Good day ladies and gentlemen, and welcome to the ThirdQuarter 2007 CompuCredit Earnings Conference Call. My name is Stacey and I willbe your moderator for today (Operator Instructions). As a reminder, thisconference is being recorded for replay purposes. I would now like to turn presentation over to your host fortoday, Mr. Jay Putnam, Director of Investor Relations. Please proceed sir.

Thank you. Good afternoon and welcome to CompuCreditCorporation's third quarter 2007 earnings call. Before we get started I wouldlike to remind you that some of our comments today will be forward-lookingstatements. These forward-looking statements include all statements ofour plans, beliefs or expectations of future results or developments, such asthe performance of our credit card receivables, including new account growth;net interest margin; other income ratio and charge-off levels; financialperformance and growth expectations for all of our business segments;acquisitions of portfolios, assets or complementary businesses; our expectedlevels of marketing expense; capital raising plans; earnings expectations andgeneral economic conditions. For information regarding some of the more importingimportant factors that may cause actual results to differ materially from thosereflected in the forward-looking statements that we make today, you should readthe Forward-Looking Information section and the Risk Factors on Form 10-Q forthe quarter ended September 30, 2007. Thanks again for your interest in CompuCredit. Please feelfree to contact me if you ever have any questions you would like to discuss.You also may access our website to obtain a hardcopy of the press release andour financial statements, to view our risk factors or to listen to an archivedversion of this call. At this time I will turn it over to David Hanna, Chairmanand CEO of CompuCredit, for his remarks.

Thanks Jay and thanks to you all for joining us today. Todaywe will review our performance during the quarter, update you on the currentstate of our business and share some thoughts about our outlook. J. PaulWhitehead, our CFO, will follow me to discuss the financial metrics for thequarter in greater detail. After our prepared remarks we will be glad to answer anyquestions that you may have. Today we reported managed earnings for the thirdquarter of $46.5 million or $0.95 per share, and a GAAP loss of $53.2 millionor $1.10 per share. The discrepancy between GAAP and managed earnings isprincipally due to the buildup of our allowances for loan losses attributableto the significant receivables growth we have experienced related to our highyielding, lower tier credit cards, our online and storefront Micro-Loans, andour auto finance loan originations. Highlighting some of our key managed stats for the quarter;our net interest margin fell 30 basis points from the second quarter to 18.6%in the third quarter. Our other income ratio increased from 12.3% in the secondquarter to 17.2% in the third quarter on the strength of the new accountadditions we have had this year. Our adjusted net charge-off rate climbed 100basis points from 9.2% in the second quarter of 2007 to 10.2% in the thirdquarter. However, our net charge-off rate actually decreased 250basis points. We expected these results based on the affects of our secondquarter U.K. credit cards acquisition from Barclaycard. Significant secondquarter net charge-offs of balances that were at or near charge-off at the timeof the acquisition were significantly offset in the second quarter by purchaseprice discounts to reflect our actual economic charge-off results. We experienced fewer U.K. portfolio net charge-offs in thethird quarter, thereby resulting in a decrease in our net charge-off rate andan increase in our adjusted charge-off rate, as the mix…

Thank you David. First I will review some of our keyfinancial operating and statistical data, and then share more color on ourfinancial performance. To recap our results for the third quarter, today wereported managed earnings of $46.5 million or $0.95 per share, and a GAAP netloss of $53.2 million or $1.10 per share. Trends into our key managed statistical measures included adecline in our net interest margin to 18.6% for the third quarter of 2007,compared to 18.9% in the second quarter of 2007, and 26% from last year's thirdquarter; an increase in our other income ratio to 17.2% for the third quarterof 2007 compared to 12.3% in the second quarter of 2007, and 15.7% from lastyear's third quarter. An increase in our adjusted charge-off rate to 10.2% for thethird quarter of 2007 compared to 9.2% in the second quarter of 2007, and 9.4%from last year's third quarter; and an increase in our 60 plus daydelinquencies to 14.6% as of September 30, 2007 compared to 13.2% as of June30, 2007, and 14% as of September 30, 2006. Our modest decline in net interest margin between the secondand third quarters of this year principally reflects a third quarterreclassification of our MEM subsidiary's revenues from our net interest marginto our other operating income category to align MEM's revenue classificationwith that of our domestic Retail Micro-Loan operations. This $2.2 million third quarter reclassification creates theappearance of an over 20 basis point reduction from our second quarter netinterest margin, when in fact our net interest margin would have been flatquarter-over-quarter without this reclassification. Our third quarter net interest margin also is depressedrelative to prior quarter comparisons based on higher draws that we madeagainst our financing facilities in the third quarter. Some of which we drew inAugust based on news of dislocation in the global liquidity…

