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Executives

Andrew S. Duff, Chief Executive Officer

Debbra L. Schoneman, Chief Financial Officer

Analysts

William Tanona – Goldman Sachs

Devin Ryan – Sandler O’Neill & Partners

Steve Stelmach – Friedman, Billings, Ramsey & Co.

Lauren Smith – Keefe, Bruyette & Woods

Unidentified Analyst

Brian Hagler – Kennedy Capital

Unidentified Analyst – Thomas Weisel Partners

Piper Jaffray Companies (PJC) Q2 2008 Earnings Call July 16, 2008 9:00 AM ET

Operator

Operator

Welcome to the Piper Jaffray Companies conference call to discuss the financial results for the second quarter of 2008. (Operator Instructions) During the question and answer session, securities industry professionals may ask questions of management.

The company has asked that I remind you statements on this call that are not historical or current facts including statements about beliefs are forward-looking statements that involve inherent risks and uncertainties that can cause actual results to differ materially from those expressed or identified in the company’s report on file with SEC which are available on the company’s website at www.piperjaffray.com and on the SEC website at www.sec.com.

I’d like to turn the call over to Andrew Duff.

Andrew Duff

We are disappointed to report a loss for the second quarter. Momentum in the equity capital market is critical to our performance, and these markets continue to be essentially on hold, particularly with respect to our focus sectors. We were, however, able to demonstrate improved performance in our sales and trading business compared to the first quarter of the year.

In the first half of 2008, just 39 IPOs were completed industry-wide. This was the lowest number since the first half of 2003. There were only 7 small cap growth IPOs completed in the first half of this year. Capital market environment for small capital companies in terms of deal activity, pricing, and after-market performance is amongst the most difficult we have ever experienced. Our equity backlog grew during quarter and into July. The ability to bring a deal to market is very difficult. This weak backdrop significantly impacted our results for the second quarter. At the end of my formal comments, I’ll provide our market outlook for the remainder of 2008.

On a more positive front, our sales in trading business recorded strong results in the second quarter, which helped to mitigate weak investment banking revenues. First, equity sales and trading recorded strong revenues, mainly due to solid performance in US equities and improved proprietary trading results. Second, our fixed income sales and trading business recorded a strong rebound from a challenging first quarter. Part of this improvement was attributable to high yield and structured products. As we discussed in our first quarter call, we significantly reduced our positions in this business. As a result, we recorded near break-even performance versus the $4.6 million in negative revenues in the first quarter.

The primary driver of this strong fixed income results was the robust municipal performance. We captured significant short-term trading opportunities presented by the dislocation in the municipal market. I need to note, however, that the volatility in the municipal market has moderated to some degree, and we don’t expect the same magnitude of opportunities going forward. In addition, our TOB portfolio generated positive revenues in the second quarter including the reversal of a million dollar loss that we spoke to on our first quarter call.

Similar to the first quarter, we recorded no mark to market adjustments in our municipal auction rate inventories. When we reported our first quarter earnings, our municipal auction rate securities inventory was $224 million. As of June 30th, the balance was $85 million. As of July 14th, the balance was $50 million. To date, all the redemptions or auctions were at par. We continue to work the restructuring plans.

Let me finish my remarks with our outlook for 2008. Our original view was that the capital markets would be soft in the first half of 2008 and then strengthen in the back half of the year. We are now in the second half, and we do not see material improvement in the market environment or signs of more positive trends particularly relating to growth IPOs. We now believe the environment will remain challenging through the rest of 2008 and could extend into 2009. I’m convinced that challenging markets such as these are opportune times to selectively extend our franchise, enhance our talent base with experienced teams. Our goal is to position ourselves to gain economic share when the market downturn corrects.

We have been successful along these lines in a number of areas. For example, we enhanced our biotech platform with 5 new hires. We have added a new sector in media, entertainment, and telecom with a team of ten. We also significantly expanded our public finance presence in California with a team of 13, and they have already generated revenues since arriving at Piper Jaffray one month ago. That said, we are also realistic about the challenging market conditions, and we will carefully evaluate additional talent. That means we are reviewing our business model to make sure that our costs, both comp and noncomp, are appropriately aligned against what appears to be a more challenging revenue environment for the remainder of 2008.

Now I would like to turn the call over to Deb for more details.

