(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~33,770,368~~30,039,200 of the Registrant’s common shares, $.00001 par value, were outstanding as of ~~October 28, 2019.~~April 30, 2020.

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. These forward-looking statements give current expectations or forecasts of future events and reflect the views and assumptions of senior management with respect to the business, financial condition, operations and prospects of Enova International, Inc. and its subsidiaries (collectively, the “Company”). When used in this report, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecast,” “project” and similar expressions or variations as they relate to the Company or its management are intended to identify forward-looking statements. Forward-looking statements address matters that involve risks and uncertainties that are beyond the ability of the Company to control and, in some cases, predict. Accordingly, there are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these statements. Key factors that could cause the Company’s actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, the following:

The foregoing list of factors is not exhaustive and new factors may emerge or changes to these factors may occur that would impact the Company’s business and cause actual results to differ materially from those expressed in any of our forward-looking statements. Additional information regarding these and other factors may be contained in the Company’s filings with the Securities and Exchange Commission (the “SEC”). Readers of this report are encouraged to review all of the Risk Factors contained in the Company’s filings

with the SEC to obtain more detail about the Company’s risks and uncertainties. All forward-looking statements involve risks, assumptions and uncertainties. The occurrence of the events described, and the achievement of the expected results, depends on many events, some or all of which are not predictable or within the Company’s control. If one or more events related to these or other risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. The forward-looking statements in this report are made as of the date of this report, and the Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this report. All forward-looking statements in this report are expressly qualified in their entirety by the foregoing cautionary statements.

	September 30,						December 31,			March 31,						December 31,
	2019			2018			2018			2020			2019			2019
Assets
Cash and cash equivalents⁽¹⁾	$	69,945		$	164,122		$	52,917		$	161,076		$	57,715		$	35,895
Restricted cash⁽¹⁾		20,719			20,897			24,342			42,742			23,168			45,069
Loans and finance receivables, net⁽¹⁾		1,001,154			838,783			859,946
Loans and finance receivables at fair value⁽¹⁾											1,093,207			—			—
Loans and finance receivables at amortized cost, net⁽¹⁾											—			752,560			1,062,650
Income taxes receivable		12,727			45,639			28,914			35,487			19,263			32,859
Other receivables and prepaid expenses⁽¹⁾		39,549			25,699			29,983			33,530			27,633			31,643
Property and equipment, net		54,951			48,514			49,553			56,216			46,820			54,540
Operating lease right-of-use assets		20,260			—			—			19,981			20,987			19,586
Goodwill		267,013			267,013			267,013			267,868			267,013			267,013
Intangible assets, net		2,452			3,523			3,255			1,918			2,987			2,185
Other assets⁽¹⁾		11,907			12,078			12,262			21,276			12,257			22,912
Assets from discontinued operations											—			114,137			—
Total assets	$	1,500,677		$	1,426,268		$	1,328,185		$	1,733,301		$	1,344,540		$	1,574,352
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses⁽¹⁾	$	122,212		$	76,188		$	89,317		$	95,893		$	79,284		$	122,163
Operating lease liabilities		36,770			—			—			35,783			38,285			35,712
Deferred tax liabilities, net		33,980			46,321			33,171			71,679			47,253			48,683
Long-term debt⁽¹⁾		873,744			951,091			857,929			1,091,732			791,908			991,181
Liabilities from discontinued operations											—			8,596			—
Total liabilities		1,066,706			1,073,600			980,417			1,295,087			965,326			1,197,739
Commitments and contingencies (Note 9)
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.00001 par value, 250,000,000 shares authorized, 35,751,763, 34,764,648 and 34,856,553 shares issued and 33,988,030, 34,274,785 and 33,584,606 outstanding as of September 30, 2019 and 2018 and December 31, 2018, respectively		—			—			—
Common stock, $0.00001 par value, 250,000,000 shares authorized, 36,112,268, 35,339,678 and 35,764,943 shares issued and 31,007,899, 33,683,763 and 32,974,714 outstanding as of March 31, 2020 and 2019 and December 31, 2019, respectively											—			—			—
Preferred stock, $0.00001 par value, 25,000,000 shares authorized, 0 shares issued and outstanding		—			—			—			—			—			—
Additional paid in capital		61,477			44,657			48,175			67,440			51,638			63,791
Retained earnings		423,234			327,744			336,415			477,082			371,086			372,681
Accumulated other comprehensive loss		(17,158	)		(12,468	)		(13,805	)		(7,807	)		(12,251	)		(3,066	)
Treasury stock, at cost (1,763,733, 489,863 and 1,271,947 shares as of September 30, 2019 and 2018 and December 31, 2018, respectively)		(33,582	)		(7,265	)		(23,017	)
Treasury stock, at cost (5,104,369, 1,655,915 and 2,790,229 shares as of March 31, 2020 and 2019 and December 31, 2019, respectively)											(98,501	)		(31,259	)		(56,793	)
Total stockholders' equity		433,971			352,668			347,768			438,214			379,214			376,613
Total liabilities and stockholders' equity	$	1,500,677		$	1,426,268		$	1,328,185		$	1,733,301		$	1,344,540		$	1,574,352

The following table presents the aggregated assets and liabilities of consolidated VIEs, which are included in the Consolidated Balance Sheets above. The assets in the table below may only be used to settle obligations of consolidated VIEs and are in excess of those obligations. See Note 121 for additional information.

	September 30,				December 31,		March 31,				December 31,
	2019		2018		2018		2020		2019		2019
Assets of consolidated VIEs, included in total assets above
Cash and cash equivalents	$	420	$	120	$	210	$	525	$	420	$	420
Restricted cash		18,618		18,678		22,168		37,802		23,167		42,354
Loans and finance receivables, net (includes allowance for losses of $34,509, $28,096 and $27,255 as of September 30, 2019 and 2018 and December 31, 2018, respectively)		340,034		291,673		318,961
Loans and finance receivables at fair value								508,276		—		—
Loans and finance receivables at amortized cost, net (includes allowance for losses of $27,227 and $38,540 as of March 31, 2019 and December 31, 2019, respectively)								—		280,711		420,690
Other receivables and prepaid expenses		9,236		2,381		2,712		4,744		5,914		9
Other assets		2,346		2,228		2,544		2,333		2,737		2,161
Total assets	$	370,654	$	315,080	$	346,595	$	553,680	$	312,949	$	465,634
Liabilities of consolidated VIEs, included in total liabilities above
Accounts payable and accrued expenses	$	3,300	$	2,514	$	3,087	$	2,790	$	2,711	$	3,171
Long-term debt		234,666		224,559		223,368		371,393		178,841		304,598
Total liabilities	$	237,966	$	227,073	$	226,455	$	374,183	$	181,552	$	307,769

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
Revenue	$	329,513		$	293,879		$	908,396		$	801,478		$	362,252		$	264,438
Change in Fair Value														(235,719	)		—
Cost of Revenue		171,266			163,763			448,608			393,810			—			(118,858	)
Gross Profit		158,247			130,116			459,788			407,668
Net Revenue/Gross Profit														126,533			145,580
Expenses
Marketing		36,993			36,011			92,559			93,133			34,558			19,061
Operations and technology		34,310			28,260			96,321			80,993			31,266			20,579
General and administrative		28,787			24,360			87,236			79,576			27,951			29,051
Depreciation and amortization		3,716			3,688			11,842			11,363			3,670			3,934
Total Expenses		103,806			92,319			287,958			265,065			97,445			72,625
Income from Operations		54,441			37,797			171,830			142,603			29,088			72,955
Interest expense, net		(18,232	)		(20,244	)		(55,847	)		(59,272	)		(20,381	)		(19,502	)
Foreign currency transaction (loss) gain		(12	)		27			(193	)		(2,265	)
Foreign currency transaction gain (loss)														41			(143	)
Loss on early extinguishment of debt		—			(12,469	)		(2,321	)		(17,179	)		—			(2,321	)
Income before Income Taxes		36,197			5,111			113,469			63,887			8,748			50,989
Provision for (benefit from) income taxes		9,112			(10,193	)		26,304			2,460
Provision for income taxes														3,000			12,010
Net income from continuing operations														5,748			38,979
Net loss from discontinued operations														(288	)		(3,962	)
Net Income	$	27,085		$	15,304		$	87,165		$	61,427		$	5,460		$	35,017
Earnings Per Share:
Earnings per common share:
Basic	$	0.80		$	0.45		$	2.58		$	1.81
Diluted	$	0.78		$	0.43		$	2.53		$	1.75
Earnings per common share – basic:
Continuing operations													$	0.18		$	1.16
Discontinued operations														(0.01	)		(0.11	)
Earnings per common share – basic													$	0.17		$	1.05
Earnings per common share – diluted:
Continuing operations													$	0.18		$	1.13
Discontinued operations														(0.01	)		(0.11	)
Earnings per common share – diluted													$	0.17		$	1.02
Weighted average common shares outstanding:
Basic		33,997			34,168			33,770			33,938			32,337			33,481
Diluted		34,577			35,665			34,492			35,200			32,833			34,421

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
Net Income	$	27,085		$	15,304		$	87,165		$	61,427		$	5,460		$	35,017
Other comprehensive loss, net of tax:
Foreign currency translation loss⁽¹⁾		(2,384	)		(1,563	)		(3,353	)		(3,760	)
Reclassification of certain deferred tax effects		—			—			—			(1,622	)
Total other comprehensive loss, net of tax		(2,384	)		(1,563	)		(3,353	)		(5,382	)
Foreign currency translation (loss) gain⁽¹⁾														(4,741	)		1,554
Total other comprehensive (loss) gain, net of tax														(4,741	)		1,554
Comprehensive Income	$	24,701		$	13,741		$	83,812		$	56,045		$	719		$	36,571

Accumulated

Additional

Other

Total

Common Stock

Paid in

Retained

Comprehensive

Treasury Stock, at cost

Stockholders'

Shares

Amount

Capital

Earnings

Loss

Shares

Amount

Equity

Balance at June 30, 2018

34,634

$
—

$
39,335

$
312,440

$
(10,905
)

(489
)

$
(7,225
)

$
333,645

Stock-based compensation expense

—

—

2,882

—

—

—

—

2,882

Shares issued for vested RSUs

9

—

—

—

—

—

—

—

Shares issued for stock option exercises

122

—

2,440

—

—

—

—

2,440

Net income

—

—

—

15,304

—

—

—

15,304

Foreign currency translation loss, net of tax

—

—

—

—

(1,563
)

—

—

(1,563
)
Purchases of treasury shares, at cost

—

—

—

—

—

(1
)

(40
)

(40
)
Balance at September 30, 2018

34,765

$
—

$
44,657

$
327,744

$
(12,468
)

(490
)

$
(7,265
)

$
352,668

Balance at June 30, 2019

35,671

$
—

$
56,910

$
396,149

$
(14,774
)

(1,682
)

$
(31,832
)

$
406,453

Stock-based compensation expense

—

—

3,387

—

—

—

—

3,387

Shares issued for vested RSUs

10

—

—

—

—

—

—

—

Shares issued for stock option exercises

71

—

1,180

—

—

—

—

1,180

Net income

—

—

—

27,085

—

—

—

27,085

Foreign currency translation loss, net of tax

—

—

—

—

(2,384
)

—

—

(2,384
)
Purchases of treasury shares, at cost

—

—

—

—

—

(82
)

(1,750
)

(1,750
)
Balance at September 30, 2019

35,752

$
—

$
61,477

$
423,234

$
(17,158
)

(1,764
)

$
(33,582
)

$
433,971

										Accumulated																					Accumulated
					Additional					Other									Total							Additional					Other									Total
	Common Stock				Paid in		Retained			Comprehensive			Treasury Stock, at cost						Stockholders'			Common Stock				Paid in		Retained			Comprehensive			Treasury Stock, at cost						Stockholders'
	Shares		Amount		Capital		Earnings			Loss			Shares			Amount			Equity
Balance at December 31, 2017		33,933	$	—	$	29,781	$	264,695		$	(7,086	)		(428	)	$	(5,703	)	$	281,687
Stock-based compensation expense		—		—		8,149		—			—			—			—			8,149
Shares issued for vested RSUs		513		—		—		—			—			—			—			—
Shares issued for stock option exercises		319		—		6,727		—			—			—			—			6,727
Net income		—		—		—		61,427			—			—			—			61,427
Foreign currency translation loss, net of tax		—		—		—		—			(3,760	)		—			—			(3,760	)
Purchases of treasury shares, at cost		—		—		—		—			—			(62	)		(1,562	)		(1,562	)
Reclassification of certain deferred tax effects		—		—		—		1,622			(1,622	)		—			—			—
Balance at September 30, 2018		34,765	$	—	$	44,657	$	327,744		$	(12,468	)		(490	)	$	(7,265	)	$	352,668
																						Shares		Amount		Capital		Earnings			Loss			Shares			Amount			Equity
Balance at December 31, 2018		34,857	$	—	$	48,175	$	336,415		$	(13,805	)		(1,272	)	$	(23,017	)	$	347,768			34,857	$	—	$	48,175	$	336,415		$	(13,805	)		(1,272	)	$	(23,017	)	$	347,768
Stock-based compensation expense		—		—		9,784		—			—			—			—			9,784			—		—		3,074		—			—			—			—			3,074
Shares issued for vested RSUs		534		—		—		—			—			—			—			—			427		—		—		—			—			—			—			—
Shares issued for stock option exercises		361		—		3,518		—			—			—			—			3,518			56		—		389		—			—			—			—			389
Net income		—		—		—		87,165			—			—			—			87,165
Net income from continuing operations																							—		—		—		38,979			—			—			—			38,979
Net loss from discontinued operations																							—		—		—		(3,962	)		—			—			—			(3,962	)
Foreign currency translation loss, net of tax																							—		—		—		—			1,554			—			—			1,554
Purchases of treasury shares, at cost																							—		—		—		—			—			(384	)		(8,242	)		(8,242	)
Cumulative effect of accounting change																							—		—		—		(346	)		—			—			—			(346	)
Balance at March 31, 2019																							35,340	$	—	$	51,638	$	371,086		$	(12,251	)		(1,656	)	$	(31,259	)	$	379,214

