Good afternoon. Welcome to Portfolio Recovery Associates Quarterly Conference Call. A webcast of this call at PRA’s investor website includes a slide deck presentation. If you are listening by phone PRA reminds you that statements made by PRA on this call may constitute forward-looking statements under applicable securities laws. Please take a moment to review our slides about forward-looking statements. Now let me introduce your host for this call. Steve Fredrickson, President, Chairman, and Chief Executive Officer of PRA

Thank you operator. Good afternoon and thank you for joining our call. We have a lot to cover this afternoon including details of our agreement to acquire pan-European debt buyer Aktiv Kapital which we also announced today. On this conference call will first take you through our Q4 and full year 2013 financial operations results as we review our strongest year ever. Then we will look ahead to 2014 and our plans in Europe. I will outline or agreement to acquire active capital and highlight our agreement to acquire Pamplona’s IVA platform which we announced earlier this month. Through 2014 we believe the global debt buying industry will continue to evolve at a very rapid pace. Given PRA’s successful track record, ample resources and our new European expansion, I’m confident that PRA is well-positioned to sustain itself as a dominant global player delivering long-term value to shareholders. Our results in 2013 continue to develop the foundation of the company’s ongoing success. Cash collections in the fourth quarter were $279 million up 22% from the fourth quarter a year ago with legal collections contributing $80 million to the total. Cash collections were negatively impacted in Q4 by extended weekends around the holidays. Delayed bankruptcy trust fee remittances in December lead to an estimated $5 million shortfall for the quarter with much of that being remitted in early January 2014. This resulted in a much more substantial impact on Q4 cash collections than it did on Q4 revenue. During this first quarter of 2014 similar to approach in Q1 2012 we’ve made a decision to once again adjusted effective ROI hurdle to legal collection activity. As a result we hope to drive incremental and profitable net collections. To achieve this PRA will be expensing added levels of legal cost upfront. We anticipate…

Thanks Steve. As I discuss our financial results and comparisons I make today will be between Q4 2013 and Q4 2012 unless otherwise noted. PRA had another successful quarter. Cash collections and revenues increased 22% and 20% respectively while operating expenses increased at a slower rate from 13%. This led to a 28% increase in net income attributable to PRA and a 30% increase in earnings per share and a 42.2% operating margin. Now, on the review of our income statement and balance sheet, cash collection for the quarter increased 22% to $278.9 million. Payments from bankruptcy accounts were up 26% to $114.4 million or 41% of cash collections. Call center and other collections were $84.4 million, up 16%. And legal collections were $80.2 million, up 22%. For the full year, cash collections were $1.14 billion, up 26% from 2012. Cash receipts were up 25% from prior year to $1.21 billion. Revenues for the full year increased 24%. Revenues for the quarter increased 20% to $184.9 million, including $168.7 million in net financial receives or NFR revenue and $16.1 million in fee revenue. NFR revenue for the quarter was comprised of a $115.8 million in core portfolio revenue including our UK operations and an allowance reversal of $700,000. Net core portfolio revenue increased 25%. NFR revenue also included bankruptcy portfolio revenue of $52.9 million net of the allowance charge of $300,000. Net bankruptcy portfolio revenue increased 17%. During the quarter, yields on all quarterly domestic core pools originated from 2009 and 2012 with the exception of two pools in 2009 and one in 2012 more increased. For bankruptcy portfolio, yields are on 2010 and 2011 benches increased on all but one quarterly pool. The yield also increased on one 2012 bankruptcy pool. Fee revenue was approximately the same as Q4…