Debbra L. Schoneman

In the second quarter of 2008, we recorded net revenues of $94.9 million, and recorded a net loss of $5.1 million, or $0.32 per share. Lower equity financing and financial advisory revenues coupled with higher noncompensation expenses were the main drivers of the weak performance. Andrew largely covered the highlights of the revenue mix, but let me add a few additional comments.

Financial advisory revenues were comparable to the year-ago period but declined from the solid first quarter. M&A transactions were also negatively impacted by the weak market conditions. In terms of pipeline, our current US equity backlog consists of thirteen transactions compared to eight when we recorded our first quarter results. We currently have two announced M&A transactions with an aggregate value of $6 billion. Our pipelines are reasonably good in both of these businesses; however, given the current environment, it is very difficult to complete transactions, and this may impact our ability to realize revenue from the pipeline through the balance of 2008.

Now, let me turn to expenses. First, compensation expense included $2.8 million in additional severance costs related to actions taken in the second quarter. Year to date, we have reduced head count by approximately 7%. Head count at June 30th included approximately 30 summer interns. Excluding these temporary employees, our head count is down slightly year to date, including the opportunistic hiring we have done this year.

In the second quarter, our compensation ratio was 69.4%, up from 58.5% last year. The higher ratio was driven by the severance charge and fixed compensation expense such as equity amortization, over a lower revenue base. We expect that we will continue to experience similar pressure on the compensation ratio during the remainder of 2008 as the revenue backdrop continues to be challenging.

For the second quarter of 2008, noncompensation expenses were $43.3 million, up 24% compared to the first quarter. The increase was mainly driven by a couple of factors. First litigation-related expenses were higher, mainly due to one matter outstanding from 2004. The trading related matter was partially resolved during Q2, and the net amount impact to the quarter was approximately $3 million in expense. Part of the matter on which there are claims that remain pending, the resolution and any benefit of which will occur in a future period. Our goal is to significantly offset the net expense incurred in the second quarter.

Second we experienced more busted deals or deals that were not completed because of the challenging market condition. As a result, we wrote off the travel expenses and legal fees related to these deals. The write-off accounted for the majority of the quarter over quarter delta in marketing, business development, and outside services. Additional contacts for the first six months, noncomp expenses were $78 million compared to $70 million last year. Approximately $5 million of this increase is related to SAMCO and Piper Jaffray Asia which we didn’t have last year.

Heading into 2008, we plan to modestly increase our noncompensation expenses above 2007, mainly to account for the added expenses of the two acquisitions we completed last year. However, as the revenue outlook has become more challenging, we are viewing our noncompensation expenses to see where we can achieve saving.

Finally, our tax rate for quarter was 65%. The rate was driven by the large amount of tax-exempt municipal interest income in addition to operating losses.

That concludes our formal comments, and now Andrew and I will answer your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from William Tanona - Goldman Sachs.

William Tanona – Goldman Sachs

Just a quick question, looking at the revenues, you actually did a pretty good job given the environment clearly. I took your comments in terms of the investment banking environment as being somewhat challenging, but the one thing you guys do have control over is obviously the comp and the noncomp, and you alluded to the fact that you are businesses and thinking about right-sizing the business.

I wanted to get a sense as to what your thoughts were in terms of what’s the appropriate comp ratio that we should be assuming given all of these things, and in the interim, should we be expecting a higher comp in that revenue ratio than we’ve historically seen from you guys, because if you look at the last two quarters, even excluding the severance, we still seem to have a significantly higher number than we’ve seen historically.

Debbra L. Schoneman

I’ll address the comp ratio. Given the challenging revenue environment that we do foresee for the rest of this year, our comp ratio will likely be similar to the first two quarters.

Andrew S. Duff

Bill, I would just add that we’re actively at work on both comp and noncomp expenses with the more difficult point of view.

William Tanona – Goldman Sachs

Clearly I think that’s a decent problem to have to be able to control those things, but as you think about noncomp, you had some one-time items out there, and if I heard the commentary correctly, you’re saying that 2008 full year noncomp expenses all inclusive are going to still be slightly higher than what they were in all of 2007 inclusive?

Debbra L. Schoneman

That is correct, including the acquisitions that we did do, but well in single-digit increase in our noncomp, although as Andrew mentioned that is something that we are looking at significantly right now.

