Welcome to the Encore Capital Group First Quarter 2016 Earnings Conference Call. [Operator Instructions]. I would now like to introduce your host for today's conference, Bruce Thomas, Vice President of Investor Relations. Mr. Thomas, you may begin.

Thank you, operator. Good afternoon and welcome to Encore Capital Group's first quarter 2016 earnings call. With me on the call today are Ken Vecchione, our President and Chief Executive Officer; Jonathan Clark, Executive Vice President and Chief Financial Officer; Ashish Masih, Executive Vice President U.S. Debt Purchasing and Operations; and Paul Grinberg, Group Executive, International and Corporate Development. Ken and Jon will make prepared remarks today and then we'll be happy to take your questions. Before we begin, we have a few housekeeping items. Unless otherwise noted, all comparisons made on this conference call will be between the first quarter of 2016 and the first quarter of 2015. Today's discussion will include forward-looking statements subject to risks and uncertainties. Actual results could differ materially from these forward-looking statements. Please refer to our SEC filings for a detailed discussion of potential risks and uncertainties. During this call, we will use rounding and abbreviations for the sake of brevity. We will also be discussing non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings presentation which was filed on Form 8-K earlier today. As a reminder, this conference call will also be made available for replay on the investor section of our website, where we will also post our prepared remarks following the conclusion of this call. With that, let me turn the call over to Ken Vecchione, our President and Chief Executive Officer.

Thank you, Bruce and good afternoon, everyone. In the first quarter, we earned $1.31 in economic EPS, growing 13% compared to last year, assisted by higher collections, growing revenues, strategic cost management initiatives, a lower tax rate and the benefit from our foreign exchange hedging strategy. This performance has led to an improvement in our return on invested capital. Our returns in the U.S. market remain higher than last year's returns, driven by continued progress in our consumer-focused liquidation programs. Our international businesses helped drive collections and revenues higher than a year ago, while our emphasis on strategic cost management in the U.S. contributed to a 110-basis-point improvement in our overall cost to collect. Full-year commitment levels for our U.S. business continue to grow and the domestic pricing environment is showing early signs of improvement. In Europe, Cabot had a strong deployment quarter as we expanded our presence in Spain. This led to an overall solid quarter of Q1 purchases for Encore. I would now like to provide a broader strategic context to the results and describe how we're managing the business on a regional basis. In the U.S. market, domestic supply remains stable and we're seeing early signs of pricing improvement in some categories of portfolios. Encore's solid capital deployment in first quarter reflected the market's emerging pricing discipline. Forward flow and bulk commitments for the year continue to grow, currently totaling nearly $330 million for 2016. We spoke last quarter of the progress we've made in improving liquidations in our domestic business and our programs remain on track. Importantly, our IRRs on deployed capital remain 15% higher than last year as our consumer-focused programs improve collections. These programs have not only provided better returns for our business, but offer better solutions for our consumers to improve their lives,…

Thank you, Ken. Before I go into our financial results in detail, I'd like to remind you that as required by U.S. GAAP, we're showing 100% of the results for Cabot, Grove, Refinancia and Baycorp in our financial statements. Where indicated, we will adjust the numbers to account for non-controlling interests. In addition, because the Propel sale occurred at the end of the first quarter, we're treating their results as discontinued operations in Q1 and the results I'll be mentioning over the next several minutes will be from continuing operations. In the first quarter, Encore generated GAAP net income from continuing operations of $1.12 per share and economic EPS of $1.31, an increase of 13% over last year. This earnings growth was afforded by collections that grew 5% to $448 million and our strategic cost management which contributed to a lower cost to collect. Deployments totaled $257 million in the first quarter. In the United States, the majority of our $142 million of deployments represented charged-off credit card paper, nearly three quarters of which was comprised of fresh accounts. This domestic purchasing level was 44% higher than in the first quarter of last year and reflects our sustained U.S. market share. U.S. year-to-date purchases and commitments now total nearly $330 million for 2016. Market share was maintained without sacrificing returns. Cabot deployed $93 million during the first quarter, with the majority attributed to portfolio purchases in Spain. We deployed $21 million in other geographies in the first quarter, including purchases in Australia and Latin America. Worldwide collections grew 5% to $448 million in the first quarter of 2016, driven primarily by the continued growth of our international business. In constant currency terms, collections grew 8% in the quarter. The first calendar quarter of each year has historically been Encore's largest…

Thanks, Jon. In summary, we made progress in a number of key areas in Q1. We had a good deployment quarter. We booked new business at improved IRRs and we benefit from our cost management initiatives rolling out which led to our growth in earnings and return on invested capital. At this time, operator, would you open up the lines for questions?

