expenses) slightly increased between periods.

Direct Client Service Costs

(Dollars in thousands)

	Successor			Predecessor
	Nine Months Ended
	September 30,			September 30,
	2008			2007
Revenues (excluding reimbursables)	$	287,268		$	248,450
Total direct client service costs	$	180,812		$	170,211
Less: equity-based compensation associated with Legacy Units and IPO Options		(15,090	)		(23,071	)
Less: acquisition retention expenses		(782	)		(2,026	)
Less: reimbursable expenses		(7,926	)		(9,825	)
Direct client service costs, as adjusted	$	157,014		$	135,289
Direct client service costs, as adjusted, as a percentage of revenues		54.7	%		54.5	%

The increase in direct client service costs, as adjusted, primarily resulted from the addition of 230 client service professionals between periods. This increase includes 78 professionals hired in conjunction with our acquisitions and the direct hiring of 99 client service professionals domestically and 53 professionals internationally.

Equity-based compensation decreased primarily as a result of the application of variable accounting on Legacy Units which was recorded in the prior year and is no longer applied in the current year. The decrease was partially offset by an increase in expense due to adjustments to our estimated forfeiture rates and expense for IPO Options and Ongoing RSAs which had not been granted in the prior year period. Expenses related to retention payments associated with the acquisition of Standard & Poor’s Corporate Value Consulting business in 2005 decreased as a result of the graded-tranche nature of the expense methodology.

33

Operating Expenses

Operating expenses increased to $90,204 for the nine months ended September 30, 2008, compared to $76,565 for the nine months ended September 30, 2007. The following table adjusts operating expenses for depreciation and amortization and equity-based compensation associated with Legacy Units and IPO Options. Adjusted operating expenses as a percentage of revenues (excluding reimbursable expenses) increased between periods.

Operating Expenses

(Dollars in thousands)

	Successor			Predecessor
	Nine Months Ended
	September 30,			September 30,
	2008			2007
Revenues (excluding reimbursables)	$	287,268		$	248,450
Total operating expenses	$	90,204		$	76,565
Less: equity-based compensation associated with Legacy Units and IPO Options		(5,930	)		(8,204	)
Less: depreciation and amortization		(6,903	)		(6,683	)
Operating expenses, as adjusted	$	77,371		$	61,678
Operating expenses, as adjusted, as a percentage of revenues		26.9	%		24.8	%

The increase in operating expenses, as adjusted, was driven by our growth and investment in infrastructure to support the increase in client service professionals, the costs of being a publicly traded company, and additional resources allocated to professional development of new hires and existing management focused on sales, marketing and collaboration within the Company to take advantage of opportunities arising in part from the current economic environment.

Equity-based compensation decreased primarily as a result of the application of variable accounting on Legacy Units which was recorded in the prior year and is no longer applied in the current year. The decrease was partially offset by an increase in expense due to adjustments to our estimated forfeiture rates and expense for IPO Options and Ongoing RSAs which had not been granted in the prior year period.

Operating Income

Operating income increased $12,711, or 111.8%, to $24,198 for the nine months ended September 30, 2008, compared to $11,427 for the nine months ended September 30, 2007. The increase in operating income was primarily due to an increase in revenues and decreases in equity-based compensation, offset by increases in selling, general and administrative expenses.

Other Income and Expenses

Other income and expenses include interest income, interest expense and other expense. Interest expense decreased primarily as a result of our lower average debt balance during the nine months ended September 30, 2008 when compared to the nine months ended September 30, 2007.

Non-Controlling Interest

Non-controlling interest represents the portion of net income or loss before income taxes attributable to the majority ownership interest in D&P Acquisitions held by the existing unitholders to the extent the book value of their interest in D&P Acquisitions is greater than zero. This interest totaled 59.0% at September 30, 2008.

34

Provision for Income Taxes

The provision for income taxes was $6,343 or 28.3% of net income before non-controlling interest and income taxes for the nine months ended September 30, 2008, compared to $1,034 or 14.7% of net income before non-controlling interest and income taxes for the nine months ended September 30, 2007.

