Good day ladies and gentlemen, and welcome to the INTL FCStone Q4 Fiscal Year 2014 Earnings call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance, please press star then zero on your touchtone telephone. As a reminder, today’s conference is being recorded. I would now like to turn the conference over to Mr. Bill Dunaway, CFO of INTL FCStone. Sir, you may begin.

Good morning. My name is Bill Dunaway, as mentioned the CFO of INTL FCStone. Welcome to our earnings conference call for our fiscal fourth quarter ending September 30, 2014. After the market closed yesterday, we issued a press release reporting our results for the fiscal fourth quarter. This release is available on our website at www.intlfcstone.com, as well as a slide presentation which we will refer to on this call in our discussions of our quarterly results. You will need to sign on to the live webcast in order to view the presentation. Both the presentation and an archive of the webcast will also be available on our website after the call’s conclusion. Before getting underway, we’re required to advise you and all participants should note that the following discussion should be taken in conjunction with the most recent financial statements and notes thereto as well as the Form 10-K filed with the SEC. This discussion may contain forward-looking statements within the meaning of Section 27(a) of the Securities Act of 1933 and Section 21(e) of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties which are detailed in our filings with the SEC. Although the company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can no assurances that the company’s actual results will not differ materially from any results expressed or implied by the company’s forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance. With that, I’ll now turn the call over to Sean O’Connor, the company’s Chief Executive Officer. Sean O’Connor:…

Good morning. My name is Philip Smith, CEO of INTL FCStone Limited in London and the broader region of Europe, Middle East, and Africa. I’d like to bring you up to date with the developments in London over the last few years as we continue to expand our operations and capabilities. London has always been the headquarters for our global payments business over the last decade, but 2011 was a transformative year for London when we completed our first corporate acquisition of Ambrian Commodities. This acquisition provided the platform for us to subsequently acquire the LME business from the administrators of MF Global, which consisted of almost 700 clients and nearly 70 employees between London and New York. Our license was then upgraded to a Category 1 ring-dealing member of the LME and a clearing member of LCH Clearnet. In the same year, we expanded our commercial hedging segment in London and began offering clearing and execution on global exchanges through our affiliate clearing memberships. In 2012, we continued our expansion of London’s product offering in the acquisition of TRX Futures Limited, a soft commodities brokerage and clearing firm. This added coffee, cocoa and sugar to our product offering and clearing membership of ICE Europe as it is today, being the old life exchange. This was followed swiftly by the establishment of our FX prime brokerage desk, all in 2012. In 2013, we began implementing the strategy of consolidating our various operating entities housing different products, a legacy of our growth over the last decade. The consolidation of our global payments business is complete and the precious metals consolidation should be completed during the course of fiscal year 2015. As of today, INTL FCStone Limited is the primary operating entity outside of the United States with the registry status equivalent of a U.S. broker-dealer, futures commission merchant, and swap dealer. It is a Category 1 ring dealing member of the London Metal Exchange, a full clearing member of ICE Clear Europe, LME Clear, CME Europe, and LCHN Clear. So from around 40 people and $30 million in equity in 2011, we have grown to over 150 professionals, $105 million in equity, revenues in excess of $100 million, and post-tax revenues of approximately $14 million. Our ambition is to offer as broad a product base as possible, which has now grown processing over 240,000 payments annually with volumes of $17 billion in 145 currencies and at the same time now offer commercial hedging in non-ferrous metals on the LME, commercial hedging in softs, ags, dairy and energy, FX prime brokerage, precious metals, and securities. We are very proud of our accomplishments and continued growth. I’ll now hand you over to Bill Dunaway for a discussion of the financial results.