Balance at December 31, 2019																							35,765	$	—	$	63,791	$	372,681		$	(3,066	)		(2,790	)	$	(56,793	)	$	376,613
Stock-based compensation expense																							—		—		3,460		—			—			—			—			3,460
Shares issued for vested RSUs																							331		—		—		—			—			—			—			—
Shares issued for stock option exercises																							16		—		189		—			—			—			—			189
Net income from continuing operations																							—		—		—		5,748			—			—			—			5,748
Net loss from discontinued operations																							—		—		—		(288	)		—			—			—			(288	)
Foreign currency translation loss, net of tax		—		—		—		—			(3,353	)		—			—			(3,353	)		—		—		—		—			(4,741	)		—			—			(4,741	)
Purchases of treasury shares, at cost		—		—		—		—			—			(492	)		(10,565	)		(10,565	)		—		—		—		—			—			(2,314	)		(41,708	)		(41,708	)
Cumulative effect of accounting change (Note 1)		—		—		—		(346	)		—			—			—			(346	)		—		—		—		98,941			—			—			—			98,941
Balance at September 30, 2019		35,752	$	—	$	61,477	$	423,234		$	(17,158	)		(1,764	)	$	(33,582	)	$	433,971
Balance at March 31, 2020																							36,112	$	—	$	67,440	$	477,082		$	(7,807	)		(5,104	)	$	(98,501	)	$	438,214

	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2019			2018			2020			2019
Cash Flows from Operating Activities
Net Income	$	87,165		$	61,427		$	5,460		$	35,017
Add: net loss from discontinued operations								288			3,962
Net income from continuing operations								5,748			38,979
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		11,842			11,363			3,670			3,934
Amortization of deferred loan costs and debt discount		4,302			4,526			1,643			1,755
Change in fair value								235,719			—
Cost of revenue		448,608			393,810			—			118,858
Stock-based compensation expense		9,784			8,149			3,460			3,074
Loss on early extinguishment of debt		2,321			17,179			—			2,321
Operating leases, net		(1,135	)		—			(340	)		(376	)
Lease termination and cease-use costs		370			—			—			370
Deferred income taxes, net		1,817			34,894			(3,212	)		8,023
Other		—			55
Changes in operating assets and liabilities:
Finance and service charges on loans and finance receivables		(20,616	)		(24,465	)		31,686			317
Other receivables and prepaid expenses		(9,000	)		(2,285	)
Other receivables and prepaid expenses and other assets								(2,865	)		2,439
Accounts payable and accrued expenses		2,996			5,054			(28,814	)		(24,052	)
Current income taxes		67,451			(41,547	)		6,107			50,949
Cash flows from operating activities - continuing operations								252,802			206,591
Cash flows from operating activities - discontinued operations								(288	)		14,489
Net cash provided by operating activities		605,905			468,160			252,514			221,080
Cash Flows from Investing Activities
Loans and finance receivables originated or acquired		(1,412,055	)		(1,277,958	)		(397,460	)		(320,822	)
Loans and finance receivables repaid		841,523			772,020			219,275			225,921
Acquisitions, net of cash acquired								(3,597	)		—
Purchases of property and equipment		(16,459	)		(11,303	)		(5,156	)		(4,425	)
Other investing activities		4			93			57			—
Cash flows from investing activities - continuing operations								(186,881	)		(99,326	)
Cash flows from investing activities - discontinued operations								—			(4,829	)
Net cash used in investing activities		(586,987	)		(517,148	)		(186,881	)		(104,155	)
Cash Flows from Financing Activities
Borrowings under revolving line of credit		235,049			109,000			100,250			45,000
Repayments under revolving line of credit		(232,049	)		(109,000	)		(67,000	)		(67,000	)
Borrowings under securitization facilities		122,800			162,413			119,200			37,800
Repayments under securitization facilities		(114,043	)		(147,601	)		(53,224	)		(84,090	)
Issuance of senior notes		—			375,000
Repayments of senior notes		—			(228,514	)
Debt issuance costs paid		(702	)		(9,156	)		(372	)		(378	)
Debt prepayment penalty paid		(1,392	)		(13,073	)		—			(1,392	)
Payment of promissory note		—			(3,000	)
Proceeds from exercise of stock options		3,518			6,727			189			389
Treasury shares purchased		(10,565	)		(1,562	)		(41,708	)		(8,242	)
Net cash provided by financing activities		2,616			141,234
Net cash provided by (used in) financing activities								57,335			(77,913	)
Effect of exchange rates on cash, cash equivalents and restricted cash		(8,129	)		(5,371	)		(114	)		1,949
Net increase in cash, cash equivalents and restricted cash		13,405			86,875			122,854			40,961
Less: increase in cash, cash equivalents and restricted cash from discontinued operations								—			(10,361	)
Change in cash, cash equivalents and restricted cash from continuing operations								122,854			30,600
Cash, cash equivalents and restricted cash at beginning of year		77,259			98,144			80,964			50,283
Cash, cash equivalents and restricted cash at end of period	$	90,664		$	185,019		$	203,818		$	80,883

Supplemental Disclosures
Loans and finance receivables renewed	$	201,207		$	282,486		$	22,281		$	33,458

The Company operates an internet-based lending platform to serve customers in need of cash to fulfill their financial responsibilities. Through a network of direct and indirect marketing channels, the Company offers funds to its customers through a variety of unsecured loan and finance receivable products. The business is operated primarily through the internet to provide convenient, fully-automated financial solutions to its customers. The Company originates, arranges, guarantees or purchases consumer loans and provides financing to small businesses through a line of credit account, installment loan or receivables purchase agreement product (“RPAs”). Consumer loans include ~~short-term~~installment loans and line of credit ~~accounts and installment loans.~~accounts. RPAs represent a right to receive future receivables from a small business. ~~“Loans and finance receivables” include~~The Company also provides services related to third-party lenders’ consumer ~~loans, small~~loan products by acting as a credit services organization or credit access business ~~lines~~on behalf of ~~credit, small business installment loans and RPAs.~~consumers in accordance with applicable state laws (“CSO program”).

The consolidated financial statements of the Company reflect the historical results of operations and cash flows of the Company during each respective period. The consolidated financial statements include goodwill and intangible assets arising from businesses previously acquired. The financial information included herein may not be indicative of the consolidated financial position, operating results, changes in stockholders’ equity and cash flows of the Company in the future. Intercompany transactions are eliminated.

The Company consolidates any variable interest entity (“VIE”) where it has been determined it is the primary beneficiary. The primary beneficiary is the entity which has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance as well as the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.

On October 25, 2019, the Company’s U.K. businesses were placed into administration, which resulted in treatment of the businesses as discontinued operations for all periods presented. Throughout these consolidated financial statements, unless otherwise noted, current and prior year financial information is presented as if the U.K. businesses were excluded from continuing operations as required. For further information about the placement of the segment into administration, refer to “Discontinued Operations” below.

The consolidated financial statements presented as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ are unaudited but, in management’s opinion, include all adjustments ~~consisting only of normal recurring adjustments,~~ necessary for a fair ~~statement~~presentation of the results for such interim periods. Operating results for the ~~three and nine-month periods~~three-month period are not necessarily indicative of the results that may be expected for the full fiscal year. Certain reclassifications have been made to prior periods to conform to the current presentation, including the incorporation of short-term loans into “Installment loans and RPAs” in disclosures that include product groupings.

These consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements as of December 31, ~~2018~~2019 and ~~2017~~2018 and for the years ended December 31, 2019, 2018 ~~2017~~ and ~~2016~~2017 and related notes, which are included on Form 10-K filed with the SEC on February 27, ~~2019.~~2020.

Beginning in 2007, the Company provided services in the United Kingdom under various brands, including QuickQuid, Pounds to Pocket and On Stride. Due in part to the level of claim and legal settlement costs incurred in conducting our U.K. business and unsuccessful discussions with U.K regulators, on October 24, 2019, the Company announced its intent to exit the U.K. market. On October 25, 2019, Grant Thornton LLP, a licensed U.K. insolvency practitioner, was appointed as administrators (“Administrators”) to take control of management of the U.K. businesses. The effect of the U.K. businesses’ entry into administration was to place their management, affairs, business and property under the direct control of the Administrators. Accordingly, the Company deconsolidated its U.K. businesses as of October 25, 2019 and is presenting them as discontinued operations for all periods presented in these consolidated financial statements. The Company recorded a one-time after-tax charge of $74.5 million, including one-time cash charges of $52.2 million, in the fourth quarter of 2019 as a result of placing the U.K. businesses into administration. During the three months ended March 31, 2020, the Company recorded an impairment charge of $0.4 million ($0.3 million net of taxes) to write down a receivable on certain expenses incurred by the Company prior to administration that were deemed non-reimbursable by the Administrators.

The Company entered into a service agreement with the Administrators under which the Company provides certain administrative, technical and other services in exchange for compensation by the Administrators. The initial term of the agreement is 12 months with options to extend the term for three-month periods. During the three months ended March 31, 2020, the Company recorded $1.9

million in revenue related to these services. As of March 31, 2020, the Administrators owed the Company $1.0 million related to services provided.

The following table provides the aggregate carrying amounts of the assets and liabilities of the U.K. businesses included in the Company’s consolidated balance sheets (in thousands):

The following table provides the financial results of the U.K. businesses, which meet the criteria of discontinued operations and, therefore, are excluded from the Company's results of continuing operations (in thousands):

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets (in thousands):

	September 30,				March 31,
	2019		2018		2020		2019
Cash and cash equivalents	$	69,945	$	164,122	$	161,076	$	57,715
Restricted cash		20,719		20,897		42,742		23,168
Total cash, cash equivalents and restricted cash	$	90,664	$	185,019	$	203,818	$	80,883

~~Reclassification of Accumulated Other Comprehensive Income~~Loans and Finance Receivables

~~In May 2009 and October 2009,~~January 1, 2020, the Company ~~began providing services in Australia~~carried its loans and ~~Canada under~~finance receivables at amortized cost, less an allowance for estimated losses and unamortized net deferred origination costs. In determining the brand name DollarsDirect. Due to the small size of the Australian and Canadian markets and our limited operations there, we decided to exit those markets in 2016 and reallocate our resources to our other existing businesses. As a result, we stopped originating loans in those countries and have wound down our loan portfolios. During the quarter ended March 31, 2018,allowance, the Company ~~continued the liquidation process~~applied a documented systematic methodology generally at a product level with charge-offs and recoveries, recorded as “Cost of ~~the legal entities related to Australia and Canada and recorded a $2.3 million loss to “Foreign currency transaction loss”~~revenue” in the consolidated statements of ~~income~~income. The allowance for single-pay installment loans classified as current was based on historical loss rates adjusted for recent default trends for current loans. For delinquent single-pay loans, the allowance was based on a six-month rolling average of loss rates by stage of collection. For other installment loans, RPAs and line of credit accounts, the Company generally used either a migration analysis or roll-rate based methodology to ~~recognize~~estimate losses inherent in the ~~cumulative translation adjustment balance that had been previously recorded to “Accumulated other comprehensive loss”~~portfolio. The allowance under the migration analysis and roll-rate methodology was based on historical charge-off experience and the ~~consolidated balance sheets.~~

~~In February 2016,~~loss emergence period, which represented the ~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016‑02,~~ ~~Leases (Topic 842)~~ ~~(“ASU 2016‑02”). ASU 2016‑02 requires lessee recognition on~~average amount of time between the ~~balance sheet~~first occurrence of a ~~right-of-use asset~~loss event and the charge-off of a ~~lease liability, initially measured at~~loan or RPA. The factors the ~~present value~~Company considered to assess the adequacy of the ~~lease payments. It further requires recognition in the income statement~~allowance included past due performance, historical behavior of a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a generally straight-line basis. It also requires classification of all cash payments within operating activities in the statement of cash flows. In July 2018, the FASB issued ASU 2018‑11, ~~Leases (Topic 842): Targeted Improvements~~ ~~(“ASU 2018‑11”), which provides targeted improvements to ASU 2016‑02 by providing an additional optional transition method~~monthly vintages, underwriting changes, delinquency status, payment history and ~~a lessor practical expedient for lease and non-lease components. In March 2019, the FASB issued ASU 2019‑01,~~ ~~Leases (Topic 842): Codification Improvements~~ ~~(“ASU 2019‑01”), which clarifies transition disclosures related to ASC 250,~~ ~~Accounting Changes and Error Corrections. ASU 2016‑02 and ASU 2019‑01 became effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2018.~~recency factors.

~~The Company adopted ASU 2016‑02 and ASU 2019‑01 on~~Beginning January 1, ~~2019 and elected~~2020, the ~~optional transition method permitted by ASU 2018‑11. The~~ Company elected the package of transition practical expedients, which allows it to not reassess whether any expired or existing contracts are or contain leases and to not reassess the lease classification for existing or expired leases. The Company also elected the practical expedient to not separate lease and associated non-lease components and the short-term lease exception. The following table sets forth the impact of adoption as of January 1, 2019 (in thousands):

~~In August 2018, the FASB issued ASU 2018‑15,~~ ~~Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract~~ (“ASU 2018‑15”). ASU 2018‑15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancellable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. The effective date of this pronouncement is for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The standard can be adopted either using the prospective or retrospective transition approach. The Company does not expect that the adoption of ASU 2018‑15 will have a material effect on its consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017‑04,~~ ~~Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment~~ (“ASU 2017‑04”) to simplify the accounting for goodwill impairment. ASU 2017‑04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017‑04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company does not expect that the adoption of ASU 2017‑04 will have a material effect on its consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016‑13,~~ ~~Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016‑13”). The amendments in ASU 2016‑13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In April 2019, the FASB issued ASU 2019-04, ~~Codification Improvements to Topic 326, Financial~~

~~Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,~~ ~~which provides subsequent amendments to the initial guidance in ASU 2016‑13. In May 2019, the FASB issued ASU 2019-05,~~ ~~Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief,~~ ~~which provides entities that have certain instruments within the scope of ASC 326-20,~~ ~~Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect~~utilizes the fair value option ~~in ASC 825-10,~~ ~~Financial Instruments—Overall, applied~~ on ~~an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13. ASU 2016‑13 is effective for annual periods beginning after December 15, 2019,~~its entire loan and interim periods within those annual periods. The Company is evaluating its alternatives with respect to the available accounting methods under ASU 2016‑13, including the fair value option. If the fair value option is not utilized, adoption of ASU 2016-13 will increase the allowance for credit losses with a resulting negative adjustment to retained earnings on the date of adoption.

~~Revenue generated from the Company’s~~finance receivable portfolio. As such, loans and finance receivables ~~for~~are carried at fair value in the ~~three~~consolidated balance sheet with changes in fair value recorded in the consolidated income statement. To derive the fair value, the Company generally utilizes discounted cash flow analyses that factor in estimated losses and ~~nine months ended September 30, 2019~~prepayments over the estimated duration of the underlying assets. Loss and ~~2018 was as follows (dollars~~prepayment assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that the Company believes a market participant would require. Accrued and unpaid interest and fees are included in ~~thousands):~~

The Company classifies its loans and finance receivables as either current or delinquent. ~~Short-term loans are considered delinquent when~~When a customer does not make a scheduled payment ~~of an amount due is not made~~ as of the due ~~date. If a line of credit account or installment loan customer misses one payment,~~date, that payment is considered delinquent, and the ~~balance~~remainder of the ~~loan~~receivable balance is considered current. If ~~a line of credit account or installment loan~~the customer does not make two consecutive payments, the entire account or loan is classified as delinquent and placed on a non-accrual status. The Company allows for normal payment processing time before considering a loan delinquent but does not provide for any additional grace period.

