$2.1 Billion in Write-Downs Taken on Auction-Rate Securities

NEW YORK, N.Y., Aug. 6, 2008 - Accounting for auction-rate securities (ARS) at full par value is becoming rare, according to the latest survey of auction-rate securities holders from Pluris Valuation Advisors LLC. Of 460 public companies included in the survey, as of July 31, 2008, 281 (61%) have taken write-downs on their auction-rate securities totaling $2.1 billion with a total par value of $32.3 billion. However, a majority of the remaining 179 companies have not yet filed their 10-Q reports for the second quarter. Extrapolating from recent filings, Pluris estimates that another 100 public companies in the U.S. will take impairments in August. "Public companies and their auditors are constantly reevaluating the fair value of their ARS positions," according to Pluris President Espen Robak. The most recent filings reveal an increasing majority of holders writing down their auction-rate securities. The percentage of filings with write-downs increased from the 40% level a few months ago to around 80% for filings made during June and July. While the increasing write-downs mark a clear trend, there is little consistency in the size of the discounts taken. Discounts range from near zero to 98%. Part of the variation is supportable, as different types of auction-rate securities have held their value better than others. The Pluris survey also reports write-downs by audit firm. For the 72 filings made during June and July, the following data is presented in the survey:   Auditor Fraction w/ write down Average discounts Deloitte & Touche LLP 77% 7% Ernst & Young LLP 83% 12% KPMG LLP 80% 13% PricewaterhouseCoopers LLP 93% 12% Total Big 4 84% 11% Total Non-Big 4 36% 8% In spite of their illiquidity, a secondary market has developed for auction-rate securities. "While many corporations have taken write-downs, the size is not always reflective of the discounts that would be taken in a sale under current market conditions," Robak said. "To comply with FAS 157, public companies need to validate the discounts they're taking with real-world market data." The Pluris study, "Accounting Impact of the Auction Failures," is available at no cost at www.PlurisValuation.com or by contacting Pluris Valuation Advisors at 212-248-4500. About Pluris Valuation Advisors Pluris Valuation Advisors LLC of New York, N.Y., is a full-service valuation firm specializing in the valuation of restricted securities of public companies, auction-rate securities, stock options and other assets that lack liquidity. Pluris valuations are used for financial reporting, tax purposes, business transactions and litigation support. Additional information is available at www.PlurisValuation.com.