Duff & Phelps 8K Second Quarter 2009 Financial Results | DUF 3 Aug 09

DUFF & PHELPS REPORTS

SECOND QUARTER 2009 FINANCIAL RESULTS

AND DECLARES QUARTERLY DIVIDEND

RECENT HIGHLIGHTS

Second quarter revenues excluding reimbursable expenses of $90.1 million and adjusted EBITDA(1) of $16.8 million, representing an 18.6% margin

Second quarter adjusted pro forma net income per share(1) of $0.22

Completes follow-on offering with net proceeds of $111.8 million, terminates existing credit facility by repaying $42.4 million of outstanding debt and redeems $67.1 million of New Class A Units

Enters into a $30.0 million revolving credit facility to fund future growth

Strengthens global investment banking segment with new M&A leader and seven new managing directors

Declares second quarterly dividend of $0.05 per share of Class A common stock

NEW YORK, August 3, 2009 – Duff & Phelps Corporation (NYSE: DUF), a leading independent provider of financial advisory and investment banking services, today announced financial results for its second quarter of 2009 and declares a quarterly dividend.

Results

For the quarter ended June 30, 2009, Duff & Phelps generated revenues excluding reimbursable expenses of $90.1 million, compared to $97.8 million for the corresponding prior year quarter. Adjusted EBITDA(1) for the quarter was $16.8 million, representing 18.6% of revenues excluding reimbursable expenses, compared to $18.4 million for the corresponding prior year quarter, representing 18.8% of revenues excluding reimbursable expenses. Fully diluted net income per share of Class A common stock was $0.09, compared to $0.09 for the corresponding prior year quarter. Adjusted pro forma net income(1) was $8.1 million, or $0.22 per share on a fully exchanged, fully diluted basis, compared to $9.6 million, or $0.28 per share, for the corresponding prior year quarter.

For the six months ended June 30, 2009, Duff & Phelps generated revenues excluding reimbursable expenses of $179.3 million, compared to $191.0 million for the corresponding prior year period. Adjusted EBITDA(1) for the period was $32.0 million, representing 17.8% of revenues excluding reimbursable expenses, compared to $37.1 million for the corresponding prior year period, representing 19.5% of revenues excluding reimbursable expenses. Fully diluted net income per share of Class A common stock was $0.20, compared to $0.19 for the corresponding prior year period. Adjusted pro forma net income(1) was $15.1 million, or $0.42 per share on a fully exchanged, fully diluted basis, compared to $18.7 million, or $0.55 per share, for the corresponding prior year period.

“As we begin to emerge from these challenging economic times, we are pleased to have strengthened our position by successfully completing a follow-on stock offering, which allowed us to pay down all of our debt and expand our shareholder base in a meaningful way,” commented Noah Gottdiener, chairman and chief executive officer. “In addition, Duff & Phelps has been able to enhance its position in key areas by recruiting top talent who are attracted to our stable, balanced platform.”

“Duff & Phelps’ second quarter results highlight the ongoing strength and diversity of our advisory services and our responsiveness amid a rapidly changing regulatory and economic environment,” said Gerry Creagh, president. “Our counter-cyclical businesses, such as restructuring and dispute consulting, are growing rapidly on a sequential and year-over-year basis. Given the recently announced additions to our firm, we are confident that our cyclical businesses are well-positioned to capitalize on future improvements in the broader M&A markets.”

Declaration of Quarterly Dividend

The Company also announced today that its board of directors has declared a quarterly dividend of $0.05 per share on its outstanding Class A common stock. The dividend is payable on August 28, 2009, to shareholders of record on August 18, 2009.

(1) Adjusted EBITDA, adjusted pro forma net income and adjusted pro forma net income per share are non-GAAP financial measures. See definitions and disclosures herein.

Earnings Call Webcast

As previously announced, Duff & Phelps will host a conference call today, August 3, 2009, at 5 p.m. EDT to discuss the Company’s financial results. Interested parties can access the webcast for this call through http://ir.duffandphelps.com/events.cfm.

