Good morning and welcome to the Piper Jaffray Companies' conference call to discuss the financial results for the fourth quarter and full year of 2017. During the question-and-answer session, securities industry professionals may ask questions of management. The Company has asked that I remind you that statements on this call that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements that involve inherent risks and uncertainties. Factors that could cause actual results to differ materially from those anticipated are identified in the Company's earnings release and reports on file with the SEC, which are available on the Company's Web-site at www.piperjaffray.com and on the SEC Web-site at www.sec.gov. This call will also include statements regarding certain non-GAAP financial measures. Please refer to the Company's earnings release issued today for a reconciliation of these non-GAAP financial measures to the most comparable GAAP measure. The earnings release is available on the Investor Relations page of the Company's Web-site or at the SEC Web-site. As a reminder, this call is being recorded. And now, I'd like to turn the call over to Mr. Chad Abraham. Mr. Abraham, you may begin your call.

Good morning and thanks to everyone joining the call. This is the first for Tim Carter, our new CFO, and me to host our earnings call. So we are very excited to be on the call today. We are especially excited to report our fourth consecutive year of record revenues. Deb Schoneman, who is an old pro at doing earnings calls, is with us today as well. So Deb and I will take a few minutes to discuss the business and markets and then hand the call over to Tim to go through the financials in more detail. We will then open up the call for questions. The record revenue levels we have produced is a testament to the skills and dedication of all of our partners across the firm, both on the front line and support. I want to thank them for their long-term commitment. The significant number of professionals we've added to the firm over the past few years made meaningful contributions to our record results. Maybe even more important however is that very few professionals have left the firm. The culture we have at Piper Jaffray is unique and we believe a competitive advantage. Our constant focus is on making Piper Jaffray the best possible home for our employees to serve their clients' interests, and the continuity of our professionals reflect that we are getting this right. The main driver for revenue growth has been our advisory business. This has been an area of strategic focus and investment for the firm over the past several years. We like the attributes of this business as it doesn't use capital and it has a variable cost structure. We believe that remixing our business toward more advisory revenue would improve our overall profitability and return on capital. This has played…

Thanks Chad. Public finance recorded strong results in 2017 on the heels of a record year for both us and a new issue market in 2016. We experienced a wave of issuance in Q4, spurred by pending changes arising from the federal tax bill that passed in December. Under the new tax law, tax exempt advance refundings will be eliminated, which drove a surge of refunding activity late in the year. We participated in this activity as Q4 was the best quarter of the year for public finance. However, we expect the new issuance market will be down meaningfully in 2018 as some of the demand was pulled forward into 2017. Refundings overall represent about half of the market issuance over the past several years and we expect this segment of the market will be lower in 2018. We think 2018 will get off to a slow start after the surge of activity at the end of 2017 and we are confident that we will maintain our prominent position in this market. Moving on to our brokerage businesses, equities had a good year relative to a very tough market condition. For the year, our business was down about 7% compared to a decline of 11% in market volume. Historically, low levels of volatility once again led to subdued activity. We believe continued market share gains are available to us as we find ways to create and communicate the value we bring to our clients. For much of the year, the potential impact of MiFID II on the industry has been a major topic of discussion. Since this is a European regulation, our expectation is that the impact on the U.S. market might be more gradual and less severe. While we will closely monitor this situation, our main area of focus…

Thanks Deb. As context, unless specifically noted, my remarks will be focused on our adjusted non-GAAP results. We finished the year very strong with revenue for the quarter just slightly behind last quarter's record levels. For the year we generated record revenues of $870 million. Chad just put out some of the progress we've made in the shift to advisory, which shows up in the numbers. For 2017, advisory was 51% of total revenues versus 41% in 2016. With over half of our revenue coming from advisory, we are seeing the positive impacts on our overall business model we expected. Revenue growth coming from advisory contributed to increased operating leverage as our operating income was up 38% on a revenue increase of 18%. This resulted in a 260 basis point improvement in operating margin, which really was attributed to a lower non-comp ratio. Since advisory places much lower demands on the fixed infrastructure, non-comps were up only 2% for the year on 18% revenue growth. These results translated into much better return for our shareholders in 2017. We produced a record adjusted EPS of $7.12 for the year, an increase of 52% over 2016. Our adjusted return on equity for the year was a little over 14% versus about 9% in 2016. As mentioned on last quarter's call, in addition to the very strong operating earnings, there were a couple of other items favorably impacting our adjusted ROE for the year. First was the positive earnings impact attributable to the tax benefit associated with the vesting of employee stock awards. It's worth mentioning that the impact of employee stock award vesting on taxes will vary from year to year. The second favorable impact on ROE was the reduction of our equity related to two non-cash asset write-offs this year. In…

Thanks Tim. Operator, we'd like to open up the line for questions.

[Operator Instructions] You have a question from the line of Devin Ryan with JMP Securities.