Andrew S. Duff

And the point that Deb is making, Bill, is that the two acquisitions were both very late last year, one at the very end of Q3 and the other in Q4, so you’ve got to normalize that, and we’re going to try and hold the expenses down despite that.

William Tanona – Goldman Sachs

Finally, in terms of the fixed income environment, clearly a very challenging environment. Your commentary seemed to suggest that the business environment isn’t as robust right now in the third quarter, at least in the start of the third quarter as maybe it was in the second quarter. Given the jumps that we’ve seen in that institutional sales and trading fixed income line, what do you think we should be looking at? Would you average the two quarters of what we’ve seen in the first half to get a normalized run rate for the back half of the year?

Andrew S. Duff

Bill, you’re in the right zone. What I was trying to communicate is the dislocations in the municipal area are really as severe as I’ve ever seen in my career, probably starting in the tail end of the first quarter, and our various trading areas really did an exceptional job. They were in the right place at the right time and took advantage of that very successfully, and I think it would be hard to replicate that quarter after quarter, and I say that from the perspective that I think actually some of the volatility is going to moderate.

Operator

Your next question is from Devin Ryan - Sandler O’Neill & Partners.

Devin Ryan – Sandler O’Neill & Partners

Clearly, as we’ve been talking this morning, it’s a really challenging environment. Can you just talk a little bit about what you are optimistic about and the opportunities that you are seeing, whether it’s adding talent like a team of senior level bankers in the municipal finance business that you announced or building out other products or even geography? Can you just talk a little bit about that for us?

Andrew S. Duff

Geographic expansion remains a very high level key objective of ours. We are adding additional talent in our Asian platform and really transforming that. We’re where once it was bringing companies public in the New York exchanges to now really a global capability and more activity right in the region on the foreign exchange and developing the capabilities that Goldbond had. We are looking at other regions more broadly from Europe.

Additionally the team hiring environment is unlike any I’ve actually ever seen as well. Take the group in California. What’s unique about it is you have longstanding well-developed, well-working teams on platforms that in a regular normal environment, I’ll call it, would be highly unlikely to move and are compelled to for one reason or another typically go through a process to look at a couple of firms.

I actually think we’re advantaged by that, and by the time we’re selected, there is a high degree of confidence that it’s a good long-term fit, and the economics around that are reasonably favorable, but this is 13 professionals who had a leading share in higher education for a very long time and that’s successfully transformed our platform, and we’ve already done a number of underwritings in just weeks of them being in here. So, I believe we will see more opportunities like that. Having said that, I recognize we’ve got to have balance around that because of the uncertainty and the lack of capital raising, particularly on the equity side.

Devin Ryan – Sandler O’Neill & Partners

Given the significant recent declines in the stock price, also just wanted to get your thoughts on the buyback.

Debbra L. Schoneman

You’re, I am sure, aware we’ve $100 million authorization that runs through June 2010, and we do anticipate executing a portion of that repurchase authorization during the remainder of 2008. We did not purchase any shares in the second quarter.

Devin Ryan – Sandler O’Neill & Partners

On the tax rate, it looks like the first half tax rate was about 55%. Is this a good level to think about for the rest of the year? I know you mentioned this year being helped by the mix of revenues in the municipal business helping.

Debbra L. Schoneman

I think given the current environment, the rate is very difficult to project. I can say, however, we do expect that the large municipal tax-exempt interest income will continue to drive a large tax benefit for us.

Devin Ryan – Sandler O’Neill & Partners

On the equity sales and trading side, you mentioned principal trading helping the sequential increase. Was this the biggest driver of that increase or was it just client activity?

Andrew S. Duff

It was essentially US equities trading.

Devin Ryan – Sandler O’Neill & Partners

Right, on the actual, was it from principal to principal investing though?

Andrew S. Duff

No. Client activity.

Operator

Your next question is from Steve Stelmach - Friedman, Billings, Ramsey & Co.

Steve Stelmach – Friedman, Billings, Ramsey & Co.

Andrew, if you could, can you give us your outlook maybe a little bit longer term on how things will bond in the industry? There’s both a legislative and a rating agency push to get municipal bond ratings more on a global scale. Can you give us your feel for what that means in terms of margins, in terms of volumes, in terms of your business outlook?

Andrew S. Duff

When you refer to global ratings, I gather you’re referring to a corporate rating system. There a large part of me that thinks that’s a constructive idea, that in fact we really look at the underlying creditworthiness and track record of municipals. You can go back 40 or 50 years, and the default rate is really very, very, very low, that in fact if you used a corporate rating system, many would probably enjoy a higher rating, which then leads me to wonder frankly if we really needed to insure all this.

