Neuberger Berman's First Quarter Net Income $34.2 Million, or $0.69 Per Share

$54.8 Billion in Assets Under Management

Reflects Record $22.8 Billion in Private Asset Management



Mutual Fund and Sub-Advised Accounts Has Net Cash Inflows

For the Fourth Consecutive Quarter



High Net Worth Sales Force Generates Record $400 Million in New Assets



Apr 19, 2001, 01:00 ET from Neuberger Berman

    NEW YORK, April 19 /PRNewswire/ -- Neuberger Berman (NYSE:   NEU) today
 reported net income of $34.2 million, or $0.69 per share (diluted) and
 $0.70 per share (basic), for the first quarter ended March 31, 2001. These
 figures reflect a charge of approximately $0.01 per share related to severance
 payments incurred as a result of limited and selective personnel reductions.
 In the prior year period, net operating income was $34.1 million, or $0.69 per
 share, excluding a financial statement tax benefit of $6.1 million, or
 $0.12 per share, related to the change in the Company's stock price in
 connection with the Employee Defined Contribution Stock Incentive Plan.
     Cash earnings for the quarter, which exclude non-cash items such as
 deferred taxes and depreciation and amortization, were $35.9 million, or
 $0.72 per share (diluted) and $0.74 per share (basic).  This compares with
 cash earnings of $36.5 million, or $0.74 per share, in the 2000 period.
     Net revenues after interest expense for the quarter were $154.8 million,
 down slightly from the 2000 period, reflecting an increase of 6.5% in
 investment advisory and administrative fees which was offset by declines in
 other revenue sources. Assets under management at quarter-end were
 $54.8 billion, down 1.2% from $55.5 billion at both March 31, 2000 and
 year-end 2000.
     The Company's common stock repurchase program continued with the purchase
 in the quarter of 119,100 shares for approximately $8 million. Since the
 inception of the program, 1,378,158 shares have been repurchased for
 approximately $51 million, and an authorization of $74 million remains
 outstanding.
 
     Solid Results in a Volatile Market
     Jeffrey B. Lane, President and Chief Executive Officer of Neuberger
 Berman, said, "In a quarter marked by further chaotic conditions in the
 securities markets, Neuberger Berman continues to produce solid results. I
 believe we are demonstrating prudent control over the non-market-related
 aspects of our business -- over those factors that we are able to control
 directly. These include keeping a tight rein on operating expenses, which were
 less than 1%higher than in last year's quarter.  Most important, we continue
 to deliver on our commitments to grow assets, to steadily improve investment
 performance relative to good or bad market environments, to diversify our
 products and capabilities, and to achieve and sustain positive cash flows.
     "I am particularly pleased with the performance of our Private Asset
 Management sales force, which generated $400 million of new assets in a single
 quarter versus $807 million in all of last year, and with our fourth
 consecutive quarter of net cash inflows in the Mutual Fund and Sub-Advised
 Accounts business. To have accomplished all this, not only throughout the past
 year but also in this very difficult quarter, is outstanding.
     "Further, I would again point out that the difficulty of the current
 environment could prove to be a positive factor in Neuberger Berman's future
 growth. The steep declines experienced by countless individual investors in
 the value of their portfolios over the recent past may well serve as an
 inducement for them to seek professional help with the investment process. We
 intend to aggressively pursue opportunities to provide such guidance to a
 greater universe of clients, both individuals and institutions, in the coming
 years."
 
                            PRIVATE ASSET MANAGEMENT
            Net Revenues:  $75.9 Million vs. $73.5 Million, Up 3.1%
           Pretax Income:  $36.2 Million vs. $36.7 Million, Down 1.3%
 