Prior to October 4, 2007, the Company had not been subject to U.S. federal income taxes as the Predecessor entity is an LLC, but had been subject to the New York City Unincorporated Business Tax and certain other state and local taxes, including certain non-income tax fees in other jurisdictions where the Company had registered offices and conducted business.

As a result of the IPO, the operating business entities of the Company were restructured and a portion of the Company’s income will be subject to U.S. federal, state, local and foreign income taxes and taxed at the prevailing corporate tax rates. The Company’s effective tax rate may change year to year based on recurring factors such as the geographical mix of earnings in tax jurisdictions that have a broad range of enacted tax rates, the timing and amount of foreign dividends, state and local taxes, the ratio of permanent items to pretax book income, and the implementation of various global tax strategies, as well as nonrecurring factors.

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Segment Results –Nine months ended September 30, 2008 versus nine months ended September 30, 2007

The following table sets forth selected segment operating results:

Results of Operations by Segment

(Dollars in thousands)

	Successor			Predecessor
	Nine Months Ended
	September 30,			September 30,			Unit			Percent
	2008			2007			Change			Change
Financial Advisory
Revenues (excluding reimbursables)	$	234,721		$	187,795		$	46,926			25.0	%
Segment operating income		39,521			30,783			8,738			28.4	%
Segment operating income margin		16.8	%		16.4	%		0.4	%		N/A
Investment Banking
Revenues (excluding reimbursables)	$	52,547		$	60,655		$	(8,108	)		(13.4	)%
Segment operating income		13,361			20,700			(7,339	)		(35.5	)%
Segment operating income margin		25.4	%		34.1	%		(8.7	)%		N/A
Average Client Service Professionals
Financial Advisory		805			601			204			33.9	%
Investment Banking		115			104			11			10.6	%
Total		920			705			215			30.5	%
End of Period Client Service Professionals
Financial Advisory		864			663			201			30.3	%
Investment Banking		129			100			29			29.0	%
Total		993			763			230			30.1	%
Revenue per Client Service Professional
Financial Advisory	$	292		$	312		$	(20	)		(6.4	)%
Investment Banking		457			583			(126	)		(21.6	)%
Total professionals		312			352			(40	)		(11.4	)%
Financial Advisory Utilization Rate(1)		62.5	%		68.4	%		(5.9	)%		(8.6	)%
Financial Advisory Rate-per-Hour(2)	$	350		$	321		$	29			9.0	%
Total
Revenues (excluding reimbursables)	$	287,268		$	248,450
Segment operating income	$	52,882		$	51,483
Net client reimbursable expenses		20			(72	)
Equity-based compensation from Legacy Units and IPO Options		(21,019	)		(31,275	)
Depreciation and amortization		(6,903	)		(6,683	)
Acquisition retention expense		(782	)		(2,026	)
Total operating income	$	24,198		$	11,427

⁽¹⁾ The utilization rate for any given period is calculated by dividing the number of hours Financial Advisory client service professionals (excluding approximately 60 client service professionals associated with Rash, the Company’s wholly owned subsidiary, and certain acquisitions prior to the transition to the Company’s financial system) worked on client assignments 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.

⁽²⁾ Average billing rate per hour is calculated by dividing applicable revenues for the period by the number of hours worked on client assignments during the same period. The average billing rate excludes approximately $6,677 of revenues associated with Rash in the nine months ended September 30, 2008. The average billing rate also excludes certain hours from certain acquisitions prior to their transition to the Company’s financial system.

