GlobeNewswire Inc | Jul 28, 2020 07:01AM EDT

July 28, 2020

-- Reports Record 2Q20 US GAAP Net Income of $112.1 million or $3.83 per share -- Record Economic Operating Income of $166.9 million, or $5.69 per share -- The Nikola investment contributed $64.9 million to Economic Operating Income, or $2.21 per share -- Strong Book Value Growth, up $5.82 per share to $28.96, Tangible Book Value up $5.86 to $22.94 per share

NEW YORK, July 28, 2020 (GLOBE NEWSWIRE) -- CowenInc. (NASDAQ: COWN) (Cowen or the Company) today announced its operating results for the second quarter ended June30, 2020.

Jeffrey M. Solomon, Chair and Chief Executive Officer of Cowen, said, "We outperformed across the entire organization in the second quarter. With record revenues in our banking and markets businesses as well as a strong contribution from our investment management operations, we generated record profitability, even before factoring in the unrealized investment gains from Nikola. In an environment of heightened volatility and macroeconomic uncertainty, we remain dedicated to helping our clients navigate with our strategic advice, capital raising expertise, advanced execution capabilities and world-class research and differentiated investment products.

Second Quarter 2020 Financial Summary

US GAAP Economic Operating Income Three Months Ended Three Months Ended June 30, June 30,($ in millions,except per share 2020 2019 ? % 2020 2019 ? %information) Revenue $ 418.8 $ 292.2 43 % $ 558.7 $ 244.4 129 %Net income (loss)attributable to $ 112.1 $ 4.1 N/A $ 166.9 $ 20.4 718 %commonstockholdersEarnings (loss)per common share $ 3.83 $ 0.13 N/A $ 5.69 $ 0.65 775 %(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)."

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

Second quarter 2020 US GAAP revenue was $418.8 million compared to $292.2 million in the second quarter of 2019.

Second quarter 2020 US GAAP employee compensation and benefits expenses was $305.3 million, an increase of $168.9 million from the prior-year period.

Second quarter 2020 US GAAP income tax expense was $44.9 million compared to $5.1 million in the prior-year quarter.

Second quarter 2020 US GAAP total expenses totaled $411.5 million, an increase of $164.0 million from the prior-year period.

Second quarter 2020 US GAAP net income attributable to common stockholders was $112.1 million compared to net income attributable to common stockholders of $4.1 million in the second quarter of 2019.

Second Quarter 2020 Operating Financial Highlights (Non-GAAP)

-- Record Investment Banking performance:- Strongest quarter on record driven by capital markets activity in biotech and healthcare tools & diagnostics. Revenues for the month of June alone surpassed any quarter on record.- M&A revenue strong despite difficult economic backdrop, including record single fee from Nikola engagement. -- Record markets revenues with continuing share gains:- Markets revenue, which includes brokerage, financing and other revenue, was a record $169.2 million ($2.69 million/day).- Posted strong performances in electronic trading, European trading, derivatives and prime brokerage.- Securities finance and special situations, including SPAC trading, rebounded sharply after a difficult 1Q20. -- Strong momentum in investment management:- Record incentive income accrual driven by IPOs in the healthcare investment strategy portfolio and strong performance in the activist strategy. Management fee revenue run-rate at highest level since 2016. -- Invested capital - Strong returns with reduced risk:- Record investment income driven by valuation of Nikola investment ($129.8 million) and rebound in other balance sheet investments.- Reduced investment risk in portfolio in March/April and increased hedging to reflect a more volatile trading environment due to economic uncertainty.

Capital Optimization Update

As of June30, 2020, Cowen had book value of $28.96 per common share and tangible book value per common share of $22.94, up from book value of $24.77 and tangible book value of $18.72 at December31, 2019.

In the second quarter of 2020, the Company repurchased $6.6 million of its common stock, or 446,800 shares, at an average price of $14.67 under the Company's existing share repurchase program.

Outside the share repurchase program, in the second quarter of 2020 the Company acquired approximately $3.2 million of shares as a result of net share settlements relating to the vesting of equity awards, or 262,160 shares, at an average price of $12.22.