     Assets under management in this segment - which accounted for 49% of net
 revenues and over 61% of pretax income in the quarter - reached a record
 $22.8 billion at quarter-end. This represents a 2.5% increase from
 $22.2 billion in the prior year period and a rise of 1.2% from $22.5 billion
 at December 31, 2000. The increase was achieved despite severe declines in the
 securities markets. Portfolio performance continued to be good, with the
 segment significantly outperforming the S&P 500 Index.
     Key drivers of the segment's continuing growth in assets include improved
 cash flow as a result of solid investment performance, the addition of
 investment professionals with existing client relationships, and the
 successful efforts of the national sales force. These 38 Client Consultants
 generated $400 million in new assets in the quarter, almost half the amount
 generated in all of last year. In addition, as previously announced, three
 experienced money management teams recently joined Neuberger Berman from other
 institutions. These teams have added nearly $1.0 billion in assets under
 management to the segment, net of approximately $500 million of institutional
 assets allocated to the Mutual Fund and Institutional segment, through the end
 of the quarter.
     Also, on February 27, 2001, the Company completed its announced
 acquisition of Executive Monetary Management, which provides wealth management
 services to high net worth individuals and families. EMM's clients, as of
 quarter-end, had in the aggregate approximately $1.7 billion of investable
 assets. It is expected that the combination will allow EMM to expand
 its products and services, as well as its client base, while EMM's expertise
 will strengthen Neuberger Berman's presence in the highly specialized market
 of upper echelon wealth.
     Also as announced, the Company was granted a national bank charter in the
 quarter and launched the Neuberger Berman National Trust Company,
 headquartered in Seattle, Washington. Albert C. Bellas, former Managing
 Director of OFFITBANK, was named Chairman of the Neuberger Berman Trust Group.
 Providing clients with a wide range of sophisticated trust services should
 become an increasingly important aspect of the Company's business in the
 coming years.
 
                         MUTUAL FUND AND INSTITUTIONAL
           Net Revenues:  $55.2 Million vs. $55.4 Million, Down 0.4%
           Pretax Income:  $19.3 Million vs. $17.0 Million, Up 13.9%
 
     Assets under management in this segment were $32.0 billion at quarter-end,
 down 3.7% from $33.3 billion in the prior year period and down 2.9% from
 $33.0 billion at December 31, 2000. The figures include $192 million in assets
 from the completion of the announced acquisition of a small capitalization
 blend fund, the Fasciano Fund, on March 23, 2001. The drop in assets resulted
 principally from declines in the securities markets, which also accounted for
 mixed results in mutual fund performance. Despite the erratic market
 conditions, the segment experienced net cash inflows of $905 million in the
 quarter, which included approximately $500 million related to the addition of
 a money management team and $192 million from the Fasciano acquisition.  This
 compared to net cash outflows of $1.2 billion in the prior year period and $10
 million in the previous quarter.
     Other positive developments in the segment included the following:
 
      -- The Mutual Fund and Sub-Advised Accounts business experienced net cash
         inflows of $233 million, excluding the acquisition of the Fasciano
         Fund, for the quarter versus net cash outflows of $482 million in the
         prior year period. Although this was down from the $660 million in net
         cash inflows for the previous quarter, it represents the fourth
         consecutive quarter of net cash inflows for this business.
      -- The Consultant Services Group (wrap accounts) had net cash inflows of
         $205 million and for the first time exceeded $2 billion in assets
         under management. This compares with net cash outflows of $74 million
         in the prior year period and $49 million in the previous quarter. The
         Company has relationships with three of the four largest sponsors of
         wrap account programs and is actively marketing its capabilities in
         this business.
 
                        PROFESSIONAL SECURITIES SERVICES
           Net Revenues:  $25.7 Million vs. $26.7 Million, Down 3.8%
           Pretax Income:  $8.5 Million vs. $10.1 Million, Down 15.6%
 
     The decline in net revenues in the quarter is primarily attributable to
 lower revenues from principal transactions because of the steep drop in the
 Nasdaq market. The Professional
 Investor Clearing Services business continues to be strong, and the Company is
 marketing this capability very actively, as it provides an important source of
 recurring revenues.
 
                                   CORPORATE
     Corporate includes various expenses, including administrative costs, that
 are not attributable to the activities of any business segment. The net loss
 after interest expense in the quarter reflects the decrease in value of the
 corporate investment in our mutual funds.
 
     Neuberger Berman is an investment advisory company that has provided
 clients with a broad range of investment products, services and strategies for
 more than 60 years.  The Company engages in private asset management, wealth
 management services, tax planning and personal and institutional trust
 services, mutual funds and institutional management, and professional
 securities services for individuals, institutions, corporations, pension
 funds, foundations and endowments.  Its website, and this news release, can be
 accessed at http://www.nb.com.
 