Thanks Kevin. As I discuss fourth quarter results and operations I’ll be making comparisons with results from the fourth quarter 2012 unless otherwise noted. Our fourth quarter results highlighted these four key trends in our U.S. business. We received 2.5 million payments in the quarter which was up 18% and those payments brought our full year totals just under 10 million payments up 21% from 2012. Our average payment size increased by 3% contributing $7 million more in cash collections for the quarter. Our Q4 call center productivity improved by 28% and for the full year productivity improved by 18%. Our legal collections increased by 22% in the quarter. These results continued to reflect our long-term focus on being a compliant, patient and effective collector. The group of accounts making regular monthly payments to us has been expanding as a result of increased buying, improved operational efficiencies and most critically our staff’s ability to identify affordable repayment plans. These regular monthly payments remain above expectation for stickiness and frequency and have helped contribute greatly to our productivity figures. Further assisting our productivity has been the improvement in average payment size, which as I said was up 3% in Q4. All these figure is not a pure indicator of consumer financial health as it can be heavily influenced by our operational strategies by increased legal activity, changes in the average balance sizes purchase and other factors, I think this is indicative of a positive payment trend. We have continued to see a correlation between payment activities and unemployment and we’ve observed increases in the number of context with consumers that result in a payment. Our fourth quarter legal collections increased by 22%, external legal collection finished 11% higher and the internal legal collections were up 42%. Our spending in court costs…

Earlier today PRA entered into a definitive sale and purchase agreement subject to certain customary and regulatory closing conditions for the purchase of Aktiv Kapital. Aktiv, headquartered in Oslo, Norway, is a leading international debt purchaser and collector with a presence across Europe and Canada. Aktiv’s current ERC is approximately $1.9 billion and is dispersed throughout 15 markets. We are paying approximately $880 million for the equity of the company plus we are assuming approximately $435 million in debt. We expect to finance the transaction with the combination of cash, a $170 million of seller financing, $435 million from our revolver and up to $200 million from an exercise of our accordion loan feature. In addition, we may choose to use other debt instruments to expand, replace or pay down any of these financing options. As always our financing plan is design to provide us with a more than enough funding to meet the needs of our U.S. core and bankruptcy markets in 2014 and beyond. We anticipate transaction cost of approximately $15 million which we expect to incur between both Q1 and Q2 2014. In Aktiv Kapital, we believe we found an excellent cultural fit with PRA from the way each of our companies approaches the investment process and compliance to how we respectfully treat the stressed customers, to how we engage our clients and employees. With combined ERC of more than $4.6 billion, this transaction is a transformative deal for PRA and creates a premier global leader in the debt purchase and collection sector. We expect this deal will be accretive to earnings and will help PRA deliver long-term profit targets of 20% return on equity and 15% earnings per share growth as we expand our footprint from the U.S., UK and Canada across Europe. Here is our…

Thank you, sir. (Operator Instructions) Our first question comes from Sameer Gokhale of Janney Capital. Your line is open.

Congratulations on the acquisition. Seems like a smart move to do, you have the balance sheet, and you have a lot of capacity there. I don't have access to your slides, so I apologize, but I just had a question in terms of the types of paper that Aktiv focuses on. Can you talk about that a little bit in our midst? What kind of paper does Aktiv focus on? Is it special paper, older paper?

About 97% of our paper is from financial institutions, so that would be credit cards, consumer loans and overdraft and we’ve also done some telcos and utility, but it’s primarily financial.

And is this older, as the older receivables or are these special types of receivables you purchase immediately after their types are?

It varies by country and in certain countries like Canada; it’s more of an older type of receivable but in other parts of Europe you will get a wide range of that, we’ve invested quite a lot on especially that’s in the UK for instance.

Okay. That's helpful. And then in the commentary about the expected ERC, I think $1.7 billion from Aktiv, does that constitute any sort of lift to your ERC, maybe from certain processes or technology or other things that PRA might deliver to Aktiv, or is that just what you currently expect on a standalone basis with the possibility of maybe resulting in that $1.7 billion number?

Sameer, it's Kevin. The number is about $1.9 billion. We're going to let Aktiv run their operations. Neal Stern is going to see if he can help, but we expect that $1.9 billion to probably be a good number.

Okay.

Sameer, there’s nothing baked into that as an assumed synergy or lift from the combination, you know we are very hopeful that we’re going to be able to pass best practices back and forth between the two operations but we’ve assumed none of that in our modeling.

Okay. And can you talk about maybe some items that you touched on, some of the work that's currently being outsourced by Aktiv that could be moved over to some of your other collections operations in Scotland? Are there any other -- what specific maybe synergies or process improvements or technology sharing can you talk about that you've already contemplated that you would put in place post-acquisition?