For the first half of 2020, the Company repurchased 1,830,457 shares for $24.6 million, or an average price of $13.42 under the Company's existing share repurchase program. Outside the share repurchase program, in the first half of 2020 the Company acquired approximately $6 million of shares as a result of net share settlements relating to the vesting of equity awards, or 490,717 shares at an average price of $12.29.

Quarterly Cash Dividend

The Company maintained its quarterly cash dividend payable on its common stock. On July 21, 2020, the Board of Directors declared a cash dividend of $0.04 per common share, payable on September 15, 2020, to stockholders of record on September 1, 2020.

Select Balance Sheet Data

(Amounts in millions, except per share information) June 30, December 31, 2020 2019Cowen Inc. stockholders' equity $ 901.7 $ 809.9Common equity (CE) $ 800.4 $ 708.5Tangible common equity (TCE) $ 634.1 $ 535.6 Book value per share (CE/CSO) $ 28.96 $ 24.77Tangible book value per share (TCE/CSO) $ 22.94 $ 18.72 Common shares outstanding (CSO) 27.6 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019Revenue Investment banking $ 203,982 $ 114,705 $ 309,010 $ 194,811 Brokerage 147,224 111,382 286,586 208,845 Management fees 11,653 7,039 23,257 14,180 Incentive income ? 8 ? 23 Interest and dividends 47,918 40,047 89,995 69,139 Reimbursement from 247 254 508 542 affiliatesReinsurance premiums 5,967 14,331 16,438 20,922 Other 1,490 930 3,340 1,991 Consolidated Funds 359 3,468 3,515 5,808 revenuesTotal revenue 418,840 292,164 732,649 516,261 Interest and dividends 49,304 39,528 88,096 68,612 expenseTotal net revenue 369,536 252,636 644,553 447,649 Expenses Employee compensation and 305,282 136,409 429,710 268,291 benefitsReinsurance claims,commissions and 6,434 10,782 16,864 16,944 amortization of deferredacquisition costsOperating, general,administrative and other 92,027 89,063 180,166 167,064 expensesDepreciation and 6,200 4,952 11,642 9,908 amortization expenseGoodwill impairment ? 4,100 ? 4,100 Consolidated Funds 1,585 2,231 4,299 3,713 expensesTotal expenses 411,528 247,537 642,681 470,020 Other income (loss) Net (losses) gains onsecurities, derivatives 196,502 3,910 152,519 42,994 and other investmentsConsolidated Funds net 37,370 5,782 (35,795 ) 7,640 (losses) gainsTotal other income (loss) 233,872 9,692 116,724 50,634 Income (loss) before 191,880 14,791 118,596 28,263 income taxesIncome tax expense/ 44,932 5,073 43,759 8,250 (benefit)Net income (loss) 146,948 9,718 74,837 20,013 Net income (loss)attributable tonon-controlling interests 33,113 3,906 (29,075 ) 4,418 in consolidatedsubsidiaries and fundsNet income (loss)attributable to Cowen 113,835 5,812 103,912 15,595 Inc.Less: Preferred stock 1,698 1,698 3,396 3,396 dividendsNet income (loss)attributable to Cowen $ 112,137 $ 4,114 $ 100,516 $ 12,199 Inc. common stockholders Earnings (loss) per share:Basic $ 4.01 $ 0.14 $ 3.55 $ 0.41 Diluted $ 3.83 $ 0.13 $ 3.39 $ 0.39 Weighted average shares used in per share data:Basic 27,983 29,769 28,289 29,766 Diluted 29,316 31,522 29,644 31,572