     Statements made in this release that look forward in time involve risks
 and uncertainties and are forward-looking statements within the meaning of the
 Private Securities Litigation Reform Act of 1995. Such risks and uncertainties
 include, without limitation, the adverse effect from a decline in the
 securities markets or a decline in the Company's products' performance, a
 general downturn in the economy, competition from other companies, changes in
 government policy or regulation, inability of the Company to attract or retain
 key employees, inability of the Company to implement its operating strategy
 and acquisition strategy, inability of the Company to manage rapid expansion
 and unforeseen costs and other effects related to legal proceedings or
 investigations of governmental and self-regulatory organizations.
 
      Neuberger Berman Inc. and Subsidiaries
      Condensed Consolidated Statements of Income (Unaudited)
      For the Periods Ending
      (in thousands, except per share data)
 
                   Three Months Ended                            Fav (Unfav)
                                                                 Change From
                             March    December     March     December    March
                                31,        31,        31,          31,      31,
                               2001      2000        2000        2000    2000
     REVENUES:
     Investment advisory and
      administrative fees    $103,292  $101,268     $96,951       2.0%    6.5%
     Commissions               36,693    40,341      39,828      (9.0%)  (7.9%)
     Interest                  57,708    61,581      51,025      (6.3%)  13.1%
     Principal transactions
      in securities               559      (925)      5,076     160.4%  (89.0%)
     Clearance fees             3,814     3,441       3,622      10.8%    5.3%
     Other income                 577     2,195         838     (73.7%) (31.1%)
        Gross revenues        202,643   207,901     197,340      (2.5%)   2.7%
     Interest expense          47,811    50,426      41,928       5.2%  (14.0%)
        Net revenues after
         interest expense     154,832   157,475     155,412      (1.7%)  (0.4%)
 
     OPERATING EXPENSES:
     Employee compensation
      and benefits             65,572    58,977      65,933     (11.2%)   0.5%
     Information technology     5,450     6,196       5,221      12.0%   (4.4%)
     Rent and occupancy         4,625     4,655       4,164       0.6%  (11.1%)
     Brokerage, clearing and
      exchange fees             2,702     3,023       2,843      10.6%    5.0%
     Advertising and sales
      promotion                 2,546     4,286       2,452      40.6%   (3.8%)
     Distribution and fund
      administration            4,371     4,794       4,392       8.8%    0.5%
     Professional fees          1,964     3,335       2,277      41.1%   13.7%
     Depreciation and
      amortization              2,771     3,211       2,460      13.7%  (12.6%)
     Other expenses             5,775     5,877       5,452       1.7%   (5.9%)
        Total operating
         expenses              95,776    94,354      95,194      (1.5%)  (0.6%)
        Net income before
         taxes                 59,056    63,121      60,218      (6.4%)  (1.9%)
     Provision for income
      taxes                    24,822    26,976      19,977 (1)   8.0%  (24.3%)
        Net income            $34,234   $36,145     $40,241      (5.3%) (14.9%)
 
     Net income per common
      share
        Net income per share
         - Basic                $0.70     $0.74       $0.81
        Net income per share
         - Diluted              $0.69     $0.73       $0.81
     Cash earnings per
      common share
        Cash earnings per
         share - Basic          $0.74     $0.79 (2)   $0.74
        Cash earnings per
         share - Diluted        $0.72     $0.78 (2)   $0.74
      Weighted average
       common shares
        outstanding - Basic    48,778    48,804      49,476
      Weighted average
       common shares
        outstanding -
         Diluted               49,779    49,743      49,476
 
     Note 1: Provision for income taxes for the three months ended March 31,
             2000 reflects a financial statement tax benefit of $6,097 related
             to the change in the price of the Company's common stock from
             December 31, 1999 to March 31, 2000, in connection with the
             Company's Employee Defined Contribution Stock Incentive Plan.
     Note 2: Cash earnings per common share for the three months ended December
             31, 2000, has been revised to reflect presentation consistent with
             current period reporting.
 