That’s obviously going to be a work in progress I mean it will be figuring that out as we go I think initially we’ll be focusing on telephony and the technical opportunities that are aligned with that. Obviously there is some modeling back in forth that both groups can share we have modestly different approaches and there is some incremental learning for both groups there. And obviously we’ll take a look at systems and dealing with volume versus back office processes and anything to that nature. So we’ve got a good amount of work ahead.

Okay. And just my last question, and then I'll hop back in the queue, but in terms of IVA, just to clarify, you acquired assets, but does that include portfolios? You say you acquire the technology assets and going forward you has bought portfolios that are IVAs. Can you clarify that?

Sure. So really two different events first of all in Canada we made a modest first purchase of bankruptcy accounts there the Pamplona project which relates to IVA accounts in the UK is one where we are acquiring a platform data their analytical capabilities along with the team but we’re not acquiring any assets there. So that will be a build asset from scratch opportunity for us.

I was actually asking specifically for Pamplona, so thank you for that clarification and thank you for your comments. I will get back in the queue.

Thank you. (Operator Instructions) Our next question comes from Hugh Miller of Sidoti. Your question please. Hugh Miller - Sidoti & Co: I had a question with regards to, first off, you mentioned on the call about a twin goal of 20%, 15% EPS growth. Is that something we should be expecting to be achievable in 2014, given all of the things that are going between the Aktiv transaction, some of the challenges domestically that you have alluded to, and what are your thoughts there?

Well, we've got a little bit of noise headwinds with deal expenses et cetera. But we've laid down the return on equity target for quite some time now and as you know we've generally been kind of added or slightly above. We would hope that over the long term we'd also be able to achieve that 15% EPS growth rate. So we're going to be focused on it for '14 but couple of things are going to be unpredictable -- we think we have our arms around most of the deal expenses, we don’t know exactly when the deal is going to close well, so deal extended closed earlier. We had a little bit more opportunity for that recruited action if it closes a little later, less sell.

If you also add, we haven’t got purchase accounting numbers either. So that'll have some impact on accretion. Hugh Miller - Sidoti & Co: Sure. If we pro forma out the impact of the nonrecurring deal costs, and then in that scenario, would you anticipate you have a 15% is still probably a reachable goal?

We would hope so. Hugh Miller - Sidoti & Co: Okay. When you look of the deal here for Aktiv, how much of what had you mentioned in the fourth quarter being an aggressive pricing environment by competitors. It seemed to be, I don't know if on the ropes is the right word, but just as you've mentioned, desperate to buy receivables. How much of that did that play a factor in your decision to go out there and consummate this deal? Obviously, much larger in size than anything we've seen before.

The decision to pursue a deal like this wasn’t a Q4 decision. We've been talking to Aktiv for a while now; we've been discussing further geographic moves with our board for quite some time. And so Q4 didn’t put us over the edge but it's certainly what has been going on in the U.S. market over an extended period of time played some role, but you know quite honestly another part of it was just our very unlevered balance sheet and the fact that we've got able to do a deal like this pretty gracefully and maintain still a very attractive financial position. So we've had our antenna up for a while on this. Again, when we met the management team at Aktiv and started conversations, you know we became a lot more energized about the possibilities there. We just felt like you know the two companies had an awful lot in common, real similar deal how to underwrite and how to operate the business, and so that really got us energized and as we work thorough the deal in Q4 and into Q1 cemented the deal.

Thank you. Our next question comes from David Scharf of JMP Securities. Your line is open.

Steve, just curious, maybe focusing first on the UK and then providing maybe just some broad observations about the other markets that Aktiv is present in. Are you seeing any evidence that the regulatory developments, even though formal rulemaking hasn't been laid forth in the US, but given all of the things that have prompted sellers to conduct enhanced audits and due diligence, is there any sense that is a wave that may be sweeping Europe and Canada, or at this time, does it look like largely a US phenomenon?

Let me give you a light cake on it and then I think Geir has probably got some thoughts on that as well. Our view in underwriting act is -- is that the regulatory environment really can't be looked at as a uniform thing across Europe. You know you really run the gamut from the UK where the regulatory environment is most like the U.S. to places like Spain where there largely is no regulation -- as to the trends that have been observed over the last few years. Geir is probably in a better position to comment on that.

