Good day, ladies and gentlemen and welcome to the Fourth Quarter 2009 Portfolio Recovery Associates, Incorporated Earnings Conference Call. My name is Noelia and I will be your coordinator for today. At this time all participants are in a listen only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s conference Mr. Jim Fike, Vice President of Finance and Accounting. Please proceed.

Good afternoon and thank you for joining Portfolio Recovery Associates fourth quarter and full-year 2009 earnings call. Speaking to you today will be Steve Fredrickson, our Chairman, President and CEO; Kevin Stevenson, our Chief Financial and Administrative Officer, and Neal Stern, our Chief Operating Officer of Owned Portfolios. We will begin with prepared comments and then follow up with a question-and-answer period. Afterwards, Steve will wrap up the call with some final thoughts. Before we begin, I'd like everyone to please take note of our Safe Harbor language. Statements on this call which are not historical, including Portfolio Recovery Associates' or managements intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, including with respect to the future portfolio's performance, opportunities, future revenue and earnings growth, future space and staffing requirements, future productivity of collectors, expansion of the RDS, IGS and MuniServices businesses and future contribution of the RDS, IGS and MuniServices businesses to earnings are forward-looking statements. These forward-looking statements are based upon management's beliefs, assumptions and expectations of the company's future operations and economic performance, taking into account currently available information. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ from those expressed or implied in any such forward-looking statements as a result of various factors, including the risk factors and other risks that are described from time to time in the company's filings with the Securities and Exchange Commission, including but not limited to its annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K filed with the Securities and Exchange Commission and available through the company's web site which contain a more detailed discussion of the company's business, including risks and uncertainties that may affect future results. Due to such uncertainties and risks, you are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. The company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based in whole or in part. Now, here's Steve Fredrickson, our Chief Executive Officer.

Thanks, Jim, and thank you all for attending Portfolio Recovery Associates fourth quarter and full-year 2009 earnings call. On today's call I'll begin by covering the company's results broadly. Neal Stern will then talk to you in more detail about our operational strategies and finally Kevin Stevenson will discuss our financial results in detail. After our prepared comments we'll open up the call to Q&A. Portfolio Recovery Associates concluded a very challenging 2009 on a high note. We produced strong fourth quarter financial results recording our highest net income since the second quarter of 2007 in the face of tepid economic recovery, seasonal weakness in consumer collections and a large allowance charge of $9.5 million. In addition to excellent overall numbers, which I'll detail in the moment, Portfolio Recovery Associates continued to build for the future in the final quarter of 2009. Our continued ability to access capital in a challenging economy allowed PRA to acquire large amounts of portfolios that we believe are well priced even in a market where collections have grown more difficult. In addition, we were able to sequentially improve both revenue and income at our fee businesses compared with Q3, during which we experienced a notable weakness thanks to our operational strategies, cost containment and some seasonal strength. Taken together, these efforts position PRA to realize strong operating and financial results in the future. Now on to our fourth quarter numbers. PRA acquired $75.1 million of defaulted debt during the quarter. Cash collections were a record $95.3 million of 20.2% from $79.2 million in the year ago period. These help drive our record cash receipts of $112.5 million in the quarter, up 14.7% from $98.1 million in the same period a year ago. Fee revenue was $17.3 million in the fourth quarter, a decline of…

Thanks, Steve. During the fourth quarter PRA's operational results reflected the trends we have been discussing with you throughout 2009. The number of people making monthly payments to us has continued to increase significantly. The benefit of this has been offset in the short term by the fact that those payments had smaller average balances reflecting both our increased dialing capacity and the difficult macro economic environment. In Q4, the total number of payments received was up a strong 40% over the prior year. For full year 2009, the number of payments finished 35% higher than 2008. Clearly, this is not just a reflection of our 2009 purchase activity. More people understand the importance of credit and we have made significant strides in productivity through increase automation and improved analytics. In December, the total number of agent phone calls increased by 16% over the prior year and we were able to much more narrowly target the groups that we felt were the most likely to have the ability to pay. As I've indicated on prior calls, its my contention that the short term issues related to average payment size which for the call centers in December was down almost 15% over the prior year can be more than overcome provided we are able to keep people on payment plans in an operationally efficient manner. To this point our fourth quarter call center collections on accounts that we've owned for more than five years finished at $3.7 million and for the full year 2009, that number was $16.5 million, a 50% increase over 2008. Importantly this result was obtained in a tremendously efficient manner. Obviously we could set about increasing the collection to purchased price multiple from any prior year if we focused all of our efforts on accounts purchased in…