Second Quarter 2020 Economic Income Financial Review

Three Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019(Dollar amounts in Op Co Asset Co Total Op Co Asset Co Total Op Co Asset Co Total Op Co Asset Co Totalthousands)Investment banking $ 190,430 $ ? $ 190,430 $ 104,216 $ ? $ 104,216 $ 289,627 $ ? $ 289,627 $ 187,212 $ ? $ 187,212 Brokerage 167,067 ? 167,067 124,044 ? 124,044 299,739 ? 299,739 235,916 ? 235,916 Management fees 14,234 168 14,402 9,968 500 10,468 27,351 372 27,723 19,695 1,203 20,898 Incentive income 45,392 983 46,375 2,633 1,596 4,229 43,449 (1,161 ) 42,288 19,270 1,706 20,976 Investment income 142,379 (1,893 ) 140,486 (6,513 ) 3,626 (2,887 ) 122,931 (13,548 ) 109,383 2,914 4,467 7,381 (loss)Other revenues (62 ) 2 (60 ) 4,304 15 4,319 498 2 500 5,427 51 5,478 Total revenue 559,440 (740 ) 558,700 238,652 5,737 244,389 783,595 (14,335 ) 769,260 470,434 7,427 477,861 Interest Expense /Discount 6,102 1,469 7,571 5,298 1,408 6,706 12,445 2,904 15,349 10,615 2,655 13,270 AmortizationTotal net revenues 553,338 (2,209 ) 551,129 233,354 4,329 237,683 771,150 (17,239 ) 753,911 459,819 4,772 464,591 Compensation & 304,644 438 305,082 134,454 1,955 136,409 429,650 1,136 430,786 264,703 3,652 268,355 BenefitsFixednon-compensation 34,755 105 34,860 37,171 1,244 38,415 72,094 251 72,345 71,428 1,862 73,290 expenseVariablenon-compensation 40,817 5 40,822 39,428 40 39,468 84,109 12 84,121 76,514 85 76,599 expenseDepreciation & 5,657 6 5,663 4,945 7 4,952 11,085 12 11,097 9,884 24 9,908 AmortizationNon-Controlling 1,739 ? 1,739 1,258 ? 1,258 3,479 ? 3,479 2,283 ? 2,283 InterestTotal expenses 387,612 554 388,166 217,256 3,246 220,502 600,417 1,411 601,828 424,812 5,623 430,435 Less: Preferred 1,387 311 1,698 1,341 357 1,698 2,745 651 3,396 2,717 679 3,396 DividendEconomic Income(Loss)attributable to 164,339 (3,074 ) 161,265 14,757 726 15,483 167,988 (19,301 ) 148,687 32,290 (1,530 ) 30,760 CommonShareholders Add: Depreciation 5,657 6 5,663 4,945 7 4,952 11,085 12 11,097 9,884 24 9,908 & AmortizationEconomic OperatingIncome (Loss)attributable to $ 169,996 $ (3,068 ) $ 166,928 $ 19,702 $ 733 $ 20,435 $ 179,073 $ (19,289 ) $ 159,784 $ 42,174 $ (1,506 ) $ 40,668 CommonShareholders Economic Income $ 5.61 $ (0.10 ) $ 5.50 $ 0.47 $ 0.02 $ 0.49 $ 5.67 $ (0.65 ) $ 5.02 $ 1.02 $ (0.05 ) $ 0.97 per common shareEconomic OperatingIncome per common $ 5.80 $ (0.10 ) $ 5.69 $ 0.63 $ 0.02 $ 0.65 $ 6.04 $ (0.65 ) $ 5.39 $ 1.34 $ (0.05 ) $ 1.29 share

Revenues included in Economic Income were a record $558.7 million versus $244.4 million in the second quarter of 2019, an increase of 129%. Op Co revenue included in economic income was $559.4 million while Asset Co revenue included in economic income was a loss of $0.7 million.

Investment Banking revenues were a record $190.4 million, up 83% versus the prior-year period, driven by stronger ECM activity as well as higher-fee M&A transactions.

Brokerage revenues of $167.1 million were up 35% versus the prior-year period, driven by strength in derivatives, electronic trading and non-US trading.

Management Fees rose 38% year-over-year to $14.4 million in the second quarter, driven by the launch of the sustainability strategy and growth in assets in the private healthcare strategy and the healthcare royalties strategy. Management fees included a gain of $0.2 million in Asset Co.

Incentive Income posted record revenues of $46.4 million in the second quarter of 2020, up from $4.2 million in the prior-year period. Second quarter 2020 incentive income reflects stronger investment performance in the healthcare strategy and the activist strategy, as well as a gain of $1.0 million in Asset Co.

