The Company uses economic income and economic net income to provide greater clarity regarding the cash earnings of the business by removing non-cash reorganization-related share-based compensation charges and non-cash interest expense on shares subject to mandatory redemption, as defined in the Non-GAAP Financial Measures section below. On this basis, Manning & Napier reported first quarter 2012 economic income of $40.1 million, compared with $37.2 million in the first quarter of 2011, and $40.0 million in the fourth quarter of 2011. Also for the first quarter of 2012, economic net income was $24.8 million, or $0.28 per adjusted share, compared with $23.0 million in the first quarter of 2011, and $24.7 million, or $0.27 per adjusted share in the fourth quarter of 2011.

On a GAAP basis, net income attributable to the controlling and noncontrolling interests for the first quarter was $34.4 million, compared with net income of $23.7 million in the first quarter of 2011 and a net loss attributable to the controlling and noncontrolling interests of $179.7 million in the fourth quarter of 2011. The fourth quarter 2011 net loss was attributable to non-cash reorganization-related share-based compensation expense of $215.3 million and non-cash interest expense on shares subject to mandatory redemption of $3.1 million. GAAP net income attributable to the common shareholders for the first quarter of $2.9 million, or $0.21 per basic and diluted share, reflects the public ownership of the Company’s subsidiary, Manning & Napier Group, LLC. The remaining ownership interest is attributed to the other members of Manning & Napier Group, LLC.

Assets Under Management

As of March 31, 2012, assets under management (“AUM”) were $44.7 billion, an increase of 11% from the $40.2 billion reported as of December 31, 2011 and an increase of 5% compared with $42.6 billion as of March 31, 2011. As of March 31, 2012, the composition of our AUM was 56% in separate accounts and 44% in mutual funds and collective investment trusts, which is generally consistent with the AUM composition as of March 31, 2011 and December 31, 2011.

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