[Operator Instructions]. And our first question comes from the line of John Rowan with Janney Montgomery. Your line is now open. Please proceed with your question.

Just on liquidity, I know obviously your subsidiaries have their own credit agreements. But, you know, $228 million on the revolving facility in the U.S. Do you think that's enough? You've purchased $142 million in the U.S. this quarter. I just want to know your appetite. And you know, obviously with high-yield bond spreads coming down quite a bit, is there any appetite to go to the high-yield market?

We're always exploring alternative sources of liquidity. We feel very comfortable where we're today. But we would like to be able to access all markets. In my ideal world, I would be able to access the ABS market, the high-yield market. We already access the convertible market and over time I expect we'll reach into each of those markets.

Okay. And then your peer noted a change in legal channel collections. Did you see a similar adjustment to that channel for you guys?

Yes, we did. We saw a slowdown in the amount of legal suits we processed in Q1. We saw a pickup in the call center collection activity. So net-net, no impact to us in Q1.

Our next question comes from the line of David Scharf with JMP Securities. Your line is now open. Please proceed with your question.

First off, your competitor as well as you had positive comments, at least directionally, on U.S. pricing. Can you speculate as to why you might finally be seeing some softening there?

Let me give you a little bit more of a backdrop on there. We've actually seen on our actual deployments and forward flows, we see market pricing starting to decrease slightly across all aged segments in the U.S. from fresh paper to non-fresh paper. And that is beginning to delight us, quite frankly. I think there are a few reasons why this is occurring. And most importantly, I think there is better pricing discipline in the market. And I think buyers are willing to hold to their prices more. And I think issuers have readjusted some of their expectations. And quite frankly, we're seeing pricing at this point - what I mean by at this point, with about 60% of the market sold, we're seeing pricing running along the same levels as 2014 which is a very encouraging for us. So pricing is coming down a little bit which is good. Our liquidation activities continue to improve. Ashish is sitting here with - he and his team are running a little bit over with their expectations which are good. And that's also helping our returns. So we're seeing both happening here. Now the question is does it stay that way for the rest of the year? We think so. We think it's improving, but we'll wait and see.

And Ken, on the legal channel, just maybe a little more color there. It looks like in the bar chart, U.S. collections may have been down on a year-over-year basis. Was that primarily a function of delays or the number of lawsuits you filed? Or was it just based on the trailing 12-months relative deployment of capital in the U.S. versus overseas?

There you go. You just answered it. It's the second position. You know, we no longer just deploy capital I'll say equally. We move the capital around to find the best returns and we were deploying more overseas. So we look at it on a collective basis and our total collections were up 5% versus prior year. And if you want to factor in the FX impact, then we were closer to 7% up. So that's how we look at it, David.

Okay. So it's just a portfolio mix. And then just a couple quick cleanup financial questions for Jonathan. On the tax rate, the low 30%, for the full year, is that effectively the lower-than-usual Q1 with the benefit netted against maybe a 35% outlook for the rest of the year? Just trying to get a sense for what the normalized effective tax rate should be going forward, even if the full year ends of being in the low 30%s.

No, I think your normalized rate going forward is going to be in the low 30%s. I don't expect - one of the things you have to remember, David, going on here is that we're also moving into - more and more of our portfolio is being placed overseas or we're making purchases overseas. And there are some clear benefits there in terms of effective tax rate when you do that as long as you structure it appropriately. So as we said before, I said low to mid 30%s before. I'm feeling more confident that it's going to be low 30%s. And depending on the mix of where we actually deploy capital, at the end of the day, that will really drive it. But going forward from here, I think you can expect quarterly going forward we're still going to be in the low 30%s.

And then lastly, I missed - sorry, I was fading out on the explanation on that $0.04 currency pickup. Is that captured in that $7 million of other income?

Correct.

Okay. How much of that $7 million was it?

For us, it was yes, it's about half of that which is $5.5 million.

$5.5 million to $7 million. Got it. Okay, thanks so much.

Our next question comes from the line of Hugh Miller with Macquarie Capital. Your line is now open. Please proceed with your question.

