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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 website, which contain a more detailed discussion of the company's business including risk 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. Steve Fredrickson Thanks, Jim, and thank you all for joining us. Today I'm pleased to report record buying, cash collections, revenue and net income for a PRA quarter. I'll have our Q2 2012 highlights in a moment. Then I'll spend a few minutes on a midyear update of each of our fee-for-service businesses. Next, Neal Stern will comment on our operational strategies; Kevin Stevenson will discuss our key financials. Then we'll open the call to Q&A. Our Q2 results continued our strong performance this year, demonstrating the strength of our business model focused on diverse revenue and earnings from our bankruptcy, core and fee businesses, as well as our strategy to in-stores collection. Here are the highlights of our Q2 results.
Cash collections, including those in the UK, were $232 million, up 32% from 2011. Domestic collections alone were $229.8 million, up 30% from a year ago. Revenue was up 29% year over year to $148 million. Net income increased 25% year over year to $32 million, translating into diluted earnings per share of $1.87 compared with $1.48 in the second quarter of 2011. Return on equity exceeded 20% in Q2, achieving the benchmark that we set as a long-term goal.We acquired a record $1.48 billion of face value domestic finance receivables for $123 million in the second quarter. These receivables were at 105 defaulted debt portfolios from 12 different sellers. Pricing continues to be quite sensitive but steady relative to Q1 2012 in both the direct-from-issuer and resale markets. With regard to expanded legal collections from those who can but won't pay their debts, I'm happy to report that we continue ahead of expectations to achieve both our two-to-one return and the six to 12-month recovery of court cost expenses. And we experienced a lower impact to earnings than expected by handily exceeding our internal projections for cash collections overall. Neal and Kevin will have more details in a moment. In spite of our expanded investment in court costs, our net margin grew to 21.7% in Q2 from 18% in Q1 2012, and fell just slightly from 22.3% in Q2 2011. We continued executing opportunistic stock purchases under our existing program during the second quarter. Through June 30, we have acquired a total of 331,449 shares at an average price of $68.56 per share, spending a total of $22.7 million of the $100 million total authorized by the Board. We will continue to monitor market conditions as we administer the remaining $77 million under the current program. Read the rest of this transcript for free on seekingalpha.com