GlobeNewswire Inc | Oct 27, 2020 07:01AM EDT

October 27, 2020

-- Reports 3Q20 US GAAP Net Income of $18.6 million or $0.62 per share -- Economic Operating Income of $37.4 million, or $1.25 per share, second highest on record -- Second-strongest quarter for Investment Banking and Brokerage, Record M&A revenues -- Solid results despite impact of mark-to-market on unrealized Nikola investment, which reduced Economic Operating Income by $48.3 million, or $1.62 per share -- Book Value increased to $30.48 per share and Tangible Book Value increased to $24.32 per share -- Doubled quarterly cash dividend, to $0.08 per common share

NEW YORK, Oct. 27, 2020 (GLOBE NEWSWIRE) -- CowenInc. (NASDAQ: COWN) (Cowen or the Company) today announced its operating results for the third quarter ended September30, 2020.

Jeffrey M. Solomon, Chair and Chief Executive Officer of Cowen, said, "Our results for the third quarter demonstrate the strength and sustainability of our operating business. It was the second-best quarter on record for markets and investment banking, we set a new record for M&A revenues and management fees are at multi-year highs. We also took advantage of the opportunity to repurchase shares at attractive valuations, with the largest quarterly buyback in five years. We continue to embrace our core values of vision, empathy, sustainability and tenacious teamwork as we help our clients, our colleagues and our communities to tackle their biggest challenges and navigate through these uncertain times."

Third Quarter 2020 Financial Summary

US GAAP Economic Operating Income Three Months Ended Three Months Ended September 30, September 30,($ in millions,except per share 2020 2019 ? % 2020 2019 ? %information) Revenue $ 387.7 $ 252.0 54 % $ 274.3 $ 216.5 27 %Net income (loss)attributable to $ 18.6 $ 2.1 786 % $ 37.4 $ 10.1 270 %common stockholdersEarnings (loss) percommon share $ 0.62 $ 0.07 786 % $ 1.25 $ 0.32 291 %(diluted) Note: Throughout this press release the Company presents non-GAAP financialmeasures that are not prepared in accordance with accounting principlesgenerally accepted in the United States of America ("US GAAP"). Areconciliation of these non-GAAP measures appears under the section,"Reconciliation of US GAAP (Unaudited) to Economic Operating Income (Loss)."

Third Quarter 2020 Operating Financial Highlights (US GAAP) (unaudited)

Third quarter 2020 US GAAP revenue was $387.7 million compared to $252.0 million in the third quarter of 2019.

Third quarter 2020 US GAAP employee compensation and benefits expenses was $153.4 million, an increase of $33.1 million from the prior-year period.

Third quarter 2020 US GAAP income tax expense was $8.8 million compared to $1.4 million in the prior-year quarter.

Third quarter 2020 US GAAP total expenses totaled $249.2 million, an increase of $29.3 million from the prior-year period.

Third quarter 2020 US GAAP net income attributable to common stockholders was $18.6 million compared to net income attributable to common stockholders of $2.1 million in the third quarter of 2019.

Third Quarter 2020 Operating Financial Highlights (Non-GAAP)

? Strong Investment Banking performance: ? Second-strongest quarter on record driven by capital markets activity in biotech and healthcare tools & diagnostics Record M&A revenues driven by several high-fee engagements. Deal pipeline ? now at record high level

? Markets revenues near record levels, continuing share gains: Markets revenue, which includes brokerage, financing and other revenue, ? was $167.4 million ($2.62 million/day), just below the record highs of 2Q'20 Posted strong performances in prime services, outsourced trading, ? securities finance, special situations and non-US execution

? Strong momentum in investment management: Management fee run-rate at highest annual level since 2016, AUM increased ? year-over-year

? Invested capital: Nikola position creates quarterly volatility Mark-to-market unrealized loss of $96.6 million on Nikola investment ? partially offset by gains in balance sheet investments including Cowen Healthcare Investments and SPAC trading



Capital Optimization Update

As of September30, 2020, Cowen had book value of $30.48 per common share and tangible book value per common share of $24.32, up from book value of $28.96 and tangible book value of $22.94 at June 30, 2020, and up from book value of $24.77 and tangible book value of $18.72 at December31, 2019.

In the third quarter of 2020, the Company repurchased $18.9 million of its common stock, or 1,144,254 shares, at an average price of $16.49 under the Company's existing share repurchase program, representing the largest quarterly share repurchase since the third quarter of 2015.