Yes. So we have seen tightening of regulation in the UK where it’s been more consumer focused and we’ll move over to from OST to SPA in the UK we clearly see that trend going to continue there. In other markets as Steve pointed out is very different so you have staying with very low level of regulation and then you have the Nordics and Central Europe where it’s highly dependent on the public bailiff system. So we wouldn’t expect major changes there. So for now is that UK is the one that is following most closely to U.S.

Got it, got it. By the way, when the transaction does close, and Aktiv is consolidated, is it the same level yield accounting that we are accustomed to?

Yes, it is, David.

Okay.

And so it’s a good question so they’re on IFRS so we’re there right now and so they’ll continue to do that and we will take their numbers and reversal it off and book them under GAAP procedures.

Got it, and Kevin, for now for Pamplona, and I don’t if that when the expected closing date is…

Pamplona is going to close at the end of it’s got a hard close date at the end of June.

End of June. Okay. And is that pretty much just at this juncture layering in some additional cost for the investment where you really ramp up any purchasing?

Yes, exactly that’s just some personal cost and fixed cost. Again there is no portfolio there yet.

Got it. And I guess revisiting Hugh's question, clarifying your goals for earnings growth, if we exclude one-time deal costs, is it accurate to think that the combination of Aktiv headwinds from the increased upfront court costs this year, and the headwinds from more costs from Pamplona, despite that, you are still focused on a 15% growth rate?

Yes, that’s our goal.

Okay. And I will jump back in queue, after just maybe one on the domestic side. We appreciate the nuanced remarks on the activities of sellers these days. Steve, in terms of on our end, thinking about what's prudent to forecast, ignoring any specific numbers and names of sellers, just directionally, is it more likely than not that the domestic volumes would likely be down this year?

Well, again the rate at which sellers are kind of coming in and out of the market right now I think it’s just tough to tell David it’s really going to depend on who comes in or stays in running for how long. I don’t think that it’s a done deal but buying volumes would be significantly negatively impacted at this point. Relative to the volumes that certainly we did in Q1-Q2, it would look like the markets going to be tighter from a supply perspective this year than last. And hopefully we’ll see kind of a reversal of both those in Q3 and Q4.

Got it, got it. We appreciate the fluidity. Just curious, you have been through, obviously, a lot of the audits, and they are longer than they used to be. Every seller has got a different timeframe and priority. But are they giving you any kind of feedback, just anything anecdotally, that suggests that once the comment period on the CFPB rulemaking is over, I guess this month, right? I mean, have any of them pretty much hinted that once we get some definitive rules, we are ready to hit the ground running?

I think that the sellers’ primary concern is the OCC as opposed to the CFPB certainly not that they’re ignoring the CFPB but is it relates to this element of their business and the selling process it’s really the OCC that has been driving this behavior in our view.

So even after last summer's OCC guidelines, are they waiting for another shoe to drop, or is it just OCC audit --?

Well I think the guideline leave some room for interpretation and we are seeing a wide variety of interpretation of those guidelines.

Got it, that’s helpful. Thank you.

Thank you. Our next question comes from Mark Hughes of SunTrust. Your question please.

Could you give a broad brush, if you look at those 13 markets, how big they are in terms of the annual supply of paper? And if not an absolute number, relative to the US, how big and in the growth rate do we expect growth in 2014 and beyond?

Yes. I’ll let Geir give you some high level numbers there. I think giving you kind of granular by country data is a little bit of a crap shoot because one of the things that’s certainly going on in especially the bigger markets there, the bigger market opportunities is a little bit of a disconnect between the amount of non-performing loans that are existing in exactly what’s being brought to market, and that’s in our commentary we talked a little bit about we think regulatory changes and Basel III perhaps squeezing some of that out. But let me see if you got may be some additional commentary you can give on the market opportunities?