(Operator Instructions) Your first come from the line ofSameer Gokhale with KBW. Please proceed.

Hi, thank you. I just had a question about the, you madesome comments about the health of the consumer and maybe you weren't seeinganything yet in your portfolio. I think historically you have said that basedon what happened in your portfolio you can figure out how consumers are goingto be behave six to 12 months out. Can you give us some more commentary on exactly what you'reseeing there as far as payment rates and most currently after the end of thequarter? And how confident you feel in the health of the consumer goingforward? Thank you.

Sameer, is as I think, you know we look at all of our creditcard portfolios, both at a top level as well as looking at everything on avintage basis. And especially in some of the lower tier products looking at thevintage analysis helps us to really determine how things are coming in based onprevious vintages and the like. And to date, we are not really seeing meaningful problemsanywhere in our originated or in receivables that we have purchased. We’ve notseen things that are outside of the expectation bands that we have for any ofour portfolios. So, despite what a lot of the noise we hear going on in themortgage market and the like, we can't really tell what is going to happen withthe overall consumer, but with our consumer base as yet we haven't seen thingsthat give us cause for concern.

Okay. And then, I know you’ve been asked this fromtime-to-time, and you’ve been somewhat constrained in your ability to say awhole lot about this. But I think it would help investors I think to have somesense for what the FDIC is actually doing in terms of the investigation intoyour relationship with CB&T. Where does it stand? What are they looking at this point? Ithink it’s been a year and a half since they have been in there now. So, canyou give us any sense for what they might be looking at this point in time?

The FDIC, as you point out, over the last year and hascompleted an exhaustive review of our entire business and practices as theypertain to our relationship with CB&T or with other banks. And as ourexpectations have been for some time, we expect that we will resolve anyquestions and come to a resolution with the FDIC, hopefully in the near term. But with the federal government on the other side, we don'tget to set the time line; they have a lot more ability to do so. But we thinkthat we will get to a resolution with them that satisfy all parties.

Okay. Then just my last question. I think you’ve givenguidance for Q4 of $0.80 to $0.90, and in there was a $6 million charitablecontribution. I think that works out to roughly about $0.08 or so a share. Butthe rest of it I think you said was partly because of curtailing new accountoriginations. It just seems like a pretty big drop in expected earningsjust from one quarter less or maybe a couple quarters less of marketing. So,can you help us get a sense for is there anything else going on from a creditdynamic? Or how should we think about this, because going from your run ratefor this quarter down to the $0.80 to $0.90 seems like a relatively big dropsequentially?

Yes. I think certainly coming from quarters in which we hadmarketed at 750,000 gross account adds for quarter, dropping that down as wehave to the 150,000 to 200,000 account add level has a significant affect onour other income ratio, net interest margin. And then as we mentioned in the call, you began to see someof the effects of some of those high volume vintages to begin flow through ourearnings in the fourth quarter and that certainly has an effect on ourexpectations with regard to managed earnings in the fourth quarter. We also are going to be making some account managementchanges, taking some account management actions in the fourth quarter toaddress the ongoing industry wide issue associated with negative amortization.And that is going to cause some marginal reduction in our fourth quarterearnings. But I would say, echoing what J. Paul said, the lion's shareof that is due to the pretty dramatic reduction in marketing we expect in thefourth quarter versus the second or third quarter.

Okay. Thank you.

Your next question comes from line of Dan Fannon with TopyCredit (ph). Please Proceed.

Good afternoon guys. On the liquidity side, can you talkabout the terms of the transactions or the funding that you have received inthe quarter versus historically where they have been and what has changed? Thenalso let us know did you guys have any renewals coming up on any creditfacilities in the near term that you're going to have to go back to your banksto renew?