About Duff & Phelps

As a leading global independent provider of financial advisory and investment banking services, Duff & Phelps delivers trusted advice to our clients principally in the areas of valuation, transactions, financial restructuring, dispute and taxation. Our world class capabilities and resources, combined with an agile and responsive delivery, distinguish our clients' experience in working with us. With more than 1,200 employees serving clients worldwide through offices in North America, Europe and Asia, Duff & Phelps is committed to fulfilling its mission to protect, recover and maximize value for its clients. Investment banking services in North America are provided by Duff & Phelps Securities, LLC. Investment banking services in Europe are provided by Duff & Phelps Securities Ltd. Duff & Phelps Securities Ltd. is authorized and regulated by the Financial Services Authority. Investment Banking services in France are provided by Duff & Phelps SAS. For more information, visit www.duffandphelps.com. (NYSE: DUF)

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure and is reconciled as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2009			2008			2009			2008
Revenues (excluding reimbursable expenses)	$	90,053		$	97,801		$	179,318		$	190,954

Net income attributable to Duff & Phelps Corporation	$	1,734		$	1,260		$	3,499		$	2,675
Net income attributable to the noncontrolling interest		3,465			5,762			8,281			11,039
Provision for income taxes		2,421			2,731			4,533			4,995
Other expense/(income), net		2,137			6			2,795			1,087
Depreciation and amortization		2,556			2,281			5,118			4,457
Acquisition retention expenses		-			266			-			576
Equity-based compensation associated with
Legacy Units and IPO Options		4,481			6,047			7,733			12,315
Adjusted EBITDA	$	16,794		$	18,353		$	31,959		$	37,144
Adjusted EBITDA as a percentage of revenues		18.6	%		18.8	%		17.8	%		19.5	%

Adjusted EBITDA is a non-GAAP financial measure. 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 attributable to Duff & Phelps Corporation for (a) interest expense and depreciation and amortization (a significant portion of which relates to debt and capital investments that have been incurred 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 predecessor acquisitions and IPO Options, (c) acquisition retention expenses which are related to deferred payments associated with prior acquisitions, and (d) net income attributable to the noncontrolling interest.

Given the level of acquisition activity during the period prior to the Company’s initial public offering (“Predecessor”), and related capital investments and one time equity grants associated with acquisitions during the Predecessor period (which we do not expect to incur at the same levels in periods subsequent to the Company’s initial public offering) 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 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 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 attributable to Duff & Phelps Corporation before (a) net income attributable to the noncontrolling interest, (b) provision for income taxes, (c) other expense/(income), net, (d) depreciation and amortization, (e) acquisition retention expenses, and (f) equity-based compensation associated with Legacy Units and IPO Options included in (i) compensation and benefits and (ii) selling, general and administrative expenses.

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.

Adjusted pro forma net income, as defined by Duff & Phelps, consists of Adjusted EBITDA (as defined above), less depreciation and amortization, interest income and expense, other income and pro forma corporate income tax applied at an assumed rate as specified in the calculations. Adjusted pro forma net income per share, as defined by Duff & Phelps, consists of adjusted pro forma net income divided by the weighted average number of the Company's Class A and Class B shares for the applicable period, giving effect to the dilutive impact, if any, of stock options and restricted stock awards.

Disclosure Regarding Forward-Looking Statements

Statements in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (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 our historical performance 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 Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission (“SEC”) on February 26, 2009, and in any subsequent filings of our Form 10-Qs. The forward-looking statements included in this press release 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.

Investor and Media Relations

Marty Dauer

+ 1 212 871 7700

investor.relations@duffandphelps.com

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2009			2008			2009			2008

Revenues	$	90,053		$	97,801		$	179,318		$	190,954
Reimbursable expenses		2,626			2,837			4,663			5,165
Total revenues		92,679			100,638			183,981			196,119

Direct client service costs
Compensation and benefits (including $5,075 and $5,006 of equity-based compensation for the three months ended June 30, 2009 and 2008, respectively, and $9,338 and $9,630 for the six months ended June 30, 2009 and 2008, respectively)		51,698			55,952			102,828			108,996
Other direct client service costs		1,543			1,796			2,847			3,418
Acquisition retention expenses		-			266			-			576
Reimbursable expenses		2,637			2,844			4,652			5,113
Subtotal		55,878			60,858			110,327			118,103