Thank you, Philip. I’d like to start my discussion with a review of the quarterly results. I’ll be referring to some new slides in the information we have made available as part of the webcast, specifically starting with Slide No. 3, which represents a bridge between the fourth quarter operating revenues from last year to the fourth quarter of fiscal 2014. As noted on the slide, fourth quarter revenues were a record $130.6 million, which represented a 17% increase as compared to the $111.9 million in the fourth quarter of 2013. The biggest increase in operating revenues was in our commercial hedging segment, which increased $12.9 million to $59.7 million in the fourth quarter. This was partially driven by a 26% increase in exchange traded revenues, driven by strong growth in both agricultural commodities as a result of improved market conditions, particularly in the United States, as well as in the LME metals as a result of our expansion into the far eastern markets. Also driving the increase in commercial hedging revenues was a 32% increase in OTC commodity revenues, driven by increased customer activity in agricultural commodities as well as energy and renewable fuels. The second largest increase was in our global payments segment in which operating revenues increased 50% or $5.1 million in the fourth quarter of 2014 as compared to the prior year. The continued acquisition of commercial bank clients and the successful implementation of our new back office platform led to the 54% increase in the number of payments during the fourth quarter. Moving on to Slide No. 4, which represents a bridge from fourth quarter pre-tax income in 2013 to the current period, the biggest contributor to the $9.4 million increase in pre-tax income between the periods was the commercial hedging segment which increased 38%…

[Operator instructions] Our first question comes from the line of John Dunn of Sidoti & Company. Your line is now open.

Good morning, guys. Nice quarter. Sean O’Connor: Hey John, how are you?

Good. Since we’re looking at 2015, could you talk about some of the factors that you think will help particularly the commercial hedging line and the global payments business? Sean O’Connor: Well, we’re a little bit hesitate to give sort of forward guidance, but what we can tell is sort of the basic factors that we believe will impact our business and the big sort of market factors that may drive that. So on the commercial hedging side, I think one of the things that has driven our business in the last while, and we think this is probably going to continue, is a recovering in the grains market. The prior year and maybe for 18 months, we had been dealing with the aftermath of a drought situation, and domestic grains is a big part of commercial hedging. That’s turned around - as we know, we’ve got the largest ever crop. There’s a lot of hedging that has to be done. There’s a carry market - all of that sort of augers pretty well for us, as well as that continues, obviously. So that’s good news. Our LME business seems to be going from strength to strength, quarter to quarter. There seems to be a lot of good traction in that market. Clearly some banks have got out of that market, and we think that that’s an interesting place for us. Generically, though, the thing that will ultimately drive those revenues beyond that baseline is volatility. When we get more volatility, we tend to directly see more trading revenues, and that particularly helps us on the OTC side. The OTC side is where we have better margins, and that really kind of gives us that additional level of profitability that can really push us to the next level. So volatility…

It does. Can you just mention how the harvest in 2014 was versus prior years, and how that may--what the read-through is for 2015, just briefly? Sean O’Connor: Okay, so if you’ve been following any of the news headlines, you’ll know that this is the all-time record harvest in the U.S. I think there’s been good harvest in other parts of the world. Our key grain franchise in the U.S. really at some basic level is influenced by how much grain is stored in the system, and when you have a big harvest like we’ve just had, a lot of the grain is going to be stored and it’s going to be stored for a while. That’s really kind of the underlying determinant for us, so when the grain elevators are full and they keep the grain in the bins, they have to hedge; and if that grain sticks around, they have to roll their hedge, and every time they roll we make an additional amount of revenue. So that’s really kind of the big change. I think certainly it’s hard to predict weather patterns out sort of next year, towards end of next year, but there’s nothing out there that would suggest that anything will be different from what it is now. They certainly have had great success with the crop here, and absent a bad weather pattern, that’s probably going to be repeated, I would suggest. Does that answer your question on that?