Yes. We talk about the transactions that we did during thequarter and then just after the close of the quarter, or just last week that wecompleted, we completed a $300 million facility with a new lender in the middleof August. And we were actually very pleased with the underlying termsat a time with respect to both advance rate and pricing. We’re really able toaccomplish that deal in a way that we thought represented some improvement inthe terms that we had achieved in the past associated with the particularportfolio underlying that piece of financing. We have seen, we also did a $200 million facility as wementioned, for our Auto Finance, segment. And the terms here are disclosed inthe notes payable section of our 10-Q in our financial statements. But therehas been a little bit of widening of spreads there, but we are very pleasedwith the terms that we achieved on that $200 million deal and believe that itallows us to earn our desired returns within the Auto Finance business as wecrank up the originations there. The deal that we just closed last week, it was an amendmentto our first facility that is supported by our lower tier credit cardreceivables. And it took that capacity up from $350 million to $450 million.Along with that change there were some changes to advance rates and pricing,which might be expected based on the increased capacity that we have with that lenderin a deal that has not been syndicated to outside parties. So, we're borrowing more money, so there have been somemodest changes to advance rate and pricing there. Still with the pricing andthe terms that we have there and the underlying IRRs that we earn our lowertier credit card receivables products, we are very pleased with that financingand the additional capacity that gives us to grow. That particular facility has been extended to March 2009. Itotherwise would have expired in March of 2008. So, towards your question ofwhether there are any significant re-financings that we need to undertake orextensions, there really are not at this time. We will get into what we thinkwill be our normal course extension of our BoA conduit in September of nextyear. And as we mentioned in the call, we think we got all theboxes checked to grow at a decent rate, as David mentioned and I mentioned,without having to do anything else from a liquidity standpoint.

That's helpful. And then David, you mentioned I guess in thescenario of a more healthy kind of liquidity environment about potentialpurchasing of receivables. I was wondering, if you guys are already in discussions withbanks or kind of where you our in that process of digging around to see what isout there or what the sale process might be or partners in which you might beable to team up with for purchase? Then you also mentioned stock purchases as another use ofcapital. I am wondering, what you guy’s appetite is for purchasing your ownstock, given your heavy inside ownership already?

Well, I think that your first question about purchasingportfolios, we believe that and over our history even during very tight creditmarkets back in 2001 timeframe and things like that, we have always been ableto finance portfolio purchases under terms that we found to be prettyattractive. And we are looking and talking with various parties, lookingfor potential new portfolios to purchase. And we do not believe that financingwill be an impediment to us as we move forward on that. In terms of looking at using some of our capital torepurchase stock, as anybody who follows our Company knows, that stock priceshave taken a pretty good big dive over the last month. And when we look and make estimates about what we mightspend our capital on, whether it is new accounts we originate, whether it isaccounts we might buy through a portfolio purchase or whether it is purchasingour own stock, sometimes we think that purchasing our own stock is probably thebest move in that scenario.

Okay, Thank you.

The next question comes from the line of Moshe Orenbuch withCredit Suisse. Please proceed.

Thanks, a couple of things. With respect to just drillingdown a little more on the fourth quarter, should we expect to see asignificant, like as in 75% or 70% reduction in the marketing expense or doesit not come down that quickly?

We have, I think the number that you put on it is maybe atad high, but it is in that ballpark.

On a separate issue, could you talk a little bit about, youhave already talked about it just in response to the last question a littleabout portfolio acquisitions? What actually has been out there? Is there anyway you can characterize the mindset of any of the players? And who is lookingin a more aggressive way to sell now than has been, what types of companies?

Well, I think that at least in our company's history,whenever there has been concern about what is going on with the consumermarket, has been the time when people look to potentially sell portfolios. And so while, as I mentioned earlier, we're not seeingthings that concern us about our customer base, I think others may be seeingthat, others with a more prime like customer base, may be saying that andmaking decisions to at least explore offloading some of their credit cardportfolios. I would hesitate to get into specific names and the like,but like I said, if you look over the last 10 years when there has been credittightening and consumer concerns has been where portfolio trades happened. Andthat is why we believe that there is a reasonable chance we will see some ofthat going forward.