Outside the share repurchase program, in the third quarter of 2020 the Company acquired approximately $267 thousand of shares as a result of net share settlements relating to the vesting of equity awards, or 14,985 shares, at an average price of $17.80.

For the first nine months of 2020, the Company repurchased 2,974,711 shares for $43.4 million, or an average price of $14.60 under the Company's existing share repurchase program. Outside the share repurchase program, in the first nine months of 2020 the Company acquired approximately $6.3 million of shares as a result of net share settlements relating to the vesting of equity awards, or 505,702 shares at an average price of $12.45.

Increased Quarterly Cash Dividend

The Company increased its quarterly cash dividend payable on its common stock from $0.04 to $0.08 per common share. On October 21, 2020, the Board of Directors declared a cash dividend of $0.08 per common share. The dividend will be payable on December 15, 2020, to stockholders of record on December 1, 2020.

Select Balance Sheet Data

(Amounts in millions, except per share information) September 30, December 31, 2020 2019Cowen Inc. stockholders' equity $911.2 $809.9Common equity (CE) $809.9 $708.5Tangible common equity (TCE) $646.1 $535.6 Book value per share (CE/CSO) $30.48 $24.77Tangible book value per share (TCE/CSO) $24.32 $18.72 Common shares outstanding (CSO) 26.6 28.6 Note: Common Equity (CE) is calculated as Cowen Inc, stockholders? equity lessour preferred stock issuance.Tangible common equity (TCE) is calculated as common equity (CE) less goodwilland net intangible assets.

Cowen Inc.US GAAP Preliminary Unaudited Condensed Consolidated Statements of Operations(Dollar and share amounts in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Revenue Investment banking $ 194,341 $ 77,292 $ 503,351 $ 272,103Brokerage 138,483 93,995 425,069 302,840Management fees 11,954 7,300 35,211 21,480Incentive income 127 701 127 724Interest and dividends 37,552 60,707 127,547 129,846Reimbursement from affiliates 269 238 777 780Reinsurance premiums 2,505 8,146 18,943 29,068Other 1,369 1,237 4,709 3,228Consolidated Funds revenues 1,135 2,431 4,650 8,239Total revenue 387,735 252,047 1,120,384 768,308Interest and dividends expense 37,754 56,477 125,850 125,089Total net revenue 349,981 195,570 994,534 643,219Expenses Employee compensation and 153,427 120,320 583,137 388,611benefitsReinsurance claims,commissions and amortization 4,852 8,195 21,716 25,139of deferred acquisition costsOperating, general,administrative and other 84,784 83,851 264,950 250,915expensesDepreciation and amortization 5,682 5,082 17,324 14,990expenseGoodwill impairment ? ? ? 4,100Consolidated Funds expenses 494 2,516 4,793 6,229Total expenses 249,239 219,964 891,920 689,984Other income (loss) Net (losses) gains onsecurities, derivatives and (68,781 ) 18,446 83,738 61,440other investmentsConsolidated Funds net 6,385 13,896 (29,410 ) 21,536(losses) gainsTotal other income (loss) (62,396 ) 32,342 54,328 82,976 Income (loss) before income 38,346 7,948 156,942 36,211taxesIncome tax expense/(benefit) 8,830 1,365 52,589 9,615Net income (loss) 29,516 6,583 104,353 26,596Net income (loss) attributableto non-controlling interests 9,232 2,770 (19,843 ) 7,188in consolidated subsidiariesand fundsNet income (loss) attributable 20,284 3,813 124,196 19,408to Cowen Inc.Less: Preferred stock 1,698 1,698 5,094 5,094dividendsNet income (loss) attributableto Cowen Inc. common $ 18,586 $ 2,115 $ 119,102 $ 14,314stockholders Earnings (loss) per share: Basic $ 0.67 $ 0.07 $ 4.24 $ 0.48Diluted $ 0.62 $ 0.07 $ 4.02 $ 0.46 Weighted average shares used in per share data:Basic 27,663 29,529 28,078 29,687Diluted 29,970 31,264 29,646 31,381