It’s hard to give a common view on all of this, but the most the largest of the European market little bit of UK with north of £1 billion in investment volumes in the markets we operate in. We’re seeing growth as Steve mentioned from the significant NPL stocks that need to get off bank’s balance sheet from a tough economic environment. There is this tighter regulation on capital. And as Steve mentioned you would see that many of the markets being significantly less mature when it comes to debt purchasing compared to the U.S. And this is not a normal operating model for many banks, in most market with exception of UK where I would say it’s a very well developed debt purchase market. This market opportunity has also attracted a lot of capital across these markets, so existing players have been capitalized up, there has been some acquisitions in the national players and we have also seen some players coming into the markets. So while there are good growth opportunities, it’s clearly attracting also more capital into this space. And we think the combination of the two companies will help us to capture some of these opportunities as well. A strong focus on compliance and customer centricity, strong analytics and a very good efficient business model I think we’re well set for that.

We also run the gamut from fairly large existing market opportunity in UK to a country like Spain where we believe we have got some interesting future possibilities certainly not without competition but there are a lot of pieces there that look like they may come together to help spell future volume. But we also have some interesting situations even in countries in Central Europe that overall may not have huge NPL opportunities but where we have a really well established franchise that has a leading market share. So in some cases we have kind of a disproportionate piece of what market that is.

What's going to be your first use of cash post deal? Are you going to be looking to delever, pay down some debt? Are, you going to use free cash to buy paper and just hold this level of debt?

It's Kevin. First things first, let's get the deal purchase and then financed with debt, right? I think the next thing; this is not going to tap out our balance sheet. I have to say, the banks over in Europe, the Nordic banks, they are currently being financed by 2 of the largest banks in the Nordic region, and they've been great to work with. So we look forward to working with those guys, and possibly extending their credit facility over there, and continuing to buy over there. Again, same dry powder for here in the States as well. We're pretty optimistic that will be able to do all of those things.

I would say though overall we’re not going to be in a rush to pay down cash or pay down debt, we’re certainly not going to sit in a high cash balance situation when we’ve got debt outstanding. But at the same time we’re actually very pleased to have a little bit of financial leveraged here. And as Kevin said we’re going to maintain a good amount of dry powder and anticipate both here and in Europe, because we don’t want to miss deals. We want to continue to be an aggressive buyer in both markets, I want to make sure that everybody understands that we’re not saying, we’re going to do this active deal and that’s it we’re tapping out for 2014 far, far from it. We anticipate being as aggressive as we would have been if we hadn’t the deal.

And one more question. First, I will say I am looking forward to the investor day in Oslo which ought to be coming soon.

We’ll be pleased to host you.

That would be wonderful. The question was, in looking at those headcount numbers, I might have misinterpreted, but it looked like fairly modest headcount relative to portfolio recoveries, in a collection centric model, let's say. Is there a different method or different procedure or different staffing ratios in the new business?

Sure, just overall at a high level, Aktiv has created an operating model that really takes into consideration this unusual portfolio flow dynamic that they see in the European country. So, there may be countries where in given years very little of anything comes for sale and very little of anything is bought by Aktiv followed by a very large portfolio the following year and so they have these big evident flows in volume at a country-by-country basis although at the portfolio level it really levels itself out nicely and that’s one of the very attractive things we saw in this acquisition. However, to deal with that Aktiv has built a really neat model that allows them to use outsourcers to flex up and down as their collection needs drive. So, we do not want to dissuade them of that. We think it’s a really smart operating model. In the UK, we do have a little bit more collection born there because we have got a good size call center and so we would imagine we will flip some own portfolio work over from Bramley. But other than that just because we tend to be in-source heavy here, we are not going to drive that philosophy throughout Aktiv in Europe. We think they have got a neat model. Also as Geir mentioned in some part of their operation geographically they do a lot of bailiff work and just the nature of the collection is different. It’s not a call center type collection activity and so we tend to have fewer people on staff to deal with that.

Thank you. Our next question from Robert Napoli of William Blair. Your question please. Brian Hogan - William Blair & Company: This is actually Brian Hogan for Bob.

Hi, Brian. Brian Hogan - William Blair & Company: Hello. Questions on the revenue for Aktiv, what was the run rate in 2013?

We disclosed the EBITDA numbers on slide 12. The revenue numbers, as I was trying to describe earlier on the call, are a little problematic, simply because they are under IFRS, and it will be a different -- it will be under GAAP when we come here to the States. So I would project that if you are talking about the deltas between those two, I'm going to guess that the amortization rates would be a little higher in the States. But again, we showed that EBITDA numbers, and they are adjusted EBITDA, so it takes that amortization out of play. Brian Hogan - William Blair & Company: Okay, thank you. And then management, do you have retainers in place for Aktiv, I mean as the cultural fit you said was very strong and where are you at from a management standpoint, that’s to manage your global business?