Investment Income posted record revenues of $140.5 million, versus a loss of $2.9 million in the prior-year period. The second quarter 2020 revenues include a $129.8 million unrealized gain on the investment in Nikola and improved performance in the event driven strategy, the healthcare strategy and the activist strategy. Investment income includes markdowns in Asset Co investments of $1.9 million.

Compensation and benefits expense was $305.1 million compared to $136.4 million in the second quarter of 2019. The increase was due to higher revenues, and includes a 50% compensation-to-revenue accrual for the unrealized gains from the Nikola investment. Despite the increase in the compensation accrual amount, the second quarter 2020 compensation-to-revenue ratio fell to 54.6%, down from 59.6% in 1Q20 and down from 55.8% in 2Q19.

Fixed non-compensation expenses decreased $3.6 million from the prior-year period to $34.9 million. The decrease was due in part to lower professional fees and consulting costs.

Variable non-compensation expenses were $40.8 million, up from $39.5 million in the second quarter of 2019. The increase is related in part to higher brokerage and trade execution costs due to increased volumes, 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 $166.9 million for the second quarter of 2020, up from $20.4 million in the prior-year period. Second quarter 2020 Economic Operating Income for Op Co was $170.0 million, while Asset Co Economic Operating loss was $3.1 million.

Assets Under Management As of June30, 2020, the Company had assets under management of $11.5 billion, up $0.7 billion from March 31, 2020 and a decrease of $0.6 billion from June 30, 2019, respectively.

Invested Capital As of June 30, 2020, the Company had invested capital in Op Co totaling $711.8million, up from $539.9 million as of March 31, 2020. The biggest increase was the stake in Nikola Corporation ($129.8 million).

As of July 1, 2020, the Company had invested capital in Asset Co totaling $124.4 million, a reduction of $2.3 million from the invested capital invested as of March 31, 2020.

The largest Asset Co investments were the stake in Italian wireless broadband provider Linkem ($73.6 million), private equity funds Formation8/Eclipse ($38.9 million) and other private investments ($5.1 million).

Earnings Conference Call

Management will hold a conference call today, July28, 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) 760-0961International dial-in: (631) 485-4850Passcode: 5580959

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: http://edge.media-server.com/mmc/p/bohrvhbk

A replay of the call will be available for one week beginning at 12:00 pm ET on July28, 2020 on the Companys website at investor.cowen.com/events/or via the following numbers:

U.S. replay dial-in: (855) 859-2056International replay dial-in (404) 537-3406Replay ID: 5580959

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 at Cowen.com

Investor Relations Contact:JT Farley(646) 562-1056james.farley@cowen.comSource: 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 operating income, 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 Six Months Ended June 30, June 30,(Dollar amounts in 2020 2019 2020 2019thousands) US GAAP Net income (loss)attributable to Cowen Inc. $ 112,137 $ 4,114 $ 100,516 $ 12,199 common stockholdersAdjustments: Income tax expense 44,837 5,039 43,554 8,281 (benefit)Uncrystallized incentive ? 150 ? 606 feesAmortization of discount on 1,131 1,071 2,242 2,117 convertible debtRetainer fees revenue ? 836 ? 2,272 deferred for US GAAPContingent liability 2,596 ? 1,758 ? adjustmentsGoodwill & intangible 545 4,100 545 4,100 impairmentTransaction-related and 19 173 72 1,185 other costsEconomic Income (Loss) $ 161,265 $ 15,483 $ 148,687 $ 30,760 Add back: Depreciation and 5,663 4,952 11,097 9,908 amortization expenseEconomic Operating Income $ 166,928 $ 20,435 $ 159,784 $ 40,668 (Loss)