Just to get back, sorry to jump around like this, but to getback to the fourth quarter a little bit, I was thinking this through. I mean,you had been previously guiding to north of $1.65, and you've got $0.10 inthere I guess roughly, or a little less, from the charitable contribution,which wasn't in your earlier guidance. It still seems like you're talking $0.60 to $0.70 weakerearnings. Yet you have also got maybe $0.30 or so in terms of lower marketing.So is that difference, is that primarily credit losses? Is there anything elsein there and I would be missing?

No. I think that as you look at our lower tier segment, theprofitability’s of that are highest in the first six months. And then you gothrough six months, nine months of your peak charge-off timing. And then youreturn to normalized profitability after that. So you've got those factors, the lack of new accounts, aswell as some maturation of our older accounts and the like. But it is not oneof higher credit losses on the vintages and the like than what ourexpectations.

Okay.

I would also verify versus that with the ramp up inmarketing and the trajectory that we were on based on second and third quartermarketing spend and marketing levels, you would have seen that trend increaseand continue in the fourth quarter and there would have been even more accountadditions in the fourth quarter likely than in the second and the third, basedon the path that we were on, which obviously given David's point, would havecreated a good bit of income in the fourth quarter.

Got you. Thanks.

Your next question comes from the line of David Hochstimwith Bear Stearns. Please proceed.

Yeah, hi. I wonder, could you just give a sense of how muchin the net account growth there might be as you pull back on growth accountadditions? Is there anything different in the last two quarters new accountsthat would lead those to stay longer or leave faster?

I think at the levels that we're talking about from amarketing perspective, we will likely see fairly modest account growth in thefourth quarter relative to the third quarter this year.

On a net basis.

On a net basis. Yes.

And then in the first quarter or second quarter would therestill be net account growth at the same level of originations, grossoriginations or it would sort of runoff?

Once again, our hope and our expectation is that we're goingto have funding in place to ramp back up our marketing in the first quarter.

But you would probably have to have that pretty soon, ifyou're planning out over 18 months, wouldn't you?

Yes, we're planning the funding for 12 or 18 months, butonce we have the funding it doesn't take an awful long period of time to crankback up on the marketing.

Okay. And could you just repeat what you said about the currentlevel of mortgage-related investments and where the market was at the end ofSeptember and what might have changed by the first week in November?

One more time, I'm sorry.

If you could just repeat what you have said about I didn'tfollow it all on the mortgage-related investments, how much was left atSeptember 30, how much the write-down was and I guess it is in other income or…?

We had realized and unrealized losses of $37.4 million. Andthat is included within the other income ratio. And without those losses in theother income ratio, we would have, our other income ratio would have been20.9%. And without those losses we would have been at about $1.38of managed earnings in the quarter as well, so just to clarify that point.

There is a little under $12 million left.

Yes, a little bit under $12 million of investment value orcarrying costs left in our financial statements.

And that was at September 30 or that is like …?

As of September 30.

And if you had to estimate how much has changed since then?

Not of any material amount at all at this point, not basedon the information we have today.

Okay. And how much of the losses are unrealized losses thatin theory can come back if cash flows …?

I don't have that number right in front of me right now.Give me a couple of seconds and then get the next questioner and I will getthat for you later.

Okay. Thanks.

Stella, please ask them the next question.

Your next question is comes from the line of Carl Drake withSunTrust Robinson Humphrey. Please proceed.

Thank you. Good afternoon. A couple of questions on theliquidity, J. Paul, are any of the liquidity constraints perhaps impacting yourmix of gross card adds going forward? In other words, is it more difficult to,I guess, is it more difficult to obtain lower tier financing versus your primefinancing?

No, it’s not. Not at all. I have not had that experience.

So from a mix standpoint, even though at a much lower150,000 and 250,000, you don't expect to change the mix going forward?

The mix of marketing?

Yes, the type of card accounts that you are growing?

No, I think, if you look at a percentage or a proportion ofour total marketing, it’s relatively comparable to what it was when we weremarketing at the higher level, between the near prime and the lower tieraccount marketing.

Is that a breakout then more than two-thirds lower tier,more like 75%, 80%?