     Neuberger Berman Inc. and Subsidiaries
     Selected Segment Financial Data (Unaudited)
     For the Periods Ending
     (in thousands)
 
                                      Three Months Ended         Fav (Unfav)
                                                                 Change From
                                 March    December   March   December  March
                                    31,         31,     31,        31,    31,
                                   2001    2000 (1)  2000 (1)   2000    2000
     PRIVATE ASSET MANAGEMENT
     Net revenues after interest
      expense                     $75,850   $76,460   $73,539   (0.8%)    3.1%
 
     Net income before taxes      $36,218   $38,239   $36,685   (5.3%)   (1.3%)
 
     MUTUAL FUND & INSTITUTIONAL
     Net revenues after interest
      expense                     $55,165   $55,827   $55,399   (1.2%)   (0.4%)
 
     Net income before taxes      $19,309   $18,716   $16,952    3.2%    13.9%
 
     PROFESSIONAL SECURITIES
      SERVICES
     Net revenues after interest
      expense                     $25,681   $27,552   $26,686   (6.8%)   (3.8%)
 
     Net income before taxes       $8,511   $11,597   $10,085  (26.6%)  (15.6%)
 
     CORPORATE
     Net loss after interest
      expense                     $(1,864)  $(2,364)    $(212)  21.2%  (779.2%)
 
     Net loss before taxes        $(4,982)  $(5,431)  $(3,504)   8.3%   (42.2%)
 
     TOTAL
     Net revenues after interest
      expense                    $154,832  $157,475  $155,412   (1.7%)   (0.4%)
 
     Net income before taxes      $59,056   $63,121   $60,218   (6.4%)   (1.9%)
 
     Note 1: Segment financial data for prior periods have been reclassified to
             reflect presentation consistent with current period segment
             reporting.
 
     Neuberger Berman Inc. and Subsidiaries
     Assets Under Management
     For the Periods Ending
     (in millions)                   Three Months Ended        Fav (Unfav)
                                                               Change From
                                 March   December    March    December  March
                                    31,        31,      31,        31,     31,
                                   2001     2000      2000       2000    2000
     PRIVATE ASSET MANAGEMENT
 
     Assets under management (1) (2)
                                  $22,777  $22,510  $22,214     1.2%     2.5%
     Market flows (1) (2)
        Net additions              $1,412   $1,082      $37
        Market appreciation
         (depreciation)            (1,145)    (858)     638
        Total increase               $267     $224     $675
 
     MUTUAL FUND & INSTITUTIONAL
 
     Equity Separate Accounts
     Assets under management       $6,415   $6,402   $6,268     0.2%     2.3%
     Market flows
        Net additions
         (withdrawals)               $356    $(172)   $(324)
        Market appreciation
         (depreciation)              (343)     (42)     135
        Total increase (decrease)     $13    $(214)   $(189)
 
     Fixed Income Separate
      Accounts
     Assets under management       $5,310   $5,298   $5,717     0.2%    (7.1%)
     Market flows
        Net withdrawals              $(81)   $(449)   $(315)
        Market appreciation            93      183      107
        Total increase (decrease)     $12    $(266)   $(208)
 
     Consultant Services Group
     Assets under management       $2,002   $1,796   $1,764    11.5%    13.5%
     Market flows
        Net additions
         (withdrawals)               $205     $(49)    $(74)
        Market appreciation
         (depreciation)                 1       44       (2)
        Total increase (decrease)    $206      $(5)    $(76)
 
     Mutual Fund and Sub-Advised
      Accounts
     Assets under management (1) (3)
                                   $18,298  $19,480  $19,507    (6.1%)   (6.2%)
     Market flows (1) (3)
        Net additions
         (withdrawals)               $425     $660    $(482)
        Market appreciation
         (depreciation)            (1,607)  (1,413)   1,351
        Total increase (decrease) $(1,182)   $(753)    $869
 
     Sub-Total Mutual Fund &
      Institutional
     Assets under management (1)  $32,025  $32,976  $33,256    (2.9%)   (3.7%)
     Market flows (1)
        Net additions
         (withdrawals)               $905     $(10) $(1,195)
        Market appreciation
         (depreciation)            (1,856)  (1,228)   1,591
        Total increase (decrease)   $(951) $(1,238)    $396
 
     TOTAL
     Assets under management      $54,802  $55,486  $55,470    (1.2%)   (1.2%)
     Market flows
        Net additions
         (withdrawals)             $2,317   $1,072  $(1,158)
        Market appreciation
         (depreciation)            (3,001)  (2,086)   2,229
        Total increase (decrease)   $(684) $(1,014)  $1,071
 
     Note 1: Segment assets under management and related market flows for
             prior periods have been reclassified to reflect presentation
             consistent with current period segment reporting.
     Note 2: As of March 31, 2001, Private Asset Management includes $49
             million of assets invested in EMM's Fund of Funds product.
     Note 3: As of March 31, 2001, Mutual Fund and Sub-Advised Accounts
             includes $79 million of client assets invested in the Fund
             Advisory Service wrap mutual fund program with third party funds,
             a decrease of $9 million from the prior quarter.
 