Where permitted by law and as long as a loan is not considered delinquent, a customer may choose to renew or extend the due date on certain installment loans. In order to renew or extend a single-pay loan, a customer must agree to pay the current finance charge for the right to make a later payment of the outstanding principal balance plus an additional finance charge. In order to renew an installment loan, the customer enters into a new installment loan contract and agrees to pay the principal balance and finance charge in accordance with the terms of the new loan contract. If a single-pay loan is renewed, but the customer fails to pay that loan’s current finance charge as of the due date, the unpaid finance charge is classified as delinquent.

The Company does not accrue interest on delinquent loans and does not resume accrual of interest on a delinquent loan unless it is returned to current status. In addition, delinquent loans generally may not be renewed, and if, during its attempt to collect on a delinquent loan, the Company allows additional time for payment through a payment plan or a promise to pay, it is still considered delinquent. Generally, all payments received are first applied against accrued but unpaid interest and fees and then against the principal balance of the loan.

~~Allowance and Liability for Estimated Losses on Loans and Finance Receivables~~

The Company monitors the performance of its loan and finance receivable portfolios and maintains either an allowance or liability for estimated losses on loans and finance receivables (including revenue, fees and/or interest) at a level estimated to be adequate to absorb losses inherent in the portfolio. The allowance for losses on the Company’s owned loans and finance receivables reduces the outstanding loans and finance receivables balance in the consolidated balance sheets. The Company provides services related to third-party lenders’ short-term and installment consumer loan products by acting as a credit services organization or credit access business, which it refers to as its CSO programs, on behalf of consumers in accordance with applicable state laws. The liability for estimated losses related to loans guaranteed under its CSO programs is initially recorded at fair value and is included in “Accounts payable and accrued expenses” in the consolidated balance sheets.

In determining the allowance or liability for estimated losses on loans and finance receivables, the Company applies a documented systematic methodology. In calculating the allowance or liability for receivable losses, outstanding loans and finance receivables are divided into discrete groups of short-term loans, line of credit accounts, installment loans and RPAs and are analyzed as current or delinquent. Increases in either the allowance or the liability, net of charge-offs and recoveries, are recorded as a “Cost of revenue” in the consolidated statements of income.

The allowance or liability for short-term loans classified as current is based on historical loss rates adjusted for recent default trends for current loans. For delinquent short-term loans, the allowance or liability is based on a six-month rolling average of loss rates by stage of collection. For line of credit account, installment loan and RPA portfolios, the Company generally uses either a migration analysis or roll-rate based methodology to estimate losses inherent in the portfolio. The allowance or liability calculation under the migration analysis and roll-rate methodology is based on historical charge-off experience and the loss emergence period, which represents the average amount of time between the first occurrence of a loss event and the charge-off of a loan or RPA. The factors the Company considers to assess the adequacy of the allowance or liability include past due performance, historical behavior of monthly vintages, underwriting changes and recent trends in delinquency in the migration analysis. The roll-rate methodology is based on delinquency status, payment history and recency factors to estimate future charge-offs.

~~The Company fully reserves for loans and finance receivables once the receivable or a portion of the receivable has been classified as delinquent for 60 consecutive days and~~ generally charges off loans and finance receivables between 60 and 65 days delinquent. If a loan or finance receivable is deemed uncollectible ~~before it is fully reserved,~~prior to this, it is charged off at that point. Loans and finance receivables classified as delinquent generally have an age of one to 64 days from the date any portion of the receivable became delinquent, as defined above. Recoveries on loans and finance receivables that were previously charged ~~to the allowance~~off are ~~credited to the allowance~~generally recognized when collected.

The ~~components~~Company recognizes revenue based on the financing products and services it offers and on loans it acquires. “Revenue” in the consolidated statements of ~~Company-owned~~income includes: interest income, finance charges, fees for services provided through the Company’s CSO programs (“CSO fees”), revenue on RPAs, service charges, draw fees, minimum billing fees, purchase fees, origination fees, late fees and non-sufficient funds fees as permitted by applicable laws and pursuant to the agreement with the customer. Interest is recognized on an effective yield basis over the contractual term of the loan on installment loans, the estimated outstanding period of the draw on line of credit accounts, or the projected delivery term on RPAs. CSO fees are recognized over the term of the loan. Late and nonsufficient funds fees are recognized when assessed to the customer.

Prior to the adoption of the fair value option effective January 1, 2020, origination fees as well as certain direct costs associated with originating loans were deferred and amortized into or against revenue on an effective yield basis over the term of the loan or the projected delivery term of the finance receivable. Subsequent to the election of the fair value option, these fees and costs are no longer eligible for deferral. As such, origination fees on installment loans, purchase fees on RPAs, and draw fees on line of credit accounts are recognized when assessed to the customer.

Marketing expenses consist of digital costs, lead purchase costs and offline marketing costs such as television and direct mail advertising. With the adoption of the fair value option on January 1, 2020, all marketing expenses are expensed as incurred. Prior to January 1, 2020, marketing costs directly related to loan and RPA originations were deferred and amortized against revenue, whereas marketing costs not directly resulting in loan and RPA originations were expensed as incurred.

As part of the Company’s overall funding strategy and as part of its efforts to support its liquidity from varying sources, the Company has established a securitization program through several securitization facilities. The Company transferred certain consumer loan receivables to VIEs which issue notes backed by the underlying consumer loan receivables and are serviced by another wholly owned subsidiary of the Company. The cash flows from the loans held by the VIEs are used to repay obligations under the notes.

The Company is required to evaluate the VIEs for consolidation. The Company has the ability to direct the activities of the VIEs that most significantly impact the economic performance of the entities as the servicer of the securitized loan receivables. Additionally, the Company has the right to receive residual payments, which expose it to potentially significant losses and returns. Accordingly, the Company determined it is the primary beneficiary of the VIEs and is required to consolidate them. The assets and liabilities related to the VIEs are included in the Company’s consolidated financial statements and are accounted for as secured borrowings.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016‑13”). The amendments in ASU 2016‑13 replace the incurred loss impairment methodology in current GAAP with a methodology that reflects lifetime expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In April 2019 and November 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, respectively, which provide subsequent amendments to the initial guidance in ASU 2016‑13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief, which provides entities that have certain instruments within the scope of ASC 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost, with an option to irrevocably elect the fair value option in ASC 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of ASU 2016-13. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which sets the mandatory effective date of ASU 2016‑13 for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for annual periods beginning after December 15, 2019, and interim periods within those annual periods.

The Company adopted ASU 2016-13 and the related aforementioned ASUs under the modified-retrospective method effective January 1, 2020 and elected the fair value option to account for all loans and finance ~~receivables at September 30, 2019~~receivables. The Company believes that the fair value option better reflects the value of its portfolio and ~~2018~~its future economic performance as well as more closely aligning with the Company’s marginal decision-making processes that rely on risk-based pricing and ~~December 31, 2018 were as follows (dollars in thousands):~~discounted cash flow methodologies. In

accordance with the transition guidance, the Company (i) released the allowance for estimated losses on loans and finance receivables at that date; (ii) released the unamortized net deferred origination costs at that date; and (iii) measured the loans and finance receivables at fair value. As a result of the adoption of this ASU, the Company’s loans and finance receivables are carried at fair value with changes in fair value recognized directly in earnings and origination fees and costs are no longer eligible for deferral.

The following table summarizes the impact of adoption on the consolidated balance sheet as of January 1, 2020 (in thousands):

In August 2018, the FASB issued ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”). ASU 2018-15 requires implementation costs incurred by customers in cloud computing arrangements to be deferred over the noncancelable term of the cloud computing arrangements plus any optional renewal periods (1) that are reasonably certain to be exercised by the customer or (2) for which exercise of the renewal option is controlled by the cloud service provider. The effective date of this pronouncement is for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and early adoption is permitted. The standard can be adopted either using the prospective or retrospective transition approach. The adoption of ASU 2018-15 did not have a material effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. As permitted in the transition guidance, the Company adopted ASU 2018-13 in the first quarter of 2020, which did not have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) to simplify the accounting for goodwill impairment. ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and will not have an impact on the Company’s consolidated financial statements unless goodwill is deemed to be impaired.

In November 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also clarifying and amending existing guidance to improve consistent application. ASU 2019-12 is effective in fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact ASU 2019-12 will have on its consolidated financial statements.

Revenue generated from the Company’s loans and finance receivables for the three months ended March 31, 2020 and 2019 was as follows (dollars in thousands):

The components of Company-owned loans and finance receivables at March 31, 2020 were as follows (dollars in thousands):

Changes in the fair value of Company-owned loans and finance receivables during the three months ended March 31, 2020 were as follows (dollars in thousands):

Prior to January 1, 2020, the Company carried its loans and finance receivables at amortized cost, including unamortized net deferred origination costs, less an allowance for estimated losses. The components of Company-owned loans and finance receivables at March 31, 2019 and December 31, 2019 were as follows (dollars in thousands):

Changes in the allowance for losses for the Company-owned loans and finance receivables and the liability for losses on the Company’s guarantees of third-party lender-owned loans during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2019 ~~and 2018~~ were as follows (dollars in thousands):

	Three Months Ended September 30, 2019												Three Months Ended March 31, 2019
	Short-term			Line of Credit			Installment Loans and						Installment Loans and			Line of Credit
	Loans			Accounts			RPAs			Total			RPAs			Accounts			Total
Allowance for losses for Company-owned loans and finance receivables:
Balance at beginning of period	$	13,729		$	51,419		$	90,032		$	155,180		$	93,205		$	51,009		$	144,214
Cost of revenue		12,195			83,755			75,339			171,289			81,860			37,900			119,760
Charge-offs		(19,026	)		(66,186	)		(102,497	)		(187,709	)		(113,992	)		(51,206	)		(165,198	)
Recoveries		4,716			6,425			23,297			34,438			20,079			3,660			23,739
Effect of foreign currency translation		(126	)		—			(688	)		(814	)		(26	)		—			(26	)
Balance at end of period	$	11,488		$	75,413		$	85,483		$	172,384		$	81,126		$	41,363		$	122,489
Liability for third-party lender-owned loans:
Balance at beginning of period	$	1,301		$	—		$	425		$	1,726		$	2,166		$	—		$	2,166
(Decrease) increase in liability		(99	)		—			76			(23	)
Decrease in liability														(902	)		—			(902	)
Balance at end of period	$	1,202		$	—		$	501		$	1,703		$	1,264		$	—		$	1,264

In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for ~~short-term and~~ installment loans and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default. As of ~~September 30, 2019 and 2018 and December~~March 31, ~~2018,~~2020 the ~~amount of~~ consumer loans guaranteed by the Company ~~was $23.6 million, $30.1 million and $29.7 million, respectively, representing amounts due under consumer loans originated by third-party lenders under the CSO programs. The~~had an estimated fair value of $12.4 million and an outstanding principal balance of $10.3 million. As of March 31, 2020, March 31, 2019 and December 31, 2019, the ~~liability for estimated losses~~outstanding principal balances on consumer loans guaranteed by the Company ~~of $1.7~~were $10.3 million, ~~$2.2~~$22.3 million and ~~$2.2~~$27.6 million, ~~as of September 30, 2019 and 2018 and December 31, 2018, respectively, is~~respectively. These loans are not included ~~in “Accounts payable and accrued expenses”~~ in the consolidated balance ~~sheets.~~

~~In order to leverage its online lending platform,~~sheets as the Company launched a program with a bank in 2016 to provide technology, marketing services, and loan servicing for near-prime unsecured consumer installment loans. Under the program, the Company received marketing and servicing fees while the bank received an origination fee. The bank had the ability to selldoes not own the loans ~~it originated~~prior to the Company. In May 2018, as a result of a change in the law in Ohio, our bank partner suspended lending and the Company suspended purchasing loans through this program. The Company plans to continue and grow this program by adding new partners and expanding into additional states.default.

The Company has operating leases primarily for its corporate headquarters, other offices located in the U.S. and the U.K. and certain equipment. The Company’s leases have remaining lease terms of less than one year to nine years. Certain leases include options to extend the leases for up to five years, while others include options to terminate the leases within one year. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. All other operating leases are recorded on the consolidated balance sheet with right-of-use assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilitiesare recognized at the commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The right-of-use assets represent the lease liability~~, plus any lease payments made at or before the commencement date, less any lease incentives received.~~ If a lease does not provide an implicit rate, the Company uses its incremental secured borrowing rate, adjusted for the maturity date, based on information available at the commencement date in determining the present value of lease payments.Lease agreements with lease and non-lease components are accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term and is recorded in general and administrative expense.

~~Lease expenses for the three and nine months ended September 30, 2019 were as follows (in thousands):~~

~~Future minimum lease payments as of September 30, 2019 are as follows (in thousands):~~

~~The weighted average remaining lease term and discount rate as of September 30, 2019 were as follows:~~

~~Supplemental cash flow disclosures related to leases for the nine months ended September 30, 2019 were as follows (in thousands):~~

The Company’s long-term debt instruments and balances outstanding as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018~~2019 were as follows (dollars in thousands):

	September 30,						December 31,			March 31,						December 31,
	2019			2018			2018			2020			2019			2019

Securitization notes	$	236,052		$	226,218		$	227,288		$	373,864		$	181,000		$	307,885
Revolving line of credit		25,000			—			22,000			105,250			—			72,000
9.75% senior notes due 2021		—			115,821			—
8.50% senior notes due 2024		250,000			250,000			250,000			250,000			250,000			250,000
8.50% senior notes due 2025		375,000			375,000			375,000			375,000			375,000			375,000
Subtotal		886,052			967,039			874,288			1,104,114			806,000			1,004,885
Less: Long-term debt issuance costs		(12,308	)		(15,948	)		(16,359	)		(12,382	)		(14,092	)		(13,704	)
Total long-term debt	$	873,744		$	951,091		$	857,929		$	1,091,732		$	791,908		$	991,181

Weighted average interest rates on long-term debt were ~~8.74%~~8.15% and ~~9.80%~~9.03% during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. As of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018,~~2019, the Company was in compliance with all covenants and other requirements set forth in the prevailing long-term debt agreements.

On September 19, 2018, the Company issued and sold $375.0 million in aggregate principal amount of 8.50% Senior Notes due 2025 (the “2025 Senior Notes”). The 2025 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States pursuant to Regulation S under the Securities Act. The 2025 Senior Notes bear interest at a rate of 8.50% annually on the principal amount payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2019. The 2025 Senior Notes were sold at a price of 100%. The 2025 Senior Notes will mature on September 15, 2025. The 2025 Senior Notes are unsecured debt obligations of the Company, and are unconditionally guaranteed by certain of the Company’s domestic subsidiaries.