Thank you Neil. Record cash receipts, record cash collections and record revenue. We can talk about all of these in the fourth quarter. I look forward to a future where we can move beyond the larger allowance charges we've been discussing recently and begin to talk about record net income as well. We're not there yet but it's definitely our goal. Nevertheless PRA did report solid fourth quarter net income of $12.4 million which is an improvement of 17% from $10.6 million a year ago and represents our highest net income since the second quarter of 2007. EPS advanced to $0.80 from $0.69 a year earlier. We achieved this despite incurring $9.5 million in allowance charges in the quarter, which cost us $0.38 in EPS. For the full year 2009 we incurred $27.6 million in allowance charges, costing us approximately $1.10 in foregone EPS. This compares with reported full year EPS of $2.87. Total revenue for the quarter was $73.2 million which was 9.3% when compared to same period one year ago. Operating income was $22.1, million up 9% from the year earlier period while net interest expense decreased from $2.9 million one year ago to $2 million in Q4. For full year 2009 revenue was $281.1 million, up 6.8% from 2008. Operating income was $80.6 million, down 5% from $84.8 million in 2008. Full year 2009 net income was $44.3 million, down 2.3% from $45.4 million in 2008. Return on equity improved from Q3 to 15% during the fourth quarter, leaving us at 14.3% for the full year 2009. We consider any ROE under 15% to be unacceptably low and remain very focused on bringing that number back towards our historical 20%. Our weighted average interest cost on the acquisition line during the quarter was 2.47% and 2.62% for…

(Operator Instructions). Your first question comes from the line of Mark Hughes with SunTrust.

Kevin, you talked about the accretion issue on BK, you said $5.5 million for the full year, was that affect greater in the fourth quarter than it was in the third quarter or less?

I want to say it was greater then the fourth, but I can get that in a second.

What was your cash from operations for the quarter for full year?

See the cash flow from the press release numbers

Yes maybe I didn’t see in the press release.

Yes, it’s in the press release.

No I was talking cash from operations of the cash flow statements.

Net cash provided by operating activities was 285

Your next question comes from the line of David Scharf with JMP Securities.

Steve I want to ask you little bit about how we are going to think about the supply and pricing environment. I am cognizant of your bullish comments and by all indications, it should be a very positive year for supply. There are some anecdotes out there of some credit granters maybe pulling back a little bit from sales of fresh charge-offs, working more in house. Is that purely kind of one off anecdotal evidence, on the whole is that something we are to be concerned about that perhaps we don’t have as much so called desperate sellers or by all accounts are you seeing this for shaping up this to a very, very big volume here.

Well, I think there is a little bit of both going on, there is an awful lot of charge-off paper in the market. There is a record amount of charge-off paper that’s being created and I think it’s just reasonable that as the credit issuers try to maximize their collections on those portfolios that still there agency pipelines as well as use the debt sale markets. So, actually long term I see the use of agencies is very positive for our markets, I think that it implies that we are going to have pretty substantial portfolios for sale for some time to come. Eventually, those pools will be liquidated to whatever their strategic end is and though we sold out at some point in time and at that point they become portfolio to folks like us. So I certainly didn’t mean to imply that all of this charge-off is occurring, it’s hitting the fore sale market, that’s definitely not the case. It’s also filling agency pipelines as well.