I just I wanted to start off just kind of revisiting the legal placement question. Seems like you guys indicated that there was a bit of a challenge, but was netted off on the call center side. As you look at kind of that scenario, where law firms may be a little bit more slower to kind of get a comfort level on placements, how long do you anticipate that that will likely influence things? When do you anticipate that things get back to normal? Is there a catch-up phase and Ashish, will you be thinking about placements in the coming quarters?

I would like to take that question a little bit more holistically. I think if you step back and look at what's gone on the regulatory front, the industry now has the benefit of two debt via consent orders, both Encore and PRA. And now we have two law firms who have consent orders with the CFPB, Hannah and Pressler. As you can see, the CFPB is really using these consent orders to drive rulemaking the industry. And they are consistent with each other as kind of the direction the industry is going to take. What we see is these collection law firms are adapting really well to the new requirements and that has indeed resulted in some slowdown in litigation activity in the first quarter, perhaps it will continue for a few more months, but we believe that the slowdown is temporary and the firm is going to reengineer the processes and adapt to this and the new set of requirements. This slowdown will result in some shift of legal collections from 2016 to 2017, but our call centers are really performing well. And as you've heard many times, we've talked about our consumer-focused programs. They are really paying dividends in our call centers and that is offsetting any temporary slowdown in legal collections or the shift into next year. So that plus our strategic cost management programs will further negate any shift of legal collections into next year. And we remain on track to meet our targets for returns as well as operating income in the U.S. market. So I hope that helps.

So I guess as we think about it in terms of the rationale for why there may not have been impairments even though there is a potential for a delay in the timing of the collections in the legal is just that that may have been netted against positive performance in those pools on the call centers, so net-net it didn't result in impairment?

That's right. We're talking about a couple of months does not shift or put us into an impairment phase here.

Okay. And then another housekeeping question. Obviously, I appreciate the guidance on how we should be thinking about a tax rate in a go-forward. And can you just provide a little bit of color as to what resulted in the tax settlement in this quarter that kind of generated the rate to be below the 30% threshold?

Sure. We received a favorable settlement related to an acquisition. We've been working on this for quite some time. And we originally took a conservative position and the result was more favorable in that position. You know, as I mentioned before, we have some structural changes at work and our tax rate will continue to move down. And occasionally, you get these settlements which in this particular case can work to your benefit.

And you guys mentioned seeing a strong pipeline in the UK in the second quarter. Obviously there tends to be a little bit of a seasonal lift there. Some of your peers noted that 1Q activity was fairly strong with supply in the first quarter; maybe some deals slipping into 1Q from 4Q, but they noted that returns in the first quarter in the UK were somewhat similar to the prior-year period. Can I guess would you agree with that and, you know, what are you seeing there in terms of kind of return profile in the UK relative to last year?

In general, I'll say that the pipeline looks strong for the second quarter. There are a number of large deals coming to market. There's always the chance some of them move out of Q2 and into the second half of the year, but right now, we like the pipeline. And I'm talking about the UK pipeline and the European pipeline as well. For us, that would be Ireland and Spain and France as well. In terms of pricing, I would concur that the pricing in the UK and the returns really in the UK have been relatively flat for the last 18 months. So there's been no dramatic shift in supply or demand. In our case, we put more of our money into Spain in Q1 because we saw returns there several hundred basis points above the returns that we can garner if we put the money into the UK. So for us, it was just really a very simple IRR calculation. We like the returns in Spain over those in the UK and that's where we put our money for Q1. In Q2, again, there's a good pipeline both coming in Spain and Ireland and in the UK and we'll, again, let the returns drive where we're going to put either our pounds or euros.

You mentioned an improvement in the consumer programs. I was wondering is that driven more by improved analytics on deciding maybe who to use collection efforts with? Or is it more of a function of the messaging and the dialogue with consumers and kind of maybe connecting with them a bit more based on some of those changes?

It's not one thing, it's several things. It's as we talk about these consumer-focus programs. They are designed to generate more liquidation, but do it, as I've said many times before, in a more empathetic and more sympathetic way. That's one. We've changed some of our calling strategies, that has helped as well. And then the selection of accounts has also helped. To put all this in the proper perspective, we're probably - the complaint level as measured by the CFPB is 0.0021 of all the accounts that we have. So it's really miniscule. But we do take it very seriously. We do follow up on every complaint that comes in and then we look at them to see how we can make better process improvements throughout the whole Company.

And then last from me. I assume since there wasn't any commentary in the prepared remarks that the thought process regarding the sideline issuers hasn't changed meaningfully one way or the other with where you see things now?