It does. Sean O’Connor: Okay, so let’s move to global payments, what’s going to drive global payments. I think we’ve spoken about this now for a couple quarters, and honestly we’re probably going to carry on speaking about it for a couple quarters. The main driver there is we have moved this business into the banking business; in other words, we are now offering these services to financial institutions. We have signed up a number of financial institutions over the last couple of years. We continue to make progress in signing up other large financial institutions. This is the ultimate long sell - I mean, this is a long sales process, and once the sales process is done, it’s a long adoption process and ramp-up process. We are in the midst of that entire sign-on, on-boarding and adoption process with a large number of banks, and we know, having gone through this a number of times, that over that two, three-year period, you ramp up from zero to could be a very significant number of payments. We are right in the midst of that, so the main driver for us on global currencies is focusing on those customers, making sure we deliver what we say we’re going to deliver, getting them comfortable with our service and our system and our operational capabilities. If we do that, there’s every reason to believe that they will continue to ramp up the use of us. We have a unique product offering, it’s what the market wants, there’s honestly no one that can deliver it, and we just have to execute well. If we do that, I think there’s going to be a good embedded growth rate. Now, it may not be exactly linear and it may not be exactly stable quarter to quarter, but there’s very strong underlying reasons that would underpin that growth rate, at least for the next--it’s hard to go beyond a year or two, I guess - who knows? But certainly for the next while, while we’re in the midst of ramping up with these large, large customers, that’s going to be the key driver for that business.

Got it. Do you have any idea about how much capital broker consolidation might free up? Sean O’Connor: Yeah. These are round number, big picture guesses. In our current broker-dealer, we have about $20 million-odd of capital. The consolidation of the FCM broker-dealer will certainly free that capital up, and that capital will effectively be released to handle growth. The GX Clarke acquisition, when we roll that into that merged entity, and that’s likely to only be six months or so out, that will release a further $25 million of capital. So we will be able to run the businesses we have with something like $25 million to $50 million less capital than we would in the current configuration. Now, what we think will happen and we hope will happen is these capital efficiencies will be used to fund the growth in our business. We like to run our businesses with headroom. We do that. We think this creates the headroom. Obviously earnings creates more capital. We like to run the businesses with headroom, but the capital efficiencies we get here are pretty substantial. You effectively get to run two businesses and get two EBITDAs on the same dollar of capital, and that’s going to allow us over time to really get our returns up to where they need to be.

Great. Last one for me - you mentioned the operating environment, market environment has got a little bit better. What’s the temperature of smaller players, potential sellers versus, say, six months ago? Sean O’Connor: We’ve probably mentioned this before. For the better part of two, three years, we’ve seen a constant sort of pipeline of opportunities coming our way - you know, FCMs, broker-dealers, teams of people, London-based, U.S.-based. I think the sort of typical characteristics that we see from those opportunities are smaller type of operators, typically mono-line businesses that have come to the conclusion that the costs of remaining independent from a regulatory point of view, the capital required either from regulators or sometimes more importantly, actually, from customers who want to deal with larger customers, those two constraints are causing their business to be un-workable as an independent entity. The opportunity we offer is we can sweep those businesses in, immediately give their customers and clients the counterparty credit worthiness that they seek, and additionally we can defray the infrastructure costs and the regulatory compliance costs over a multitude of businesses. So it seems to us that the model of being a mono-line business is a really, really tough one to make work, and what you really need is to defray the costs of operation amongst a multitude or at least a variety of product lines and also to make sure you structure those businesses so you can get maximum capital efficiency and maximum leverage of your infrastructure, and of course you share the credibility capital, the show capital that you need to show your customers. That seems to be to us to be the model for a mid-market firm for success. We think we are well placed for that success. As I’ve said, we’ve been seeing…

It does, that’s helpful. Thank you very much. Sean O’Connor: Okay, thank you.

Thank you, and our next question comes from the line of John Leonard of Singular Research. Your line is now open.

Morning, great quarter. I was just wondering if you could provide some more color on the cash management programs, such as the current run rate of incremental earnings, the duration, and the amount invested. Thanks. Sean O’Connor: Okay, I’m going to hand you over to Bill Dunaway, who can help you with that.

Okay, hey John. The program that we had, we started in late Q3. As of the end of the fourth quarter, we had approximately $400 million of that rolled out. The average duration on that, if you count all of our investments that are invested in non-money market funds, it was about 20 months, and at that point we were probably adding incrementally pre-tax a little over $800,000 a quarter to the incremental earnings with the program as its currently implemented.

Okay, great. Thanks. That’s all I have.

Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question, please press star followed by the number one key. Our next question comes from the line of Russell Mollen of Nine Ten Capital. Your line is now open.

