 Leveraging Intellectual Capital Exhibit 99.1 |
 1 CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS Certain statements in this presentation constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of these factors, we refer you to the Company's Annual Report on Form 10-K as of and for the year ended December 31, 2004 and all other reports filed by the Company thereafter. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or by any other person or entity that the objectives and plans of the Company will be achieved. FORWARD-LOOKING STATEMENTS |
 2 Background Public company since 1999 Leadership change in May 2000 – Since then, we have invested over $450 million to acquire receivables with a face value of more than $15.7 billion Core business is the purchasing and collecting of charged-off consumer receivables at deep discounts Recently acquired the leading consumer bankruptcy services company Unique business model based on consumer level analytics Industry leader in consumer debt management |
 3 Strategic Vision Leverage analytics to build the leading company in the distressed consumer space – Continuously improve our differentiated analytical capabilities utilized for both acquiring and managing portfolios Continue to grow the profitable core business of purchasing unsecured defaulted consumer receivables – Focus on larger transactions to mitigate competition – Improve liquidation and increase efficiency of our business processes Build new businesses with high barriers to entry and growth potential centered around the management of distressed consumers – Strategic acquisitions (e.g., Ascension Capital) – Organic growth (e.g., Healthcare business) |
 4 The Distressed Consumer Debt Industry |
 5 Industry Dynamics Highly fragmented industry with more than 6,500 players (95% of them have less than $8mm in revenue) – Few large, sophisticated competitors – Most buyers tend to specialize in a particular asset class, delinquency range and / or geographic location – Most buyers have limited analytical tools and narrow range of collection methods Credit originators have increasingly sought to outsource the management of their defaulted receivables Pricing has risen and at current levels some new entrants may not realize desired profits |
 6 Catalysts for Growth $1,174 $1,743 $2,239 $2,786 1995 2000 2005E 2010E Consumer Debt Other Drivers ($ billions) Source: Historical data from Federal Reserve; forecasted data from Global Insight Increase in the minimum payment to 4% from 2% Ripple effect after repricing of adjustable rate mortgages Increase in volume outside the traditional credit card portfolios – Auto deficiencies – Medical – Telecom Change in bankruptcy law driving more Chapter 13’s |
 7 Our Company |
 8 Encore’s Differentiated Approach to Business Buy Right Collect Well Strategic Growth Demand Professional and Ethical Behavior Consumer level analytics Multiple collection strategies Strong management team Focus on innovation Manage Expenses |
 9 Goal is to Buy Right Account level analytics allow us to effectively target broad purchase distribution – Provides ability to create positively selected deals – Enables us to buy accounts from competitors – Applies to alternative paper types Strong relationships with nation’s largest credit grantors Months Since Face Value % of Total Face Charge-off ($ billions) Purchased 0 – 6 $2.3 15% 7 – 12 $1.7 10% 13 – 18 $2.1 14% 19 – 24 $0.9 6% 25 – 36 $4.9 31% 37+ $3.8 24% Total $15.7 100% ¹ All purchases from mid-2000 through September 2005 Purchase distribution¹ Balanced acquisition strategy |
 10 Proprietary account allocation software Legal outsourcing collections Third-party agency outsourcing Call center collections Mailing collections Account sales to third-parties Consumer analysis Use Analytical Approach to Collections Encore’s collection systems Continuous feedback Monitor / no current work effort |
 11 $33.8 $35.8 $38.6 $40.3 $47.1 $46.7 $49.1 $47.7 $64.0 $57.4 $59.9 $53.4 $65.9 $70.4 $83.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Which Leads to Strong Collections Growth 2002 2005 2003 2004 Gross Collections ($ millions) |
 12 General outbound calling New channels Collection Growth Driven By Innovation, not Replication Total Collections by Channel Type 18.5% 52.3% 81.5% 47.7% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0% 85.0% Q1 2002 Q2 2002 Q3 2002 Q4 2002 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 (% of total collections) |