I'll say it until I'm blue in the face, we run the Company as if they are never coming back. And when they do, we will be thankful for that and then we'll put our money to work, but right now, we run it as if they never come back.

[Operator Instructions]. Our next question comes from the line of Leslie Vandegrift with Raymond James. Your line is now open. Please proceed with your question.

It's Robert Dodd, actually. Just a couple of housekeeping questions since you've addressed most of my questions already. On that other income line, you said $5.5 million was related to the Cabot notes, etcetera. The other small piece, is that a one-time, obviously the Cabot - the $5.5 million can recur depending on what FX does. But I'm not going to project that. But the other piece of it, was that a one-time as well or is there some sustainable number now going to be flowing through the other income line?

Some of what's in there is other gains related to the rupee and that's kind of normal course that flows through our P&L, so I wouldn't call that one-time.

And then just on revenue and the amortization rate, it looked a little off. It looked a little lower or amortization rate than I was expecting and is that a function of mix, obviously with international now being more than 41%? Are we going to see a - I don't want to call it a trend there, but I mean, is there any more color you can give us on that number in terms of mix, FX, etc.?

Do you want to repeat that question again? I'm not sure I followed what you were getting at there.

I'll be more blunt. The revenue was lower than I expected, but cash collections was basically in line. So is that a function of the mix of cash collections affecting the recognition rate or was there something else in terms of timing of tax season or anything like that going on in the quarter?

It wasn't anything extraordinary. There's a natural ebb and flow here. There wasn't anything noticeable that I can think of that was at work this quarter.

Depending how you think about ZBA revenue coming in. If you thought there was more ZBA revenue, it would be a higher recognition. That's probably the only thing I can think about that could impact your decision-making.

Our next question comes from the line of Mark Hughes with SunTrust. Your line is now open. Please proceed with your question.

I'm sorry if I missed that last question. I checked off for just a second, but your amortization rate was up year over year. And I'm sorry if I'm repeating, but was that a mix issue? Was that over performance? I would like to see the amortization up like that. That looks good. What was the driver there?

Yes, as I said in the call before, it could be a mix. And Ken had chimed in. It could be a mix of ZBA versus those that are still on their yield curves. There isn't anything I can think of that was particularly abnormal that would have driven it this quarter. We would have to dig into that.

Yes. And just sometimes, we're slower to raise the yields, so that impacts it as well.

And then when I think just generally and this may be another mix question - but your ERC is up 14%. Your currency adjusted collection is up 7%, so ERC up faster than collections. What is the main drivers of the difference there?

You got to remember, Q1 in 2016 we had the DLC acquisition. And it wasn't in Q1 of 2015. So that acquisition really makes some of the difference in the ERC.

Okay. And then in Latin America, your commentary at the beginning seemed to be a bit more cautious about the economic conditions there. And I don't recall immediately how much capital you have invested, but are you seeing any impact on current collections? Or you are just being cautious about the future outlook?

Yes. So I was really referring mostly to Brazil. Let me just take half a step backwards and just say we like the Brazilian market. We're excited by the Brazilian market, but we're cautious investing at this time because of the high geopolitical uncertainty that region has, but we've made R&D investments in Q4 of 2015 and Q1 of 2016. These investments are targeted to deliver higher or much higher after-tax IRRs than other investments that we've made around the world. But at this moment, it's a little early to gauge performance of these R&D pools and we're watching the consumer's willingness to pay in the current geopolitical climate. In terms of a backdrop to talking to some of the servicers in the region, some are reporting liquidation volatility as consumers wait to see how the political environment plays out before they pay their debt. So we're watching all this. At the moment, our pools are performing just fine. They are performing according to what we were anticipating. But it's so early yet, there's nothing to draw from that. I guess the point I am making here overall is while we like the returns, while we're very excited by them, we're just cautious. And when we put a dollar out in the U.S. with high predictability and confidence level and we tell you what the IRR is, we hit that number. In these new emerging countries, there's volatility. And it's going to take some time to get comfortable with that volatility. And we're watching that and we're judging that. We think that the current Brazilian market and the economic uncertainty there is creating a - will create over time a very favorable supply environment and we think as the supply increases, again pricing will drop; returns will rise. But for us, if we have one chief worry about Brazil is that consumers are stressed with rising unemployment, with rising inflation, increasing defaults, that's putting pressure on collections. So very quickly or very simply said, there's a fine line between greed and fear and we're walking that line. And we're trying to judge what's happening with our existing portfolios before we push further into Brazil. We will continue to make some small R&D portfolios, but I don't think you are going to see us with a big, large, huge portfolio purchase in Brazil in the short term, not until we get comfortable.