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Other Operating Data

(Dollars in thousands)

	Successor		Predecessor
	Nine Months Ended
	September 30,		September 30,		Unit			Percent
	2008		2007		Change			Change
Revenues (excluding reimbursables)
Financial Advisory	$	234,721	$	187,795	$	46,926			25.0	%
Investment Banking		52,547		60,655		(8,108	)		(13.4	)%
Total	$	287,268	$	248,450	$	38,818			15.6	%
Average Number of Managing Directors
Financial Advisory		117		91		26			28.6	%
Investment Banking		32		31		1			3.2	%
Total		149		122		27			22.1	%
End of Period Managing Directors
Financial Advisory		134		95		39			41.1	%
Investment Banking		34		31		3			9.7	%
Total		168		126		42			33.3	%
Revenue per Managing Director
Financial Advisory	$	2,006	$	2,064	$	(58	)		(2.8	)%
Investment Banking		1,642		1,957		(315	)		(16.1	)%
Total Managing Directors		1,928		2,036		(109	)		(5.3	)%

Financial Advisory

Revenues

Revenues from the Financial Advisory segment increased $46,926, or 25.0%, to $234,721 for the nine months ended September 30, 2008, compared to $187,795 for the nine months ended September 30, 2007. Growth was driven by demand across all business units, as summarized in the following table:

	Successor		Predecessor
	Nine Months Ended
	September 30,		September 30,		Dollar		Percent
	2008		2007		Change		Change
Financial advisory revenues
Valuation advisory	$	136,104	$	126,165	$	9,939		7.9	%
Corporate finance consulting		43,036		29,870		13,166		44.1	%
Specialty tax		33,440		17,018		16,422		96.5	%
Dispute and legal management consulting		22,141		14,742		7,399		50.2	%
	$	234,721	$	187,795	$	46,926		25.0	%

The increase in revenues resulted from an increase in client service professionals and rate-per-hour, offset by a decrease in utilization. Improvements in rate-per-hour benefited largely from a change in mix of services provided, including contingency fees associated with Specialty Tax. Utilization was impacted by a 30.3% increase in client service professionals, compared to only a 25.0% increase in revenues. Of the overall increase in revenues, approximately 46% is attributable to a higher number of chargeable hours as a result of the increase in the number of client service professionals, 33% from a higher rate-per-hour and 21% from our recent acquisitions⁽¹⁾.

⁽¹⁾Valuation Advisory includes the results of the Kane Reece acquisition effective July 31, 2008. Specialty Tax includes the results of Rash & Associates effective April 11, 2008 and World Tax Service US effective July 15, 2008. Dispute and Legal Management Consulting includes the acquisitions of Dubinsky & Company effective April 11, 2008, and the Lumin Expert Group effective August 8, 2008.

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End of period client service professionals increased by 201 during the period. Approximately 49% of the growth in headcount resulted from targeted domestic hiring, 12% from hiring in our international offices and 39% from our recent acquisitions.

Our revenue per client service professional was $292 in the nine months ended September 30, 2008, compared to $312 in the nine months ended September 30, 2007. The change was driven by an increase in headcount due to the Rash acquisition whose business generates lower revenue per client service professional and lower utilization offset by a higher rate-per-hour.

The number of client service managing directors increased by 39 between periods to 134. Of the total increase 23 resulted from hiring, lift-outs and acquisitions with the remaining 16 from promotions within the Company. Our revenue per client service managing director was $2,006 in the nine months ended September 30, 2008, compared to $2,064 in the nine months ended September 30, 2007.

Segment Operating Income

Financial Advisory segment operating income increased $8,738, or 28.4%, to $39,521 for the nine months ended September 30, 2008, compared to $30,783 for the nine months ended September 30, 2007. Segment operating income margin, defined as segment operating income expressed as a percentage of segment revenues, was 16.8% for the nine months ended September 30, 2008, compared to 16.4% for the nine months ended September 30, 2007.

Investment Banking

Revenues

Revenues from the Investment Banking segment were $52,547 for the nine months ended September 30, 2008, compared to $60,655for the nine months ended September 30, 2007. The results were impacted by the general economic environment and dislocation in the credit markets which have led to a lower volume of M&A transactions. Although Restructuring Advisory has benefited from our international restructuring practice which we launched in the second quarter of 2008, domestic restructuring continues to see softness in spite of the current economic environment. In addition, the results reflect the inherently episodic nature of this business as a result of the timing of success fees, particularly with respect to M&A Advisory and to a lesser extent Restructuring Advisory. Accordingly, we tend to look at overall annual performance, as opposed to quarters, to assess key trends in this business.