So, the management team was a critical part of this deal for us and we have got new long-term agreement signed with Geir and his entire senior management team. Geir is going to report to me and on the European business as he has been doing. So, critical part of what we got and we believe that it is a very skilled team and one that I think can be leveraged pretty significantly, very talented, very experienced group that I think can run a much larger business than they are currently operating. Brian Hogan - William Blair & Company: Okay. Shifting to U.S. buying, what is the pricing on U.S. pay relative to a year ago; would you say it’s up, how much?

It depends. There are some portfolios that we continue to buy where pricing has moved up modestly. There are others where we have seen much more pressure. I would say overall we probably see more upward pressure on the BK side of the market than we have on the core side. But there has been upward pressure on both. Brian Hogan - William Blair & Company: All right. And then the legal channel, you are investing more in 2014. The numbers you gave, $26 million in the first quarter and $20 million to $25 million per quarter thereafter in 2014, is that on top, or is that the total number for legal costs?

Again the goal we announced in 2012 was 200% return on investment and we have been dealing that pretty handily every single quarter. So, this was just recalibrating to get back to our original goal. The goal stayed the same, it’s just now all the models can reflect the sustained over performance.

So we’ve never got the 200%. When we counted up the results at the end of day, we will well north of up 200% so we need to go little bit lower to get down to what we think is an appropriate threshold there. Brian Hogan - William Blair & Company: All right. Thank you.

Thank you. Our next question comes from Edward Hemmelgarn of Shaker Investments. Your line is open.

Just a couple of questions. One regarding your presence now in UK, one of the things you can talk about in the past is that your size has been a bit of hindrance and what’s going to be the relative market share now reflection markets with combined company?

We’ll be a top five maybe 10% or so of the market there.

And how does that compare say to the largest competitor?

Third of the size of the largest competitor, you know, I don’t. We’re a larger player but we’re not the largest.

Okay, do you have any intensions of combining the operations in the UK under one management?

Yes, at the end of the day, the European operation is all going to report to Gear and so we’re going to - once the deal is closed we’re going to have a combined UK operation. Again, we think we have some very interesting and complementary strength there. We focused on different market segments and we do different thing well. So we think putting those two organizations together is going to be pretty easy.

Then are you going to once the acquisition is completed disclose similar amounts of data under non-U.S. umbrella or something as you do for your U.S. collection efforts?

Yes, I’m sure we have to do that.

You had so much movement here or there it’s difficult I’m not sure how to go back, if you can go back to give the information but what was the adjusted EBITDA margin?

The slide show will be up on the website beginning - I think if it’s not up, it will be shortly thereafter.

All right, Okay. Thanks and congratulations.

Thank you. Our next question comes from Robert Dodd of Raymond James. Your line is open.

Think you for taking my question. On Aktiv, again, obviously the topic today, can you give us any kind of indication on the expected life of that $1.9 billion in ERC? If I heard correctly, and I may not, you indicated $318 million in cash collections in 2013, which compared to the ERC, would tend to imply they've got a very long life. Can you give us any color on that? You mentioned bailiff work, but is it majority payment plans, are these really long-term deals, or can you give us any color on that?

The 120 month is the ERC number that was given.

If you see in some of the more legal markets like central Europe and Nordics, you could easily see up to more than 20 years lifetime in a given portfolio? While in countries like Spain normalized maybe 5 to 6 years and we have a significant portion of our ERCs from some of the longer retail countries?

Thank you very much.

Thank you. Our next question comes from Sameer Gokhale of Janney Capital. Your line is open.

So just the onshore versus offshore. Was that an increase in the number of buyers in terms of wanting to do more on shoring versus offshore compared to your prior commentary? I think you said there were some in the top 10. Or is there not really that much of a change on that front?

I think we said we were aware of three last time amendments still account by my knowledge.

