On December 21, 2016, Piper Jaffray Companies (the “Company”) concluded that it will be required to record a noncash impairment charge to reduce the carrying value of the goodwill associated with the Company’s Asset Management segment. The Company reached this conclusion in connection with its annual impairment testing of goodwill. The Company’s Asset Management segment has experienced net outflows of assets under management during its fiscal year ending December 31, 2016. Company management believes that these net outflows are the result of an extended cycle of investors favoring passive investment vehicles over active management, combined with certain investment strategies having performance below their benchmarks. As a result of the decline in assets under management, management fees as well as the profitability of our Asset Management segment have declined since the end of the Company’s previous fiscal year. The Company estimates that the impairment charge will be in the range of $75 million to $95 million on a pre-tax basis. The impairment will not result in any current or future cash expenditures.

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