	Successor		Predecessor
	Nine Months Ended
	September 30,		September 30,		Dollar			Percent
	2008		2007		Change			Change
Investment banking revenues
Transaction opinions	$	27,374	$	30,178	$	(2,804	)		(9.3	)%
M&A advisory		13,235		15,818		(2,583	)		(16.3	)%
Restructuring advisory		11,938		14,659		(2,721	)		(18.6	)%
	$	52,547	$	60,655	$	(8,108	)		(13.4	)%

End of period client service professional headcount increased by 29 to 129 client service professionals at September 30, 2008, compared to 100 client service professionals at September 30, 2007. The increase primarily resulted from the addition of professionals in our international restructuring practice at the beginning of our second quarter.

Our revenue per client service professional was $457 in the nine months ended September 30, 2008, compared to $583 in the nine months ended September 30, 2007. Revenue per client service professional was directly impacted by the decrease in segment revenues and ramp-up of our international restructuring practice.

The number of client service managing directors increased by 3 between periods to 34, as a result of hiring in our international restructuring practice. Our revenue per managing director was $1,642 in the nine months ended September 30, 2008, compared to $1,957 in the nine months ended September 30, 2007.

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Segment Operating Income

Operating income from the Investment Banking segment was $13,361 for the nine months ended September 30, 2008, compared to $20,700 for the nine months ended September 30, 2007. Operating income margin was 25.4% for the nine months ended September 30, 2008, compared to 34.1% for the nine months ended September 30, 2007.

Liquidity and Capital Resources

Our primary source of liquidity is our existing cash balances and debt capacity available under our credit facility.

Our historical cash flows are primarily related to the timing of receipt of Financial Advisory and Investment Banking revenues, payment of base compensation, benefits and operating expenses, and the timing of payment of bonuses to professionals and tax distributions to members of D&P Acquisitions. Typically, we accrue performance bonuses during the course of the calendar year, therefore generating cash, which is used to fund bonus payments to our personnel early in the following year.

In addition, as a limited liability company, D&P Acquisitions does not incur significant federal or state and local taxes, which taxes are primarily the obligations of our members of D&P Acquisitions. Therefore, D&P Acquisitions makes periodic distributions to its members based on estimates of taxable income and assumptions about marginal tax rates. The marginal tax distribution rate that has initially been set is 45%. D&P Acquisitions made aggregate distributions to members, not including the Company, of $7,888 and $28,374 during the nine months ended September 30, 2008 and 2007, respectively, primarily with respect to estimated taxable income for 2007 and 2006, respectively. D&P Acquisitions is only required to make such distributions if cash is available for such purposes for at least the next 12 month period. The Company expects cash will be available to make these distributions. Upon completion of its tax returns with respect to the prior year, D&P Acquisitions may make true-up distributions to its members, if cash is available for such purposes, with respect to actual taxable income for the prior year to the extent it is higher than the original estimate. In October 2008, the Company made an additional tax distribution to members, not including the Company, totaling approximately $1,865 with respect to a true-up in respect of the 2007 tax year.

As a result of our ownership of D&P Acquisitions, we expect to benefit from depreciation and other tax deductions reflecting D&P Acquisitions' tax basis for its assets. Those deductions will be allocated to us and will be taken into account in reporting our taxable income. Further, as a result of a federal income tax election made by D&P Acquisitions applicable to a portion of our acquisition of D&P Acquisitions interests, the income tax basis of the assets of D&P Acquisitions underlying a portion of the interests we acquire will be adjusted based upon the amount that we have paid for that portion of our D&P Acquisitions interests. We have entered into an agreement with the existing unitholders’ of D&P Acquisitions (for the benefit of the existing unitholders’ of D&P Acquisitions) that will provide for the payment by us to the unitholders of D&P Acquisitions of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that we realize (i) from the tax basis in our proportionate share of D&P Acquisitions' goodwill and similar intangible assets (determined as of the date of this offering) that we receive as a result of the exchanges and (ii) from the federal income tax election referred to above.