I think they got started largely to access money market funds on the short end. I think you might normalize into something that makes more sense and could be functional. That might have a little bit of spread to climb because there’s a credit standard that’s more easily understood. Having said that, I still think there’s a pretty healthy volume for the years to come. It’s really financing a lot of infrastructure that’s clearly needed from one of the country to another.

We feel like that’s a very good growth area for us, with longstanding very solid franchise and very high share in a number of areas, but from a geographic perspective, we’ve largely been upper Midwest/Western part of the country. We changed our status in California overnight with the team, and have the Eastern half of the country as an opportunity.

Steve Stelmach – Friedman, Billings, Ramsey & Co.

Could you provide maybe a goalpost of what you are thinking in terms of possible dollar amount of saving that you could see on the noncomp side?

Debbra L. Schoneman

I think right now we are early in the analysis. In looking at noncomps, we’re looking at various areas there, so at this point, again to reiterate what I said about the full year, we do anticipate low single-digit increases versus ’07, again including the acquisitions that we made.

Andrew S. Duff

That shows the moderation of where we’ve been, and that effort is underway.

Operator

Your next question is from Steve [inaudible].

Unidentified Analyst

If I heard you correctly, on the noncompleted deal expenses, when I do the math on that, it appears that’s about $4 million in the quarter. Is that about right?

Debbra L. Schoneman

It was the majority [inaudible] category.

Unidentified Analyst

I would assume as the market environment kind of transitions that eventually that should not be repeat as things start to turn and hopefully improve. Would you agree with that?

Debbra L. Schoneman

I would agree with that from the standpoint as things begin to improve. I think to the extent that market environment continues to be challenging, it is possible that we could see additional [inaudible].

Andrew S. Duff

That reflects the prolonged market window being closed and we page our backlog and write them off at the appropriate time.

Unidentified Analyst

The other thing I just wanted to ask about was in terms of positioning for the future to gain that share when things eventually do improve, when you’re sitting in a position of having tons of excess of capital when it’s so dire and it just seems like in such a great potential position to achieve some of the things you want to achieve over the long term, and I know you talked about some of them, but I just wanted to hear maybe a little bit more of the game plan from here and what you’re seeing and maybe the wish list of things to do in this environment because it seems like you are well situated from here to deploy that capital.

Andrew S. Duff

Steve, let me make a couple of comments, and the headline would be I very much share your perspective. We’ve got the capital we need to operate our business. We’ve got capital for growth, and a good position to be in currently. The priorities are similar to those that we talked about since we exited the private client business and have had the resources; geographic expansion that I talked about, and there are opportunities to maybe expand beyond Europe in that region; asset management, where we continue to look at a number of opportunities and I believe we’ve got a very solid start with SAMCO, and there are a variety of new products.

Most likely debt products, and we’re being very thoughtful about that. The fact that previous efforts did not succeed maybe turned out to be a benefit and it’s gotten much more dearer and could you find the right partner today? So we’re thinking about that, and then I would say also, very importantly, sectors. What we accomplished with media and telecom really transformed our tech into an MET franchise, a very experienced team with longstanding client relationships. Thirteen senior investment bankers in California more than doubled our California business. That’s a very substantial group. I believe I made some reference to this in the first call; I’ll say it again.

I think we have as active a recruiting dialogue going on across the company as we ever have. These cycles are very opportune time to do that. High-quality experienced people with relationships and internal group dynamics that are functional are available, really not out of their choice, and we can look pretty attractive in that. I have to balance all that, Steve, with recognizing that for our key equity sectors the window has essentially been closed, flat-out closed. Now, that may extend for a period of time, and I need the balance, but I am willing to invest and take some short-term pain for substantial intermediate to longer term gain, up to a point.

Unidentified Analyst

That makes sense, and I that’s what I look forward to seeing there.

Operator

Your next question comes from Lauren Smith from Keefe, Bruyette & Woods.

Lauren Smith – Keefe, Bruyette & Woods

A couple of followups. First off, with the headcount reductions as well as additions, could you just walk us through since say year end what you’ve cut in terms of headcount and then what you’ve added in terms of hires, because the net number is higher, so I just want to get a sense of how many you’ve gotten rid of over the past 6 months versus how many have been hired over the similar timeframe, and I’m assuming a lot of that has been backloaded over the past three months or so?