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

Three Months Ended Six Months Ended June 30, June 30,(Dollars per share) 2020 2019 2020 2019 Earnings (loss) per common share $ 3.83 $ 0.13 $ 3.39 $ 0.39 (diluted):Adjustments: Income tax expense (benefit) 1.53 0.16 1.47 0.26 Uncrystallized incentive fees ? ? ? 0.02 Amortization of discount on convertible 0.04 0.03 0.08 0.07 debtRetainer fees revenue deferred for US ? 0.03 ? 0.07 GAAPFund start-up costs recognized for US ? ? ? ? GAAPContingent liability adjustments 0.09 ? 0.06 ? Goodwill & intangible impairment 0.01 0.13 0.02 0.12 Transaction-related and other costs ? 0.01 ? 0.04 Economic income (Loss) per common share $ 5.50 $ 0.49 $ 5.02 $ 0.97 (diluted)Add back: Depreciation and amortization 0.19 0.16 0.37 0.32 expenseEconomic Operating Income (Loss) per $ 5.69 $ 0.65 $ 5.39 $ 1.29 common share (diluted)

Three Months Ended June 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 (j) (Loss)Revenues Investment $ 203,982 $ (13,552 ) a, $ ? $ ? $ 190,430 $ 190,430 $ ? banking bBrokerage 147,224 19,843 c, ? ? 167,067 167,067 ? hManagement fees 11,653 2,114 d, 635 ? 14,402 14,234 168 eIncentive income ? 46,375 e ? ? 46,375 45,392 983 (loss)Investment ? 140,486 f ? ? 140,486 142,379 (1,893 )income (loss)Interest and 47,918 (47,918 ) c ? ? ? ? ? dividendsReimbursement 247 (272 ) b 25 ? ? ? ? from affiliatesReinsurance 5,967 (5,967 ) g ? ? ? ? ? premiumsOther revenue 1,490 (1,532 ) g (18 ) ? (60 ) (62 ) 2 Consolidated 359 ? (359 ) ? ? ? ? Funds revenuesTotal revenues 418,840 139,577 283 ? 558,700 559,440 (740 )Interest expense(Economic Income/(Loss)) / 49,304 (40,602 ) c ? (1,131 ) l 7,571 6,102 1,469 Interest anddividend expense(US GAAP)Total net 369,536 180,179 283 1,131 551,129 553,338 (2,209 )revenuesExpenses Compensation & 305,282 (200 ) i ? 305,082 304,644 438 BenefitsFixed e,non-compensation ? 37,475 j ? (2,615 ) m 34,860 34,755 105 expenseVariablenon-compensation ? 40,822 j ? ? 40,822 40,817 5 expense a,Other b,non-compensation 98,461 (98,461 ) d, ? ? ? ? ? US GAAP expense g, iDepreciation & 6,200 8 ? (545 ) p 5,663 5,657 6 AmortizationNon-Controlling ? 1,739 j ? ? 1,739 1,739 ? InterestConsolidated 1,585 ? (1,585 ) ? ? ? ? Funds expensesTotal expenses 411,528 (18,617 ) (1,585 ) (3,160 ) 388,166 387,612 554 Other income e,(loss) 233,872 (201,994 ) f, (31,878 ) ? ? ? ? hIncome taxesexpense / 44,932 (95 ) ? 44,837 n ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 33,113 (3,103 ) j (30,010 ) ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to 113,835 ? ? (40,546 ) 162,963 165,726 (2,763 )Cowen Inc.Less: Preferred 1,698 ? ? ? 1,698 1,387 311 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to 112,137 ? ? (40,546 ) 161,265 164,339 (3,074 )Cowen Inc.commonstockholdersAdd back:Depreciation and 5,663 5,657 6 amortizationexpenseEconomicOperating Income $ 166,928 $ 169,996 $ (3,068 )(Loss)