Can you explain--I have a question on this merging of the FCM with the broker-dealer and freeing up capital. Can you explain the mechanisms of how that works and how you get--you know, are you taking excess buffer cash away and running with a lot less? How does it work with the merging that you’re able to free up the capital? Sean O’Connor: All right, so firstly the sort of industry standard out there, certainly for entities bigger than us, is to merge the FCM and the BD. I mean, this is how most banks operate, this is how most investment banks operate, so that’s kind of the way they do it. Simplistically - and this is a very general, high level overview with lots of exceptions and detail around it - but basically what you do is you calculate the capital you would require for your futures business, you then separately calculate the capital you require for your securities business, and you are required to keep the higher of the two numbers but you’re not required to add the two numbers together.

Okay. Sean O’Connor: If they are in separate entities, you effectively are adding the two numbers together in aggregate, right?

As well as keeping a buffer on both of those requirements, Russell. Sean O’Connor: So it’s pretty simple math, but again around that you’ve got to think there’s regulatory capital, then there’s sort of operational capital to fund the liquidity requirements of the business, and sometimes that’s a different number so it gets complicated. But the simple thought process is you can effectively--as we said, it’s the higher of, you don’t add both together. And given that our future--I mean, just to give you some sense of that, our sort of net regulatory capital in the FCM, if you exclude goodwill and fixed assets and all that stuff that the regulators discount, is round numbers about $120 million. At the moment, between GX Clarke, which is sort of sitting out there - I mean, we haven’t that closed that deal yet, but GX Clarke and our broker-dealer, we have something on the order of about $40 million of regulatory capital. So as long as that $40 million is below the 120, we still only need 120. So we can really--and this would be a bad way for us to go about our business, but we can add securities businesses up to the point that they use about $100 million of capital and they kind of get a little bit of a free ride.

From how you think about the business from a risk management standpoint, does it change? Is this sort of taking on more risk than what you would normally feel comfortable with? Sean O’Connor: Well, a couple things. I certainly think we always assess our capital on a commercial basis, and in many instances we believe more capital in the strict regulatory requirements is sometimes desirable and sometimes prudent. So I’m just giving you the regulatory conversation. I think we would probably not really add--we wouldn’t sort of run the businesses by just ignoring the capital requirement of the securities business, so I think we’d be somewhere between commercially in how we think about that. But of course, greater diversity and the sort of portfolio effect that that provides also is a risk mitigant, right, so you’ve got to sort of factor that in. So if we had--I mean, I’m just using a theoretical example. If we had $120 million of futures capital we needed and we had $80 million of securities capital we needed, maybe we would come to the conclusion we needed about $150 million, $160 million of capital to be prudent, but I don’t think we’d need $200 million, so you certainly get some efficiencies.

Got it. Can you also explain the bad debt expense and what was going on there, and do you see that as some early warning signs or cracks in credit that you’re taking on as you grow? Sean O’Connor: I think there were--well, a couple things just for clarification. Looking at the sort of unusual items we had in our quarter, we had the bad debt expense; but to be clear, that was almost exactly offset by write-downs on earn-out payments and also clawbacks from compensation, so the net effect on the quarter wasn’t probably as great as you might imagine. But dealing with the bad debt itself, there were really sort of three categories of bad debt, if you like. We had one individual and certainly the largest single amount was with our IME business. That arose as we expanded our business into China. I think we were very keen to support that initiative. I think we went in with a customer that was very active, the market got very volatile, they couldn’t make a margin call. This happened some quarters ago. They have been working with us to reduce that exposure and basically paid back a significant amount of what was at risk, and eventually they became illiquid. Unfortunately, or fortunately I guess, the way GAAP works is we can only write down an exposure when the customer stops paying us. As long as a customer is making payments to us under an agreed plan, if we have a judgment about whether that customer is going to in the full analysis pay all of the debts or not off, we are not allowed to make a provision on a subjective assessment, so we have to wait until that customer basically throws up his hands and says, I can’t…

Thanks.