Operating expenses
Selling, general and administrative expenses (including $1,665 and $2,606 of equity-based compensation for the three months ended June 30, 2009 and 2008, respectively, and $3,556 and $5,319 for the six months ended June 30, 2009 and 2008, respectively)		24,488			27,740			49,428			53,763
Depreciation and amortization		2,556			2,281			5,118			4,457
Subtotal		27,044			30,021			54,546			58,220

Operating income		9,757			9,759			19,108			19,796

Other expense/(income)
Interest income		(3	)		(81	)		(17	)		(564	)
Interest expense		333			749			988			1,722
Loss on early extinguishment of debt		1,737			-			1,737			-
Other expense		70			(662	)		87			(71	)
Subtotal		2,137			6			2,795			1,087

Income before income taxes		7,620			9,753			16,313			18,709

Provision for income taxes		2,421			2,731			4,533			4,995

Net income		5,199			7,022			11,780			13,714

Less: Net income attributable to noncontrolling interest		3,465			5,762			8,281			11,039

Net income attributable to Duff & Phelps Corporation	$	1,734		$	1,260		$	3,499		$	2,675

Weighted average shares of Class A common stock outstanding
Basic		17,356			13,134			15,428			13,099
Diluted		18,111			13,430			16,045			13,287

Net income per share attributable to stockholders of Class A common stock of Duff & Phelps Corporation (Note 5)
Basic	$	0.10		$	0.09		$	0.21		$	0.19
Diluted	$	0.09		$	0.09		$	0.20		$	0.19

Cash dividends declared per common share	$	0.05		$	-		$	0.05		$	-

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

YEAR-OVER-YEAR SUMMARY OF REVENUE BY SEGMENT

(In thousands)

(Unaudited)

	2009							2008						Variance Q2 2009 vs Q2 2008						Variance H1 2009 vs H1 2008
		Q1		Q2		Total			Q1		Q2	Total		Dollar			Percent			Dollar			Percent
Financial Advisory
Valuation advisory	$	40,370	$	33,772		$	74,142	$	46,861	$	45,699	$	92,560	$	(11,927	)		-26.1	%	$	(18,418	)		-19.9	%
Tax services		10,878		11,972			22,850		8,889		11,852		20,741		120			1.0	%		2,109			10.2	%
D&LMC		9,643		12,162			21,805		5,687		7,909		13,596		4,253			53.8	%		8,209			60.4	%
		60,891		57,906			118,797		61,437		65,460		126,897		(7,554	)		-11.5	%		(8,100	)		-6.4	%

Corporate Finance Consulting
Portfolio valuation		6,295		4,338			10,633		2,382		4,240		6,622		98			2.3	%		4,011			60.6	%
Financial engineering		4,148		5,159			9,307		3,318		4,271		7,589		888			20.8	%		1,718			22.6	%
Strategic value advisory		2,620		3,588			6,208		2,262		3,302		5,564		286			8.7	%		644			11.6	%
Due diligence		1,553		1,893			3,446		4,460		3,590		8,050		(1,697	)		-47.3	%		(4,604	)		-57.2	%
		14,616		14,978			29,594		12,422		15,403		27,825		(425	)		-2.8	%		1,769			6.4	%

Investment Banking
Global restructuring		5,578		8,614	��		14,192		2,834		4,047		6,881		4,567			112.8	%		7,311			106.2	%
Transaction opinions		6,101		6,180			12,281		10,928		10,078		21,006		(3,898	)		-38.7	%		(8,725	)		-41.5	%
M&A advisory		2,079		2,375			4,454		5,532		2,813		8,345		(438	)		-15.6	%		(3,891	)		-46.6	%
		13,758		17,169			30,927		19,294		16,938		36,232		231			1.4	%		(5,305	)		-14.6	%

Total revenues	$	89,265	$	90,053		$	179,318	$	93,153	$	97,801	$	190,954	$	(7,748	)		-7.9	%	$	(11,636	)		-6.1	%

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

SEQUENTIAL SUMMARY OF REVENUE BY SEGMENT

(In thousands)