The 2025 Senior Notes are redeemable at the Company’s option, in whole or in part, (i) at any time prior to September 15, 2021 at 100% of the aggregate principal amount of 2025 Senior Notes redeemed plus the applicable “make whole” premium specified in the indenture that governs the Company’s 2025 Notes (the “2025 Senior Notes Indenture”), plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after September 15, 2021 at the premium, if any, specified in the 2025 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to September 15, 2021, at its option, the Company may redeem up to 40% of the aggregate principal amount of the 2025 Senior Notes at a redemption price of 108.5% of the aggregate principal amount of 2025 Senior Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2025 Senior Notes Indenture.

The 2025 Senior Notes and the related guarantees have not been and will not be registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

The Company used a portion of the net proceeds of the 2025 Senior Notes offering to retire $295.0 million of the remaining outstanding 9.75% senior notes due 2021 (the “2021 Senior Notes) and pay the related accrued interest, premiums, fees and expenses associated therewith. The remaining amount was used for general corporate purposes.

On September 1, 2017, the Company issued and sold $250.0 million in aggregate principal amount of 8.50% Senior Notes due 2024 (the “2024 Senior Notes”). The 2024 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act. The 2024 Senior Notes bear interest at a rate of 8.50% annually on the principal amount payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. The 2024 Senior Notes were sold at a price of 100%. The 2024 Senior Notes will mature on September 1, 2024. The 2024 Senior Notes are unsecured debt obligations of the Company, and are unconditionally guaranteed by certain of its domestic subsidiaries.

The 2024 Senior Notes are redeemable at the Company’s option, in whole or in part, (i) at any time prior to September 1, 2020 at 100% of the aggregate principal amount of 2024 Senior Notes redeemed plus the applicable “make whole” premium specified in the indenture that governs the Company’s 2024 Notes (the “2024 Senior Notes Indenture”), plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after September 1, 2020 at the premium, if any, specified in the 2024 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to September 1, 2020, at its option, the Company may redeem up to 40% of the aggregate principal amount of the 2024 Senior Notes at a redemption price of 108.5% of the aggregate principal amount of 2024 Senior Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2024 Senior Notes Indenture.

The 2024 Senior Notes and the related guarantees have not been and will not be registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

The Company used the net proceeds of the 2024 Senior Notes offering to retire a portion of the 2021 Senior Notes, to pay the related accrued interest, premiums, fees and expenses associated therewith and for general corporate purposes.

On October 17, 2019 (the “2019-A Closing Date”), the Company issued $138,888,000 Class A Asset Backed Notes (the “2019-A Class A Notes”), $44,445,000 Class B Asset Backed Notes (the “2019-A Class B Notes”), and $16,667,000 Class C Asset Backed Notes (the “2019-A Class C Notes” and, collectively with the 2019-A Class A Notes and the 2019-A Class B Notes, the “2019-A Notes”), through an indirect subsidiary. The 2019-A Class A Notes bear interest at 3.96%, the 2019-A Class B Notes bear interest at 6.17%, and the 2019-A Class C Notes bear interest at 7.62%. The 2019-A Notes are backed by a pool of unsecured consumer installment loans (“Securitization Receivables”) and represent obligations of the issuer only. The 2019-A Notes are not guaranteed by the Company. Under the 2019‑A Notes, Securitization Receivables are sold to a wholly-owned subsidiary of the Company and serviced by another subsidiary of the Company. As of March 31, 2020, and December 31, 2019 the total outstanding amount of the 2019-A Notes was $127.8 million and $173.3 million, respectively.

The net proceeds of the offering of the 2019-A Notes on the 2019-A Closing Date were used to acquire the Securitization Receivables from the Company, fund a reserve account and pay fees and expenses incurred in connection with the transaction. The amount of Securitization Receivables sold to the issuer on the 2019-A Closing Date was approximately $200.0 million. Additional Securitization Receivables totaling approximately $22.2 million were sold to the issuer prior to December 31, 2019.

The 2019-A Notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons outside of the United States in compliance with Regulation S under the Securities Act. The 2019-A Notes have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

On February 25, 2019 (the “2019‑1 Closing Date”), the Company and several of its subsidiaries entered into a receivables securitization (the “2019‑1 Facility”) with PCAM Credit II, LLC, as lender (the “2019‑1 Lender”). The 2019‑1 Lender is an affiliate of Park Cities Asset Management, LLC. The 2019‑1 Facility finances Securitization Receivables that have been and will be originated or acquired under the Company’s NetCredit and CashNetUSA brands by several of the Company’s subsidiaries and that meet

specified eligibility criteria. Under the 2019‑1 Facility, eligible Securitization Receivables are sold to a wholly-owned subsidiary of the Company (the “2019‑1 Debtor”) and serviced by another subsidiary of the Company.

The 2019‑1 Debtor has issued a delayed draw term note with an initial maximum principal balance of $30.0 million and a revolving note with an initial maximum principal balance of $20.0 million for an aggregate initial maximum principal balance of $50.0 million, which is required to be secured by eligible Securitization Receivables. The 2019‑1 Facility has an accordion feature that, with the consent of the 2019‑1 Lender, allows for the maximum principal balance of the delayed draw term note to increase to $50.0 million and the maximum principal balance of the revolving note to increase to $25.0 million, for an aggregate maximum principal balance of $75.0 million. The 2019‑1 Facility is non-recourse to the Company and matures three years after the 2019‑1 Closing Date. As of ~~September 30,~~March 31, 2020 and 2019 and December 31, 2019, the total outstanding amount of the 2019‑1 Facility was $50.0 million, $12.8 ~~million.~~million and $12.8 million, respectively.

The 2019‑1 Facility is governed by a loan and security agreement, dated as of the 2019‑1 Closing Date, between the 2019‑1 Lender and the 2019‑1 Debtor. The 2019‑1 Facility bears interest at a rate per annum equal to LIBOR (subject to a floor) plus an applicable margin, which applicable margin is initially 9.75%. In addition, the 2019‑1 Debtor is required to pay certain customary upfront closing fees to the 2019‑1 Lender. Interest payments on the 2019‑1 Facility will be made monthly. Subject to certain exceptions, the 2019‑1 Debtor is not permitted to prepay the delayed draw term note prior to two years after the 2019‑1 Closing Date. Following such date, the 2019‑1 Debtor is permitted to voluntarily prepay the 2019‑1 Facility without penalty. The revolving note may be paid in whole or in part at any time after the delayed draw term note has been fully drawn.

All amounts due under the 2019‑1 Facility are secured by all of the 2019‑1 Debtor’s assets, which include the eligible Securitization Receivables transferred to the 2019‑1 Debtor, related rights under the eligible Securitization Receivables, a bank account and certain other related collateral. The Company has issued a limited indemnity to the 2019‑1 Lender for certain “bad acts,” and the Company has agreed for the benefit of the 2019‑1 Lender to meet certain ongoing financial performance covenants.

The 2019‑1 Facility documents contain customary provisions for securitizations, including representations and warranties as to the eligibility of the eligible Securitization Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters; and default and termination provisions which provide for the acceleration of the 2019‑1 Facility in circumstances including, but not limited to, failure to make payments when due, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the eligible Securitization Receivables, defaults under other material indebtedness of the 2019‑1 Debtor and a default by the Company under its financial performance covenants.

On October 31, 2018 (the “2018‑A Closing Date”), the Company issued $95,000,000 Class A Asset Backed Notes (the “2018-A Class A Notes”) and $30,400,000 Class B Asset Backed Notes (the “2018-A Class B Notes” and, collectively with the 2018-A Class A Notes, the “2018‑A Notes”), through an indirect subsidiary. The 2018-A Class A Notes bear interest at 4.20% and the 2018-A Class B Notes bear interest at 7.37%. The 2018‑A Notes are backed by a pool of unsecured consumer installment loans (“Securitization Receivables”) and represent obligations of the issuer only. The 2018‑A Notes are not guaranteed by the Company. Under the 2018‑A Notes, Securitization Receivables are sold to a wholly-owned subsidiary of the Company and serviced by another subsidiary of the Company. As of ~~September 30,~~March 31, 2020 and 2019 and December 31, ~~2018,~~2019, the total outstanding amount of the 2018‑A Notes was ~~$50.9~~$34.1 million, $82.2 million and ~~$111.4~~$41.8 million, respectively.

The net proceeds of the offering of the 2018‑A Notes on the 2018‑A Closing Date were used to acquire the Securitization Receivables from the Company, fund a reserve account and pay fees and expenses incurred in connection with the transaction.

The 2018‑A Notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons outside of the United States in compliance with Regulation S under the Securities Act. The 2018‑A Notes have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

On October 23, 2018, the Company and several of its subsidiaries entered into a receivables funding agreement (the “2018‑2 Facility”) with Credit Suisse AG, New York Branch, as agent (the “2018‑2 Agent”). The 2018‑2 Facility collateralizes Securitization Receivables that have been and will be originated or acquired under the Company’s NetCredit brand by several of its subsidiaries and

that meet specified eligibility criteria in exchange for a revolving note. Under the 2018‑2 Facility, Securitization Receivables are sold to a wholly-owned subsidiary of the Company (the “2018‑2 Debtor”) and serviced by another subsidiary of the Company.

The 2018‑2 Debtor has issued a revolving note with an initial maximum principal balance of $150.0 million, which is required to be secured by 1.25 times the drawn amount in eligible Securitization Receivables. The 2018‑2 Facility is non-recourse to the Company and matures on October 23, 2022. As of ~~September 30,~~March 31, 2020 and 2019 and December 31, ~~2018,~~2019, the total outstanding amount of the 2018‑2 Facility was ~~$80.0~~$110.0 million, $50.0 million and ~~$25.0~~$80.0 million, respectively.

The 2018‑2 Facility is governed by a loan and security agreement, dated as of October 23, 2018, between the 2018‑2 Agent, the 2018‑2 Debtor and certain other lenders and agent parties thereto. The 2018‑2 Facility bears interest at a rate per annum equal to one-month LIBOR (subject to a floor) plus an applicable margin, which rate per annum is 3.75%. In addition, the 2018‑2 Debtor paid certain customary upfront closing fees to the 2018‑2 Agent. Interest payments on the 2018‑2 Facility will be made monthly. The 2018‑2 Debtor shall be permitted to prepay the 2018‑2 Facility, subject to certain fees and conditions. Any remaining amounts outstanding will be payable no later than October 23, 2022, the final maturity date.

All amounts due under the 2018‑2 Facility are secured by all of the 2018‑2 Debtor’s assets, which include the Securitization Receivables transferred to the 2018‑2 Debtor, related rights under the Securitization Receivables, a bank account and certain other related collateral.

The 2018‑2 Facility documents contain customary provisions for securitizations, including: representations and warranties as to the eligibility of the Securitization Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters; and default and termination provisions that provide for the acceleration of the 2018‑2 Facility in circumstances including, but not limited to, failure to make payments when due, servicer defaults, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the Securitization Receivables and defaults under other material indebtedness of the 2018‑2 Debtor.

On July 23, 2018, the Company and several of its subsidiaries entered into a receivables funding agreement (the “2018‑1 Facility”) with Pacific Western Bank, as lender (the “2018‑1 Lender”). The 2018‑1 Facility collateralizes Securitization Receivables that have been and will be originated or acquired under the Company’s NetCredit brand by several of its subsidiaries and that meet specified eligibility criteria in exchange for a revolving note. Under the 2018‑1 Facility, Securitization Receivables are sold to a wholly-owned subsidiary of the Company (the “2018‑1 Debtor”) and serviced by another subsidiary of the Company.

The 2018‑1 Debtor has issued a revolving note with an initial maximum principal balance of $150.0 million, which is required to be secured by 1.25 times the drawn amount in eligible Securitization Receivables. The 2018‑1 Facility is non-recourse to the Company and matures on July 22, 2023. As of ~~September 30,~~March 31, 2020 and 2019, ~~and 2018 and December 31, 2018,~~ the total outstanding amount of the 2018‑1 Facility was ~~$91.0~~$52.0 million, ~~$46.6 million and~~ $36.0 million, respectively. There was 0 balance outstanding on the 2018-1 Facility as of December 31, 2019.

The 2018‑1 Facility is governed by a loan and security agreement, dated as of July 23, 2018, between the 2018‑1 Lender and the 2018‑1 Debtor. The 2018‑1 Facility bears interest at a rate per annum equal to LIBOR (subject to a floor) plus an applicable margin, which rate per annum is initially 4.00%. In addition, the 2018‑1 Debtor paid certain customary upfront closing fees to the 2018‑1 Lender. Interest payments on the 2018‑1 Facility will be made monthly. The 2018‑1 Debtor shall be permitted to prepay the 2018‑1 Facility, subject to certain fees and conditions. In the event of prepayment for the purposes of securitizations, no fees shall apply. Any remaining amounts outstanding will be payable no later than July 22, 2023, the final maturity date.

All amounts due under the 2018‑1 Facility are secured by all of the 2018‑1 Debtor’s assets, which include the Securitization Receivables transferred to the 2018‑1 Debtor, related rights under the Securitization Receivables, a bank account and certain other related collateral.

The 2018‑1 Facility documents contain customary provisions for securitizations, including: representations and warranties as to the eligibility of the Securitization Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters; and default and termination provisions which provide for the acceleration of the 2018‑1 Facility in circumstances including, but not limited to, failure to make payments when due, servicer defaults, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the receivables and defaults under other material indebtedness of the 2018‑1 Debtor.

~~On January 15, 2016, the Company and certain of its subsidiaries entered into a receivables securitization (as amended, the “2016~~‑~~1 Facility”) with certain purchasers, Jefferies Funding LLC, as administrative agent (the “2016~~‑~~1 Agent”) and Bankers Trust Company, as indenture trustee and securities intermediary (the “Indenture Trustee”). The 2016~~‑~~1 Facility securitized Securitization Receivables that were originated or acquired under the Company’s NetCredit brand and that met specified eligibility criteria. Under the 2016~~‑~~1 Facility, Securitization Receivables were sold to a wholly-owned special purpose subsidiary (the “2016~~‑~~1 Issuer”) and serviced by another subsidiary. The 2016~~‑1 Facility, as amended on October 20, 2017, provided for a maximum principal amount of $275 million, an initial term note with an initial principal amount of $181.1 million and the ability to subsequently issue term notes thereafter, variable funding notes with an aggregate committed availability of $75 million per quarter with an option to increase the commitment to $90 million and a revolving period of the facility ending in April 2019.