Third Quarter 2020 Economic Income Financial Review

Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019(Dollar amounts Op Co Asset Co Total Op Co Asset Co Total Op Co Asset Co Total Op Co Asset Co Totalin thousands)Investment $ 185,151 $ ? $ 185,151 $ 69,433 $ ? $ 69,433 $ 474,778 $ ? $ 474,778 $ 254,374 $ ? $ 254,374bankingBrokerage 167,084 ? 167,084 110,178 ? 110,178 466,823 ? 466,823 346,095 ? 346,095Management fees 14,374 262 14,636 10,321 586 10,907 41,724 634 42,358 30,016 1,788 31,804Incentive income (2,621 ) 1,319 (1,302 ) 15,251 (862 ) 14,389 40,829 158 40,987 33,998 762 34,760Investment (90,364 ) (124 ) (90,488 ) 10,913 822 11,735 32,566 (13,671 ) 18,895 13,827 5,289 19,116income (loss)Other revenue (796 ) 2 (794 ) (132 ) 6 (126 ) (298 ) 4 (294 ) 5,295 56 5,351Total revenue 272,828 1,459 274,287 215,964 552 216,516 1,056,422 (12,875 ) 1,043,547 683,605 7,895 691,500Interest Expense 6,026 1,109 7,135 5,758 1,389 7,147 18,471 4,014 22,485 16,371 4,046 20,417Total net 266,802 350 267,152 210,206 (837 ) 209,369 1,037,951 (16,889 ) 1,021,062 667,234 3,849 671,083revenues Compensation & 152,829 957 153,786 121,890 729 122,619 582,480 2,093 584,573 386,593 4,383 390,976BenefitsFixednon-compensation 34,257 127 34,384 36,458 625 37,083 106,350 378 106,728 107,889 2,485 110,374expenseVariablenon-compensation 37,736 6 37,742 37,216 40 37,256 121,846 18 121,864 113,728 127 113,855expenseDepreciation & 5,670 5 5,675 5,073 9 5,082 16,756 17 16,773 14,957 30 14,987AmortizationNon-Controlling 2,105 ? 2,105 661 ? 661 5,584 ? 5,584 2,944 ? 2,944InterestTotal expenses 232,597 1,095 233,692 201,298 1,403 202,701 833,016 2,506 835,522 626,111 7,025 633,136 Less: Preferred 1,415 283 1,698 1,341 357 1,698 4,160 934 5,094 4,058 1,036 5,094DividendEconomic Income(Loss)attributable to 32,790 (1,028 ) 31,762 7,567 (2,597 ) 4,970 200,775 (20,329 ) 180,446 37,065 (4,212 ) 32,853CommonShareholders Add:Depreciation & 5,670 5 5,675 5,073 9 5,082 16,756 17 16,773 14,957 30 14,987AmortizationEconomicOperating Income(Loss) $ 38,460 $ (1,023 ) $ 37,437 $ 12,640 $ (2,588 ) $ 10,052 $ 217,531 $ (20,312 ) $ 197,219 $ 52,022 $ (4,182 ) $ 47,840attributable toCommonShareholders Economic Income $ 1.09 $ (0.03 ) $ 1.06 $ 0.24 $ (0.08 ) $ 0.16 $ 6.77 $ (0.69 ) $ 6.08 $ 1.17 $ (0.13 ) $ 1.04per common shareEconomicOperating Income $ 1.28 $ (0.03 ) $ 1.25 $ 0.40 $ (0.08 ) $ 0.32 $ 7.34 $ (0.69 ) $ 6.65 $ 1.66 $ (0.13 ) $ 1.53per common share

Economic Income total revenues were $274.3 million versus $216.5 million in the third quarter of 2019, an increase of 27%. Op Co revenue included in economic income was $272.8 million while Asset Co revenue included in economic income was $1.5 million.

Investment Banking revenues were $185.2 million, up 167% versus the prior-year period, driven by stronger equity capital markets activity as well as higher-fee M&A transactions.

Brokerage revenues of $167.1 million were up 52% versus the prior-year period, driven by strength in non-US trading, electronic trading, prime services and securities finance.

Management Fees rose 34% year-over-year to $14.6 million in the third quarter, driven by higher AUM in the sustainability strategy, private healthcare strategy and the healthcare royalties strategy. Management fees in Asset Co. were $0.3 million.

Incentive Income posted a loss of $1.3 million in the third quarter of 2020, down from income of $14.4 million in the prior-year period. Third quarter 2020 incentive income reflects the impact of mark-to-market declines in the value of positions in the private healthcare strategy, partially offset by a gain of $1.3 million in Asset Co.

Investment Income posted a loss of $90.5 million, versus income of $11.7 million in the prior-year period. The third quarter 2020 revenues include a $96.6 million unrealized loss on the investment in Nikola partially offset by positive performance in the event driven strategy, the healthcare strategy and the activist strategy. Investment income includes markdowns in Asset Co investments of $0.1 million.

