Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from [Matt O’Nee] - Stephens, Inc.
[Matt O’Nee] - Stephens, Inc.
In the past we’ve talked about 4Q being a seasonally good quarter with collections and new investments. Is that something that we should expect again in 4Q?
Jim W. Moore
We certainly anticipate that.
[Matt O’Nee] - Stephens, Inc.
On both collections and the new investments?
Jim W. Moore
We’re seeing I think an uptick in collection opportunities and I think over the third quarter we’re going to see a definite increase in the fourth quarter. I believe that with what we have on our plate for potential bids fourth quarter could be very good as well.
[Matt O’Nee] - Stephens, Inc.
You mentioned some numbers in your prepared remarks with the pipeline. Can you remind us what you consider the pipeline? Is it opportunities that you see or is it things you’re actually bidding on? How do you consider the pipeline?
Jim W. Moore
It includes that we’re actively bidding on and items that we’re actively at least exploring the opportunity. Of that $6 billion in the US that I gave you earlier, about $2.6 billion of that is on deals that we are actually going to bid on and the rest would be on deals that are out there and we may get to them but we’re still evaluating the opportunities. Once we get to the point to where we believe an opportunity no longer meets the criteria of something that we can pursue, we take it out of our pipeline.
[Matt O’Nee] - Stephens, Inc.
You said it was $6 billion in 3Q. Compared to what last quarter?
Jim W. Moore
I think at the last conference call it was about $700 million in the US.
J. Bryan Baker
In addition to the $6 billion in the US we have about $1.1 billion of opportunities that are lined up also in Europe and Latin America. But our focus is going to be predominantly in the US and we feel like that’s where the strongest opportunities are. With the potential profit margins that exist there that’s where we feel like we’ve got to maintain our focus.
[Matt O’Nee] - Stephens, Inc.
If provisions came down in 3Q significantly from the second quarter, is it safe to say that collections improved significantly in 3Q from 2Q?
Jim W. Moore
They didn’t improve significantly. Actually they were off a little bit in 3Q. But at the same time that lower collection figures into our impairments because if we have impairments that are scheduled to come in to a particular quarter and it doesn’t take place, they get pushed out and that increases the impairment. So in the fourth quarter if they improve, then it could be that the cash flows that we have scheduled if they take place, that will prevent possible impairments.
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