We really haven't disclosed that breakout specifically Paul,but I guess, I can lead you to looking at our receivables growth within ourlower tier product offering, and you can quickly get to the conclusion, if youlook at that versus our total managed receivables levels within the CreditCards segment, that a lot of the growth has come from the lower tier.

Okay. And second question on expense initiatives, there is alot of focus on efficiencies. You mentioned suspending some research anddevelopment. Maybe you could elaborate on the dollar amount of savings that wemight see if capital is not available to your liking in the fourth quarter?Would you mind, maybe would you take some more significant initiatives or doyou already have significant, maybe you can provide some color on the dollaramount of expense savings?

Yes, without getting into specific dollar amounts, we tooksome actions as soon as the global liquidity disruption occurred in August thatwe feel really good about, in the way of looking at some of our personnel andsome of the investments that we had undertaken. And really focusing more specifically on how do you bestallocate capital to the various investments and initiatives that we have inlight of an environment in which we may be constrained for some period time onthe amount of capital that we have for growth. So I would say that, absent the affects of the charitablecontribution in the fourth quarter on our operating ratio, we should see someimprovement in our operating ratio in the fourth quarter relative to the thirdquarter. Even, I guess considering as we said in the call today, thatyou would naturally think that it might increase given the mix change that wehave experienced. So we're going to keep our eye on it. As far as the othersegment goes, we have discontinued a number of initiatives, at leasttemporarily, maybe permanently, for which we hadn't made significantinvestments, but for which we were continuing to incur costs each quarter, sothere would be some modest reductions within the other income segment as well.

Okay. And I don't know if you would care to comment on 2008,given the reduction in managed earnings from the third quarter to fourthquarter, one might think take some time to ramp back up the marketing spend inthe first quarter. So the first quarter level would be similar in terms oftrajectory that you are seeing in the fourth quarter, or is there some seasonalcredit deterioration that is implied in the fourth quarter, obviously beyondthe charitable contribution.

Yes, well I think, that someone earlier had alluded to. Iguess, it was David asking about the marketing spend and number of accounts andthe like. We because of the continuing testing and the like we're doing in themarket, and as well as the fact that we're still adding a lot of accounts rightnow, just not at the level of the second and third quarter, we believe we couldramp up marketing pretty quickly. Could we do it overnight? No. But could we do it in six toeight weeks? Yes. So that is why it is hard to give you a number right now fornext year or the first quarter even, until such time as we have greater clarityon where we're going to be on marketing spend and the like. Our hope is, and like I said earlier that we're going tohave some of those questions resolved at which point we will immediately crankback up. But it is one of we could have continued on the same marketing leveland looked out and said, okay, hopefully something is there next March, April,May. We made the determination that it was wiser long-term to pull back and let'slock in the funding for the foreseeable future before we crank up the market.

Yes, agreed. It makes sense. Thank you.

The next question comes from the line of Dennis Telzrow withCompuCredit (ph). Please proceed.

That’s Stephens. Thank you, gentlemen. From what you aresaying, John Paul, that the current level of growth you could sustain, when yousay foreseeable future if nothing changed, is that a fair assumption?

Yes. Exactly.

Obviously next question is contingent on funding, but mypresumption is you would like to originate cards in the UK, if that wasavailable from a funding standpoint?

Yes, in fact that is kind of embedded in the plans that wehave discussed with you guys today. We are close to beginning originationefforts in the UK. We obviously, as we do everything here at CompuCredit, aregoing to start with doing the right amount of testing to make sure that we canget comfortable with the performance of the various vintages that we would beoriginating and with the IRRs that we would be earning on it before we reallystarted consuming a lot of capital in the UK on an origination effort. But thatis certainly baked in to the plans that we have for the fourth quarter andbeyond right now.

I know it’s difficult, given all the issues, but lookinginto next year if nothing changed, with the loss rate on the lower end cardbegin to become more of a pressure point, or how should we look at that?

I don't think it is the loss rate itself, I think it is morewhere the cards sit on the vintage curves. In the early months, as Davidmentioned before, early months of any particular vintage there are very fewcredit losses. And when you get out to eight to nine months in our curvesyou hit the peak charge-off point. And then after that the accounts that are onthe books begin to cease and then charge-offs drop off significantly after thattime period.