You actually pre-empted my next question, which was the sort of a dynamic between agency and debt buying. I was just curious, a comment about the progression throughout the quarter. I think you had mentioned November and December. We are stronger than October and was that in part just by more BKs that were liquidating quicker sort of flowing into the stream or is that in more broad comment about the overall productivity and collection patterns.

I think that from our perspective, we also had some year-over-year day comparison differences, but we had very similar looking November and December as it related to kind of year-over-year growth and October was a bit behind those two months. So I don’t know that there is a whole lot to read into that, the months content to flow in to each other fairly, easily and it’s tough to dice our operations that tightly

Lastly can you just refresh my memory, the percentage of the fee for service businesses that's represented by sort of the sales in used tax business, how much of it is coming from that?

I don’t think we have ever broken that out specifically, I don’t know how to parse it for you. It's enough to move the needle, but it's not a significant part of what's going on there. We just had in the third quarter, there was a substantial drop off in that particular part of things and just because of the magnitude of the move, it influenced our overall fee income, but generally it's not the lion share of what we do.

Your next question comes from the line of Bob Napoli with Piper Jaffray.

A question on the operating leverage in the business. So, I think it was a pretty significant move this quarter and operating expenses as the percentage of cash collections and I know you have been looking for that benefit from the bankruptcy business, is this kind of just the start of starting to see those margins improve?

Yes, we would hope that this is a long-term trend that is going to be evident over the next couple of years. I don’t know that we will necessarily be able to observe a smooth trend quarter-to-quarter just because of a lot of other things that are going on, but again because of the volume of bankruptcy volume that we have been doing and how the expenses flow there as well as we like to thank the efficiencies that we have been bringing to the charge off or core that bind business. We think we are going to see some continued push on that margin downward.

Is there any feel you can give for the operating expenses for the bankruptcy business as a percentage of cash collection that would may be help us a little bit in modeling that?

Yes, I don’t really have something to share at this point on that one, Bob.

How much of the forward flow from 2008 that you said is the least profitable business that you’ve probably ever written in your history how much of that is less than the impairment charge that you took this quarter, do you feel like you now got it, but I know there’s always going to be impairments, but are we turning to corner, how much of that workflow is left?

So you ask specifically about those flow deals, remember they were part of the charge-off debt buying groups, so they are aggregated with everything else. So if you kind of think about 2008 Q1, Q2 and Q3 there is going to be some percentage of that flow in that quarter’s aggregated deal, but also it’s going to have a big percentage of spot deals that are actually performing pretty well and they all kind of mushed in that particular quarter. So I can’t ask how much is left. So I can’t tell you how much is left in the books specifically to those deals because they are not accounted for that way. As far as allowances I will have to kind of say what I was say is that we are trying to take these allowances as they are dealt to us and deal with looking at the curve fitting and we have to see how Q1 shakes out in Q2 and move our way through 2010.

Did you stop buying there was none of that in the fourth quarter of 2008 and did it slow to a trickle in the third quarter, maybe some feel like that, there seems to be the kind of the key here to getting those impairments down to a much lower level and obviously driving up earnings pretty substantial.

The volumes were coming down throughout the year and obviously at this point anything that we are still in has been long since repriced or were out.

Okay and then, last question just on your funding. Would you expect get something done in the first half of this year and in the market today what would we expect like LIBOR 400, something like that on the pricing?

Your question is anticipated pricing on the bank line?

Yes. On the bank line and when do you think expect to renew the line?

We are in the early stages of that process, so I would certainly hope that we would be done first half of the year. As for pricing, it’s going to be where the market clears, I don’t have a term sheet in hand at this point. So, I don’t have that answer for you.

Okay. But clearly rates will go up and you’ll get a larger line most likely to go along with it?

That’s the goal. The goal is to get a larger line, not the same size, that it wouldn’t be a good move and hopefully deploy that towards highly yielding assets.

Your next comes from the line of Edward Hemmelgarn with Shaker Investments.