~~Subject to certain exceptions, the 2016~~‑1 Issuer was not permitted to prepay or redeem the 2016-1 Facility prior to April 15, 2019, but the 2016-1 Agent, the Indenture Trustee, and the holders of the notes agreed to permit an early repayment. On March 29, 2019, the 2016-1 Facility was repaid in full.

~~As of September 30, 2018 and December 31, 2018, the carrying amount of the 2016-1 Facility was $162.9 million and $54.9 million, respectively.~~

On December 1, 2016, the Company and certain of its subsidiaries entered into a receivables securitization (the “2016‑2 Facility”) with Redpoint Capital Asset Funding, LLC, as lender. The 2016‑2 Facility securitized Securitization Receivables that were originated or acquired under the Company’s NetCredit brand by several of the Company’s subsidiaries and that met specified eligibility criteria, including that the annual percentage rate for each securitized consumer loan was greater than or equal to 90%. Under the 2016‑2 Facility, Securitization Receivables are sold to a wholly-owned subsidiary of the Company and serviced by another subsidiary of the Company. ~~In October 2018, the 2016~~‑~~2 Facility was repaid in full and there is 0 remaining amount available to be borrowed. As of~~ ~~September 30, 2018, the carrying amount of the 2016~~‑~~2 Facility was $15.1 million.~~

On June 30, 2017, the Company and certain of its operating subsidiaries entered into a secured revolving credit agreement with a syndicate of banks including TBK Bank, SSB (“TBK”), as administrative agent and collateral agent, Jefferies Finance LLC and TBK as Joint Lead Arrangers and joint lead bookrunners, and Veritex Community Bank (as successor in interest to Green Bank, N.A.), as lender (as amended the “Credit Agreement”). On April 13, 2018 and October 5, 2018, the Credit Agreement was amended to include Pacific Western Bank and Axos Bank, respectively, as lenders in the syndicate of lenders. Additionally, on July 1, 2019 the Credit Agreement was amended to, amongst other changes, extend the maturity date to June 30, 2022 from May 1, 2020 and increase the advance rate to 65% from 53%.

The Credit Agreement is secured by domestic receivables. The borrowing limit in the Credit Agreement, as amended, is $125 million and its maturity date is June 30, 2022. The Company had outstanding borrowings under the Credit Agreement of ~~$25.0~~$105.3 million and ~~$22.0~~$72.0 million as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. There were 0 outstanding borrowings under the Credit Agreement as of ~~September 30, 2018.~~March 31, 2019.

The Credit Agreement provides for a revolving credit line with interest on borrowings under the facility at prime rate plus 1.00%. In addition, the Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the line, and ranges from 0.30% per annum to 0.50% per annum depending on usage. A portion of the revolving credit facility, up to a maximum of $20 million, is available for the issuance of letters of credit. The Company had outstanding letters of credit under the Credit Agreement of $1.0 million, $1.2 million ~~$3.6 million~~ and ~~$1.6~~$1.2 million as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018,~~2019, respectively. The Credit Agreement provides for certain prepayment penalties if it is terminated on or before its first and second anniversary date, subject to certain exceptions.

The Credit Agreement contains certain limitations on the incurrence of additional indebtedness, investments, the attachment of liens to the Company’s property, the amount of dividends and other distributions, fundamental changes to the Company or its business and certain other activities of the Company. The Credit Agreement contains standard financial covenants for a facility of this type based on a leverage ratio and a fixed charge coverage ratio. The Credit Agreement also provides for customary affirmative covenants, including financial reporting requirements, and certain events of default, including payment defaults, covenant defaults and other customary defaults.

On May 30, 2014, the Company issued and sold $500.0 million in aggregate principal amount of 9.75% Senior Notes due 2021. The 2021 Senior Notes bore interest at a rate of 9.75% annually on the principal amount payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2014. The 2021 Senior Notes were sold at a discount of the principal amount to yield 10.0% to maturity and would have matured on June 1, 2021.

During the year ended December 31, 2018 the Company repurchased the remaining $345.0 million of principal amount of the 2021 Senior Notes, which included $228.5 million principal amount of the 2021 Senior Notes for aggregate cash consideration of $241.6 million plus accrued interest during the nine months ended September 30, 2018. During the nine months ended September 30, 2018 the Company recorded a loss on extinguishment of debt of approximately $17.2 million ($13.6 million net of tax), which is included in “Loss on early extinguishment of debt” in the consolidated statements of income.

The Company’s effective tax rate for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was ~~23.2%~~34.3%, compared to ~~3.9%~~23.6% for the ~~nine~~three months ended ~~September 30, 2018.~~March 31, 2019. The increase is primarily attributable to ~~tax benefits recorded in 2018 related to the acceleration~~nondeductible executive and stock compensation being a higher proportion of

~~deductions on the loan portfolio and fixed assets coupled with the overall decrease in the federal tax rate from 35% to 21% resulting from the Tax Cuts and Jobs Act.~~ lower first quarter operating income.

As of ~~September 30, 2019,~~March 31, 2020, the balance of unrecognized tax benefits was $~~51.3~~53.5 million,~~($50.3 million net of the federal benefit of state matters),~~ which is included in “Accounts payable and accrued expenses” on the consolidated balance sheet, ~~$15.1~~$16.3 million of which, if recognized, would favorably affect the effective tax rate in the period of recognition. The Company had ~~$13.9~~$41.3 million and ~~$13.3~~$53.6 million of unrecognized tax benefits as of ~~September 30,~~March 31, ~~2018~~2019 and December 31, ~~2018,~~2019, respectively. The Company believes it is reasonably possible that, within the next twelve months, unrecognized domestic tax benefits could change by a significant amount. The principal uncertainties are related to the timing of recognition of income and losses related to the Company’s loan portfolio. ~~During the third quarter~~The Company is currently under a Joint Committee on Taxation review of ~~2019, an IRS examination began~~certain tax returns that were filed during 2018 in ~~connection~~conjunction with the ~~Company’s 2017 tax return and related carryback claim.~~ ~~During the first quarter of 2019, the Company received an expected refund from the Internal Revenue Service of $45.7 million.~~refunds claimed on those returns. Depending upon the outcome of the review and any related agreements or settlements with the relevant taxing authorities, the amount of the uncertainty, including amounts that would be recognized as a component of the effective tax rate, could change significantly. While the total amount of uncertainty to be resolved is not clear, it is reasonably possible that the uncertainties pertaining to this matter will be resolved in the next twelve months. The Company believes that it has adequately accounted for any material tax uncertainties in its existing reserves for all open tax years.

The Company’s U.S. tax returns are subject to examination by federal and state taxing authorities. The statute of limitations related to the Company’s consolidated Federal income tax returns is closed for all tax years up to and including ~~2013.~~2015. However, the 2015 tax year is still open to the extent of the net operating loss that was carried back from the 2017 tax return. The years open to examination by state, local and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed. For jurisdictions that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized. In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized. In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.

~~The following tables set forth the components of accumulated other comprehensive loss, net of tax for the three and nine months ended September 30, 2019 and 2018 (in thousands):~~

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the period. Restricted stock units issued under the Company’s stock-based employee compensation plans are included in diluted shares upon the granting of the awards even though the vesting of shares will occur over time.

The following table sets forth the reconciliation of numerators and denominators of basic and diluted earnings per share computations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2019		2018		2019		2018		2020			2019
Numerator:
Net income from continuing operations									$	5,748		$	38,979
Net loss from discontinued operations										(288	)		(3,962	)
Net income	$	27,085	$	15,304	$	87,165	$	61,427	$	5,460		$	35,017
Denominator:
Total weighted average basic shares		33,997		34,168		33,770		33,938		32,337			33,481
Shares applicable to stock-based compensation		580		1,497		722		1,262		496			940
Total weighted average diluted shares		34,577		35,665		34,492		35,200		32,833			34,421
Earnings per share:
Net income per share – basic	$	0.80	$	0.45	$	2.58	$	1.81
Net income per share – diluted	$	0.78	$	0.43	$	2.53	$	1.75
Earnings per common share – basic:
Continuing operations									$	0.18		$	1.16
Discontinued operations										(0.01	)		(0.11	)
Earnings per common share – basic									$	0.17		$	1.05
Earnings per common share – diluted:
Continuing operations									$	0.18		$	1.13
Discontinued operations										(0.01	)		(0.11	)
Earnings per common share – diluted									$	0.17		$	1.02

For the three months ended ~~September 30,~~March 31, 2020 and 2019, 1,757,937 and ~~2018, 834,158 and 18,213~~720,429 shares of common stock underlying stock options, respectively, and ~~7,229~~351,368 and ~~3,558~~6,187 shares of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive.~~For the nine months ended~~ ~~September 30,~~ ~~2019 and 2018, 813,076 and 403,319 shares of common stock underlying stock options, respectively, and 13,829 and 100,698 shares~~

~~of common stock underlying restricted stock units, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive.~~

The Company provides online financial services to non-prime credit consumers and small businesses in the United States ~~United Kingdom,~~ and Brazil and has 1 reportable ~~segment, which is composed of the Company’s domestic and international operations and corporate services.~~segment. The Company has aggregated all components of its business into a single operating segment based on the similarities of the economic characteristics, the nature of the products and services, the nature of the production and distribution methods, the shared technology platforms, the type of customer and the nature of the regulatory environment.

The following tables present information on the Company’s domestic, international operations and corporate services as of and for the three and nine months ended September 30, 2019 and 2018 (dollars in thousands):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2019

2018

2019

2018

Revenue

Domestic

$
300,609

$
251,054

$
812,802

$
677,658

International

28,904

42,825

95,594

123,820

Total revenue

$
329,513

$
293,879

$
908,396

$
801,478

Income (loss) from operations

Domestic

$
84,855

$
63,409

$
277,936

$
223,351

International

(1,842
)

513

(16,400
)

3,301

Corporate services

(28,572
)

(26,125
)

(89,706
)

(84,049
)
Total income from operations

$
54,441

$
37,797

$
171,830

$
142,603

Depreciation and amortization

Domestic

$
1,908

$
1,800

$
6,062

$
5,555

International

416

358

1,224

1,101

Corporate services

1,392

1,530

4,556

4,707

Total depreciation and amortization

$
3,716

$
3,688

$
11,842

$
11,363

Expenditures for property and equipment

Domestic

$
3,550

$
1,927

$
8,811

$
6,131

International

1,178

1,186

3,491

3,140

Corporate services

824

1,125

4,157

2,032

Total expenditures for property and equipment

$
5,552

$
4,238

$
16,459

$
11,303

The following table presents the Company’s revenue by geographic region for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ (dollars in thousands):

	Three Months Ended					Nine Months Ended				Three Months Ended
	September 30,					September 30,				March 31,
	2019		2018		��	2019		2018		2020		2019
Revenue
United States	$	300,609	$	251,054		$	812,802	$	677,658	$	357,716	$	257,988
United Kingdom		23,900		36,564			78,901		105,563
Other international countries		5,004		6,261			16,693		18,257		4,536		6,450
Total revenue	$	329,513	$	293,879		$	908,396	$	801,478	$	362,252	$	264,438

The Company’s long-lived assets, which consist of the Company’s property and equipment, were ~~$55.0~~$56.2 million, $46.8 million and ~~$48.5~~$54.5 million at ~~September 30,~~March 31, 2020 and 2019 and ~~2018,~~December 31, 2019, respectively. The operations for the Company’s ~~domestic and international~~ businesses are primarily located within the United States, and the value of any long-lived assets located outside of the United States is immaterial.

On April 23, 2018, the Commonwealth of Virginia, through Attorney General Mark R. Herring, filed a lawsuit in the Circuit Court for the County of Fairfax, Virginia against NC Financial Solutions of Utah, LLC (“NC Utah”), a subsidiary of the Company. The lawsuit alleges violations of the Virginia Consumer Protection Act (“VCPA”) relating to NC Utah’s communications with customers, collections of certain payments, its loan agreements, and the rates it charged to Virginia borrowers. The plaintiff is seeking to enjoin NC Utah from continuing its current lending practices in Virginia, restitution, civil penalties, and costs and expenses in connection with the same. Neither the likelihood of an unfavorable decision nor the ultimate liability, if any, with respect to this matter can be determined at this time, and the Company is currently unable to estimate a range of reasonably possible losses, as defined by ASC 450-20-20, Contingencies–Loss Contingencies–Glossary, for this litigation. The Company carefully considered applicable Virginia law before NC Utah began lending in Virginia and, as a result, believes that the Plaintiff’s claims in the complaint are without merit and intends to vigorously defend this lawsuit.

The Company is also involved in certain routine legal proceedings, claims and litigation matters encountered in the ordinary course of its business. Certain of these matters may be covered to an extent by insurance or by indemnification agreements with third parties. The Company has recorded accruals in its consolidated financial statements for those matters in which it is probable that it has incurred a loss and the amount of the loss, or range of loss, can be reasonably estimated. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or liquidity.

The Company periodically uses derivative instruments to manage risk from changes in market conditions that may affect the Company’s financial performance. The Company has primarily used derivative instruments to manage its primary market risks, which are interest rate risk and foreign currency exchange rate risk.

The Company has periodically used forward currency exchange contracts to minimize the effects of foreign currency risk in the United Kingdom and Brazil. The forward currency exchange contracts are non-designated derivatives. Any gain or loss resulting from these contracts is recorded as income or loss and is included in “Foreign currency transaction loss” in the Company’s consolidated statements of income. As of September 30, 2019, the Company did not manage its exposure to risk from foreign currency exchange rate fluctuations through the use of forward currency exchange contracts in the United Kingdom or Brazil.

~~The Company had 0 outstanding derivative instruments as of September 30, 2019 and 2018 and December 31, 2018.~~

The following table presents information on the effect of derivative instruments on the consolidated results of operations and accumulated other comprehensive income (“AOCI”) for the nine months ended September 30, 2019 and 2018 (dollars in thousands):

The Company has an agreement for direct mail production and fulfillment services with a marketing services company where David Fisher, the Company’s Chief Executive Officer and Chairman of the Board, also serves as a member of the marketing services company’s board of directors. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the Company incurred ~~$10.5~~$4.0 million and ~~$8.2~~$2.6 million, respectively, in expenses related to these services. As of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018,~~2019, the Company owed the agency ~~$4.4~~$2.5 million, ~~$1.4~~$2.4 million and ~~$2.5~~$4.6 million, respectively, related to services provided, which was included in “Accounts payable and accrued expenses” in the consolidated balance sheets.

The Company believes that the transaction described above has been provided on terms no less favorable to the Company than could have been negotiated with non-affiliated third parties.

As part of the Company’s overall funding strategy and as part of its efforts to support its liquidity from sources other than its traditional capital market sources, the Company has established a securitization program through several securitization facilities. The Company transferred certain consumer loan receivables to VIEs which issue notes backed by the underlying consumer loan receivables and are serviced by another wholly owned subsidiary of the Company. The cash flows from the loans held by the VIEs are used to repay obligations under the notes.