The big ads you added in the first two quarters would startto hit the half of next year on a loss basis, just on your vintage history?

Yes.

I would say so. Yes.

Okay. Thank you.

Your next question comes from line of John Hecht with JMPSecurities. Please proceeds.

Good afternoon. Thanks for taking my questions. With respectto the neg AM changes, how should we account for that in terms of thinkingabout what that does to the net interest margin next quarter?

It will have likely some potential affect on our otherincome ratio potentially, or our net interest margin will be the likelycategories that you might see those effects.

Can you give a sense for how much balance of neg AM wascreated this quarter to give a sense for what type of magnitude that would haveon the other income or net interest income margins?

What I can do, we've got a disclosure in our 10-Q of thepercentage of receivables that are subject to or that are in a negative AMsituation both now and historically. If I can find that, I will give that doyou here.

Okay. And then with respect to the discount in the Barclayspool you bought, can you give us a sense for how much of the discount you haveused with respect to charge-offs at this point?

Before I go there, John, let me just give you the negativeam stats that you asked about. At September 30, approximately 3.2% of our accountsin the U.S., representing 5.4% of our receivables, were experiencing negativeam at December 31st, compared to 3.8% and 5.9% at December 31, 2006.

Actually going back to it, what are you guys specificallydoing in terms of changing the billing associated with these neg am accounts orbalances?

We will likely be providing some fee relief to someconsumers in certain categories of our fees to address the issue.

And will you be allowing neg am across all accounts oraccount types going forward, or will there be changes to that going forward aswell?

Really what we're contemplating in the fourth quarter and ithas been an ongoing effort relative to some of the FDIC reviews of our accountpractices and such is that we would be making changes in the fourth quarteraffecting really all of the accounts that we have for which there are alreadynegative amortization concerns or factors. So, our best guess at this point is that we will be makingchanges in the fourth quarter, and that would be the completion of our effortto address negative am, the industry wide negative am issue.

Fine. And then moving to the Barclays discounts, how much ofthat have you applied to charge-offs?

I don't have that specific number in front of me, but youcan actually back into that by taking the difference between our net charge-offrate and our adjusted charge-off rate, and calculating that number from ourCredit Cards segment data that we have in our 10-Q.

Okay. And I did take a stab at that back then, so it doesseem we are at a point where we should start seeing the variances between thenet adjusted start to decline at this point where you are the Barclaysportfolio?

Yeah, in fact it declined this quarter relative to lastquarter. So, those two ratios, the net charge-off rate and the adjustedcharge-off rate, will begin to narrow again as they had done for many quartersprior to the UK portfolio acquisition.

And then question, can you talk about some of the purchasesof the flow activity with respect to the investments in previously charged-offreceivables?

We're actually seeing pricing looks like it is getting morefavorable for purchasers of charge-off debts. Our Chapter 13 business continuesto perform well for us, and so we think that business is and this has occurredin previous, just like we think there are opportunities to buy performingportfolios or slightly distressed portfolios in this environment. We also think that there are more opportunities to buycharge-off portfolios in this environment as well.

Are you seeing pro-activity increase then at this point, orjust sort of waiting for it based on some of the trends you're seeing?

On the charge-off portfolios we haven't seen a lot ofincreased volume, but we have seen the pricing at more favorable levels.

Okay. Thank you guys very much for the color.

Your next question comes from the line of Barry Cohen withKnott Partners. Please proceed.

Yeah. Good evening guys, couple of questions. First, couldyou just -- since we have had a spot estimate out there, I have been trying towork with a piece of paper and pencil, and it is not been terribly easy for me. Can you walk through like what gets you from the number thatpeople had originally to like what you guys are not talking about in the fourthquarter, so we can work through the pieces and say, okay, this is how much thisis, this is how much that is, and understand it a little better?

We will give the color that we gave I guess there was reallythat we're looking at some changes to our negative amortization, to addressnegative amortization. We have had a decline in the trajectory of marketingadditions, account additions that would have generated a good bit of income inthe fourth quarter. And then lastly we had the $6 million charitablecontribution, which was approved by the Board last Friday.