Maybe starting here on the advisory business and some of the commentary there, I mean clearly you just had some great success building out that business and you're getting the revenues to where they are today. And so, I heard the comment that the pace of growth could slow, but obviously that suggests there is still growth. So I'm just trying to think about after such a big year that you had this year, is there some level of kind of digesting that growth and I'm just trying to think about for modeling perspective, is the base case that we still have another year of decent growth or is there anything that you're seeing in the backup that would suggest otherwise just in your pipeline or anything else? I'm just trying to put it all together after such a big step-up in 2017.

I'll address that. I think for us obviously we've seen such big growth the last couple of years in advisory and we're continually adding to the platform. What I would say is, it's not evident that that growth is going to show up every quarter in a linear fashion. And I do think, we do believe there is significant continued growth, whether that shows up every quarter or all in a particular year. We were focused on building the platform and over time we really believe that's going to show up in the advisory growth.

Got it, okay. Thank you. And the, maybe another one, investment banking, just great debt financing activity and we saw the industry volumes which were also up pretty dramatically, and so trying to understand the amount of pull-forward from maybe the first half of the year, so just any sense of kind of how we should think about how this could play out where maybe the first quarter or first half is a little bit softer and then it kind of regains momentum, or what the drivers of that would be and how tax reform impacted that business maybe longer term, if at all?

Devin, clearly there was a large pull-forward from 2018 into 2017 and there's a lot of prospective ranging anywhere from 20 billion to 40 billion out in the market. And I guess I feel like it's probably more in the lower end of that range than the higher. But at the end of the day that was pulled forward. There has been a decline in refundings just as interest rates have stayed low for a long period of time. And really I think in terms of your question around the more long-term impact on the tax bill, you look at the elimination of tax exempt advanced refundings and over time that will moderate and sort of even out as ultimately the deals that are in the marketplace have an ability to be called. So it's really just a time period where the advanced refundings won't be able to be done. If you think about what that means for 2018, and you talked about how that plays out over the year, I think there's just a lot of questions and it's quite unknown. Clearly, the first quarter is going to be impacted by the pull forward, I think that is pretty evident. And overall, issuance is likely to be up meaningfully on a year-over-year basis. But how that plays out throughout the year I think is really unknown.

Okay, all right. Thank you. And maybe just a last one here, more of a modeling question, so the tax rate guidance that was provided, is that prior to contemplating a benefit that I suspect you should receive from the GAAP accounting change on stock-based comp? And if so, any sense of how big that could be based on where the stock price is?

Yes, Devin, it is prior to the benefit that we will see in 2018 related to stock based awards. We'll see the most of that likely in Q1 based on the timing of when we issue those awards. It is dependent on the stock price and we will actually disclose a specific number around that in our 10-K filing, but are not providing any additional guidance on that piece at this point.

Got it, okay. We'll see to it. I'll get back in the queue. Thanks guys.

Your next question is from the line of Ann Dai with KBW.

Sorry if I missed this, I joined the call a little bit late, but I was hoping you could just give us some color on what sectors were the largest contributors advisory this quarter and how that relates to what drove strength earlier this year?

It's interesting throughout the year we've had different pockets of strength with healthcare and in consumer, and in particular in Q4 we had a very strong energy quarter.

Okay, perfect. And just a follow-up on your commentary regarding the debt advisory business, so just from a higher level perspective can you give us a sense for what you see as a market opportunity there and what type of scale we might see that business become within your platform over the next couple of years?

Yes, so for us, there's been a pretty good focus on, as we've really build an advisory business and we have a significant platform of investment bankers, we saw a great opportunity to provide advisory around debt placements, and that business has grown and we've had a couple of great years and we frankly think that can continue. The more large M&A deals we work on that need to be financed, the more opportunity there is for us. There is a whole bunch of alternative lenders and sources for capital that are unique and we can really offer those relationships to our clients. So, we expect pretty good things going forward with our debt capital markets product and look for that to continue to be a growth engine.

Okay. That's it for me. Thank you.

There are no further questions.

Okay, thank you. Clearly the strategy we have in place is working and our execution is solid. We are actively seeking investment opportunities that are in line with our strategy as we look to expand our industry footprint and broaden our product offerings. We would also be open to consolidating opportunities where we can add revenue to the platform while eliminating costs. Our emergence as a market leader across many of our businesses is evidence of the strength of the entire team here. We look forward to continuing to produce great results for our shareholders. Finally, before we close the call today, on behalf of our entire organization, we'd like to express our gratitude to Andrew Duff who retired as CEO at the end of 2017. He guided us with a steady hand over the past 17 years and certainly leaves some big shoes for us to fill. We look forward to working with Andrew in his role as Chairman of the Board in 2018. Thanks everyone and have a great day.

This concludes today's conference call. You may now disconnect.