~~In accordance with ASC 820,~~ ~~Fair Value Measurements~~The Company uses a hierarchical framework that prioritizes and ~~Disclosures,~~ ~~certain~~ranks the market observability of inputs used in its fair value measurements. Market price observability is affected by a number of factors, including the ~~Company’s assets~~type of asset or liability and the characteristics specific to the asset or liability being measured. Assets and liabilities with readily available, active, quoted market prices or for which ~~are carried at~~ fair value can be measured from actively quoted prices generally are ~~classified in one~~deemed to have a higher degree of ~~the following three categories:~~market

~~Level 1: Quoted market prices in active markets for identical assets or liabilities.~~

~~Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.~~

price observability and a lesser degree of judgment used in measuring fair value. The Company classifies the inputs used to measure fair value into one of three levels as follows:

Level 2: Inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those cases, the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level of input that is significant to the entire measurement. Such determination requires significant management judgment.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ there were 0 transfers of assets or liabilities in or out of Level 1, Level 2 or Level 3 fair value measurements. It is the Company’s policy to value any transfers between levels of the fair value hierarchy based on end of period fair values.

Effective January 1, 2020, the Company elected the fair value option to account for all loans and finance receivables.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018~~2019 are as follows (dollars in thousands):

	September 30,		Fair Value Measurements Using						March 31,		Fair Value Measurements Using
	2019		Level 1		Level 2		Level 3		2020		Level 1		Level 2		Level 3
Financial assets:
Non-qualified savings plan assets⁽¹⁾	$	2,873	$	2,873	$	—	$	—
Installment loans and RPAs⁽¹⁾⁽²⁾									$	772,469	$	—	$	—	$	772,469
Line of credit accounts⁽¹⁾										320,738		—		—		320,738
Non-qualified savings plan assets⁽³⁾										2,989		2,989		—		—
Investment in trading security⁽⁴⁾										9,729		9,729		—		—
Total	$	2,873	$	2,873	$	—	$	—	$	1,105,925	$	12,718	$	—	$	1,093,207

	September 30,		Fair Value Measurements Using						March 31,		Fair Value Measurements Using
	2018		Level 1		Level 2		Level 3		2019		Level 1		Level 2		Level 3
Financial assets:
Non-qualified savings plan assets⁽¹⁾	$	2,214	$	2,214	$	—	$	—
Non-qualified savings plan assets⁽³⁾									$	2,683	$	2,683	$	—	$	—
Total	$	2,214	$	2,214	$	—	$	—	$	2,683	$	2,683	$	—	$	—

	December 31,		Fair Value Measurements Using						December 31,		Fair Value Measurements Using
	2018		Level 1		Level 2		Level 3		2019		Level 1		Level 2		Level 3
Financial assets:
Non-qualified savings plan assets⁽¹⁾	$	2,052	$	2,052	$	—	$	—
Non-qualified savings plan assets⁽³⁾									$	2,867	$	2,867	$	—	$	—
Investment in trading security⁽⁴⁾										11,449		11,449		—		—
Total	$	2,052	$	2,052	$	—	$	—	$	14,316	$	14,316	$	—	$	—

The Company primarily estimates the fair value of its loan and finance receivables portfolio using discounted cash flow models that have been internally developed. The models use inputs that are unobservable but reflect the Company’s best estimates of the

assumptions a market participant would use to calculate fair value. The following table presents quantitative information about the significant unobservable inputs used for the Company’s loan and finance receivables fair value measurements as of March 31, 2020:

Certain unobservable inputs may, in isolation, have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. An increase to the net loss rate, prepayment rate, servicing cost, or discount rate would decrease the fair value of the Company’s loans and finance receivables. When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.

The fair value of the nonqualified savings plan assets was deemed Level 1 as they are publicly traded equity securities for which market prices of identical assets are readily observable.

The fair value of the investment in trading security was deemed Level 1 as it is a publicly traded fund with active market pricing that is readily available.

The Company had no liabilities measured at fair value on a recurring basis as of March 31, 2020 and 2019 and December 31, 2019.

The Company measures non-financial assets and liabilities such as property and equipment and intangible assets at fair value on a non-recurring basis or when events or circumstances indicate that the carrying amount of the assets may be impaired. At ~~September 30,~~March 31, ~~2019~~2020 and ~~2018~~2019 and December 31, ~~2018,~~2019, there were 0 assets or liabilities recorded at fair value on a non-recurring basis.

The Company’s financial assets and liabilities as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018~~2019 that are not measured at fair value in the consolidated balance sheets are as follows (dollars in thousands):

	Balance at								Balance at
	September 30,		Fair Value Measurements Using						March 31,		Fair Value Measurements Using
	2019		Level 1		Level 2		Level 3		2020		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	69,945	$	69,945	$	—	$	—	$	161,076	$	161,076	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		291,011		—		—		291,011
Installment loans and RPAs, net ⁽¹⁾⁽³⁾		710,143		—		—		747,496
Restricted cash ⁽⁴⁾		20,719		20,719		—		—
Restricted cash ⁽¹⁾										42,742		42,742		—		—
Investment in unconsolidated investee⁽²⁾		6,703		—		—		6,703		6,918		—		—		6,918
Total	$	1,098,521	$	90,664	$	—	$	1,045,210	$	210,736	$	203,818	$	—	$	6,918
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	1,703	$	—	$	—	$	1,703
Revolving line of credit		25,000		—		—		25,000		105,250		—		—		105,250
Securitization notes		236,052		—		236,668		—		373,864		—		358,465		—
8.50% senior notes due 2024		250,000		—		235,065		—		250,000		—		216,225		—
8.50% senior notes due 2025		375,000		—		343,665		—		375,000		—		315,926		—
Total	$	887,755	$	—	$	815,398	$	26,703	$	1,104,114	$	—	$	890,616	$	105,250

	Balance at								Balance at
	September 30,		Fair Value Measurements Using						March 31,		Fair Value Measurements Using
	2018		Level 1		Level 2		Level 3		2019		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	164,122	$	164,122	$	—	$	—	$	57,715	$	57,715	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		230,650		—		—		230,650
Installment loans and RPAs, net ⁽¹⁾⁽³⁾		608,133		—		—		637,880
Restricted cash ⁽⁴⁾		20,897		20,897		—		—
Restricted cash ⁽¹⁾										23,168		23,168		—		—
Installment loans and RPAs, net ⁽³⁾⁽⁴⁾										574,944		—		—		607,433
Line of credit accounts, net ⁽³⁾										177,616		—		—		177,616
Investment in unconsolidated investee⁽²⁾		6,703		—		—		6,703		6,703		—		—		6,703
Total	$	1,030,505	$	185,019	$	—	$	875,233	$	840,146	$	80,883	$	—	$	791,752
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	2,244	$	—	$	—	$	2,244	$	1,264	$	—	$	—	$	1,264
Securitization notes		226,218		—		228,819		—		181,000		—		181,365		—
9.75% senior notes due 2021		115,821		—		121,657		—
8.50% senior notes due 2024		250,000		—		253,125		—		250,000		—		235,915		—
8.50% senior notes due 2025		375,000		—		371,250		—		375,000		—		350,593		—
Total	$	969,283	$	—	$	974,851	$	2,244	$	807,264	$	—	$	767,873	$	1,264

	Balance at								Balance at
	December 31,		Fair Value Measurements Using						December 31,		Fair Value Measurements Using
	2018		Level 1		Level 2		Level 3		2019		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	52,917	$	52,917	$	—	$	—	$	35,895	$	35,895	$	—	$	—
Short-term loans and line of credit accounts, net ⁽¹⁾		222,860		—		—		222,860
Restricted cash ⁽¹⁾										45,069		45,069		—		—
Installment loans and RPAs, net ⁽³⁾⁽⁴⁾		637,086		—		—		670,888		760,815		—		—		848,818
Restricted cash ⁽⁴⁾		24,342		24,342		—		—
Line of credit accounts, net ⁽³⁾										301,835		—		—		338,765
Investment in unconsolidated investee⁽²⁾		6,703		—		—		6,703		6,703		—		—		6,703
Total	$	943,908	$	77,259	$	—	$	900,451	$	1,150,317	$	80,964	$	—	$	1,194,286
Financial liabilities:
Liability for estimated losses on consumer loans guaranteed by the Company	$	2,166	$	—	$	—	$	2,166	$	1,511	$	—	$	—	$	1,511
Revolving line of credit		22,000		—		—		22,000		72,000		—		—		72,000
Securitization notes		227,288		—		225,474		—		307,885		—		308,513		—
8.50% senior notes due 2024		250,000		—		212,500		—		250,000		—		238,750		—
8.50% senior notes due 2025		375,000		—		306,563		—		375,000		—		355,691		—
Total	$	876,454	$	—	$	744,537	$	24,166	$	1,006,396	$	—	$	902,954	$	73,511

Cash and cash equivalents and restricted cash bear interest at market rates and have maturities of less than 90 days. The carrying amount of restricted cash and cash equivalents approximates fair value.

~~Short-term~~Prior to January 1, 2020 short-term loans, line of credit accounts, installment loans and RPAs ~~are~~were carried in the consolidated balance sheet net of the allowance for estimated losses, which iswas calculated by applying historical loss rates combined with recent default trends to the gross receivable balance. Short-term loans and line of credit accounts have relatively short maturity periods that are generally 12 months or less. The unobservable inputs used to calculate the fair value of these receivables ~~include~~included historical loss rates, recent default trends and estimated remaining loan term; therefore, the carrying value ~~approximates~~approximated the fair value. The fair value of installment loans and RPAs iswas estimated using discounted cash flow analyses, which ~~consider~~considered interest rates on loans and discounts offered for receivables with similar terms to customers with similar credit quality, the timing of expected payments, estimated customer default rates and/or valuations of comparable portfolios. Unsecured installment loans typically have terms between two and 60 months. RPAs typically have estimated delivery terms between six and 18 months.

The Company measures the fair value of its investment in unconsolidated investee using Level 3 inputs. Because the unconsolidated investee is a private company and financial information is limited, the Company estimates the fair value based on the best available information at the measurement date.

In connection with its CSO programs, the Company guarantees consumer loan payment obligations to unrelated third-party lenders for short-term and installment loans the Company arranges for consumers on the third-party lenders’ behalf and is required to purchase any defaulted loans it has guaranteed. ~~The~~Prior to January 1, 2020 the Company ~~measures~~measured the fair value of its liability for third-party lender-owned consumer loans under Level 3 inputs. The fair value of these liabilities iswas calculated by applying historical loss rates combined with recent default trends to the gross consumer loan balance. The unobservable inputs used to calculate the fair value of these loans ~~include~~included historical loss rates, recent default trends and estimated remaining loan terms; therefore, the carrying value of these liabilities ~~approximates~~approximated the fair value.

The Company measures the fair value of its revolving line of credit using Level 3 inputs. The Company considered the fair value of its other long-term debt and the timing of expected payment(s).

The fair values of the Company’s Securitization Notes and senior notes are estimated based on quoted prices in markets that are not active, which are deemed Level 2 inputs.

Subsequent events have been reviewed through the date these financial statements were available to be issued.

On October 17, 2019 (the “2019-A Closing Date”), the Company issued $138,888,000 Class A Asset Backed Notes (the “2019-A Class A Notes”), $44,445,000 Class B Asset Backed Notes (the “2019-A Class B Notes”), and $16,667,000 Class C Asset Backed Notes (the “2019-A Class C Notes” and, collectively with the 2019-A Class A Notes and the 2019-A Class B Notes, the “2019-A Notes”), through an indirect subsidiary. The 2019-A Class A Notes bear interest at 3.96%, the 2019-A Class B Notes bear interest at 6.17%, and the 2019-A Class C Notes bear interest at 7.62%. The 2019-A Notes are backed by a pool of Securitization Receivables and represent obligations of the issuer only. The 2019-A Notes are not be guaranteed by the Company. Under the 2019‑A Notes, Securitization Receivables are sold to a wholly-owned subsidiary of the Company and serviced by another subsidiary of the Company.

The net proceeds of the offering of the 2019-A Notes on the 2019-A Closing Date were used to acquire the Securitization Receivables from the Company, fund a reserve account and pay fees and expenses incurred in connection with the transaction. The amount of Securitization Receivables sold to the issuer on the 2019-A Closing Date was approximately $200.0 million. Additional Securitization Receivables totaling approximately $22.2 million are expected to be sold to the issuer by January 17, 2020.

On October 24, 2019, the Company announced that it intends to exit the U.K. market in the three months ended December 31, 2019. On October 25, 2019, a licensed U.K. insolvency practitioner was appointed as administrator to take control of management of the U.K. business. The Company expects to record a one-time after-tax charge of approximately $74.0 million, including one-time cash charges of approximately $43.0 million to support cessation of U.K. lending activities. The Company plans on deconsolidating its U.K. businesses and presenting them as discontinued operations beginning with the Annual Report on Form 10‑K for the year ended December 31, 2019.

The following discussion of financial condition, results of operations, liquidity and capital resources and certain factors that may affect future results, including economic and industry-wide factors, of Enova International, Inc. and its subsidiaries should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

We are a leading technology and analytics company focused on providing online financial services. In ~~2018,~~2019, we extended approximately ~~$2.5~~$2.2 billion in credit or financing to borrowers. As of ~~September 30, 2019,~~March 31, 2020, we offered or arranged loans or draws on lines of credit to consumers in 3240 states in the United States ~~and in the United Kingdom~~ and Brazil. We also offered financing to small businesses in all 50 states and Washington D.C. in the United States. We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers who and small businesses which have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and through ~~September 30, 2019,~~March 31, 2020, we have completed over ~~50.5~~51.9 million customer transactions and collected more than 3537 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years having expanded the markets we serve and the financing products we offer. These financing products include ~~short-term loans, line of credit accounts,~~ installment loans and receivables purchase agreements (“RPAs”). and line of credit accounts.

We believe our customers highly value our products and services as an important component of their personal or business finances because our products are convenient, quick and often less expensive than other available alternatives. We attribute the success of our business to our advanced and innovative technology systems, the proprietary analytical models we use to predict the performance of loans and finance receivables, our sophisticated customer acquisition programs, our dedication to customer service and our talented employees.

We have developed proprietary underwriting systems based on data we have collected over our 15 years of experience. These systems employ advanced risk analytics to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine the analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions.