Compensation and benefits expense was $153.8 million compared to $122.6 million in the third quarter of 2019. The increase was due to higher revenues offset only partially by a lower compensation to revenue ratio, as well as a $48.3 million reversal of a compensation accrual that was booked through 2Q 2020 related to previous gains on the Nikola investment. The third quarter 2020 compensation-to-revenue ratio was 56.1%, up from 54.6% in 2Q20 and down from 56.6% in 3Q19.

Fixed non-compensation expenses decreased $2.7 million from the prior-year period to $34.4 million. The decrease was due in part to lower service fees and reduced office service expenses.

Variable non-compensation expenses were $37.7 million, up from $37.3 million in the third quarter of 2019. The increase is related in part to higher brokerage and trade execution costs due to increased volumes, partially offset by lower travel, entertainment and business development expenses.

Economic Operating Income, which represents Economic Income attributable to common stockholders before depreciation and amortization, was $37.4 million for the third quarter of 2020, up from $10.1 million in the prior-year period. Third quarter 2020 Economic Operating Income for Op Co was $38.5 million, while Asset Co Economic Operating loss was $1.0 million.

Assets Under Management As of September30, 2020, the Company had assets under management of $11.8 billion, an increase of $0.3 billion from June 30, 2020 and an increase of $1.0 billion from September 30, 2019, respectively.

Invested Capital As of September 30, 2020, the Company had invested capital in Op Co totaling $784.2 million, up from $711.8 million as of June 30, 2020, as an increase in invested broker dealer capital more than offset the impact of the mark-to-market on the Nikola investment.

As of Sept 30, 2020, the Company had invested capital in Asset Co totaling $127.7 million, an increase of $3.3 million from the invested capital invested as of June 30, 2020.

The largest Asset Co investments were the stake in Italian wireless broadband provider Linkem ($77.4 million), private equity funds Formation8/Eclipse ($39.1 million) and other private investments ($9.3 million).

Earnings Conference Call

Management will hold a conference call today, October27, 2020 at 9:00 am ET to discuss these results and provide an update on business conditions.

Chair and Chief Executive Officer Jeffrey M. Solomon and Chief Financial Officer Stephen A. Lasota will host the presentation, followed by a question and answer period.

U.S. dial in: (855) 760-0961 International dial-in: (631) 485-4850 Passcode: 8591505

Please call the conference telephone number at least 15 minutes prior to the start time.

The call can also be accessed through live audio webcast via this direct link: https://edge.media-server.com/mmc/p/nazu2fc3

A replay of the call will be available for one week beginning at 12:00 pm ET on October27, 2020 on the Companys website at investor.cowen.com/investor-callsor via the following numbers:

U.S. replay dial-in: (855) 859-2056 International replay dial-in (404) 537-3406 Replay ID: 8591505

About Cowen Inc. Cowen Inc.(Cowen or the Company) is a diversified financial services firm offering investment banking services, research, sales and trading, prime brokerage, global clearing, commission management services and investment management. Cowen focuses on delivering value-added capabilities to our clients in order to help them outperform. Founded in 1918, the Company is headquartered inNew Yorkand has offices worldwide. Learn more atCowen.com

Investor Relations Contact: JT Farley (646) 562-1056 james.farley@cowen.com Source: Cowen Inc.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements provide the Companys current expectations or forecasts of future events. Forward-looking statements include statements about the Companys expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. As a result of the spread of COVID-19, economic uncertainties have arisen that have the potential in future periods to negatively impact the Companys business, financial condition, results of operation, cash flows, strategies and prospects. The extent of the impact of COVID-19 on the Companys operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and impact on our clients, employees, vendors and the markets in which we operate our businesses, all of which are uncertain and cannot be reasonably estimated at this time. The Companys actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in the sections entitled Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in the Companys Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. The Annual Report on Form 10-K and Quarterly Reports on Form 10-Q are available at our website at www.cowen.com and at the Securities and Exchange Commission website at www.sec.gov. Unless required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statement to reflect circumstances or events after the date of this press release.

Non-GAAP Financial Measures

In addition to the results presented above in accordance with US GAAP, the Company presents supplemental financial measures that are non-GAAP measures. The Company believes that these non-GAAP measures, viewed in addition to, and not in lieu of, the Companys reported US GAAP results, provide useful information to investors and analysts regarding its performance and overall results of operations as it presents investors and analysts with a supplemental operating view of the Companys financials to help better inform their analysis of the Companys performance. These metrics are an integral part of the Companys internal reporting to measure the performance of its business segments, allocate capital and other strategic decisions as well as assess the overall effectiveness of senior management. Reconciliations to comparable US GAAP measures are available in the accompanying schedules.The non-GAAP measures presented herein may not be comparable to similarly titled measures presented by other public companies, and are not identical to corresponding measures used in our various agreements or public filings.