 13 $19.8 $21.4 $23.1 $22.5 $25.0 $23.2 $23.0 $22.3 $27.4 $25.2 $27.3 $26.9 $31.3 $33.4 $37.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Leads to Collections Efficiency Growth fueled through innovation rather than headcount Monthly collection dollars per employee ($ thousands) 2002 2005 2003 2004 ¹ ¹ Excludes sale of portfolio of rewritten consumer notes for $4.0 million 580 557 592 628 672 711 712 729 759 731 728 670 701 757 703 Average employees, ex. Ascension |
 14 Versus our Peers, We Collect More Peer 1 Encore Capital Cumulative Collections as a % of Purchase Price 2001 Vintage 266% 206% 121% 36% 354% 294% 193% 79% 0% 50% 100% 150% 200% 250% 300% 350% 400% Year 1 Year 2 Year 3 Year 4 90% 30% 100% 39% 16% 26% 0% 20% 40% 60% 80% 100% 120% Year 1 Year 2 342% 289% 209% 125% 39% 403% 359% 284% 197% 56% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% Year 1 Year 2 Year 3 Year 4 Year 5 187% 120% 40% 228% 165% 67% 0% 50% 100% 150% 200% 250% Year 1 Year 2 Year 3 2003 Vintage 2002 Vintage 2004 and 2005 Vintages |
 15 Encore call center collector hiring and retention process 20% 76% 2000 Experienced collectors retention rate Significant focus is placed on hiring and retaining experienced collectors Promote Professional and Ethical Behavior Hiring – Behavioral test – Background checks Training – 6 months of concentrated development Compensation – Unlimited earnings potential – Reward consistency |
 16 Strategic Steps to Diversify in Complementary Areas and Enhance our Growth Potential Auto Secured loans Student loans Telecom Utilities Other asset classes / consumer types Future Areas of Opportunity Penetration into secured bankruptcy servicing through Ascension acquisition Organic expansion into medical receivables Active Approach to Broaden Business Builds upon core credit card charge-off business by expanding into higher growth areas Allows entry into growing niches within the consumer debt recovery business Affords significant cross-selling opportunities Strategic Rationale |
 17 Ascension Provides Entry into Growing Bankruptcy Servicing Opportunity ¹ Assuming all secured bankruptcy accounts are outsourced Acquired in August 2005 – Located in Arlington, Texas – 197 employees – 2004 revenue of $12.3 million Leading position in the largely untapped bankruptcy servicing market Total estimated market size of $1.2-$1.4 billion in annual fees¹ Strong cross-selling opportunities with core business Since closing the acquisition, we have added 2 significant new clients |
 18 Establishment of our Medical Debt Group Provides Entry into Growing Healthcare Opportunity Source: Nilson reports, company websites, internal analysis, press releases Bad debt in statute ($ billions, 2005E) Bad debt sold - 2004 ($ billions) $1 $39 Healthcare debt Credit card debt Healthcare debt (publicly disclosed) Credit card (not including resales) $250 – $270 $120 – $160 |
 19 Financial Highlights |
 20 $0.2 $0.5 $1.6 $1.5 $3.8 $3.3 $3.1 $4.4 $6.0 $5.6 $5.9 $5.7 $7.5 $8.1 $7.8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 $18.2 $20.1 $24.4 $27.6 $28.1 $28.4 $29.5 $31.5 $42.4 $43.6 $46.5 $46.0 $50.5 $53.8 $59.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Strong Financial Results * Excludes one-time items ¹ YTD through Q3 2005 annualized Revenue ($ millions) Net Income ($ millions) 2002 2003 2004 2005 2002 2003 2004 2005 * * * * * |
 21 2002 2003 2004 Q3 2005 $19.5 $71.4 $96.0 $111.1 2002 2003 2004 Q3 2005 Strong Balance Sheet Stockholders’ Equity Total Debt $47.7 $41.2 $66.6 $184.7 2002 2003 2004 Q3 2005 ($ millions) ($ millions) 0.6x 0.7x 1.7x 2.4x Total debt / equity |
 22 Current Facility Initiated: June 7, 2005 JPMorgan $35.0 Bank of America 30.0 Bank of Scotland 30.0 California Bank & Trust 25.0 Guaranty Bank 20.0 Citibank 15.0 First Bank 15.0 Standard Federal Bank 15.0 Bank Leumi USA 10.0 Manufacturers Bank 5.0 Total $200.0¹ Previous Facility Initiated: June 30, 2004 JPMorgan $27.5 Guaranty Bank 12.5 Banco Popular 10.0 Bank of Scotland 10.0 California Bank & Trust 10.0 Bank Leumi 5.0 Total $75.0¹ Access to Capital ¹ Excludes accordion feature allowing for an additional $25mm` ($ millions) |
 23 Investment Highlights Experienced management team Recent acquisitions diversify asset and revenue base while enhancing growth Attractive business model in a changing industry dynamic Differentiated analytical acquisition and collections approach Track record of generating superior financial returns |