Okay. And the other thing is in terms of Aktiv, again, obviously, from a financial standpoint, it makes a lot of sense to expand your geographic reach. If I was to think of regulatory risks, even the changes in the US, which is of course much more mature market, but if you look at some of those countries in Europe and the lack of a better term, they seem to have a more socialistic characteristics, in the Nordic countries and other regions. With the commentary that this is a relatively less mature market, over there in those countries, how are you comfortable with the risk that there's not going to be a change to regulation there that could possibly make it -- change the way the collections work gets done there. In light of the fact that they seem to have more of a socialist bent there?

This is Geir from Aktiv. It is very hard to predict the future of what the regulatory environment will be. However, we’ve always had a very like period, I had a very cosmocentric and compliant approach and it’s all margins, it may not be a bad thing but a little bit of a tighter regulations. In markets like for instance Spain, where there are lot, is it very level of regulations, you have a lot of funds playing out there, so that would probably help us and strengthen our position as well.

Also you know one fascinating fact, I think that you know, many of us sit back and say oh gosh, the Nordics or the countries with a little higher socialist bent you know are probably very anti debt, and you know ironically I would say the, that the country that is most pro, pro-debt is the US, you know basically in the Nordic countries there are two ways to get out of a debt, you can either pay it off or die and so you know many of these markets that Aktiv is in have very interesting kind of social norms, around the fact that if you incur debt you should take social responsibility for that and repay that debt, so you know I think you got to be careful to equate you know the political bent of a particular country with regulatory risk.

Yes, that’s helpful, to get that color on the social, you know the norms there, certainly that wasn’t something I was aware of, but thank you for the commentary.

Thank you, our next question comes from Bob Napoli of William Blair, your question please.

Hey, good afternoon, so Steve is there any, did you get a special deal on any relationship with John Fredrickson, Steve Fredrickson, that’s just kind of ironic.

No, no relation.

Maybe a question for Geir. This company was taken private a couple years ago. There's some public data on Aktiv available, I think we have found an annual report through 2011, but what prompted the take private and why is the company being sold now and what has changed in the company over the last couple of years?

Well I think that when it was taken private it was a couple of reasons, first we didn’t feel that the company the perfect market evaluation so we couldn’t use the capital market for anything and for financing reasons, it was a company that come to a quite quiet period through 2010 and 2011, after several years of growth we probably grew a little bit too quickly so we hunkered down through 2010 and 11, and built up our analytic skills, focused our business model and really strengthened operations, so coming out of that we felt there was a need for basically doubling down to go back to investments and in that period, John Fredrickson took the company private and helped us to fund the business to acquire portfolios. So since then we’ve strengthened our investment team in particular, where we’ve recruited people to call it business development and talk to customers to develop the more immature markets and secure the deals from there. We’ve also strengthened analytics, continued to build on that, I think our acquisition processes, it’s very strong. They’re very diligent, and that’s what we’ve seen in the PRA as well and, we developed that and I refined the business model to shape that as Steve mentioned to go from a very much an in house model to be little more flexible business model so can we place it for larger deal when they come, I think one particular characteristic of the European market is you could do very significant deals at one bite at a time.

How does the market -- how does the flow -- I apologize if this was already discussed, because I missed part of the call. Is the pipeline -- Geir, is the outlook for 2014 purchases, would you expect to be able to purchase more than you did in 2013? What kind of visibility do you have on that flow? You work in so many countries and there are some very lumpy deal sizes. How predictable or how much visibility do you have on flow?

We believe that there will be a reasonable flow for the next couple of years because of some other factors we’ve talked about earlier, but I also had mentioned that you know the growth we’ve seen in the last couple of years in Europe has increased a lot of, has increased competition in general. So our ability to invest will depend a lot on if we can beat the competition.

Okay and just the accounting differences, Kevin I think that the, that if you exclude the ability to write off portfolios the accounting is very similar to the US is it not.

It is, that’s correct, and you hit the one big difference is that over there they can write off portfolios so your yield doesn’t need to be static and if your collections go up, you write the balance up, and obviously we can’t do that in the states.

Right.

I’ll add that FASB has proposed, FASB has proposed that we adopt a model over here very similar to IFRS but that will be several years away probably before it’s implemented,

Okay and I think the investor day should hop around to each of Aktiv’s key markets by the way so; we’re going to leave it there, thank you.