Economic Income (Loss) may not be comparable to similarly titled measures used by other public companies. Economic Income (Loss) should not be considered in isolation or as a substitute for net income, operating cash flows, investing and financing activities, or other income or cash flow statement data prepared in accordance with US GAAP. As a result of the adjustments made to arrive at Economic Income (Loss) described below, Economic Income (Loss) has limitations in that it does not take into account certain items included or excluded under US GAAP, including its consolidated funds.

In general, Economic Income (Loss) is a pre-tax measure that (i) includes management reclassifications which the Company believes provides additional insight on the performance of the Companys core businesses and divisions (ii) eliminates the impact of consolidation for Consolidated Funds and excludes (iii)goodwill and intangible impairment (iv) certain other transaction-related adjustments and/or reorganization expenses and (v) certain costs associated with debt. Economic Operating Income (Loss) is a similar measure but before depreciation and amortization expenses.

Reconciliation of Net Income Attributable to Cowen Inc. Common Stockholders to Economic Income and Economic Operating Income

Three Months Ended Nine Months Ended September 30, September 30,(Dollar amounts in thousands) 2020 2019 2020 2019 US GAAP Net income (loss)attributable to Cowen Inc. common $ 18,586 $ 2,115 $ 119,102 $ 14,314stockholders Adjustments: Income tax expense (benefit) 8,693 1,287 52,247 9,567 Amortization of discount on 1,152 1,092 3,394 3,208 convertible debt Contingent liability adjustments 3,023 300 4,781 298 Goodwill & intangible impairment ? ? 544 4,100 Transaction-related and other 308 176 378 1,366 costs Economic Income (Loss) $ 31,762 $ 4,970 $ 180,446 $ 32,853 Add back: Depreciation and 5,675 5,082 16,773 14,987 amortization expense Economic Operating Income (Loss) $ 37,437 $ 10,052 $ 197,219 $ 47,840

Earnings Per Common Share (Diluted) to Economic Income Per Common Share (Diluted) and Economic Operating Income Per Common Share (Diluted)

Three Months Nine Months Ended Ended September 30, September 30,(Dollars per share) 2020 2019 2020 2019 Earnings (loss) per common share (diluted): $ 0.62 $ 0.07 $ 4.02 $ 0.46 Adjustments: Income tax expense (benefit) 0.29 0.04 1.76 0.30 Amortization of discount on convertible debt 0.04 0.03 0.11 0.10 Contingent liability adjustments 0.10 0.01 0.16 0.01 Goodwill & intangible impairment ? ? 0.02 0.13 Transaction-related and other costs 0.01 0.01 0.01 0.04 Economic income (Loss) per common share $ 1.06 $ 0.16 $ 6.08 $ 1.04 (diluted) Add back: Depreciation and amortization 0.19 0.16 0.57 0.49 expense Economic Operating Income (Loss) per common $ 1.25 $ 0.32 $ 6.65 $ 1.53 share (diluted)