No, I understand the categories, I understand thecategories, but I don't know the dollars to the categories. That is what I'masking for.

Yeah. I really just don't have that data in front of meright now.

Okay. Can you just remind us then, I know you guys talkedabout it last year when you started rolling out the lower tier product? Can youtalk about what basically, let's say your an average acquisition costs is androughly what on average the fee element of these accounts?

The acquisition to the marketing acquisition costs as…

If you look at the two elements of it, which is kind of likethis is the cash that goes out the door over a period. And if somebody signs up with us, this is the cash that iscoming in the door. So, we can understand that a little bit.

I would say our account marketing costs have averaged probablyon a per account basis somewhere in the $50 an account, under $60 an accountrange for the card offering.

Let's see, we added $90 million, we added $1.5 million grossaccounts in the second and third quarter, and we spent a little over $90million. So that’s just what -- $60 an account.

Thank you.

A little under $60 an account.

And one, if I was to have one of these cards, I take the applicationand I put it in, and I get it, what typically is the upfront fee elementassociated with the card? I can't remember, I don't have my notes in front ofme.

Yeah, the yield earned on the card consists of an APR plus,as is customary for other credit cards, an annual fee, a membership fee, thatis spread over 12-month period. So it’s – it’s not at all though the fees arerecognized on day one as they relate to that membership privilege period andare spread over the 12-month period.

The difference is, and the reason for the higherprofitability originally in the first six months is because you have zerolosses in the first six months, or close to zero losses in the first sixmonths. So while the fee is spread over -- the fees and APR, as J. Paul wassaying, are spread over the 12-months, you have zero losses in the first fewmonths. So that’s what elevates the profitability of those accounts during thefirst few months versus the whole year.

Yeah, I understand. I'm not trying to be…

And we have numerous different credit cards offers. Somehave some fees associated with them early; some have no fees associated withthem early. So this is not a set product to say, okay, this is 95% of ourbusiness and this is how it looks. There is -- 10 different products that aregoing out or more at different fee levels and different APRs and the like.

I guess I'm just trying to think about it as we think -- Iwas just confused because I know last year with the charitable contributionthat created a little bit of a controversy, so I was surprised it was in yournumbers this year. So I'm just trying to work through if you cut marketing, ifyou have a, if your net dollar -- if your GAAP recognition of your marketingcosts is more upfront than your GAAP recognition of your fee income?

Yes, it is.

Our GAAP recognition of marketing costs is day one.

Right, so I’m just trying to -- since that’s droppingprecipitously, it has the inverse effect of what normally would take place whenit was growing, right? That’s just the way the math works. So, I'm just tryingto understand the dollar differential almost in terms of the expectations. And so that’s just kind of where I am going in because itseems like you have got a number of different moving parts. You have gotoperating leverage. You've got new signup profitability. And you've got lowermarketing costs. You got changes in loss characteristics running through yourP&L, and so – and the charitable charge. And so instead of having -- giving us numbers so we canunderstand it, so we can figure out how these variables will impact us nextyear, we are kind of left guessing. That is what I am trying to get from you. Iam trying to understand. Work me through the math -- so you can work me through themath. I can say, okay, during the first quarter you decide to ramp up yourmarketing and you are doing 400,000 to 500,000 gross adds again, which is kindof what it would look like. Or if you can't do it, and you are doing 100,000 or200,000 gross adds this is what it kind of looks like. That’s what I trying toget at.

And that is -- our goal is to be able to provide you allwith information about 2008 once we have enough information to give you thatdata. And I get back to our working diligently on the liquidity front to enableus to come out and tell you, this is how many accounts we're hoping to add now,and this is how we think they will roll in the first quarter, second quarterand the like, so that you can get that level of data you're looking forward. In terms of though, as we look from third quarter to fourthquarter, I think that, at least our expectation, is that we will have at least600,000 fewer customers in the fourth quarter than we would have had we notchanged our level of marketing. So that gives you a little bit of informationas to what we would have been looking at in terms of that many more accounts.

On the revenue side of the equation.

Right, on the revenue side.

So you have got the marketing piece, you've got thecharitable contribution piece and just -- you can back into the regular pieceof it.

Thank you guys, I appreciate you all.

Okay.

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