Thank you, and our next question comes from the line of Paul Siegel of Columbia Management. Your line is now open.

Hi. So just a quick follow-up to that last question, it sounds like it’s a normal part of the business, and barring any unforeseen circumstances, we should sort of go back to your normal low level of bad debt for at least a few quarters now. Sean O’Connor: You know what you normally say when someone says that? You say, from your lips to God’s ears.

I don’t know God that well, but I wish you luck. Sean O’Connor: But yes, we would agree generically with that statement. Bad debts for us may be sort of lumpy, so you may have, just like we’ve had now, a couple happening in one quarter. But we certainly would not expect to see this level of bad debt as a regular occurrence quarter by quarter.

Okay, thank you.

Thank you. Our next question comes from the line of Will Settle of Woodmont. Your line is now open.

Yes, good morning. Last one on the bad debt. My understanding is you guys take some pretty extensive steps to limit risk to any one customer. I was wondering if you could just elaborate on those policies. Sean O’Connor: Yes, if you look at our generic approach, firstly we have 10,000 commercial customers, so we have a wide customer base. We’re certainly diversified by commodity, by country, and we have a pretty rigorous credit approach where every single customer is approved both for the market exposure we’re prepared to take on their account on a fully collateralized basis, because even on a fully collateralized basis, you’re still taking exposure on a customer. Certain customers in the OTC markets, we will waive a portion of the margin required, and obviously those customers undergo even greater scrutiny. Our anticipation is based on the kind of exposure we take on an extreme market move, it should be very unusual for us to lose more than, say, $2 million per customer, and the bulk of our customers would be a fraction of that on the assumption things went really badly. So that’s the kind of approach we take - we look at the customer’s capital, we look at our capital, we look at the liquidity of the instruments they’re trading, we look at the open position, we look at the credit history of the company, the liquidity our customers have to make margin calls. And bear in mind, we are never lending our customers money. Our exposure arises when there’s a rapid market move and the customer is unable to send the margin call in to cover his exposure. That’s what gives rise to a loss for us, so we are always collateralized day one. Some customers we collateralize a little bit less than others, but we always collateralize day one, and our credit assessment is if the market moves rapidly, what are the risks and the chance that that customer will not be able to make the next margin call, and our risk arises from that situation. So that’s how we look at risk, and you’re dead right - we don’t want to take any big risks on individual customers. But that said, we’re in the risk business. There is risk with every single customer that trades with us. There is some modicum of risk. If anyone tells you business is risk-free, I’ve never seen such a business in the financial business. So there is some risk and we are in the business of taking risk; we just need to do it prudently and we need to do it and make sure we earn the right amount of money for the risk we take. Does that answer your question, Will?

Yes, that’s very helpful. Just jumping into the global payments, knew that business would be growing and continue to grow just from watching it, but the acceleration surprised me at 45% this last quarter. Can you talk about the pipeline of just on-boarding, you mentioned some large customers, and kind of what it looks like now versus this time last year? Sean O’Connor: Yeah, actually it’s sort of a tough question. We’re almost getting a little bit worried about explaining who we do business with. We seem to be running into everyone at the moment. We are dealing with--I’ll put it this way. We are either in process of on-boarding or have on-boarded a significant number of what I would call the tier 1 banks in the world. That’s been our focus, that’s where the volumes are, that’s where the real money is for us. As I mentioned on one of the earlier questions, there is a real long on-boarding process, and then once you do the on-boarding sort of an adoption process. We’re sort of tying into their pipes, we’re fulfilling a really fundamental requirement for these banks. Obviously there’s legal, there’s compliance, everyone has to be comfortable. Once you’ve gone through all that upfront work, it’s kind of okay, we sort of trust you guys, but it’s trust but verify - let’s do a few deals. Over a period of one to two years, you’ll slowly ramp up. We are in that curve with every one of those customers and I don’t think we’ve reached near to the end of the curve with any of them. So if that answers your question, that’s our primary focus at the moment, is just servicing these big customers. They account for the major portion of the payments universe we want to target, so it’s a high priority to make sure we stay on top of that, and we really do a good job. We have also signed up a number of what I would call second tier banks. That’s obviously a bigger universe and sort of the next target for us, and we are really starting to go after them given that there is such long lead times. But honestly, I would very much like our team to focus on that sort of critical top tier of financial institutions. If we crack that, we get that right and over the next two years sort of get through the adoption curve, I think this is going to be a really fantastic business for us.