Your bankruptcy purchases obviously are going to be, the majority of purchases are certainly recently this year, you have talked about that you are buying earlier paper, when do you think on average that bankruptcy paper starts to collect relative to when you talked about in the past. Is it two years, three years or what?

I If you look back in 2009, the average life, the average age of piece of paper we bought in bankruptcy arena was about 5 months and prior to that we are up in 14 to 15 months range, so you can see we have got at least 10 months delta between when those things were filed versus when we bought them and so what you are going to see is that there are some cash flows in there. So don’t take it zero either. The problem as I mentioned on the accretion point since we don’t allow accretion, there is not enough cash to start amortizing that pull down, so we limit the revenue to the amount of cash received, so little bit of time there into the accretion commentary. So generally we take something like 10 months, 12 months maybe even up to 18 months for those things to start flowing very heavily from the time of filing.

Then like when do you think they will start to in terms of curve, when would you expect to start to reach a peak of collections because the curves certainly look different now than the ones you were buying back in '05 to '06, those timeframe.

Typically, they are going to peak between 18 and 36 months and a typical plan could continue out for 5 years. So again, the other thing you got to keep in mind is we are not buying exclusively fresh filings, there is a mix in here. And so depending exactly kind of what the mix is with each quarter you are going to see slightly different cash flow dynamics and timing dynamics.

True, but I guess what I was just trying to bring this up because by purchasing a lot more bankruptcy, now you are changing the shape of your profitability impacts relative to what it used to be, you used to start collecting a lot upfront, in non-bankruptcy and now. So you got some of your best profitability early on. Now you are looking at given the fact that your expenses are upfront, your profits are later, you are kind of like pushing it out. You just have a different profitability curve than historically?

That’s exactly right and I think that you hit the nail on the head when you brought up not only the cash flow and revenue elongated or delayed from what we would typically see, but the expenses are much more frontend loaded and so there’s definitely a negative impact there as we ramp up buying bankrupt assets versus deploying the same amount of capital to purchase core assets.

You really stepped to bankruptcies, is it more that the pricing is better on the bankruptcy or is it more just you’ve got, you feel so much better in your analysis and how well you can process it?

Well, we tried to be very active in both parts of the market and to some degree it’s just how the deals have come down just how the business come down.

Your next question comes from the line of Bill Carcache with Macquarie Research.

Steve, you mentioned that in the fee for service businesses that some of the challenges relating to sales and used tax concerns that you guys talked about last quarter, that you expect those to persist as we look out into the rest of the year. But we had a nice increase here sequentially, and I know that the fourth quarter is seasonally stronger. But is it fair to say that you're kind of thinking about commissions over the course of the year is kind of being flat on a year-over-year basis, over the next few quarters or are you thinking that they're going to be lower? Can you just give us a little bit of guidance there in terms of how to think about that?

Well it relates to specifically the sales in used tax fees. I think if one just keeps an eye on generally the Californian economy, you are going to get some kind of feel for how we are going to do on that specific sales and used tax piece of things and I think things are kind of bouncing along there as opposed to necessarily spiraling downward. Some of the things that I had been reading recently suggested that the coastal areas were starting to get some legs although inland of the economy was still tough. You are starting to see again the coastal areas get some recovery. The rest of our fee for service businesses are on an upward trajectory. As we have been talking, we have been continuing to sign new clients. I think we’ve got some real solid things happening, both in other aspects of the government services businesses and in the IGS skip tracing business. So, hopefully we’ll keep some upward pressure on fee income there as the year goes on.

Kevin, there are a few things going on with the potential for the bank line and the change to the debt side of the balance sheet and then the possibility that under the shelf registration if an opportunity presents itself you guys may use that. Can you kind of just give us a sense of how to think about the optimal capital structure, regardless of how all of that shakes out. I think you said you're at 96% debt-to-equity now. A couple of quarters ago you guys said that you have the capacity to go up to, I believe it was 130%. What’s the optimal capital structure regardless of how these, what size the bank line gets increased to, and whether there’s any kind of offering under the shelf.