Cash and cash equivalents decreased by $33,139 to $57,104 at September 30, 2008 from $90,243 at December 31, 2007, primarily due to the payment of bonuses to our professionals during the first quarter of 2008, tax distributions to the members of D&P Acquisitions, purchases of investments for the Company’s deferred compensation plan, cash consideration for acquisitions and an earn-out payment with respect to Chanin Capital Partners, LLC.

Operating Activities

During the nine months ended September 30, 2008, cash of $9,016 was provided by operating activities, compared to $24,182 in the corresponding period of the prior year. The decrease of amounts provided by operating activities resulted from higher bonus payments due to increases in headcount, increases in accounts receivable due to increases in revenues, decreases in accounts payable and accrued expenses, and a decrease in net income.

Investing Activities

During the nine months ended September 30, 2008, cash of $32,819 was used for investing activities, compared to $9,123 used in the corresponding period of the prior year. Investing activities during the current period included (i) cash consideration used in acquisitions, including an earn-out payment to Chanin Capital Partners, LLC, (ii) purchases and sale of investments, and (iii) purchases of property and equipment to support our continued growth. The purchases of investments related the Company’s deferred compensation plan. Management believes these investments pose limited liquidity risk.

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Financing Activities

During the nine months ended September 30, 2008, cash of $8,483 was used in financing activities, compared to $29,499 used in the corresponding period of the prior year. Financing activities in the current period primarily resulted from tax distributions to members of D&P Acquisitions.

During the nine months ended September 30, 2008, the Company recorded an $853 loss from the effect of exchange rates on cash and cash equivalents.

Duff & Phelps, LLC, a subsidiary of D&P Acquisitions, entered into a senior secured credit facility, dated as of September 30, 2005, as amended on June 14, 2006, on October 31, 2006, on August 31, 2007, on October 4, 2007 and January 31, 2008, with a syndicate of financial institutions, including General Electric Capital Corporation as administrative agent. On July 30, 2008, the Company entered into an Amended and Restated Credit Agreement pursuant to which changes were made to certain terms of its credit facility, including, among other things, (i) replacing an interest coverage ratio and maximum capital expenditure covenant with a fixed charge coverage ratio; (ii) allowing for a $75,000 incremental term loan facility, which is currently uncommitted by the lenders and would require additional approval at the time of request; and (iii) providing additional capacity for permitted acquisitions and investments.

As of September 30, 2008, the Company has a seven-year credit facility, which expires October 1, 2012. The facility consisted of a $65,000 seven-year term loan, a $15,000 delayed draw term loan and a $20,000 six-year revolver loan. All obligations under the credit facility are unconditionally guaranteed by each of our existing and future subsidiaries, other than certain foreign and regulated subsidiaries. The credit facility and the related guarantees are secured by substantially all of Duff & Phelps, LLCs present and future assets and all present and future assets of each guarantor on a first lien basis.

At September 30, 2008, $42,962 was outstanding under the term loan facility (before debt discount and interest rate swap) and no amount was outstanding under the revolving credit facility. Borrowings under the credit facility bear interest at a rate based on LIBOR plus a margin of 2.75%. We incur an annual commitment fee of 1% on the unused portion of the term loan facility and 0.5% of the unused portion of the revolving credit facility.

As of September 30, 2008, the credit facility included customary events of default and covenants for maximum net debt to EBITDA, minimum interest coverage ratio and maximum capital expenditures. Based on a review conducted by the Company, management believes that the Company was in compliance with all of its covenants as of September 30, 2008.

The credit facility requires a mandatory prepayment in an amount equal to half of the Excess Cash Flow (as defined in the credit agreement) for each year. Excess Cash Flow was negative for the years 2007 and 2006. In the event that the consolidated senior leverage ratio on the last day of such fiscal year is less than 1.50 to 1.00, there will be no mandatory prepayment. Based on results through September 30, 2008, the Company does not anticipate making a mandatory prepayment under this clause in 2008.

We regularly monitor our liquidity position, including cash, other significant working capital assets and liabilities, debt, and other matters relating to liquidity and compliance with regulatory net capital requirements.