Do those agreements normally have some sort of inflation adjustment aspect to them? Or would inflation be a big negative for you?

I know Paul is on the line. Paul, I can't recall. Do they have any inflation adjustments in that?

Not in our purchase agreements, but they are - given the ability to charge interest on consumers in Brazil, you can effectively charge interest. It all comes down to the ability to collect that ultimately. And as Ken said, just with the environment right now, there's a lot of uncertainty. So we want to be measured in terms of when we deploy the capital and how much we deploy in specific deals so that we can see how consumers are responding to the current environment. And as Brazil goes through its second year of recession, how they will continue to respond.

And then finally in Spain, seems like you are continuing to increase your investments there. Can you talk about the early performance in Spain? Any hiccups? Anything that we should be cautious about, given the peers' experience in certain southern markets?

For the most part, the - for the most part, the returns are tracking according to our investment committee curves. I'll remind you that Grove was in Spain - or has been in Spain for about - Paul, audit me on this. About three years, I think. And they've been building their own consumer data set there for quite some time. So we feel more comfortable with what we're doing or how we've invested through Grove. And then on occasion, Grove and Cabot will also share purchases as well. So overall, our Spain foray is going well. But we watch that very closely because as we said, it's still a new country - relatively new country and we want to make sure that we don't overextend ourselves.

Our next question comes from the line of Michael Kaye with Citigroup. Your line is now open. Please proceed with your question.

Can you talk a little bit about your expectations for the U.S. bankruptcy market? I recall you bought a little bit during the second half of last year versus not paying in 2014. Do you see yourself being a bigger player in the bankruptcy market when it recovers?

Yes, we've been working on our BK platform for the last year plus and we like where it is now. We bought some BK paper last year. We've got some expectations to buy some again this year. And we think we've gotten our performance up so that we will have very acceptable returns. As you know, that BK market is very, very quiet. There was a book of business that traded in Q1. We looked at it; we weren't that impressed, so we moved on. But with the exception of those small little books of business that come up, there's not a lot of flow coming from the BK market.

How are you thinking about share repurchases? I recall you have an authorization I think for $50 million. It doesn't look like you've bought anything back in Q1. Is this just not a priority to see too good returns right now? Like, how are you thinking about it?

Yes, something we - capital deployment and the management of that capital is very important to us. At this time, given where the stock price is, certainly - or certainly where it was yesterday. Not so much where it turned out to be today - we see better opportunities to invest our money in other countries with better after-tax returns. If the market pulls back like it did earlier this year and our stock drops to $16, you know, we'll back up the truck and we'll buy. But given where it is now, we think our money is better spent on future capital deployments and not buying back our stock.

Just one cleanup question. Just gets a little complicated with the economic EPS, but - or maybe Jonathan has some sort of estimate of how much the tax benefit this quarter helped economic EPS?

$0.07.

[Operator Instructions]. Our next question comes from the line of Bob Napoli with William Blair. Your line is now open. Please proceed with your question.

I guess just on the legal side, a little bit of a - understanding that - you have to get better information from the banks as well, correct? It's not just the law firms and yourselves coordinating. Don't you also have to get much deeper documentation from the banks? And is that holding up any of the process?

You know, both the issuers, the law firms, the debt purchasers, they are all improving their process. And at the end of the day, Bob, what's going to happen is that we're going to have a more complete package of media. And with that more complete package of media, then it will be more efficient for us to collect as we go through litigation. And I think it will minimize any potential complaints that we have and I think we'll be more effective at collecting as well. So I think while there is a short term bump here, I think long term, if you want to ask Ashish and the rest of his legal collection team, they are very optimistic that these changes are going to be helpful for them in terms of liquidating.

Okay. So it's your view that within a few months, this industry is going to be on track, even though there are no clear rules or regulations yet, totally clear from the regulators that the settlements that you have and the law firms have is enough that the industry is moving forward?

Yes. I mean, Ashish said it best when he stepped back to give a holistic answer. They are making - they are doing their rulemaking through enforcement. It's not how the way we would do it, but if there is any silver lining in what they are doing is that they are being somewhat consistent between the debt purchasers, the issuers and the law firms. So in that sense, it makes a very even level playing field. And you know, I don't know when they are going to get around personally to making the rules. I think just doing it through enforcement is enough for them right now.