Three Months Ended June 30, 2019 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 $ 114,705 $ (11,325 ) a, $ ? $ 836 o $ 104,216 $ 104,216 $ ? banking bBrokerage 111,382 12,662 c, ? ? 124,044 124,044 ? hManagement fees 7,039 2,864 d, 565 ? 10,468 9,968 500 eIncentive income 8 4,071 e ? 150 o 4,229 2,633 1,596 (loss)Investment ? (2,887 ) f ? ? (2,887 ) (6,513 ) 3,626 income (loss)Interest and 40,047 (40,047 ) c ? ? ? ? ? dividendsReimbursement 254 (287 ) b 33 ? ? ? ? from affiliatesReinsurance 14,331 (14,331 ) g ? ? ? ? ? premiumsOther revenue 930 3,401 g (12 ) ? 4,319 4,304 15 Consolidated 3,468 ? (3,468 ) ? ? ? ? Funds revenuesTotal revenues 292,164 (45,879 ) (2,882 ) 986 244,389 238,652 5,737 Interest expense(Economic Income/(Loss)) / 39,528 (31,751 ) c ? (1,071 ) l 6,706 5,298 1,408 Interest anddividend expense(US GAAP)Total net 252,636 (14,128 ) (2,882 ) 2,057 237,683 233,354 4,329 revenuesExpenses Compensation & 136,409 ? i ? ? 136,409 134,454 1,955 BenefitsFixed e,non-compensation ? 38,588 j ? (173 ) m 38,415 37,171 1,244 expenseVariablenon-compensation ? 39,468 j ? ? 39,468 39,428 40 expense a,Other b,non-compensation 99,845 (99,845 ) d, ? ? ? ? ? US GAAP expense g, iDepreciation & 4,952 ? ? ? 4,952 4,945 7 AmortizationNon-Controlling ? 1,258 j ? ? 1,258 1,258 ? InterestGoodwill 4,100 ? ? (4,100 ) p ? ? ? impairmentsConsolidated 2,231 ? (2,231 ) ? ? ? ? Funds expensesTotal expenses 247,537 (20,531 ) (2,231 ) (4,273 ) 220,502 217,256 3,246 Other income e,(loss) 9,692 (6,865 ) f, (2,827 ) ? ? ? ? hIncome taxesexpense / 5,073 (34 ) ? (5,039 ) o ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 3,906 (428 ) j (3,478 ) ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to 5,812 ? ? 11,369 17,181 16,098 1,083 Cowen Inc.Less: Preferred 1,698 ? ? ? 1,698 1,341 357 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to 4,114 ? ? 11,369 15,483 14,757 726 Cowen Inc.commonstockholdersAdd back:Depreciation and 4,952 4,945 7 amortizationexpenseEconomicOperating Income $ 20,435 $ 19,702 $ 733 (Loss)

Six Months Ended June 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 $ 309,010 $ (19,383 ) a, $ ? $ ? $ 289,627 $ 289,627 $ ? banking bBrokerage 286,586 13,153 c, ? ? 299,739 299,739 ? hManagement fees 23,257 3,154 d, 1,312 ? 27,723 27,351 372 eIncentive income ? 42,288 e ? ? 42,288 43,449 (1,161 )(loss)Investment ? 109,383 f ? ? 109,383 122,931 (13,548 )income (loss)Interest and 89,995 (89,995 ) c ? ? ? ? ? dividendsReimbursement 508 (558 ) b 50 ? ? ? ? from affiliatesReinsurance 16,438 (16,438 ) g ? ? ? ? ? premiumsOther revenue 3,340 (2,822 ) g (18 ) ? 500 498 2 Consolidated 3,515 ? (3,515 ) ? ? ? ? Funds revenuesTotal revenues 732,649 38,782 (2,171 ) ? 769,260 783,595 (14,335 )Interest expense(Economic Income/(Loss)) / 88,096 (70,505 ) c ? (2,242 ) l 15,349 12,445 2,904 Interest anddividend expense(US GAAP)Total net 644,553 109,287 (2,171 ) 2,242 753,911 771,150 (17,239 )revenuesExpenses Compensation & 429,710 1,076 i ? ? 430,786 429,650 1,136 BenefitsFixed e,non-compensation ? 74,175 j ? (1,830 ) m 72,345 72,094 251 expenseVariablenon-compensation ? 84,121 j ? ? 84,121 84,109 12 expense a,Other b,non-compensation 197,030 (197,030 ) d, ? ? ? US GAAP expense g, iDepreciation & 11,642 ? ? (545 ) p 11,097 11,085 12 AmortizationNon-Controlling ? 3,479 j ? ? 3,479 3,479 ? InterestConsolidated 4,299 ? (4,299 ) ? ? ? ? Funds expensesTotal expenses 642,681 (34,179 ) (4,299 ) (2,375 ) 601,828 600,417 1,411 Other income e,(loss) 116,724 (146,902 ) f, 30,178 ? ? ? ? hIncome taxesexpense / 43,759 (205 ) ? (43,554 ) ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in (29,075 ) (3,231 ) j 32,306 ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to $ 103,912 ? ? 48,171 n 152,083 170,733 (18,650 )Cowen Inc.Less: Preferred 3,396 ? ? ? 3,396 2,745 651 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 100,516 $ ? $ ? $ 48,171 148,687 167,988 (19,301 )Cowen Inc.commonstockholdersAdd back:Depreciation and 11,097 11,085 12 amortizationexpenseEconomicOperating Income $ 159,784 $ 179,073 $ (19,289 )(Loss)