 

SOURCE Neuberger Berman
    NEW YORK, April 19 /PRNewswire/ -- Neuberger Berman (NYSE:   NEU) today
 reported net income of $34.2 million, or $0.69 per share (diluted) and
 $0.70 per share (basic), for the first quarter ended March 31, 2001. These
 figures reflect a charge of approximately $0.01 per share related to severance
 payments incurred as a result of limited and selective personnel reductions.
 In the prior year period, net operating income was $34.1 million, or $0.69 per
 share, excluding a financial statement tax benefit of $6.1 million, or
 $0.12 per share, related to the change in the Company's stock price in
 connection with the Employee Defined Contribution Stock Incentive Plan.
     Cash earnings for the quarter, which exclude non-cash items such as
 deferred taxes and depreciation and amortization, were $35.9 million, or
 $0.72 per share (diluted) and $0.74 per share (basic).  This compares with
 cash earnings of $36.5 million, or $0.74 per share, in the 2000 period.
     Net revenues after interest expense for the quarter were $154.8 million,
 down slightly from the 2000 period, reflecting an increase of 6.5% in
 investment advisory and administrative fees which was offset by declines in
 other revenue sources. Assets under management at quarter-end were
 $54.8 billion, down 1.2% from $55.5 billion at both March 31, 2000 and
 year-end 2000.
     The Company's common stock repurchase program continued with the purchase
 in the quarter of 119,100 shares for approximately $8 million. Since the
 inception of the program, 1,378,158 shares have been repurchased for
 approximately $51 million, and an authorization of $74 million remains
 outstanding.
 
     Solid Results in a Volatile Market
     Jeffrey B. Lane, President and Chief Executive Officer of Neuberger
 Berman, said, "In a quarter marked by further chaotic conditions in the
 securities markets, Neuberger Berman continues to produce solid results. I
 believe we are demonstrating prudent control over the non-market-related
 aspects of our business -- over those factors that we are able to control
 directly. These include keeping a tight rein on operating expenses, which were
 less than 1%higher than in last year's quarter.  Most important, we continue
 to deliver on our commitments to grow assets, to steadily improve investment
 performance relative to good or bad market environments, to diversify our
 products and capabilities, and to achieve and sustain positive cash flows.
     "I am particularly pleased with the performance of our Private Asset
 Management sales force, which generated $400 million of new assets in a single
 quarter versus $807 million in all of last year, and with our fourth
 consecutive quarter of net cash inflows in the Mutual Fund and Sub-Advised
 Accounts business. To have accomplished all this, not only throughout the past
 year but also in this very difficult quarter, is outstanding.
     "Further, I would again point out that the difficulty of the current
 environment could prove to be a positive factor in Neuberger Berman's future
 growth. The steep declines experienced by countless individual investors in
 the value of their portfolios over the recent past may well serve as an
 inducement for them to seek professional help with the investment process. We
 intend to aggressively pursue opportunities to provide such guidance to a
 greater universe of clients, both individuals and institutions, in the coming
 years."
 
                            PRIVATE ASSET MANAGEMENT
            Net Revenues:  $75.9 Million vs. $73.5 Million, Up 3.1%
           Pretax Income:  $36.2 Million vs. $36.7 Million, Down 1.3%
 