And are you seeing anything on the bankruptcy side? Did you buy any bankruptcy paper and are you seeing any more paper in the market?

The BK market is rather quiet. And as I said - I think it was the last question or the one before that. Occasionally, you'll see a portfolio float in the market, but there's really nothing coming from lenders. I'm sorry - from issuers, really, of size.

And then a question I guess on Europe. There's been a lot - seems like there's been a lot of volume that is freed up over this year. Looking at the public companies in Europe, your competitor yesterday and yourselves, it seems like the flow has really accelerated in Europe. And do you have any ideas why that is? Has there been - is it just more pressure being put on the banks from a regulatory capital perspective? Or what's freed up more supply from Europe broadly?

Well, from us, we have a more limited viewpoint of Europe at this point, right? So we're playing in the UK, the Ireland and Spanish markets. I would say supply to me looks about the same in the UK. Maybe a little bit more coming out this year, but not a whole hell of a lot more. And moving and moving into Spain is just giving us another whole market to take advantage of. And I think if you come in there and if you are more sophisticated, having been successful in what you've done in the UK, you can garner higher returns. And as I said, to grow, we've been there for a while and we've done our R&D efforts for a couple years. And we're feeling comfortable with what - how we're investing our money and the returns that we're getting there. And again, when we invest, say, in Grove, I won't go into all the tax structures, but we get some tax-advantaged strategies that add a little boost to the IRR in terms of it being on an after-tax basis very attractive to go into Spain and to buy in the UK through Grove.

Okay. And then last question. The other income that you had this quarter, there is - I mean, the hedge gain - we should not view that as something that's going to recur. That $7 million you had this quarter is likely to be lower as we move through the balance of the year.

Let's take a step back here, Bob. As you know, we only hedge what I'll call hard cash transactions. We don't hedge earnings. And if you think about this particular hedge, this was one that was related to, as I said in my talking points, related to Cabot's euro-denominated note. And so in this particular case, you are hedging that exposure. And the trade-off is that you are getting a little pickup now and when you turn - go back into euro, as Ken described, we're buying a number of euro assets. That's when you balance the ledger, if you will, right? And as that winds down, there will be less and less exposure there. But I can't tell you definitively what will be there either positively or negatively next quarter or the quarter after that. But I can tell you it will zero out economically.

Our next question is a follow-up from the line of David Scharf with JMP Securities. Your line is now open. Please proceed with your question.

One quick one just on India. I know you provided us with a little bit of process and regulatory approval update. Any sense for when you actually expect to be purchasing there?

I've been wrong every time I made a prediction, David. So I refuse to be wrong again. I'll just say in the future, we're going through the regulatory approvals. We're also setting up our operations. We're going through what we have to do. And I'll just caution you. I've said this 1000 times, I'd rather be late to India and get it absolutely right than to be early and have a few mistakes. So when we do. So when we do open up into India, it's going to be small R&D investments. And then we'll grow that over time as we get comfortable with the capital we deploy and the returns that we see. Very much the same approach we're taking to Latin America.

And then lastly, returning to the legal collection procedures and processes, all the documentation requirements. Just curious, you've obviously referenced the law firms you're dealing with. You've made a material investment over the last few years to build up in-house legal. Is it impacting your internal legal processes as much as it is with the outsourced firms you are dealing with? And is there anything in the new requirements that would lead you to accelerate the internal legal efforts.

Let me take this question. The requirements are the same, whether it's through law firms or internally. So we think of them as similar, so they are impacting in a pretty similar way in terms of any kind of process changes that we need to do and additional documentation that we have to get from the issuers, for example. And to the second part of your question, it does not impact our acceleration of building out more internal legal or less internal legal in any manner.

And what percentage of legal collections were performed internally this quarter? Just to give us a sense where we're in that evolution.

It's a question that's not come up recently, so we didn't have it memorized.

David, out of total U.S. collections, it represents 10% in Q1 of 2016. And when you go back to Q1 of 2015, it was about 9%. And one of the things that Ashish does here - and this is important as we talk about how we continue to manage our expense base in the Company as well. If the internal legal guys cannot perform like the external legal guys, we move volume away from them or we may even shut down areas. So internal legal has got to hold their own to how the other outside legal firms are performing. And Ashish is pretty strict about that.

And with no further questions in the queue, I would like to turn the call back over to Mr. Vecchione for closing remarks.

Thanks, guys. Thanks for joining us. We thought we had a decent quarter and we will talk to you all very soon. Enjoy your day. Thanks.

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