Our flexible and scalable technology platform allows us to process and complete customers’ transactions quickly and efficiently. In ~~2018,~~2019, we processed approximately ~~4.3~~3.8 million transactions, and we continue to grow our loans and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platform allows us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly. In 2012, we launched a new product in the United States designed to serve near-prime customers. ~~In April 2014, we launched On Stride Financial, an installment loan product, in the United Kingdom.~~ In June 2014, we launched our business in Brazil, where we arrange financing for borrowers through a third-party lender. In addition, in July 2014, we introduced a new line of credit product in the United States to serve the needs of small businesses. In June 2015, we further expanded our product offering by acquiring certain assets of a company that provides financing to small businesses by offering RPAs. In May 2017, we expanded products available to small businesses by offering installment loans. These new products ~~are intended to allow~~have allowed us to further diversify our product offerings and customer base and geographic scope. In the nine-month period ended September 30, 2019, we derived 89.5% of our total revenue from the United States and 10.5% of our total revenue internationally, with 82.5% of international revenue (representing 8.7% of our total revenue) generated in the United Kingdom. On October 24, 2019, we announced that we intend to exit the U.K. market in the three months ended December 31, 2019 in part due to the challenging and uncertain regulatory environment. On October 25, 2019, a licensed U.K. insolvency practitioner was appointed as administrator to take control of management of the U.K. business.base.

We have been able to consistently acquire new customers and successfully generate repeat business from returning customers when they need financing. We believe our customers are loyal to us because they are satisfied with our products and services. We acquire

new customers from a variety of sources, including visits to our own websites, mobile sites or applications, and through direct marketing, affiliate marketing, lead providers and relationships with other lenders. We believe that the online convenience of our products and our 24/7 availability to accept applications with quick approval decisions are important to our customers.

Once a potential customer submits an application, we quickly provide a credit or purchase decision. If a loan or financing is approved, we or our lending partners typically fund the loan or financing the next business day or, in some cases, the same day. During the entire process, from application through payment, we provide access to our well-trained customer service team. All of our operations, from customer acquisition through collections, are structured to build customer satisfaction and loyalty, in the event that a customer has a need for our products in the future. We have developed a series of sophisticated proprietary scoring models to support our various products. We believe that these models are an integral component of our operations and they allow us to complete a high volume of customer transactions while actively managing risk and the related quality of our loan and finance receivable portfolios. We believe our successful application of these technology innovations differentiates our capabilities relative to competitive platforms as evidenced by our history of strong growth and stable portfolio quality.

Our online financing products and services provide customers with a deposit of funds into their bank account in exchange for a commitment to repay the amount deposited plus fees, interest and/or revenue on the receivables purchased. We originate, arrange, guarantee or purchase ~~short-term consumer~~installment loans and RPAs and line of credit ~~accounts, installment loans and RPAs.~~accounts. We have one reportable segment that includes all of our online financial services.

We have been investing and will continue to invest in the growth of our near-prime installment lending portfolio.

~~We have been investing and will continue to invest in the growth of our near-prime installment lending portfolio.~~

As of ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ the outstanding amount of active ~~short-term~~ consumer loans originated by third-party lenders under the CSO programs was ~~$13.9~~$11.8 million and ~~$25.5 million, respectively, which were guaranteed by us.~~

~~As of September 30, 2019 and 2018, the outstanding amount of active installment loans originated by third-party lenders under the CSO programs was $9.7 million and $4.6~~$22.3 million, respectively, which were guaranteed by us.

Our internet websites and the information contained therein or connected thereto are not intended to be incorporated by reference into this Quarterly Report on Form 10-Q.

On ~~October 10, 2019, the Governor of California signed into law Assembly Bill 539 (“AB 539”), which amends several aspects~~March 7, 2020, SB 421 passed through both houses of the ~~California Finance Lenders Law (the “CFL”). Specifically, on loans~~Virginia Legislature. The bill amends laws governing open-end lines of ~~$2,500 or more but less than $10,000, AB 539 caps~~credit to cap interest ~~rates~~and fees at 36% annual interest plus a $50 annual participation fee. Further, the ~~federal funds rate and requires~~law would allow Virginia-licensed lenders to make installment loans at 36% APR plus a loan ~~terms~~processing fee equal to ~~be at least 12 months. On loans~~the greater of ~~at least $3,000~~$75 or 5% of the principal loan amount, but ~~less than $10,000, AB 539 prohibits loan terms from~~not exceeding ~~60 months and 15 days.~~$150. The law is ~~effective~~scheduled to go into effect on January 1, ~~2020.~~2021.

On August 14, 2018, Brazil adopted the General Data Privacy Law (Lei Geral de Proteção de Dados Pessoais or “LGPD”). The key provisions of LGPD are quite similar to the European Union’s General Data Protection Regulation (“GDPR”) in that it grants certain rights to data subjects, imposes obligations on companies with regard to the processing of data, and allows authorities to impose substantial fines on companies that violate the law. LGPD was originally anticipated to go into effect on February 15, 2020; however, several amendments to LGPD have been proposed, one of which could delay the effective date of the legislation to August 2020. Compliance with LGPD may increase the cost of conducting business in Brazil, and we could see regulatory compliance costs and enforcement activity once the law goes into effect.

Prior to January 1, 2020, we carried our loans and finance receivables at amortized cost, net of an allowance for estimated losses inherent in the portfolio. Effective January 1, 2020, we elected the fair value option to account for all our loans and finance receivables in conjunction with the transition guidance specified in ASU 2019-05. We believe the fair value option better reflects the value of our portfolio and its future economic performance as well as more closely aligns with our marginal decision-making processes that rely on risk-based pricing and discounted cash flow methodologies. Refer to Note 1 for discussion of the election and its impact on our accounting policies. In comparing our current year results under the fair value option to prior periods, it may be helpful to consider the following:

Prior to 2020, origination fees as well as certain direct costs associated with originating loans were deferred and amortized into or against revenue on an effective yield basis over the term of the loan or the projected delivery term of the finance receivable. Subsequent to the election of the fair value option, these fees and costs are no longer eligible for deferral. As such, we expect revenue to be slightly higher due to origination fees being immediately recognized and the lack of amortization of deferred costs into revenue. As origination costs are no longer eligible for deferral, we expect marketing and operations and technology expenses to be higher, particularly in periods of growth.

Loans and finance receivables are carried at fair value with changes in fair value recorded in the consolidated income statement. The fair value takes into consideration expected lifetime losses of the loans and finance receivables, whereas the prior method incorporated only incurred losses. As such, changes in credit quality, amongst other significant assumptions, typically have a more significant impact on the carrying value of loans and finance receivables under the fair value option.

The COVID-19 pandemic has, and will likely continue to, severely impact global economic conditions, resulting in substantial volatility in the financial markets, increased unemployment, and operational challenges resulting from measures that governments have imposed to control its spread. We have implemented a number of procedures in response to the pandemic to support the safety and well-being of our employees, customers and shareholders that continue through the date of this report:

From a loan valuation perspective, the COVID-19 pandemic significantly increases the potential variability of our expected cash flows. In the latter half of March 2020, we noted a slight worsening in certain credit metrics, such as delinquencies, that we attributed primarily to the impact of the COVID-19 pandemic. Consequently, the associated fair values of these loans were adjusted lower as part of the standard process in our internally-developed valuation models described in the Notes to the Consolidated Financial Statements as well as the “Critical Accounting Estimates” section of this Form 10-Q. In addition, the number of loans with payment deferrals or other modifications increased meaningfully in the latter half of March. While not considered delinquent, we expect these customers to present a higher default risk than typical non-delinquent customers that continue to pay on a timely basis; therefore, we adjusted the fair value of these loans lower to reflect the increased risk. We also deemed it appropriate to increase the discount rate to capture the increase in potential volatility in expected cash flows due to the unprecedented nature of this pandemic and governmental response. After adjusting the discount rate for the decrease in underling interest rates, we increased the rate by 500 basis points based on what we deemed a market participant would require to assume the additional risk. We deemed the resulting fair value to be an appropriate market-based exit price that considers current market conditions at March 31, 2020.

We continue to closely monitor this pandemic and expect to make future changes to respond to the situation as it continues to evolve.

Our financial results for the three-month period ended ~~September 30, 2019,~~March 31, 2020, or the current quarter, are summarized below.

The following tables reflect our results of operations for the periods indicated, both in dollars and as a percentage of total revenue (dollars in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2019			2018			2020			2019
Revenue
Loans and finance receivables revenue	$	329,288		$	293,624		$	907,614		$	800,435		$	359,806		$	264,125
Other		225			255			782			1,043			2,446			313
Total Revenue		329,513			293,879			908,396			801,478			362,252			264,438
Change in Fair Value														(235,719	)		—
Cost of Revenue		171,266			163,763			448,608			393,810			—			(118,858	)
Gross Profit		158,247			130,116			459,788			407,668
Net Revenue/Gross Profit														126,533			145,580
Expenses
Marketing														34,558			19,061
Operations and technology														31,266			20,579
General and administrative														27,951			29,051
Depreciation and amortization														3,670			3,934
Total Expenses														97,445			72,625
Income from Operations														29,088			72,955
Interest expense, net														(20,381	)		(19,502	)
Foreign currency transaction gain (loss)														41			(143	)
Loss on early extinguishment of debt														—			(2,321	)
Income before Income Taxes														8,748			50,989
Provision for income taxes														3,000			12,010
Net income from continuing operations														5,748			38,979
Net loss from discontinued operations														(288	)		(3,962	)
Net Income													$	5,460		$	35,017
Earnings Per Share:
Earnings per common share - diluted:
Continuing operations													$	0.18		$	1.13
Discontinued operations														(0.01	)		(0.11	)
Total earnings common share - diluted													$	0.17		$	1.02

Revenue
Loans and finance receivables revenue														99.3	%		99.9	%
Other														0.7			0.1
Total Revenue														100.0			100.0
Change in Fair Value														(65.1	)		—
Cost of Revenue														—			(44.9	)
Net Revenue/Gross Profit														34.9			55.1
Expenses
Marketing		36,993			36,011			92,559			93,133			9.6			7.2
Operations and technology		34,310			28,260			96,321			80,993			8.6			7.8
General and administrative		28,787			24,360			87,236			79,576			7.7			11.0
Depreciation and amortization		3,716			3,688			11,842			11,363			1.0			1.5
Total Expenses		103,806			92,319			287,958			265,065			26.9			27.5
Income from Operations		54,441			37,797			171,830			142,603			8.0			27.6
Interest expense, net		(18,232	)		(20,244	)		(55,847	)		(59,272	)		(5.6	)		(7.4	)
Foreign currency transaction (loss) gain		(12	)		27			(193	)		(2,265	)		—			—
Loss on early extinguishment of debt		—			(12,469	)		(2,321	)		(17,179	)		—			(0.9	)
Income before Income Taxes		36,197			5,111			113,469			63,887			2.4			19.3
Provision for (benefit from) income taxes		9,112			(10,193	)		26,304			2,460
Provision for income taxes														0.8			4.6
Net income from continuing operations														1.6			14.7
Net loss from discontinued operations														(0.1	)		(1.5	)
Net Income	$	27,085		$	15,304		$	87,165		$	61,427			1.5	%		13.2	%
Diluted net income per share	$	0.78		$	0.43		$	2.53		$	1.75

Revenue
Loans and finance receivables revenue		99.9	%		99.9	%		99.9	%		99.9	%
Other		0.1			0.1			0.1			0.1
Total Revenue		100.0			100.0			100.0			100.0
Cost of Revenue		52.0			55.7			49.4			49.1
Gross Profit		48.0			44.3			50.6			50.9
Expenses
Marketing		11.2			12.2			10.2			11.6
Operations and technology		10.4			9.6			10.6			10.1
General and administrative		8.8			8.3			9.6			10.0
Depreciation and amortization		1.1			1.3			1.3			1.4
Total Expenses		31.5			31.4			31.7			33.1
Income from Operations		16.5			12.9			18.9			17.8
Interest expense, net		(5.5	)		(6.9	)		(6.1	)		(7.4	)
Foreign currency transaction (loss) gain		—			—			—			(0.3	)
Loss on early extinguishment of debt		—			(4.3	)		(0.3	)		(2.1	)
Income before Income Taxes		11.0			1.7			12.5			8.0
Provision for (benefit from) income taxes		2.8			(3.5	)		2.9			0.3
Net Income		8.2	%		5.2	%		9.6	%		7.7	%

In addition to the financial information prepared in conformity with generally accepted accounting principles (“GAAP”), we provide historical non-GAAP financial information. We believe that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of our operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our business that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.

We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, our consolidated financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

In addition to reporting financial results in accordance with GAAP, we have provided adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of our financial performance, competitive position and prospects for the future. We also believe that investors regularly rely on non-GAAP financial measures, such as the Adjusted Earnings Measures, to assess operating performance and that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the adjustments shown below are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of each of these expense items.

The following table provides reconciliations between net income and diluted earnings per share calculated in accordance with GAAP to the Adjusted Earnings Measures, which are shown net of tax (in thousands, except per share data):

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
Net Income	$	27,085		$	15,304		$	87,165		$	61,427
Net income from continuing operations													$	5,748		$	38,979
Adjustments:
Lease termination and cease-use costs		—			—			726			—			—			726
Loss on early extinguishment of debt		—			12,469			2,321			17,179			—			2,321
Intangible asset amortization		268			268			803			803			267			268
Stock-based compensation expense		3,387			2,882			9,784			8,149			3,460			3,074
Foreign currency transaction loss (gain)		12			(27	)		193			2,265
Foreign currency transaction (gain) loss														(41	)		143
Cumulative tax effect of adjustments		(853	)		(3,332	)		(3,215	)		(6,088	)		(868	)		(1,519	)
Discrete tax adjustments		—			(11,237	)		(141	)		(11,237	)		—			(141	)
Adjusted earnings	$	29,899		$	16,327		$	97,636		$	72,498		$	8,566		$	43,851

Diluted earnings per share	$	0.78		$	0.43		$	2.53		$	1.75		$	0.18		$	1.13
Adjustments:
Lease termination and cease-use costs		—			—			0.02			—			—			0.02
Loss on early extinguishment of debt		—			0.35			0.07			0.49			—			0.07
Intangible asset amortization		0.01			0.01			0.02			0.02			0.01			0.01
Stock-based compensation expense		0.10			0.08			0.28			0.23			0.10			0.09
Foreign currency transaction loss (gain)		—			—			—			0.06
Foreign currency transaction (gain) loss														—			—
Cumulative tax effect of adjustments		(0.03	)		(0.09	)		(0.09	)		(0.17	)		(0.03	)		(0.05	)
Discrete tax adjustments		—			(0.32	)		—			(0.32	)		—			—
Adjusted earnings per share	$	0.86		$	0.46		$	2.83		$	2.06		$	0.26		$	1.27

The table below shows Adjusted EBITDA, which is a non-GAAP measure that we define as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, and stock-based compensation expense. We believe Adjusted EBITDA is used by investors to analyze operating performance and evaluate our ability to incur and service debt and our capacity for making capital expenditures. Adjusted EBITDA is also useful to investors to help assess our estimated enterprise value. In addition,

we believe that the adjustments for loss on early extinguishment of debt and lease termination and cease-use costs shown below are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of the expense items. The computation of Adjusted EBITDA, as presented below, may differ from the computation of similarly-titled measures provided by other companies (in thousands):