     Assets under management in this segment - which accounted for 49% of net
 revenues and over 61% of pretax income in the quarter - reached a record
 $22.8 billion at quarter-end. This represents a 2.5% increase from
 $22.2 billion in the prior year period and a rise of 1.2% from $22.5 billion
 at December 31, 2000. The increase was achieved despite severe declines in the
 securities markets. Portfolio performance continued to be good, with the
 segment significantly outperforming the S&P 500 Index.
     Key drivers of the segment's continuing growth in assets include improved
 cash flow as a result of solid investment performance, the addition of
 investment professionals with existing client relationships, and the
 successful efforts of the national sales force. These 38 Client Consultants
 generated $400 million in new assets in the quarter, almost half the amount
 generated in all of last year. In addition, as previously announced, three
 experienced money management teams recently joined Neuberger Berman from other
 institutions. These teams have added nearly $1.0 billion in assets under
 management to the segment, net of approximately $500 million of institutional
 assets allocated to the Mutual Fund and Institutional segment, through the end
 of the quarter.
     Also, on February 27, 2001, the Company completed its announced
 acquisition of Executive Monetary Management, which provides wealth management
 services to high net worth individuals and families. EMM's clients, as of
 quarter-end, had in the aggregate approximately $1.7 billion of investable
 assets. It is expected that the combination will allow EMM to expand
 its products and services, as well as its client base, while EMM's expertise
 will strengthen Neuberger Berman's presence in the highly specialized market
 of upper echelon wealth.
     Also as announced, the Company was granted a national bank charter in the
 quarter and launched the Neuberger Berman National Trust Company,
 headquartered in Seattle, Washington. Albert C. Bellas, former Managing
 Director of OFFITBANK, was named Chairman of the Neuberger Berman Trust Group.
 Providing clients with a wide range of sophisticated trust services should
 become an increasingly important aspect of the Company's business in the
 coming years.
 
                         MUTUAL FUND AND INSTITUTIONAL
           Net Revenues:  $55.2 Million vs. $55.4 Million, Down 0.4%
           Pretax Income:  $19.3 Million vs. $17.0 Million, Up 13.9%
 
     Assets under management in this segment were $32.0 billion at quarter-end,
 down 3.7% from $33.3 billion in the prior year period and down 2.9% from
 $33.0 billion at December 31, 2000. The figures include $192 million in assets
 from the completion of the announced acquisition of a small capitalization
 blend fund, the Fasciano Fund, on March 23, 2001. The drop in assets resulted
 principally from declines in the securities markets, which also accounted for
 mixed results in mutual fund performance. Despite the erratic market
 conditions, the segment experienced net cash inflows of $905 million in the
 quarter, which included approximately $500 million related to the addition of
 a money management team and $192 million from the Fasciano acquisition.  This
 compared to net cash outflows of $1.2 billion in the prior year period and $10
 million in the previous quarter.
     Other positive developments in the segment included the following:
 
      -- The Mutual Fund and Sub-Advised Accounts business experienced net cash
         inflows of $233 million, excluding the acquisition of the Fasciano
         Fund, for the quarter versus net cash outflows of $482 million in the
         prior year period. Although this was down from the $660 million in net
         cash inflows for the previous quarter, it represents the fourth
         consecutive quarter of net cash inflows for this business.
      -- The Consultant Services Group (wrap accounts) had net cash inflows of
         $205 million and for the first time exceeded $2 billion in assets
         under management. This compares with net cash outflows of $74 million
         in the prior year period and $49 million in the previous quarter. The
         Company has relationships with three of the four largest sponsors of
         wrap account programs and is actively marketing its capabilities in
         this business.
 
                        PROFESSIONAL SECURITIES SERVICES
           Net Revenues:  $25.7 Million vs. $26.7 Million, Down 3.8%
           Pretax Income:  $8.5 Million vs. $10.1 Million, Down 15.6%
 
     The decline in net revenues in the quarter is primarily attributable to
 lower revenues from principal transactions because of the steep drop in the
 Nasdaq market. The Professional
 Investor Clearing Services business continues to be strong, and the Company is
 marketing this capability very actively, as it provides an important source of
 recurring revenues.
 
                                   CORPORATE
     Corporate includes various expenses, including administrative costs, that
 are not attributable to the activities of any business segment. The net loss
 after interest expense in the quarter reflects the decrease in value of the
 corporate investment in our mutual funds.
 
     Neuberger Berman is an investment advisory company that has provided
 clients with a broad range of investment products, services and strategies for
 more than 60 years.  The Company engages in private asset management, wealth
 management services, tax planning and personal and institutional trust
 services, mutual funds and institutional management, and professional
 securities services for individuals, institutions, corporations, pension
 funds, foundations and endowments.  Its website, and this news release, can be
 accessed at http://www.nb.com.
 
     Statements made in this release that look forward in time involve risks
 and uncertainties and are forward-looking statements within the meaning of the
 Private Securities Litigation Reform Act of 1995. Such risks and uncertainties
 include, without limitation, the adverse effect from a decline in the
 securities markets or a decline in the Company's products' performance, a
 general downturn in the economy, competition from other companies, changes in
 government policy or regulation, inability of the Company to attract or retain
 key employees, inability of the Company to implement its operating strategy
 and acquisition strategy, inability of the Company to manage rapid expansion
 and unforeseen costs and other effects related to legal proceedings or
 investigations of governmental and self-regulatory organizations.
 