Three Months Ended September 30, 2020 US GAAP Reclassifications and Adjustments Economic Income Fund Income Total(Dollars amounts Net income Management Consolidation Statement Economic Operating Assetin thousands) (loss) Reclassifications Reclassifications Adjustments Income/ Company Company (k) (Loss)Revenues Investment $ 194,341 $ (9,190 ) a, $ ? $ ? $ 185,151 $ 185,151 $ ? banking bBrokerage 138,483 28,601 c, ? ? $ 167,084 167,084 ? hManagement fees 11,954 2,519 d, 163 ? $ 14,636 14,374 262 eIncentive income 127 (1,462 ) e 33 ? $ (1,302 ) (2,621 ) 1,319 (loss)Investment ? (90,488 ) f ? ? $ (90,488 ) (90,364 ) (124 )income (loss)Interest and 37,552 (37,552 ) c ? ? ? ? ? dividendsReimbursement 269 (269 ) b ? ? ? ? ? from affiliatesReinsurance 2,505 (2,505 ) g ? ? ? ? ? premiumsOther revenue 1,369 (2,160 ) g (3 ) ? (794 ) (796 ) 2 Consolidated 1,135 ? (1,135 ) ? ? ? ? Funds revenuesTotal revenues 387,735 (112,506 ) (942 ) ? 274,287 272,828 1,459 Interest expense(Economic Income/(Loss)) / 37,754 (29,467 ) c ? (1,152 ) l 7,135 6,026 1,109 Interest anddividend expense(US GAAP)Total net 349,981 (83,039 ) (942 ) 1,152 267,152 266,802 350 revenuesExpenses Compensation & 153,427 359 i ? ? 153,786 152,829 957 benefitsFixed e,non-compensation ? 37,708 j ? (3,324 ) m 34,384 34,257 127 expenseVariablenon-compensation ? 37,742 j ? ? 37,742 37,736 6 expense a,Other b,non-compensation 89,636 (89,636 ) d, ? ? ? ? ? expense g, iDepreciation & 5,682 ? ? (7 ) n 5,675 5,670 5 amortizationNon-controlling ? 2,105 j ? ? 2,105 2,105 ? interestConsolidated 494 ? (494 ) ? ? ? ? Funds expensesTotal expenses 249,239 (11,722 ) (494 ) (3,331 ) 233,692 232,597 1,095 Other income e,(loss) (62,396 ) 64,896 f, (2,500 ) ? ? ? ? hIncome taxesexpense / 8,830 (137 ) ? (8,693 ) o ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 9,232 (6,284 ) j (2,948 ) ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to 20,284 ? ? 13,176 33,460 34,205 (745 )Cowen Inc.Less: Preferred 1,698 ? ? ? 1,698 1,415 283 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 18,586 $ ? $ ? $ 13,176 31,762 32,790 (1,028 )Cowen Inc.commonstockholdersAdd back:Depreciation and 5,675 5,670 5 amortizationexpenseEconomicOperating Income $ 37,437 $ 38,460 $ (1,023 )(Loss)

Three Months Ended September 30, 2019 US GAAP Reclassifications and Adjustments Economic Income Net Fund Income Total(Dollars amounts income Management Consolidation Statement Economic Operating Assetin thousands) (loss) Reclassifications Reclassifications Adjustments Income/ Company Company (k) (Loss)Revenues Investment $ 77,292 $ (7,859 ) a, $ ? $ ? $ 69,433 $ 69,433 $ ? banking bBrokerage 93,995 16,183 c, ? ? 110,178 110,178 ? hManagement fees 7,300 3,033 d, 574 ? 10,907 10,321 586 eIncentive income 701 13,675 e 13 ? 14,389 15,251 (862 )(loss)Investment ? 11,735 f ? ? 11,735 10,913 822 income (loss)Interest and 60,707 (60,707 ) c ? ? ? ? ? dividendsReimbursement 238 (265 ) b 27 ? ? ? ? from affiliatesReinsurance 8,146 (8,146 ) g ? ? ? ? ? premiumsOther revenue 1,237 (1,389 ) g 26 ? (126 ) (132 ) 6 Consolidated 2,431 ? (2,431 ) ? ? ? ? Funds revenuesTotal revenues 252,047 (33,740 ) (1,791 ) ? 216,516 215,964 552 Interest expense(Economic Income/(Loss)) / 56,477 (48,238 ) c ? (1,092 ) l 7,147 5,758 1,389 Interest anddividend expense(US GAAP)Total net 195,570 14,498 (1,791 ) 1,092 209,369 210,206 (837 )revenuesExpenses Compensation & 120,320 2,299 i ? ? 122,619 121,890 729 benefitsFixed e,non-compensation ? 37,559 j ? (476 ) m 37,083 36,458 625 expenseVariablenon-compensation ? 37,256 j ? ? 37,256 37,216 40 expense a,Other b,non-compensation 92,046 (92,046 ) d, ? ? ? ? ? expense g, iDepreciation & 5,082 ? ? ? 5,082 5,073 9 amortizationNon-controlling ? 661 j ? ? 661 661 ? interestConsolidated 2,516 ? (2,516 ) ? ? ? ? Funds expensesTotal expenses 219,964 (14,271 ) (2,516 ) (476 ) 202,701 201,298 1,403 Other income e,(loss) 32,342 (26,721 ) f, (5,621 ) ? ? ? ? hIncome taxesexpense / 1,365 (78 ) ? (1,287 ) o ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 2,770 2,126 j (4,896 ) ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to 3,813 ? ? 2,855 6,668 8,908 (2,240 )Cowen Inc.Less: Preferred 1,698 ? ? ? 1,698 1,341 357 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 2,115 $ ? $ ? $ 2,855 4,970 7,567 (2,597 )Cowen Inc.commonstockholdersAdd back:Depreciation and 5,082 5,073 9 amortizationexpenseEconomicOperating Income $ 10,052 $ 12,640 $ (2,588 )(Loss)