Any way to frame the percentage of capture of those banks you’ve on-boarded at this point? Sean O’Connor: I think I’ve sort of addressed this on prior calls. We’ve now met a lot of payments businesses and been out and seen sort of what other people are doing, and frankly, no one is doing what we’re doing. I think we’re very unique in the payments sector, and also to be clear, we’re not focusing on retail payments. We’re more in the institutional commercial space. But if we had to use some of the metrics I see in investor decks that other payment companies use, I would tell you there are trillions of dollars of payments. Our customers account for a major portion of that - we’ll get a major portion of that. And if you start doing that, the numbers become silly, right? So I think having worked at banks and being familiar with institutions, all these big organizations are really, really hard to crack. They tend to be lots of different divisions and fiefdoms and areas, they’re global and they’ve got different subsidiaries, so to make the sort of assumption we’ll get 80% of their flow because they like us and we do a fantastic job, I think is a little naïve. Obviously that’s our objective, but I think we’ve just got to steadily work at it. As I think I’ve said on previous calls, I feel very confident saying that absent some huge problem or disaster out there, this business could easily grow top line at 15 or 20%, and I think there’s a shot it could be multiples of that. But I don’t know how much confidence I can give you on that curve. We don’t have enough data points really to focus on or to give you any color. Bear in mind, the payment we’re looking at, our niche and where we have a unique advantage, is the non-OECD payments. So it’s a smaller portion of the global payments flow, but it’s still significant. It’s huge numbers of payments to a vast number of countries, but we’re not focusing on sort of the dollar European payments, which are huge. We’re focusing on the other markets, so we’re really filling a huge gap in the marketplace. The underlying potential I think is very large. We think we have a unique product. All our customers tell us that we provide them with a fantastic value-add, and they also tell us there are very few people who do what we do. So the question is how deep and how far can we get into these organizations and try to fulfill that need, and it’s very hard for me to give you color on that, other than I think it’s sort of all good, it’s all going to be upside.

So last question on the segment income that you break out in your release and filings, help me understand the cost not allocated to operating segments and how much might [indiscernible] to the global, or I guess--I assume that’s mostly corporate overhead that’s difficult to allocate. What type of corporate investment does it take to support the global payments business? Sean O’Connor: So sorry, Will, you’re very faint. What was your last sentence, what type of--?

Well, just trying to understand the corporate--you know, if you look at this in the quarter, $25 million of cost not allocated to operating segments. I’m just curious what that investment supports among these different business segments [indiscernible] global payments. Sean O’Connor: Okay, so let me tell you sort of how our cost waterfall works. So all the people that are directly allocated to their business are allocated directly to the business unit, okay? All the operational charges related with the settling of that business, the functioning of that business are allocated to the business. Any specific IT systems and IT people that are working only for that business are allocated to that business, so what you’re left with is management, which the rest of our people in our organization would say that’s overhead, but management. You’re left with risk, general IT - you know, people who keep the systems and the servers and the emails working and general corporate systems not specific to a business, compliance, legal, the cost of the offices because everyone kind of shares those offices, it’s hard to allocate those out. So that’s generally what’s sort of unallocated. I guess if we had--and there are a thousand ways we could allocate those out. I think probably the simplest way might be to look at it on a headcount basis if you wanted to. Some businesses are heavier users of certain services than even headcount would dictate, and some are lighter; but if you looked at headcount on the front office side, so people absorbed in that business and the related operations people, I don’t know, it’s probably 700 people, I’m guessing are allocated out to the units, and I would say round numbers probably 85 of them in the payments area. So just a quick--I’m just doing this on the fly here for you, Will, but I would say it’s something like 10 to 15% of that number would be allocated to payments.