      Neuberger Berman Inc. and Subsidiaries
      Condensed Consolidated Statements of Income (Unaudited)
      For the Periods Ending
      (in thousands, except per share data)
 
                   Three Months Ended                            Fav (Unfav)
                                                                 Change From
                             March    December     March     December    March
                                31,        31,        31,          31,      31,
                               2001      2000        2000        2000    2000
     REVENUES:
     Investment advisory and
      administrative fees    $103,292  $101,268     $96,951       2.0%    6.5%
     Commissions               36,693    40,341      39,828      (9.0%)  (7.9%)
     Interest                  57,708    61,581      51,025      (6.3%)  13.1%
     Principal transactions
      in securities               559      (925)      5,076     160.4%  (89.0%)
     Clearance fees             3,814     3,441       3,622      10.8%    5.3%
     Other income                 577     2,195         838     (73.7%) (31.1%)
        Gross revenues        202,643   207,901     197,340      (2.5%)   2.7%
     Interest expense          47,811    50,426      41,928       5.2%  (14.0%)
        Net revenues after
         interest expense     154,832   157,475     155,412      (1.7%)  (0.4%)
 
     OPERATING EXPENSES:
     Employee compensation
      and benefits             65,572    58,977      65,933     (11.2%)   0.5%
     Information technology     5,450     6,196       5,221      12.0%   (4.4%)
     Rent and occupancy         4,625     4,655       4,164       0.6%  (11.1%)
     Brokerage, clearing and
      exchange fees             2,702     3,023       2,843      10.6%    5.0%
     Advertising and sales
      promotion                 2,546     4,286       2,452      40.6%   (3.8%)
     Distribution and fund
      administration            4,371     4,794       4,392       8.8%    0.5%
     Professional fees          1,964     3,335       2,277      41.1%   13.7%
     Depreciation and
      amortization              2,771     3,211       2,460      13.7%  (12.6%)
     Other expenses             5,775     5,877       5,452       1.7%   (5.9%)
        Total operating
         expenses              95,776    94,354      95,194      (1.5%)  (0.6%)
        Net income before
         taxes                 59,056    63,121      60,218      (6.4%)  (1.9%)
     Provision for income
      taxes                    24,822    26,976      19,977 (1)   8.0%  (24.3%)
        Net income            $34,234   $36,145     $40,241      (5.3%) (14.9%)
 
     Net income per common
      share
        Net income per share
         - Basic                $0.70     $0.74       $0.81
        Net income per share
         - Diluted              $0.69     $0.73       $0.81
     Cash earnings per
      common share
        Cash earnings per
         share - Basic          $0.74     $0.79 (2)   $0.74
        Cash earnings per
         share - Diluted        $0.72     $0.78 (2)   $0.74
      Weighted average
       common shares
        outstanding - Basic    48,778    48,804      49,476
      Weighted average
       common shares
        outstanding -
         Diluted               49,779    49,743      49,476
 
     Note 1: Provision for income taxes for the three months ended March 31,
             2000 reflects a financial statement tax benefit of $6,097 related
             to the change in the price of the Company's common stock from
             December 31, 1999 to March 31, 2000, in connection with the
             Company's Employee Defined Contribution Stock Incentive Plan.
     Note 2: Cash earnings per common share for the three months ended December
             31, 2000, has been revised to reflect presentation consistent with
             current period reporting.
 
     Neuberger Berman Inc. and Subsidiaries
     Selected Segment Financial Data (Unaudited)
     For the Periods Ending
     (in thousands)
 
                                      Three Months Ended         Fav (Unfav)
                                                                 Change From
                                 March    December   March   December  March
                                    31,         31,     31,        31,    31,
                                   2001    2000 (1)  2000 (1)   2000    2000
     PRIVATE ASSET MANAGEMENT
     Net revenues after interest
      expense                     $75,850   $76,460   $73,539   (0.8%)    3.1%
 
     Net income before taxes      $36,218   $38,239   $36,685   (5.3%)   (1.3%)
 
     MUTUAL FUND & INSTITUTIONAL
     Net revenues after interest
      expense                     $55,165   $55,827   $55,399   (1.2%)   (0.4%)
 