Nine Months Ended September 30, 2020 US GAAP Reclassifications and Adjustments Economic Income Fund Income Total(Dollars amounts Net income Management Consolidation Statement Economic Operating Assetin thousands) (loss) Reclassifications Reclassifications Adjustments Income/ Company Company (k) (Loss)Revenues Investment $ 503,351 $ (28,573 ) a, $ ? $ ? $ 474,778 $ 474,778 $ ? banking bBrokerage 425,069 41,754 c, ? ? 466,823 466,823 ? hManagement fees 35,211 5,672 d, 1,475 ? 42,358 41,724 634 eIncentive income 127 40,827 e 33 ? 40,987 40,829 158 (loss)Investment ? 18,895 f ? ? 18,895 32,566 (13,671 )income (loss)Interest and 127,547 (127,547 ) c ? ? ? ? ? dividendsReimbursement 777 (827 ) b 50 ? ? ? ? from affiliatesReinsurance 18,943 (18,943 ) g ? ? ? ? ? premiumsOther revenue 4,709 (4,982 ) g (21 ) ? (294 ) (298 ) 4 Consolidated 4,650 ? (4,650 ) ? ? ? ? Funds revenuesTotal revenues 1,120,384 (73,724 ) (3,113 ) ? 1,043,547 1,056,422 (12,875 )Interest and 125,850 (99,971 ) c ? (3,394 ) l 22,485 18,471 4,014 dividend expenseTotal net 994,534 26,247 (3,113 ) 3,394 1,021,062 1,037,951 (16,889 )revenuesExpenses Compensation & 583,137 1,436 i ? ? 584,573 582,480 2,093 benefitsFixed e,non-compensation ? 111,880 j ? (5,152 ) m 106,728 106,350 378 expenseVariablenon-compensation ? 121,864 j ? ? 121,864 121,846 18 expense a,Other b,non-compensation 286,666 (286,666 ) d, ? ? ? ? ? expense g, iDepreciation & 17,324 ? ? (551 ) n 16,773 16,756 17 amortizationNon-controlling ? 5,584 j ? ? 5,584 5,584 ? interestConsolidated 4,793 ? (4,793 ) ? ? ? ? Funds expensesTotal expenses 891,920 (45,902 ) (4,793 ) (5,703 ) 835,522 833,016 2,506 Other income e,(loss) 54,328 (82,006 ) f, 27,678 ? ? ? ? hIncome taxesexpense / 52,589 (342 ) ? (52,247 ) o ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in (19,843 ) (9,515 ) j 29,358 ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to $ 124,196 ? ? 61,344 185,540 204,935 (19,395 )Cowen Inc.Less: Preferred 5,094 ? ? ? 5,094 4,160 934 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 119,102 $ ? $ ? $ 61,344 180,446 200,775 (20,329 )Cowen Inc.commonstockholdersAdd back:Depreciation and 16,773 16,756 17 amortizationexpenseEconomicOperating Income $ 197,219 $ 217,531 $ (20,312 )(Loss)