Yes I think optimal is a big word, but we do think about a lot. So just to sort of recount what you said, we are working towards those goals, we are at about 96% ratio at this point. I think in the past calls, Steve and I have talked about the concept that 2 to 1 ratio would kind of be outward, we would feel some pressure internally, just about where that’s out, but clearly a lot of companies run higher debt to equity ratios than those, but for right now I don’t think we’ll be approaching the kind of ratios that make us uncomfortable at all.

Okay and if you had to have an open line of available capacity, you currently are at I believe you said $46 million or so, how high will that be, not to say that’s what you would get from the banks but what a range where we feel comfortable with available capacity?

Well I think right now what we are looking for is to have available capacity you think as we see the deals that we think we just need to purchase so all I can tell you is that we are going to go after a line that’s materially larger than one we have.

Do you have a review on whether tax refunds are going to be up year-over-year in the first quarter?

We don’t know yet

Okay and then last question is the forward flows that can you talk just about any that you may have entered into that you are currently in now and when those were priced, just any perspective on that?

Sure in the normal course we are generally going in and out of forward flow arrangements on a pretty regular basis, I will tell you that both sellers and buyer tended to shorten up flows during 2009 and there were a lot of you know even 3 months flows that we could kind of bounce in and out of, so at this point I would say the flows that we are in tend to be on the shorter side but they continue to be a important part of the debt purchase market certainly.

If I could reach here for Mark use the earlier more queues that are earlier question you'd ask about the impact of accretion on Q4 versus Q3 and I don’t have any exact reconciliation for remark but I can tell you that I think that the impact in Q4 was lower than it was in Q3 was somewhat lower than it was in Q3. Okay? Next caller.

Your next question comes from the line of Rick Shane with Jefferies.

Thanks guys for taking my question, I realize that it's getting late out there, I will try to be pretty quick. One of the trends that we have seen over the last couple of years if I would look back nine of the last 10 quarters you have seen year-over-year increases impairments. There was also been fairly consistent commentary along the way that the purchase environment is getting better. You maintain your discipline your there was some time since last year you are still bidding on the number of yield et cetera and clearly something has changed because the impairments continue to come through fairly substantial levels I think that a lot of folks thought that we probably returning to quarter after Q3 and a little bit surprise by the Q4 impairment number. The silver lining here to me is that ordinarily in Q4, over the last several years to started to impair the current years or the most recent years advantages. It's only a modest impairment but at least for the 2009 vintage we didn’t see that impairment starting to come through. So, perhaps the trajectory is different there. That leads to sort of two parts to my question one, do you really think that the 2009 vintage now that we have seen it seasoned for on a weighted average basis for about six months is going to substantially outperform the '08, the '07, and the '06s and at the same time do you think that what happened to the industry in which changed the collectability and influenced these outcomes is some of behavioral shift do you think we have seen a The outcomes is some sort of behavioral shift do you think we have seen a moral decline in the obligation of pay debt based on things like media effect because everybody sitting here saying hearing they may remodify their mortgage you can pay off your credit card debt pennies on the dollar do you think that’s actually starting to hurt you business?

Well first of all as that relates to how does '09 work versus especially 07, 08 I think just looking at our multiples we would suggest that we think '09 is going to be healthier tranche than no as others no doubt about that we are in the business of buying charged off and bankrupt that and so we have always doubt with at this adversely selected customers to be their don’t want to pay or cant pay their obligations I don’t know within that population like we feel is though we have seen any moral, is that what you want to call it as it relates to peoples desire to repay I think the biggest that we have seen in this very much impacted the assumptions the original under writing assumptions that we had made during the years and which you correctly pointed out we have been struggling with some of these allowance charges but we have really seen the sub prime market or the consumer refinance market really go away people are rolling there credit card balances over from card to card anymore people don’t have the ability to take out a second or a third mortgage to refinance their trouble debts anymore, people aren’t rolling from house to house like they had been and its all impacting our larger payments. Our larger payments have almost fallen to nothing as it relates to the mortgage revise base, they had historically never been huge but they had bounced around say 4%, 5%, 6% of our total payments, total cash received and they have gone to nothing and at the same time our average payment sizes come down and again we feel like we are seeing really more people inclined to pay, its just a matter of what they are able to pay. And since they are relying really only on their cash flow from wage and salary you have seen those payment sizes come down are settlements and our payments in full have dropped dramatically and we have to make it up by getting more payment. So, actually with anything the overall population of our customers seems more inclined to repay their debts, its just they are doing so in small advice.