Six Months Ended June 30, 2019 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 $ 194,811 $ (9,871 ) a, $ ? $ 2,272 o $ 187,212 $ 187,212 $ ? banking bBrokerage 208,845 27,071 c, ? ? 235,916 235,916 ? hManagement fees 14,180 5,651 d, 1,067 ? 20,898 19,695 1,203 eIncentive income 23 19,804 e 543 606 o 20,976 19,270 1,706 (loss)Investment ? 7,381 f ? ? 7,381 2,914 4,467 income (loss)Interest and 69,139 (69,139 ) c ? ? ? ? ? dividendsReimbursement 542 (609 ) b 67 ? ? ? ? from affiliatesReinsurance 20,922 (20,922 ) g ? ? ? ? ? premiumsOther revenue 1,991 3,499 g (12 ) ? 5,478 5,427 51 Consolidated 5,808 ? (5,808 ) ? ? ? ? Funds revenuesTotal revenues 516,261 (37,135 ) (4,143 ) 2,878 477,861 470,434 7,427 Interest expense(Economic Income/(Loss)) / 68,612 (53,225 ) c ? (2,117 ) l 13,270 10,615 2,655 Interest anddividend expense(US GAAP)Total net 447,649 16,090 (4,143 ) 4,995 464,591 459,819 4,772 revenuesExpenses Compensation & 268,291 64 i ? ? 268,355 264,703 3,652 BenefitsFixed e,non-compensation ? 74,475 j ? (1,185 ) m 73,290 71,428 1,862 expenseVariablenon-compensation ? 76,599 j ? ? 76,599 76,514 85 expense a,Other b,non-compensation 184,008 (184,008 ) d, ? ? ? ? ? US GAAP expense g, iDepreciation & 9,908 ? ? ? 9,908 9,884 24 AmortizationNon-Controlling ? 2,283 j ? ? 2,283 2,283 ? InterestGoodwill 4,100 ? ? (4,100 ) p ? ? ? impairmentConsolidated 3,713 ? (3,713 ) ? ? ? ? Funds expensesTotal expenses 470,020 (30,587 ) (3,713 ) (5,285 ) 430,435 424,812 5,623 Other income e,(loss) 50,634 (47,186 ) f, (3,448 ) ? ? ? ? hIncome taxesexpense / 8,250 31 ? (8,281 ) n ? ? ? (benefit)Income (loss)attributable tonon-controllinginterests in 4,418 (540 ) j (3,878 ) ? ? ? ? consolidatedsubsidiaries andinvestment fundsIncome (loss)attributable to $ 15,595 ? ? 18,561 34,156 35,007 (851 )Cowen Inc.Less: Preferred 3,396 ? ? ? 3,396 2,717 679 stock dividendsEconomic Income(Loss)/ Income(loss)attributable to $ 12,199 $ ? $ ? $ 18,561 30,760 32,290 (1,530 )Cowen Inc.commonstockholdersAdd back:Depreciation and 9,908 9,884 24 amortizationexpenseEconomicOperating Income $ 40,668 $ 42,174 $ (1,506 )(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) recognizes 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 income taxes. For periods prior to the first quarter of 2020, Economic Income (Loss) records a) income from uncrystallized incentive fees and b) retainer fees,o relating to investment banking activities, earned during the period that would otherwise be deferred until closing for US GAAP reporting. Similar amounts are not adjusted subsequently.p Economic Income (Loss) excludes goodwill and intangible impairment.