Just to jump in there, we’ve 70 people allocated to global payments, Will, at the end of the year. Sean O’Connor: So my numbers aren’t far off, so yeah. I would say it’s about 10%. We could do a hugely complex theoretical exercise, but I don’t think it’s going to be materially either side of that number.

No, that’s helpful. Obvious reason for my question is looking at the growth of this segment, the more recurring nature of it, [indiscernible] asset kind of embedded among some other complicated businesses, so just trying to make [indiscernible]. Sean O’Connor: Yeah. I mean, the one thing that you should be clear about is while this business doesn’t consume vast quantities of central resources or even material amounts of our capital, this business would have a really tough time operating as a very small standalone subsidiary. The large international banks we’re dealing with would not conduct such an important key function with a small company.

No, that’s a fair point, but it obviously could get part of another large company too. I’ll leave it at that. Thank you. Sean O’Connor: All right. Anything else, Will?

No, thanks. Happy holidays. Sean O’Connor: Okay, thank you and you too.

Thank you. Our next question comes from the line of Steven Spartz of International Assets. Your line is now open.

Yes, good afternoon, Sean. Sean O’Connor: Steve, long time! How have you been?

Doing well, doing well. Question concerning your current buyback of share programs. How many shares have we purchased back this past year, and the outlook as far as purchasing shares going forward? I did note that over the past 18 to 24 months, Bares Capital, they had over 3 million shares and Leucadia also a big shareholder, and it looks like there’s 4 or 5 million shares have been gobbled up in the market as they’ve liquidated their shares. It seems to have been absorbed pretty well in the market. Again, are we doing any sort of an effort on a buyback of shares internally, or how are these being absorbed in the marketplace? Sean O’Connor: I’m going to turn that over to Bill. I think your numbers on some of those shareholders are incorrect, so Bill can--

Yeah Steve, this is Bill Dunaway. Bares, actually what they did is they split their shares out into Nine Ten Partners and the Duke University Endowment, so if you look at the largest holders, those are actually just split-offs of shares that previously showed up as holdings of Bares. So they have not significantly reduced their position in the firm over the last 12 months. Now, Leucadia has sold some, a smaller portion of their holdings here in the fourth quarter, but certainly have not liquidated their whole position. We haven’t bought back any shares here recently. We’ve actually been blacked out because of the GX Clarke acquisition. Because we were working on that over an extended period of time, we had suspended our stock buyback plans just because of that blackout period. But we did buy back earlier in the year, a share under $10 million worth of stock or a little over 500,000 shares of the stock, so certainly that was something we were active in prior to ending up in that blackout period.

All right, and a follow-up also on--you might have mentioned this, was the return on equity. What sort of level did we see this last quarter and for the year, and what is the outlook going forward? And also, the current book valuation? Sean O’Connor: Okay, our book is, what, 18.25?

$18.25, and for the fourth quarter we were at 6.8% return on equity, and for the full year it was a 5.8%. Sean O’Connor: Yeah, I think the way we think about it is if we continue to do what we do, and certainly I think there is strong evidence over the last three, four quarters that all the metrics are moving up, but if you keep your revenue growing and you keep your costs flat, it doesn’t take too long before that ROE starts to go up pretty materially, so I think we’re right at that inflection point now. We had a lot of headwinds two years ago that started hitting us. I think those have abated, maybe even some of them are starting to swing around in our favor - not materially, but even if it’s not a headwind, it’s still a big improvement. We’ve just got to execute well here, and I think the ROE will take care of itself, hopefully.

Very good, thank you.

Thank you, and I’m showing no further questions at this time. I’d like to turn the call back over to Mr. Sean O’Connor for any further remarks. [end of Q&A]: Sean O’Connor: Okay. We’d like to thank everyone for their participation. We love getting the questions, so this is one of our longer calls with questions, so please keep them coming. Please give us any feedback on the amended format of our earnings release and also the earnings presentation. We certainly think it was a better way of doing it, but let us know what you think. Thanks for your time, and we will speak to you soon. Cheers.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you may all disconnect. Have a great day everyone.