Got it. And guys thank you, I always ask very point of questions on the call and I always really appreciate your patients in the questions on the call and I always really appreciate your patients you answering them. Thank you.

No problem. And if I can also add, if you think about the curve, remember we are dealing with this accounting process as it appears 3-3 or ASP 3-10-30 it is now this called. The curve said really the situation where if that cash does commit even higher in the long term you can end up in the allowance in the current period, so its just the nature of the accounting and I would highly recommend people also look at the deal multiples when the case gets filed and you will get a feel for what those tranches are really doing in terms of where they started and where there are at currently?

Now, I will pile on because I can help myself but I mentioned in my script we had 40% increase year-over-year in the number of payments received in Q4 that to me is a fairly impressive improvement and as I said in my script I think people understand the importance of credit and we have got more effective and so I see nothing portraying the sentiment that you described.

Your next question comes from the line of Hugh Miller with Sidoti & Company. Hugh Miller - Sidoti & Company: Thanks so much for taking my questions. I know its been long call, I just had a couple that weren’t asked and just wanted to get a better feel of the bankruptcy process if you had a second year. Was wondering historically can you just give us a sense of what the fall out rate is for consumers going through the bankruptcy process that you guys have kind of seen?

It would vary, but it wouldn’t be unusual for that number to be high, it could be in the 40% to 50% range. Hugh Miller - Sidoti & Company: Okay and when that does happen, can you give us a sense of the consumer repayment patterns that you have seen with those types of customers relative to some of that you buy there would be a traditional receivable repayment, it tend to be better worse about the same?

Well I think its one of the benefits of having in an integrated shop where we do bankruptcy work along with normal collections works. So when those people fall out we quickly get them over to the other side of the house. Once they are there though and once they are a kind of normal customer, the propensity to pay relative to just the average charge off customer would be higher than a typical customer.

I want to make sure clear on that you, that number if a plus or minus will stay to a pricing what when price those bankruptcy deals we expect a certain fallout. So if you pick the 40% that Steve used as example, these things are priced you expect the 40% fall out so that’s all part of the deal and if that number goes to 30, its probably better for us when we go to 50 or 60 we need to kind of a Neal to give us some cash from the collections. Hugh Miller - Sidoti & Company: Yeah, I can clearly understand that I just want to get a sense of that type of figure on relative basis because a lot of you peers are going out there in the bankruptcy market and they are not collecting for themselves, they have a different option with that type. So, I guess the way that you are able to price that is a little bit different in the way they have been looking that type of business correct?

Yeah, that’s right. Hugh Miller - Sidoti & Company: Okay and then I guess assigned from that ability relative to some of those who are there bankruptcy buyers where you are integrated shop, are there any other things that you guys see things that you guy see as a competitive advantage because obviously most of that stuff is then being collected for use, you are not using leveraging the other call center and the abilities you have there but any other competitive advantage you can see with that business?

Well, I think that the other significant competitive advantage one can develop is just the ability to very accurately process these things at the lowest possible price. You don’t want to miss filings to do so can be very expensive especially when you are dealing with a lot of numbers and if you have a couple of miss percentages here and there it can definitely affect your cash flow and then whether you can do it at x% or x-1% the lower your operating cost they are the better and more your systems are the more competitive you can be and obviously the more profit you can bring to the bottom line at any given purchase point.