     Net income before taxes      $19,309   $18,716   $16,952    3.2%    13.9%
 
     PROFESSIONAL SECURITIES
      SERVICES
     Net revenues after interest
      expense                     $25,681   $27,552   $26,686   (6.8%)   (3.8%)
 
     Net income before taxes       $8,511   $11,597   $10,085  (26.6%)  (15.6%)
 
     CORPORATE
     Net loss after interest
      expense                     $(1,864)  $(2,364)    $(212)  21.2%  (779.2%)
 
     Net loss before taxes        $(4,982)  $(5,431)  $(3,504)   8.3%   (42.2%)
 
     TOTAL
     Net revenues after interest
      expense                    $154,832  $157,475  $155,412   (1.7%)   (0.4%)
 
     Net income before taxes      $59,056   $63,121   $60,218   (6.4%)   (1.9%)
 
     Note 1: Segment financial data for prior periods have been reclassified to
             reflect presentation consistent with current period segment
             reporting.
 
     Neuberger Berman Inc. and Subsidiaries
     Assets Under Management
     For the Periods Ending
     (in millions)                   Three Months Ended        Fav (Unfav)
                                                               Change From
                                 March   December    March    December  March
                                    31,        31,      31,        31,     31,
                                   2001     2000      2000       2000    2000
     PRIVATE ASSET MANAGEMENT
 
     Assets under management (1) (2)
                                  $22,777  $22,510  $22,214     1.2%     2.5%
     Market flows (1) (2)
        Net additions              $1,412   $1,082      $37
        Market appreciation
         (depreciation)            (1,145)    (858)     638
        Total increase               $267     $224     $675
 
     MUTUAL FUND & INSTITUTIONAL
 
     Equity Separate Accounts
     Assets under management       $6,415   $6,402   $6,268     0.2%     2.3%
     Market flows
        Net additions
         (withdrawals)               $356    $(172)   $(324)
        Market appreciation
         (depreciation)              (343)     (42)     135
        Total increase (decrease)     $13    $(214)   $(189)
 
     Fixed Income Separate
      Accounts
     Assets under management       $5,310   $5,298   $5,717     0.2%    (7.1%)
     Market flows
        Net withdrawals              $(81)   $(449)   $(315)
        Market appreciation            93      183      107
        Total increase (decrease)     $12    $(266)   $(208)
 
     Consultant Services Group
     Assets under management       $2,002   $1,796   $1,764    11.5%    13.5%
     Market flows
        Net additions
         (withdrawals)               $205     $(49)    $(74)
        Market appreciation
         (depreciation)                 1       44       (2)
        Total increase (decrease)    $206      $(5)    $(76)
 
     Mutual Fund and Sub-Advised
      Accounts
     Assets under management (1) (3)
                                   $18,298  $19,480  $19,507    (6.1%)   (6.2%)
     Market flows (1) (3)
        Net additions
         (withdrawals)               $425     $660    $(482)
        Market appreciation
         (depreciation)            (1,607)  (1,413)   1,351
        Total increase (decrease) $(1,182)   $(753)    $869
 
     Sub-Total Mutual Fund &
      Institutional
     Assets under management (1)  $32,025  $32,976  $33,256    (2.9%)   (3.7%)
     Market flows (1)
        Net additions
         (withdrawals)               $905     $(10) $(1,195)
        Market appreciation
         (depreciation)            (1,856)  (1,228)   1,591
        Total increase (decrease)   $(951) $(1,238)    $396
 
     TOTAL
     Assets under management      $54,802  $55,486  $55,470    (1.2%)   (1.2%)
     Market flows
        Net additions
         (withdrawals)             $2,317   $1,072  $(1,158)
        Market appreciation
         (depreciation)            (3,001)  (2,086)   2,229
        Total increase (decrease)   $(684) $(1,014)  $1,071
 
     Note 1: Segment assets under management and related market flows for
             prior periods have been reclassified to reflect presentation
             consistent with current period segment reporting.
     Note 2: As of March 31, 2001, Private Asset Management includes $49
             million of assets invested in EMM's Fund of Funds product.
     Note 3: As of March 31, 2001, Mutual Fund and Sub-Advised Accounts
             includes $79 million of client assets invested in the Fund
             Advisory Service wrap mutual fund program with third party funds,
             a decrease of $9 million from the prior quarter.
 
 SOURCE  Neuberger Berman