Now that the safe harbor is behind us, I would like to turn the call over to Arbor’s President and CEO, Ivan Kaufman.

Ivan Kaufman

Thank you, Paul, and thanks to everyone for joining us on today’s call. Before Paul takes you through the second quarter results, I would like to talk about some of our significant accomplishments during the quarter, and how the successful execution of our strategy has positioned the company favorably for the future.

Throughout the past three years and especially over the last several quarters, we have worked diligently to execute our strategy of managing our portfolio, maximizing our liquidity, and repurchasing our debt at deep discounts when available. As announced last month and discussed in detail on our July 12 call, the completion of the retirement of our debt with Wachovia at a discount for a gain of $157 million was a critical component in completing our goal of restructuring a significant amount of our balance sheet.

This milestone transaction has eliminated nearly all of our short-term recourse debt and it generated a significant gain and increase in book value per share. It has also increased our core earnings substantially through a significant reduction in our interest expense, increased our operating flexibility and positioned the firm well to actively participate in the accretive opportunities that are becoming available on the market.

We are extremely pleased with the way we strategically manage the completion of the Wachovia debt retirement through a combination of corporate liquidity, and the utilization of other debt facilities. This eliminated the need to raise capital or paying significant additional long-term recourse debt in order to complete the transaction, and allowed us to retain a substantial amount of value in the form of unencumbered assets.

During the quarter, we also continued to selectively repurchase our CDO debt at discount purchasing approximately $19 million of bonds for a price of approximately $6 million resulting in a net gain on early extinguishment of this debt of nearly $13 million. This adds to the string of success on these transactions that we have had recording $54 million of gains from the debt repurchases in 2009, and another $47 million in the first quarter of 2010, including the gain from the retirement of our trust preferred debt. We believe that there may be some more opportunities for us to repurchase our debt at discounts going forward, and we will continue to evaluate these transactions based on availability, pricing and liquidity.

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