Nine Months Ended September 30, 2019 US GAAP Reclassifications and Adjustments Economic Income Net Fund Income Total(Dollars amounts income Management Consolidation Statement Economic Operating Assetin thousands) (loss) Reclassifications Reclassifications Adjustments Income/ Company Company (k) (Loss)Revenues Investment $ 272,103 $ (17,729 ) a, $ ? $ ? $ 254,374 $ 254,374 $ ? banking bBrokerage 302,840 43,255 c, ? ? 346,095 346,095 ? hManagement fees 21,480 8,684 d, 1,640 ? 31,804 30,016 1,788 eIncentive income 724 33,479 e 557 ? 34,760 33,998 762 (loss)Investment ? 19,116 f ? ? 19,116 13,827 5,289 income (loss)Interest and 129,846 (129,846 ) c ? ? ? ? ? dividendsReimbursement 780 (874 ) b 94 ? ? ? ? from affiliatesReinsurance 29,068 (29,068 ) g ? ? ? ? ? premiumsOther revenue 3,228 2,109 g 14 ? 5,351 5,295 56 Consolidated 8,239 ? (8,239 ) ? ? ? ? Funds revenuesTotal revenues 768,308 (70,874 ) (5,934 ) ? 691,500 683,605 7,895 Interest expense(Economic Income/(Loss)) / 125,089 (101,464 ) c ? (3,208 ) l 20,417 16,371 4,046 Interest anddividend expense(US GAAP)Total net 643,219 30,590 (5,934 ) 3,208 671,083 667,234 3,849 revenuesExpenses Compensation & 388,611 2,365 i ? ? 390,976 386,593 4,383 benefitsFixed e,non-compensation ? 112,038 j ? (1,664 ) m 110,374 107,889 2,485 expenseVariablenon-compensation ? 113,855 j ? ? 113,855 113,728 127 expense a,Other b,non-compensation 276,054 (276,054 ) d, ? ? ? ? ? expense g, iDepreciation & 14,990 (3 ) ? ? 14,987 14,957 30 amortizationNon-controlling ? 2,944 j ? ? 2,944 2,944 ? interestGoodwill 4,100 ? ? (4,100 ) n ? ? ? impairmentConsolidated 6,229 ? (6,229 ) ? ? ? ? Funds expensesTotal expenses 689,984 (44,855 ) (6,229 ) (5,764 ) 633,136 626,111 7,025 Other income e,(loss) 82,976 (73,907 ) f, (9,069 ) ? ? ? ? hIncome taxesexpense / 9,615 (48 ) ? (9,567 ) o ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 7,188 1,586 j (8,774 ) ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to 19,408 ? ? 18,539 37,947 41,123 (3,176 )Cowen Inc.Less: Preferred 5,094 ? ? ? 5,094 4,058 1,036 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 14,314 $ ? $ ? $ 18,539 32,853 37,065 (4,212 )Cowen Inc.commonstockholdersAdd back:Depreciation and 14,987 14,957 30 amortizationexpenseEconomicOperating Income $ 47,840 $ 52,022 $ (4,182 )(Loss)

Adjustments made to US GAAP Net Income (Loss) to arrive at Economic Operating Income (Loss)

Management Reclassifications Management reclassification adjustments and fund consolidation reclassification adjustments have no effect on economic income. These adjustments are reclassifications to change the location of certain line items.a Economic Income (Loss) presents underwriting expenses net of investment banking revenues. Economic Income (Loss) presents expenses reimbursed from clients andb affiliates within their respective expense category but is included as a part of revenues under US GAAP. Economic Income (Loss) brokerage revenues included net securities borrowedc and securities loaned activities which are shown gross in interest income and interest expense for US GAAP.d Economic Income (Loss) presents revenues net of fund start-up costs and distribution fees paid to agents. Economic Income (Loss) recognizes the Company's proportionate share of management and incentive fees and associated share of expenses on a gross basis for certain real estate operating entities, the healthcare royaltye business and the activist business. Additionally, carried interest, which the Company applies an equity ownership model to, is recorded in other income (loss) for US GAAP and is shown as incentive income for Economic Income (Loss). Economic Income (Loss) recognizes Company income from proprietary tradingf (including interest and dividends) for which the majority of this activity is shown in other income (loss) for US GAAP reporting. Economic Income (Loss) recognizes underwriting income from the Company'sg insurance related activities, net of expenses, within other revenue. The costs are recorded within expenses for US GAAP reporting. Economic Income (Loss) recognizes gains and losses on investments held ash part of the Company's facilitation and trading business within brokerage revenues as these investments are directly related to the markets business activities.i Economic Income (Loss) presents certain payments to associated banking partners as compensation rather than non-compensation expenses. Economic Income (Loss) presents US GAAP expenses as either Fixedj non-compensation or Variable non-compensation expenses. The Company also presents US GAAP Income (loss) attributable to non-controlling interests within total other expenses for Economic Income (Loss).Fund Consolidation Reclassifications The impacts of consolidation and the related elimination entries of the Consolidated Funds are not included in Economic Income (Loss). Adjustmentsk to reconcile to US GAAP net income (loss) included elimination of incentive income and management fees earned from the Consolidated Funds and addition of investment fund expenses excluding management fees paid, investment fund revenues and investment income (loss).Income Statement Adjustmentsl Economic Income (Loss) excludes the amortization of discount on convertible debt. Economic Income (Loss) excludes acquisition related adjustments asm management does not consider these items when evaluating the performance of the Company.n Economic Income (Loss) excludes goodwill and intangible impairment.o Economic Income (Loss) excludes income taxes.