We’ll do it as well in January so I don’t know if that’s a treat or not but I think we want to wait till September maybe.

Thank you.

You bet.

Thanks, your next question comes from David Scharf of JMP Securities, your question please.

An extra kind of one-off. Steve, the other operating expense, which ticked up markedly $8 million, was there anything deal-related in there? Anything one-time we should note?

There was nothing deal-related in that. I can tell you what that’s going to be. We have to pull some detail on it.

Let’s pull the detail on him.

Okay. That's fine. Also, turning to the domestic market, again. I haven't been keeping track of the regulatory flow on this cell phone calling, but I know there was a setback a couple years ago. Is there any renewed focus or possibility that you may see the ability to do an automated dialing to mobile?

Well, you know there’s just a massive amount of litigations surrounding the TCPA in fact it’s really been where the plaintiffs so far has gone leaving the FTCPA cases alone to a greater degree and migrating the TCPA, there’s a number of large cases that are sliding their way through the courts, but there’s actually been some very interesting decisions lately that you know lead you to believe that there could be some you know we think more industry friendly decisions and as a result operating parameters that are permitted but it’s speculative to say anything at this point and you know it’s going to be a process, so I wouldn’t look for any new rules any time soon.

Got it, got it. Lastly, I think last quarter, Steve; you were talking about a new call center. Domestic, I think it was in Texas maybe. DFW? I'm just curious, based on; you're gauging this selling environment versus just three months ago. I mean, have you altered your plans for staffing collectors versus maybe what we heard on the third quarter call?

No, just let me give you a quick refresher David, I know you reason that we went to Dallas, we had a 100 plus collectors in the Philippines that were handling our Spanish speaking portfolio and we had heard from the sellers that it’s their preference to not have any more offshore activity for their accounts. So we were left with either pursuing those portfolios and having some of these calls take place in the Philippines and some here but you know organizationally, operationally we prefer to leverage scale and that’s what usually brings us efficiency so we didn’t want to separate those pools, we like to work all of our pools in one large group, so we did not have a plethora of Spanish speaking collectors in Hutchinson, or Jackson, so sought out a market that would be easier for us to fill those jobs and we selected Dallas and we’re up to nearly a 100 folks there now and we’ll be ramping to 200 I’m sure in the coming months, so no plans are altered as a result of buying, this was really in response to trying to exit the Philippines and seeing a modest increase in the size of our Spanish speaking portfolio relative to the rest of the portfolio.

And the other piece of it, you know, just looking at the core BK buying mix over the last couple of years, we bought an awful lot of core portfolio which is, you know that that’s yields per handle and so some of it is just simply trying to catch up with where he needed to be.

And David, Kevin again, part of that variance you ask about earlier, it was a couple of million bucks of accrual for the earn out of the MCM portfolio that we purchased in Q4 of 2012, so that portfolio is doing really well for us, and there was a earn out criteria to it and a liability setup and we had to expense a little more to meet those needs.

Does that earn out continue, for how much longer is it? Is it done now?

Well anything that’s booking accrual at year end it is supposed to be done, right?

Right, okay, got it.

And the good news is that, if it goes up that’s being offset by better earnings. So we were net positive on that, be up for this year.

I meant the duration, the earn out goes beyond 2013. The terms of the earn out.

Total loan out period is five years. But that will be largely big finance.

How much was non-cash interest?

For the convertible debt offering?

Yes.

I actually don’t have that number in front of me.

Okay, I will get it later.

Just a follow up on David’s question. The interest rate is 4.92% versus a coupon of 3%. Okay, so that concludes our call. PRA celebrates its 18th year of business in a few weeks. During that time PRA’s management team has delivered exceptional growth and profitability while successfully navigating a wide variety of economic competitive regulatory and operational challenges. While challenges won’t go away combination of PRA and Aktiv Kapital I believe creates a formidable competitor on our industry, one with proven management teams, a conservative balance sheet, a deep and diverse status that and remarkable analytical and operating capabilities to help us drive growth and continue exceptional results to our shareholders for many years to come. On behalf of my management team and all PRA employees I thank you for your continued investment in PRA and your continued confidence in our ability to grow and deliver long-term value you, thanks again.