(Unaudited)

	2009						2008
	Q1		Q2		Total		Q1		Q2		Q3		Q4		Total
Financial Advisory
Valuation advisory	$	40,370	$	33,772	$	74,142	$	46,861	$	45,699	$	43,777	$	42,461	$	178,798
Tax services		10,878		11,972		22,850		8,889		11,852		12,700		11,524		44,965
D&LMC		9,643		12,162		21,805		5,687		7,909		8,545		7,264		29,405
		60,891		57,906		118,797		61,437		65,460		65,022		61,249		253,168

Corporate Finance Consulting
Portfolio valuation		6,295		4,338		10,633		2,382		4,240		5,011		3,592		15,225
Financial engineering		4,148		5,159		9,307		3,318		4,271		3,068		3,838		14,495
Strategic value advisory		2,620		3,588		6,208		2,262		3,302		3,315		3,130		12,009
Due diligence		1,553		1,893		3,446		4,460		3,590		3,818		2,898		14,766
		14,616		14,978		29,594		12,422		15,403		15,212		13,458		56,495

Investment Banking
Global restructuring		5,578		8,614		14,192		2,834		4,047		4,825		5,947		17,653
Transaction opinions		6,101		6,180		12,281		10,928		10,078		6,366		8,812		36,184
M&A advisory		2,079		2,375		4,454		5,532		2,813		4,890		4,741		17,976
		13,758		17,169		30,927		19,294		16,938		16,081		19,500		71,813

Total revenues	$	89,265	$	90,053	$	179,318	$	93,153	$	97,801	$	96,315	$	94,207	$	381,476

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

OTHER QUARTERLY OPERATING DATA BY SEGMENT

(In thousands)

(Unaudited)

	2009				2008
	Q1	Q2	Total		Q1	Q2	Q3	Q4	Total
Average Client Service Professionals
Financial Advisory	700	658		679	665	671	701	715		688
Corporate Finance Consulting	131	134		133	112	126	137	135		127
Investment Banking	136	135		135	102	118	125	131		119
	967	927		947	879	915	963	981		934

End of Period Client Service Professionals
Financial Advisory	681	640			681	663	722	710
Corporate Finance Consulting	130	136			124	125	142	131
Investment Banking	137	131			109	121	129	134
	948	907			914	909	993	975

Average Managing Directors
Financial Advisory	101	99		100	84	94	103	104		96
Corporate Finance Consulting	30	30		30	19	25	28	29		25
Investment Banking	36	39		37	30	32	33	34		32
	167	168		167	133	151	164	167		153

End of Period Managing Directors
Financial Advisory	101	96			84	98	105	105
Corporate Finance Consulting	30	31			21	26	29	28
Investment Banking	38	38			30	33	34	35
	169	165			135	157	168	168

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT

(In thousands, except headcount data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2009			2008			2009			2008
Financial Advisory
Revenues (excluding reimbursables)	$	57,906		$	65,460		$	118,797		$	126,897
Segment operating income	$	10,339		$	11,455		$	20,688		$	20,910
Segment operating income margin		17.9	%		17.5	%		17.4	%		16.5	%

Corporate Finance Consulting
Revenues (excluding reimbursables)	$	14,978		$	15,403		$	29,594		$	27,825
Segment operating income	$	3,178		$	3,760		$	6,430		$	6,661
Segment operating income margin		21.2	%		24.4	%		21.7	%		23.9	%

Investment Banking
Revenues (excluding reimbursables)	$	17,169		$	16,938		$	30,927		$	36,232
Segment operating income	$	3,288		$	3,145		$	4,830		$	9,521
Segment operating income margin		19.2	%		18.6	%		15.6	%		26.3	%

Total
Revenues (excluding reimbursables)	$	90,053		$	97,801		$	179,318		$	190,954

Segment operating income	$	16,805		$	18,360		$	31,948		$	37,092
Net client reimbursable expenses		(11	)		(7	)		11			52
Equity-based compensation from
Legacy Units and IPO Options		(4,481	)		(6,047	)		(7,733	)		(12,315	)
Depreciation and amortization		(2,556	)		(2,281	)		(5,118	)		(4,457	)
Acquisition retention expenses		-			(266	)		-			(576	)
Operating income	$	9,757		$	9 ,759		$	19,108		$	19,796