Future Needs

Our primary financing need has been to fund our growth. Our growth strategy includes hiring additional revenue-generating client service professionals and expanding our service offerings through existing client service professionals, new hires or acquisitions of new businesses. We intend to fund such growth over the next twelve months with funds generated from operations and borrowings under our credit agreement and believe these funds will be adequate to fund future growth.

Our liquidity and our ability to obtain financing may be negatively impacted if one of our lenders under our revolving credit facility, or another financial institution, suffers liquidity issues. In such an event, we may not be able to draw on all, or a substantial portion, of our revolving credit facility. Also, if we attempt to obtain future financing in addition to our existing credit facility to finance our continued growth through acquisitions or otherwise, the credit market turmoil could negatively impact our ability to obtain such financing. Our ability to secure short-term and long-term financing in the future will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity and the overall condition of the credit markets.

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Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP. This statement shall be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” We do not expect the adoption of SFAS 162 to have a material impact on our financial condition, results of operations and cash flows.

In April 2008, the FASB issued FSP No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets.” The intent of the position is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R), and other GAAP. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. We are currently evaluating the impact that the adoption of FSP FAS 142-3 will have on our financial condition, results of operations and cash flows.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 (“SFAS 161”). SFAS 161 requires disclosures of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for years beginning after November 15, 2008, with early adoption permitted. We are currently evaluating the impact this standard may have on our financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”), an amendment to ARB No. 51, Consolidated Financial Statements. SFAS 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. This is effective for years beginning after December 15, 2008. We are currently evaluating the impact this standard may have on our financial position, results of operations and cash flows.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), Business Combinations (“SFAS 141(R)”). SFAS 141(R) requires all entities to account for business combinations and subsequent consolidations to follow the entity view in which the parent company consolidates 100% of the book value of the acquiree’s net assets plus 100% of the fair value increment and where goodwill is recognized and allocated between controlling and non-controlling interests. This is effective for business combinations for which the acquisition date is on or after the beginning of the first fiscal period beginning on or after December 15, 2008. Therefore, the adoption of this standard will not have a material impact on the Company’s financial position, results of operations and cash flows during the current year.

In September 2006, SFAS No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements in financial statements, but standardizes its definition and guidance in GAAP. In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157, which delayed for one year the applicability of SFAS No. 157’s fair-value measurements to certain nonfinancial assets and liabilities. The Company adopted SFAS No. 157 in 2008, except as it applies to those nonfinancial assets and liabilities affected by the one-year delay. The partial adoption of SFAS No. 157 did not have a material impact on the Company’s consolidated financial position or results of operations. The Company is currently evaluating the potential impact of adopting the remaining provisions of SFAS No. 157 on its financial position and results of operations.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risks at September 30, 2008 have not changed significantly from those discussed in Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC on March 26, 2008.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) are effective, in all material respects, to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during our most recent fiscal quarter that has materially affected, or is likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this filing, we are not a party to or threatened with any litigation or other legal proceeding that, in our opinion, could have a material adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors.

There have been no material changes in the Company’s risk factors since those published in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as filed with the SEC on March 26, 2008, except as noted below:

Our liquidity, financial position and profitability could be adversely affected by U.S. and international credit markets and economic conditions.

Our liquidity and our ability to obtain financing may be negatively impacted if one of our lenders under our revolving credit facility, or another financial institution, suffers liquidity issues. In such an event, we may not be able to draw on all, or a substantial portion, of our revolving credit facility. Also, if we attempt to obtain future financing in addition to our existing credit facility to finance our continued growth through acquisitions or otherwise, the credit market turmoil could negatively impact our ability to obtain such financing. In addition, the credit market turmoil has negatively impacted certain of our customers which could lead to a decrease in demand for our services.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not Applicable

Item 3. Defaults Upon Senior Securities.

Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable

Item 5. Other Information.

Not Applicable

Item 6. Exhibits.

Exhibit Number	Description
31.1	Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DUFF & PHELPS CORPORATION
	(Registrant)
Date: November 6, 2008	/s/ Jacob Silverman
	JACOB SILVERMAN
	Chief Financial Officer

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