And I would just add so it helps us analytically as well so there are charge-off accounts that go bankrupt and fly from my side to the other side of the houses well and so having account obviously helps us model that event to a better degree. Hugh Miller - Sidoti & Company: And certainly it will take an appreciate to inside dept and the very last question I had was at regards to and I know you guys have said in the past that you kind don’t practice the kitchen sink method with regards to impairments but just I can guess one of the give us any sense of given the other strong performance in the fourth quarter with the bankruptcy improvement and so forth and would you say that you maybe little bit more aggressive then you are normally would have with the ’08 vintage?

Yeah I don’t there are any more aggressive I think we are pretty tight in terms of how we look at the allowances so I think that you look at the percentage coming from 08 being 70% this quarter it was the loud side compared to the prior ones but again I think that the process itself was pretty tight and pretty consistent. Hugh Miller - Sidoti & Company: Okay, thanks so much I appreciate that

Your next question comes from the line of Sameer Gokhale with KBW.

Hi thank you. If you are going to refresh my memory that will be great I think maybe your last two quarters about this but how should we think about may be a drop in unemployment and be benefit that you might see on your productivity metrics I mean unemployment as its been rising you guys have been showing improvements in productivity because changes you made our operation and if unemployment falls it suggest that you should see some sort of lift there in your productivity metric and I was wondering how you think about maybe a potential offset being decrease in unemployment accompanied by reductions and settlements to more people or few people going into the upfront settlement, you guys collecting more overtime as you pursue collecting is that an offset or how should we think about there, how do you think about that internally?

So at the highest level I would just reiterate a point that Steve made earlier and that is we buy a subset of the population that’s always been fairly troubled. Unemployment is not new to the folks that we are buying. So, it doesn’t impact us quite as much as it might normally otherwise impact someone else doing recovery work. However this recession was clearly different and it did impact us and as we have described in most sizable impact was this decrease in the average payment size. I do think there is some correlation to unemployment and now recovery figures and I would expect that if unemployment improves that we would improve in someway as well.

It doesn’t seem like you specifically think that there is any sort of statistical correlation that you have drawn at least that you can share with us today?

There is definitely a correlation, I’m just saying it’s not quite a strong as you might imagine given it’s a lot of the accounts that we buy haven’t made a payment in two years so there employment of than to me if in quite some time ago.

Okay and then, there seem to be more opportunities for you guys to buy the charged off paper and you are trying to negotiate an increase in your credit facility, perhaps an anticipation of that or maybe looking for opportunities but few quarters to go I think you would try bid for a mortgage servicing business which wasn’t from what I understand that large of an acquisition but as you think about making acquisition are you looking at things outside of your traditional debt of portfolio purchasing business at this point in time, are then specific things were looking at.

There is nothing specifically targeted in terms of a business that we want to get in, I would say that our strong desire as we look at potential fee businesses, it would be a way from kind of the typical core collection business as suppose to a part of it and we continue to have our eyes open for interesting little businesses that we think we can help out from a process technology capital marketing perspective. But are generally related to what we do processing payments dealing with call centers that sort of thing.

Okay, that’s helpful and congratulations on a god quarter again.

Ladies and gentlemen this concludes your question-and-answer session. I’d now like to hand the call over to Mr. Steve Fredrickson for closing remarks.

Thank you operator. I8’d like reiterate a few key points about our fourth quarter performance before concluding the call. Portfolio recovery associates concluded a very challenging 2009 on a high note. We produce strong fourth quarter financial results in fact reporting our highest net income since the second quarter of 2007 in the phase of a tepid economic recovery season of weakness in consumer collections and large allowance charge of $9.5 million. In addition to the excellent overall numbers, portfolio recovery associates continue to build for the future in the final quarter of 2009. Overall, we have entered 2010 a stronger and more efficient competitor reiterating what I said on our third quarter call, I am excited about PRA's future today as I have been in years. I would like to thank all of you for participating in our conference call. We look forward to speaking with you next quarter.

Thank you for participation in today's conference. This concludes your presentation and you may now disconnect. Have a great day.