Debbra L. Schoneman

We ended the year at 1238 employees. We have taken reductions of 7% of that. The other thing to note is our June 30th numbers include 33 summer interns, so if you exclude them, our headcount is down slightly from year end. That really accounts for the fact that we have reduced by 7%, but have added headcount in certain added that Andrew was mentioning.

Lauren Smith – Keefe, Bruyette & Woods

So, it’s pretty much kind of like the 10 in public finance and the other 13 you cited, is that where we have seen…

Andrew S. Duff

So, 14 senior bankers, and we’ll probably have some support associated with them in California; 10 in the MET, 5 in biotech. Having said that, we’re looking hard at the headcount still.

Lauren Smith – Keefe, Bruyette & Woods

So, it’s an ongoing process, so we shouldn’t think about it as being finished quite yet.

Andrew S. Duff

Correct.

Lauren Smith – Keefe, Bruyette & Woods

Just one followup on that. Where did the public finance team come from? They were all lifted out of one institution or is it an aggregate from different places?

Andrew S. Duff

Lauren, it was UBS. They started a process to sell the business and they then announced that they were going to shut it. They enjoyed the #2 underwriting position nationally for several years.

Lauren Smith – Keefe, Bruyette & Woods

Looking at the institutional fixed income business, I think you had said that there weren’t any marks this quarter, so there’s a pretty big sequential delta, so should we think about $20.8 million, give or take, as sort of a reasonable run rate, and I am assuming that includes some added revenues from this new public finance team?

Andrew S. Duff

Personally, let me just clarify something. When I was talking about the market as being very specific about the auction rate, Lauren, that we are working through those restructurings, that had been an issue in the market place. Certainly, there were marks required and there aren’t as we do everything at par. So back to your question, it really is a combination of a better trading environment, additional underwriting, and you are seeing the ramp of some of the additional resources. Having said that, the final caveat would be the municipal trading was very, very successful. They were really in need. There was a point at which municipals yielded 125% of treasuries. That is very unusual and created a big opportunity.

Lauren Smith – Keefe, Bruyette & Woods

Just to circle back to Devin’s question, on the institutional equities, I can appreciate that you said it’s really more core client flow and not so much meaningful increase in prop trading. Maybe you can just serve that out a little bit, because with such a weak underwriting quarter, to have that number be up pretty meaningfully Q on Q and year on year means there’s something going on in terms of…do you feel like you’re gaining market share or penetrating certain account base where maybe you didn’t have as much of a presence? I just want to get a better sense for the kind of underlying trends going on the equity side

Debbra L. Schoneman

Lauren, I can address that. We really think a couple of things are happening. With the increased volatility in the equities market comes the increased volumes and our commission revenues are up significantly. In addition, we have been able to manage our loss ratio down through the combination of those two things that have created that increased revenue.

Lauren Smith – Keefe, Bruyette & Woods

So, overall then when we think about prop trading relative to the total, should we be thinking about it as being pretty small, kind of single digits?

Debbra L. Schoneman

I think that is correct. It was really something that we thought improved compared to where it was in the first quarter.

Lauren Smith – Keefe, Bruyette & Woods

Just last one on the bigger picture. Geographic expansion has always been high on your priority list, and we can look at the revenue distribution and see that you have certainly made positive strides there. When you look at the mix, I don’t know what it was in Q2, but in Q1, you were up 6%, Asia 7%, so that’s up small single digit, but up a lot year on year. When you think the next two or three years, how would envision potentially that balance shaking out?

Andrew S. Duff

I continue to expect that to expand. It actually didn’t in the second quarter. Those markets are also challenged, and if you netted it all out, we were actually I think 12% outside the US, so down just slightly in the quarter versus previous quarters, but still looking at it historically, a pretty solid growth rate. I’d expect that to extend and continue to grow our business more rapidly outside the US than inside. I think that percentage will get to and be north of 20.

Operator

Your next question is from the line of Brian Hagler from Kennedy Capital.

Brian Hagler – Kennedy Capital

I guess my question was touched on earlier as far as the busted deal expenses. They appear to be $3 to $4 million or so, and if I understood your response correctly, it sounds like those could potentially continue in this environment, but is it safe to assume that they’ll need to be a little bit less than that in the coming quarters?