Average Client Service Professionals
Financial Advisory		658			671			679			666
Corporate Finance Consulting		134			126			133			118
Investment Banking		135			118			135			110
Total		927			915			947			894

End of Period Client Service Professionals
Financial Advisory		640			663			640			663
Corporate Finance Consulting		136			125			136			125
Investment Banking		131			121			131			121
Total		907			909			907			909

Revenue per Client Service Professional
Financial Advisory	$	88		$	98		$	175		$	191
Corporate Finance Consulting	$	112		$	122		$	223		$	236
Investment Banking	$	127		$	144		$	229		$	329
Total	$	97		$	107		$	189		$	214

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

RESULTS OF OPERATIONS BY SEGMENT – CONTINUED

(In thousands, except rate-per-hour and headcount data)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2009			2008			2009			2008
Utilization(1)
Financial Advisory		62.3	%		60.1	%		64.8	%		63.5	%
Corporate Finance Consulting		60.2	%		61.4	%		57.9	%		61.5	%

Rate-Per-Hour(2)
Financial Advisory	$	328		$	371		$	316		$	345
Corporate Finance Consulting	$	404		$	409		$	416		$	377

Revenues (excluding reimbursables)
Financial Advisory	$	57,906		$	65,460		$	118,797		$	126,897
Corporate Finance Consulting		14,978			15,403			29,594			27,825
Investment Banking		17,169			16,938			30,927			36,232
Total	$	90,053		$	97,801		$	179,318		$	190,954

Average Number of Managing Directors
Financial Advisory		99			94			100			89
Corporate Finance Consulting		30			25			30			22
Investment Banking		39			32			37			31
Total		168			151			167			142

End of Period Managing Directors
Financial Advisory		96			98			96			98
Corporate Finance Consulting		31			26			31			26
Investment Banking		38			33			38			33
Total		165			157			165			157

Revenue per Managing Director
Financial Advisory	$	585		$	696		$	1,188		$	1,426
Corporate Finance Consulting	$	499		$	616		$	986		$	1,265
Investment Banking	$	440		$	529		$	836		$	1,169
Total	$	536		$	648		$	1,074		$	1,345

____________________________________

(1)

The utilization rate for any given period is calculated by dividing the number of hours incurred by client service professionals who worked on client assignments (including internal projects for the Company) 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. Financial Advisory utilization excludes approximately 60 client service professionals associated with Rash & Associates, L.P. (“Rash”), the Company's wholly owned subsidiary.

(2)

Average billing rate-per-hour is calculated by dividing applicable revenues for the period by the number of hours worked on client assignments (including internal projects for the Company) during the same period. Financial Advisory revenues used to calculate rate-per-hour exclude approximately $2,430 and $1,915 of revenues associated with Rash in the three months ended June 30, 2009 and 2008, respectively, and $4,322 and $3,939 of revenues associated with Rash in the six months ended June 30, 2009 and 2008, respectively.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	June 30,		December 31,
	2009		2008
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	58,588	$	81,381
Restricted cash		4,043		-
Accounts receivable, net		59,678		55,876
Unbilled services		26,874		17,938
Prepaid expenses and other current assets		5,334		6,599
Net deferred income taxes, current		1,889		4,304
Total current assets		156,406		166,098

Property and equipment, net		29,028		28,350
Goodwill		117,036		116,456
Intangible assets, net		29,773		32,197
Other assets		2,461		3,541
Investments related to deferred compensation plan (Note 10)		14,765		7,946
Net deferred income taxes, non-current		91,788		61,609
Total non-current assets		284,851		250,099

Total assets	$	441,257	$	416,197

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	2,739	$	3,692
Accrued expenses		3,257		4,424
Accrued compensation and benefits		13,549		39,282
Accrued benefits related to deferred compensation plan (Note 10)		15,060		8,479
Deferred revenue		4,506		3,280
Equity-based compensation liability		188		1,115
Current portion of long-term debt (Note 8)		-		794
Current portion due to non-controlling unitholders		3,148		3,148
Total current liabilities		42,447		64,214

