The Company recognized a $2.5 million income tax provision for the second quarter of 2010, and a $0.1 million income tax benefit for both the second quarter of 2009 and the first quarter of 2010. Second quarter 2010 income taxes included a $1.4 million provision associated with adjustments to the valuation allowance recorded against the Company’s deferred tax asset related to its tax receivable agreement. Such adjustments generated income tax benefits of $0.9 million and $1.3 million for the second quarter of 2009 and the first quarter of 2010, respectively. Details of income tax provision/(benefit), as well as a reconciliation of the GAAP and non-GAAP measures, are shown below:

Income Tax Provision/(Benefit) (unaudited)
($ thousands)
        Three Months Ended
June 30,   March 31,   June 30,
2010 2010 2009
 
Unincorporated Business Tax Provision $ 622 $ 615 $ 406
Corporate Income Tax Provision   546   552     406  
Non-GAAP Income Tax Provision   1,168   1,167     812  
Change in Valuation Allowance¹   1,379   (1,266 )   (876 )
GAAP Income Tax Provision/(Benefit) $ 2,547 $ (99 ) $ (64 )
 
Six Months Ended
June 30, June 30,
2010 2009
 
Unincorporated Business Tax Provision $ 1,237 $

744
Corporate Income Tax Provision   1,098    

608
 
Non-GAAP Income Tax Provision   2,335    

1,352
 
Change in Valuation Allowance¹   113    

(1,690
)
GAAP Income Tax Provision/(Benefit) $ 2,448   $

(338
)
 

(1)
 

Reflects the change in the valuation allowance assessed against the deferred tax asset established as part of the Company’s initial public offering and subsequent unit conversions. This valuation allowance was initially recorded by the Company on September 30, 2008.

Non-controlling interests in the operations of the Company’s operating company and consolidated subsidiaries are comprised of the following:

Non-Controlling Interests (unaudited)
($ thousands)
       
Three Months Ended
June 30, March 31, June 30,
2010 2010 2009
 
Operating Company Allocation¹ $ 7,470 $ 8,291 $ 6,119
Outside Interests of Investment Partnerships²   (162 )   -     2,336
GAAP Net Income Attributable to Non-Controlling Interests $ 7,308   $ 8,291   $ 8,455
 
 
Six Months Ended
June 30, June 30,
2010 2009
 
Operating Company Allocation¹ $ 15,761 $ 9,685
Outside Interests of Investment Partnerships²   (162 )   1,010
GAAP Net Income Attributable to Non-Controlling Interests $ 15,599   $ 10,695
 

(1)
 

Represents the non-controlling interest allocation of the income of Pzena Investment Management, LLC that is retained by its members.
 

(2)

Represents the non-controlling interest allocation of the income of the Company’s consolidated investment partnerships to its outside investors.

During the quarter ended June 30, 2010, the Company repaid the remaining $7.5 million of the principal amount outstanding on its Senior Subordinated Notes.