Debbra L. Schoneman

Yes, I think it’s very dependent on the market environment. I do think that it will likely be moderated from what we thought of in the second quarter.

Operator

Your next question is from the line of from [inaudible] from Thomas Weisel Partners.

Unidentified Analyst - Thomas Weisel Partners

You’ve made good progress winding down your exposure to the auction rate municipal securities, and I’m particularly impressed that there were no marks. I’m wondering whether the credit quality of the balance is any different from the portion you already wound down and whether you’re headed for zero both on auction rate municipal securities and variable rate demand notes. I’m just trying to get a sense of what the target is.

Andrew S. Duff

Let me separate those two out. The variable rate note business, we remain very active in it despite some of these rating changes, but that market is functioning really relatively very, very well. In fact, I think the weeklies are yielding under one’ish or a little lower, so that’s highly functional. We’re active in it, and any given time, we’re going to add some. We’ve got a substantial buildup, we’ll have some in inventory, and I’d expect that to continue. To the auction rate book, we’ve got restructuring plans for the balance of our book. We’d anticipate that that would be completed in the third quarter largely. There isn’t a particular credit quality difference. It was much more the timing and the process that the issuers went through. These are nonprofit entities and have a variety of processes they use. They came to a conclusion about whether and how they wanted to restructure, but we do have a restructuring plan for all of them.

Unidentified Analyst - Thomas Weisel Partners

In regards to the litigation expenses that are contained in the noncompensation expenses, are you able to quantify how much they are? I am trying to get a sense of whether this is a one-time item or a recurring item.

Debbra L. Schoneman

Just to clarify, are you talking about the legal matter which was discussed in our script?

Unidentified Analyst - Thomas Weisel Partners

Yes.

Debbra L. Schoneman

For that particular legal matter, it equated a net expense of $3 million in the second quarter, and we’re continuing to work through that being a plaintiff on the remaining portion of that, and we do expect to significantly offset that net expense in the future.

Unidentified Analyst - Thomas Weisel Partners

My final question is to Andrew again. You do state in your press release that you’re evaluating appropriate actions to position your firm for a more prolonged market downturn. I’m wondering if you’re able to elaborate on what those options might be and what your timing might be in coming to a decision.

Andrew S. Duff

I would tell you that we anticipate actions that will reduce both comp and noncomp expenses, and we’re actively making those evaluations right now and expect them to be done.

Operator

Your next question is from William Tanona from Goldman Sachs

William Tanona – Goldman Sachs

I have a couple of followups here. First is the tangible book value. Obviously with the loss in the quarter, seeing that book value and tangible book value go up as much as it did, I was just surprised by that. What was driving that?

Debbra L. Schoneman

Part of it has to do with the fact that even though we are reporting a loss, part of that is related to the equity amortization. It still does increase our overall equity, so the equity is increasing even though we have reported a loss because of the equity amortization.

William Tanona

Okay. It’s solely just the equity amortization or are there other things in there as well?

Debbra L. Schoneman

Yeah. Primarily that.

William Tanona

Okay, and I guess just lastly. In terms of looking at where your stock price is below tangible book value and looking at the goodwill that’s on your balance sheet, I think there is obviously some accounting rules that allow you to attest for impairment of goodwill, and I know that was push-down goodwill, but any chance that you take the opportunity to kind of write down that push-down goodwill from the USB spinoff here given where your market value is?

Debbra L. Schoneman

We do our impairment testing in the fourth quarter of each year. We don’t believe currently that we have any triggering in the second quarter that would have caused us to look at that analysis any earlier in the year, so that’s where we came out in the second quarter.

Andrew S. Duff

And we’ll go through the process in the first quarter.

William Tanona

I don’t know if I recall, but was your stock actually below tangible book at that point in time?

Debbra L. Schoneman

Yes. There are a number of factors that go into a goodwill announcement when you do that. It’s not solely related to that, and really the accounting standards require you to test it once a year unless there are triggering events that would cause you to need to do that earlier.

Operator

There are no further questions.

Andrew S. Duff

Let me close the call. Thank you all for dialing in, and we reiterate we are positioning our firm for long-term growth, but are clearly realistic about the current environment. We are focused on making sure that our expenses are aligned with a more prolonged time period of muted revenues but significant growth opportunities. Thank you.

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