Long-term debt, less current portion (Note 8)		-		42,178
Other long-term liabilities		17,036		16,715
Due to non-controlling unitholders, less current portion		88,879		55,331
Total non-current liabilities		105,915		114,224

Total liabilities		148,362		178,438

Commitments and contingencies (Note 11)

Stockholders' equity
Preferred stock (50,000 shares authorized; zero issued and outstanding)		-		-
Class A common stock, par value $0.01 per share (100,000 shares authorized; 23,924 and
14,719 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively)		239		147
Class B common stock, par value $0.0001 per share (50,000 shares authorized; 16,248 and
20,889 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively)		2		2
Additional paid-in capital		171,749		100,985
Accumulated other comprehensive income		504		122
Retained earnings/(accumulated deficit)		1,183		(1,127	)
Total stockholders' equity of Duff & Phelps Corporation		173,677		100,129
Noncontrolling interest		119,218		137,630
Total stockholders' equity		292,895		237,759
Total liabilities and stockholders' equity	$	441,257	$	416,197

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Quarter Ended June 30, 2009
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	90,053		$	-			$	90,053
Reimbursable expenses		2,626			-				2,626
Total revenues		92,679			-				92,679

Direct client service costs
Compensation and benefits		51,698			(3,548	)	(a)		48,150
Other direct client service costs		1,543			-				1,543
Reimbursable expenses		2,637			-				2,637
		55,878			(3,548	)			52,330

Operating expenses
Selling, general and administrative		24,488			(933	)	(a)		23,555
Depreciation and amortization		2,556			-				2,556
		27,044			(933	)			26,111

Operating income		9,757			4,481				14,238

Other expense/(income)
Interest income		(3	)		-				(3	)
Interest expense		333			-				333
Loss on early extinguishment of debt		1,737			(1,737	)	(b)		-
Other expense		70			-				70
		2,137			(1,737	)			400

Income before income taxes		7,620			6,218				13,838
									-
Provision for income taxes		2,421			3,333		(c)		5,754

Net income		5,199			2,885				8,084

Less: Net income attributable to the noncontrolling interest		3,465			(3,465	)	(d)		-

Net income attributable to Duff & Phelps Corporation	$	1,734		$	6,350			$	8,084

Pro forma fully exchanged, fully diluted shares outstanding							(e)		36,780

Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding								$	0.22

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)	Represents a non-recurring charge from the repayment and subsequent termination of our credit agreement.

(c)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 41.5% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.

(d)

Represents elimination of the noncontrolling interest associated with the ownership by existing unitholders of D&P Acquisitions (excluding D&P Corporation), as if such unitholders had fully exchanged their partnership units and Class B common stock of the Company for shares of Class A common stock of the Company.

(e)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding and dilutive effect of Ongoing RSAs and for the quarter ended June 30, 2009. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Quarter Ended June 30, 2008
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	97,801		$	-			$	97,801
Reimbursable expenses		2,837			-				2,837
Total revenues		100,638			-				100,638

Direct client service costs
Compensation and benefits		55,952			(4,174	)	(a)		51,778
Other direct client service costs		1,796			-				1,796
Acquisition retention expenses		266			(266	)			-
Reimbursable expenses		2,844			-				2,844
		60,858			(4,440	)			56,418

Operating expenses
Selling, general and administrative		27,740			(1,873	)	(a)		25,867
Depreciation and amortization		2,281			-				2,281
		30,021			(1,873	)			28,148

Operating income		9,759			6,313				16,072

Other expense/(income)
Interest income		(81	)		-				(81	)
Interest expense		749			-				749
Other expense		(662	)		-				(662	)
		6			-				6

Income before income taxes		9,753			6,313				16,066
									-
Provision for income taxes		2,731			3,762		(b)		6,493

Net income		7,022			2,551				9,573

Less: Net income attributable to the noncontrolling interest		5,762			(5,762	)	(c)		-

Net income attributable to Duff & Phelps Corporation	$	1,260		$	8,313			$	9,573

Pro forma fully exchanged, fully diluted shares outstanding							(d)		34,119

Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding								$	0.28

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)

Represents an adjustment to reflect an assumed effective corporate tax rate of approximately 40.8% for the full year, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and/or foreign jurisdiction. Assumes full exchange of existing unitholders' partnership units and Class B common stock of the Company into Class A common stock of the Company.

(c)

(d)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding and dilutive effect of Ongoing RSAs for the quarter ended June 30, 2008. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Six Months Ended June 30, 2009
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	179,318		$	-			$	179,318
Reimbursable expenses		4,663			-				4,663
Total revenues		183,981			-				183,981

Direct client service costs
Compensation and benefits		102,828			(5,880	)	(a)		96,948
Other direct client service costs		2,847			-				2,847
Reimbursable expenses		4,652			-				4,652
		110,327			(5,880	)			104,447

Operating expenses
Selling, general and administrative		49,428			(1,853	)	(a)		47,575
Depreciation and amortization		5,118			-				5,118
		54,546			(1,853	)			52,693

Operating income		19,108			7,733				26,841

Other expense/(income)
Interest income		(17	)		-				(17	)
Interest expense		988			-				988
Loss on early extinguishment of debt		1,737			(1,737	)	(b)		-
Other expense		87			-				87
		2,795			(1,737	)			1,058

Income before income taxes		16,313			9,470				25,783
									-
Provision for income taxes		4,533			6,167		(c)		10,700

Net income		11,780			3,303				15,083

Less: Net income attributable to the noncontrolling interest		8,281			(8,281	)	(d)		-

Net income attributable to Duff & Phelps Corporation	$	3,499		$	11,584			$	15,083

Pro forma fully exchanged, fully diluted shares outstanding							(e)		35,818

Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding								$	0.42

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)	Represents a non-recurring charge from the repayment and subsequent termination of our credit agreement.

(c)

(d)

(e)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding and dilutive effect of Ongoing RSAs for the six months ended June 30, 2009. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

DUFF & PHELPS CORPORATION AND SUBSIDIARIES

ADJUSTED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Six Months Ended June 30, 2008
	As							Adjusted
	Reported			Adjustments				Pro Forma

Revenues	$	190,954		$	-			$	190,954
Reimbursable expenses		5,165			-				5,165
Total revenues		196,119			-				196,119

Direct client service costs
Compensation and benefits		108,996			(8,505	)	(a)		100,491
Other direct client service costs		3,418			-				3,418
Acquisition retention expenses		576			(576	)	(b)		-
Reimbursable expenses		5,113			-				5,113
		118,103			(9,081	)			109,022

Operating expenses
Selling, general and administrative		53,763			(3,810	)	(a)		49,953
Depreciation and amortization		4,457			-				4,457
		58,220			(3,810	)			54,410

Operating income		19,796			12,891				32,687

Other expense/(income)
Interest income		(564	)		-				(564	)
Interest expense		1,722			-				1,722
Other expense		(71	)		-				(71	)
		1,087			-				1,087

Income before income taxes		18,709			12,891				31,600
									-
Provision for income taxes		4,995			7,898		(c)		12,893

Net income		13,714			4,993				18,707

Less: Net income attributable to the noncontrolling interest		11,039			(11,039	)	(d)		-

Net income attributable to Duff & Phelps Corporation	$	2,675		$	16,032			$	18,707

Pro forma fully exchanged, fully diluted shares outstanding							(e)		33,984

Adjusted pro forma net income per fully exchanged, fully diluted shares outstanding								$	0.55

(a)	Represents elimination of equity-based compensation associated with Legacy Units and IPO Options.

(b)	Represents elimination of expense associated with deferred payments made in connection with the acquisition of Standard & Poor’s Corporate Value Consulting business in September 2005.

(c)

(d)

(e)	Based on the weighted-average number of aggregated Class A and Class B shares of common stock outstanding and dilutive effect of Ongoing RSAs for the six months ended June 30, 2008. The Company believes that IPO Options would not be considered dilutive when applying the treasury method.

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Duff & Phelps (DUF) Inactive 8-KSecond Quarter 2009 Financial Results