	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2019			2018			2019			2018			2020			2019
Net Income	$	27,085		$	15,304		$	87,165		$	61,427
Net income from continuing operations													$	5,748		$	38,979
Depreciation and amortization expenses		3,716			3,688			11,842			11,363			3,670			3,934
Interest expense, net		18,232			20,244			55,847			59,272			20,381			19,502
Foreign currency transaction loss (gain)		12			(27	)		193			2,265
Provision for (benefit from) income taxes		9,112			(10,193	)		26,304			2,460
Foreign currency transaction (gain) loss														(41	)		143
Provision for income taxes														3,000			12,010
Stock-based compensation expense		3,387			2,882			9,784			8,149			3,460			3,074
Adjustment:
Lease termination and cease-use costs		—			—			370			—			—			370
Loss on early extinguishment of debt		—			12,469			2,321			17,179			—			2,321
Adjusted EBITDA	$	61,544		$	44,367		$	193,826		$	162,115		$	36,218		$	80,333

Adjusted EBITDA margin calculated as follows:
Total Revenue	$	329,513		$	293,879		$	908,396		$	801,478		$	362,252		$	264,438
Adjusted EBITDA		61,544			44,367			193,826			162,115			36,218			80,333
Adjusted EBITDA as a percentage of total revenue		18.7	%		15.1	%		21.3	%		20.2	%		10.0	%		30.4	%

In addition to reporting financial results in accordance with GAAP, we have provided certain other non-GAAP financial information on a constant currency basis. WeOutside the United States, we currently operate in ~~the United Kingdom and~~ Brazil. During the current quarter, ~~8.8%~~1.3% of our revenue originated in currencies other than the U.S. Dollar, principally the ~~British Pound Sterling.~~Brazilian Real. As a result, changes in our reported revenue and profits include the impacts of changes in foreign currency exchange rates. ~~As additional information to the reader, we~~We provide constant currency assessments in the following discussion and analysis to ~~remove and/or quantify~~isolate the impact of the fluctuation in foreign exchange rates and utilize constant currency results in our analysis of performance. Our constant currency assessment assumes foreign exchange rates in the current fiscal periods remained the same as in the prior fiscal year periods. All conversion rates below are based on the U.S. Dollar equivalent to ~~one of~~ the applicable foreign ~~currencies:~~currency:

We believe that our non-GAAP constant currency assessments are a useful measure, as they indicate the actual growth and profitability of our operations.

In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 2 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and

Finance Receivables Measures are non-GAAP measures that include both loans and RPAs we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See “—Loan and Finance Receivable ~~Balances,”~~Balances” and “—Credit Performance of Loans and Finance ~~Receivables Loss Experience” and “—Loans and Finance Receivables Loss Experience by Product”~~Receivables” below for reconciliations between Company owned and purchased loans and finance receivables, gross, allowance and liability for losses, cost of revenue and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures.

We believe these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. We also believe that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on our consolidated balance sheet since both revenue and cost of revenue are impacted by the aggregate amount of receivables we own and those we guarantee as reflected in our consolidated financial statements.

THREE MONTHS ENDED ~~SEPTEMBER 30, 2019~~MARCH 31, 2020 COMPARED TO THREE MONTHS ENDED ~~SEPTEMBER 30, 2018~~MARCH 31, 2019

Revenue increased ~~$35.6~~$97.8 million, or ~~12.1%~~37.0%, to ~~$329.5~~$362.2 million for the current quarter as compared to ~~$293.9~~$264.4 million for the prior year quarter. On a constant currency basis, revenue increased by ~~$37.1~~$98.6 million, or ~~12.6%~~37.3%, for the current quarter compared to the prior year quarter. ~~Our domestic operations contributed an~~The vast majority of this increase is due to organic growth, with a small portion due to the adoption of ~~$49.6 million, primarily resulting from~~fair value accounting on our loan portfolio and the differing treatment of the origination fees and the costs previously described in the “Election of Fair Value Option” section. On the organic growth side, the increase was due to a ~~48.3%~~77.8% increase in line of credit account revenue and ~~an 11.5%~~a 9.0% increase in installment loan and RPA revenue in the current quarter compared to the prior year quarter driven by strong customer demand for these products. ~~Our international operations decreased $13.9 million~~ ~~(a decrease of $12.5 million on a constant currency basis), primarily resulting from a 57.4% decrease in short-term loan~~

Net revenue ~~and a 9.9% decrease in installment loan and RPA revenue as we decreased marketing spend in the United Kingdom during the quarter.~~

~~Our gross profit increased by $28.1 million to $158.2 million~~ for the current quarter ~~from $130.1 million for the prior year quarter.~~ ~~On a constant currency basis, gross profit increased by $29.0~~was $126.5 million for the current quarter compared to gross profit of $145.6 million for the prior year quarter. Our consolidated net revenue margin was 34.9% for the current quarter gross profit as a percentage of revenue, or our gross profit margin, ~~increased~~compared to ~~48.0% for the current quarter, from 44.3%~~gross profit of 55.1% for the prior year quarter.

The following ~~tables set~~table sets forth the components of revenue and gross profit, separated by product ~~and between domestic and international~~ for the current quarter and the prior year quarter (in thousands):

	Three Months Ended September 30,												Three Months Ended March 31,
	2019			2018			$ Change			% Change			2020			2019			$ Change			% Change
Revenue by product:
Short-term loans	$	34,844		$	57,851		$	(23,007	)		(39.8	)%
Installment loans and RPAs													$	174,034		$	159,642		$	14,392			9.0	%
Line of credit accounts		146,362			98,666			47,696			48.3			185,772			104,483			81,289			77.8
Installment loans and RPAs		148,082			137,107			10,975			8.0
Total loans and finance receivables revenue		329,288			293,624			35,664			12.1			359,806			264,125			95,681			36.2
Other		225			255			(30	)		(11.8	)		2,446			313			2,133			681.5
Total revenue	$	329,513		$	293,879		$	35,634			12.1	%		362,252			264,438			97,814			37.0
Change in fair value														(235,719	)		—			(235,719	)		100.0
Cost of revenue														—			(118,858	)		118,858			(100.0	)
Net revenue/gross profit													$	126,533		$	145,580		$	(19,047	)		(13.1	)%

Revenue by product (% to total):
Short-term loans		10.6	%		19.7	%
Installment loans and RPAs														48.0	%		60.4	%
Line of credit accounts		44.4			33.6									51.3			39.5
Installment loans and RPAs		44.9			46.7
Total loans and finance receivables revenue		99.9			99.9									99.3			99.9
Other		0.1			0.1									0.7			0.1
Total revenue		100.0	%		100.0	%								100.0			100.0
Change in fair value														(65.1	)		—
Cost of revenue														—			(44.9	)
Net revenue/gross profit														34.9	%		55.1	%

The fair value of our loan and finance receivable portfolio in our consolidated financial statements at March 31, 2020 was $1,093.2 million with an outstanding principal balance of $1,061.4 million. Our loan and finance receivable balance in our consolidated financial statements ~~for September 30,~~as of March 31, 2019 ~~and 2018~~ was ~~$1,173.5~~$875.0 million, ~~and $990.4 million, respectively,~~ before the allowance for losses of ~~$172.4 million and $151.6 million, respectively.~~$122.5 million. The fair value of the combined loan and finance ~~receivable~~receivables portfolio includes $12.4 million with an outstanding principal balance ~~includes $23.6~~of $10.3 million ~~and $30.1 million as of September 30, 2019 and 2018, respectively,~~ of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements ~~for September 30,~~as of March 31, 2020. The combined loan and finance receivables portfolio includes $22.3 million as of March 31, 2019 ~~and 2018, respectively,~~of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as of March 31, 2019 before the liability for estimated losses of ~~$1.7 million and $2.2~~$1.3 million provided in “Accounts payable and accrued expenses” in our consolidated financial statements for ~~September 30, 2019 and 2018, respectively.~~March 31, 2019.

The ending portfolio balance of company owned loans and finance receivables, net of allowance for losses, increased $162.4 million, or 19.4%, to $1,001.1 million as of September 30, 2019 from $838.8 million as of September 30, 2018, and the outstanding combined portfolio balance of loans and finance receivables, net of allowance and liability for estimated losses, increased $156.5 million, or 18.1%, to $1,023.1 million as of September 30, 2019 from $866.6 million as of September 30, 2018, due primarily to increased demand for our consumer line of credit and installment products as well as our small business loans and finances receivables. The outstanding loan balance for our domestic near-prime consumer installment product increased 22.5% in the current quarter compared to the prior year quarter resulting in a domestic near-prime consumer installment portfolio balance ~~that comprises 46.4%~~comprised 50.4% of our total loan and finance receivable portfolio ~~balance. We expect the loan balances for our domestic near-prime consumer installment loan product will continue~~balance as of March 31, 2020 compared to ~~comprise a larger percentage~~50.6% as of ~~the total loan and finance receivable portfolio, due to customer demand for these products and their longer loan term.~~March 31, 2019. The outstanding loan balance for our ~~domestic~~ consumer line of credit product ~~increased 50.9% in the current quarter compared to the prior year quarter resulting in a domestic consumer line of credit portfolio balance that comprises 22.1%~~comprised 23.4% of our total loan and finance receivable portfolio ~~balance.~~balance compared to 18.6% as of March 31, 2019. Our portfolio of loans and finance receivables serving the needs of small businesses increased to ~~12.4% in the current quarter~~16.1% as of March 31, 2020 from ~~7.8% in the prior year quarter due to an 85.6% increase in the small business loan and finance receivables balance resulting from improvements in the underwriting process.~~11.4% as of March 31, 2019. See “—Non-GAAP Disclosure—Combined Loans and Finance Receivables” above for additional information related to combined loans and finance receivables.

The following tables summarize loan and finance receivable balances outstanding as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ (in thousands):

As of September 30,

2019

2018

Guaranteed

Guaranteed

Company

by the

Company

by the

Owned^(a)

Company^(a)

Combined^(b)

Owned^(a)

Company^(a)

Combined^(b)

Ending loans and finance receivables balances:

Short-term loans

$
41,065

$
13,922

$
54,987

$
78,508

$
25,533

$
104,041

Line of credit accounts

336,847

—

336,847

216,624

—

216,624

Installment loans and RPAs

795,626

9,726

805,352

695,236

4,573

699,809

Total ending loans and finance receivables, gross

1,173,538

23,648

1,197,186

990,368

30,106

1,020,474

Less: Allowance and liabilities for losses^(a)

(172,384
)

(1,703
)

(174,087
)

(151,585
)

(2,244
)

(153,829
)
Total ending loans and finance receivables, net

$
1,001,154

$
21,945

$
1,023,099

$
838,783

$
27,862

$
866,645

Allowance and liability for losses as a % of loans and finance receivables, gross

14.7
%

7.2
%

14.5
%

15.3
%

7.5
%

15.1
%

	As of March 31, 2020
				Guaranteed
	Company			by the
	Owned^(a)			Company^(a)			Combined^(b)
Installment loans and RPAs
Principal	$	748,422		$	10,287		$	758,709
Fair value		772,469			12,445			784,914
Fair value as a % of principal		103.2	%		121.0	%		103.5	%
Line of credit accounts
Principal	$	312,986		$	—		$	312,986
Fair value		320,738			—			320,738
Fair value as a % of principal		102.5	%		—	%		102.5	%
Total loans and finance receivables
Principal	$	1,061,408		$	10,287		$	1,071,695
Fair value		1,093,207			12,445			1,105,652
Fair value as a % of principal		103.0	%		121.0	%		103.2	%

As of September 30,

2019

2018

Guaranteed

Guaranteed

Company

by the

Company

by the

Owned^(a)

Company^(a)

Combined^(b)

Owned^(a)

Company^(a)

Combined^(b)

Ending loans and finance receivables:

Total domestic, gross

$
1,095,967

$
23,648

$
1,119,615

$
867,916

$
30,106

$
898,022

Total international, gross

77,571

—

77,571

122,452

—

122,452

Total ending loans and finance receivables, gross

$
1,173,538

$
23,648

$
1,197,186

$
990,368

$
30,106

$
1,020,474

	As of March 31, 2019
				Guaranteed
	Company			by the
	Owned^(a)			Company^(a)			Combined^(b)
Ending loans and finance receivables balances:
Installment loans and RPAs	$	656,070		$	22,296		$	678,366
Line of credit accounts		218,979			—			218,979
Total ending loans and finance receivables, gross		875,049			22,296			897,345
Less: Allowance and liabilities for losses^(a)		(122,489	)		(1,264	)		(123,753	)
Total ending loans and finance receivables, net	$	752,560		$	21,032		$	773,592
Allowance and liability for losses as a % of loans and finance receivables, gross		14.0	%		5.7	%		13.8	%

At March 31, 2020, the ratio of fair value as a percentage of principal was 103.0% on company owned loans and finance receivables and 103.2% on combined loans and finance receivables. These ratios decreased during the quarter due to the impact of COVID-19 on loan fair values at March 31, 2020.

The average amount outstanding per loan is calculated as ~~the~~ total combined loans, ~~gross balance~~including accrued interest and fees, at the end of the period divided by the total number of combined loans outstanding at the end of the period. The following table shows the average amount outstanding per loan by product at ~~September 30, 2019~~March 31, 2020 and ~~2018:~~2019:

	As of September 30,				As of March 31,
	2019		2018		2020		2019
Average amount outstanding per loan (in ones)^(a)
Short-term loans^(b)	$	433	$	460
Installment loans^(b)(c)					$	2,125	$	1,367
Line of credit accounts		1,703		1,491		1,876		1,644
Installment loans^(b)(c)		2,241		2,014
Total loans^(b)(c)	$	1,726	$	1,404	$	2,033	$	1,429

The average amount outstanding per loan increased to ~~$1,726~~$2,033 from ~~$1,404~~$1,429 during the current quarter compared to the prior year quarter, due primarily to ~~a greater mix of~~higher average amounts outstanding for both installment loans and line of credit accounts, partially offset by an increase in the mix of line of credit account balances which have ~~higher~~a lower average ~~amounts~~amount outstanding ~~relative to short-term loans, in the current quarter compared to the prior year quarter.~~than installment loans.

The average loan origination amount is calculated as the total principal amount of combined loans originated and renewed for the period divided by the total number of combined loans originated and renewed for the period. The following table shows the average loan origination amount by product for the current quarter compared to the prior year quarter:

	Three Months Ended				Three Months Ended
	September 30,				March 31,
	2019		2018		2020		2019
Average loan origination amount (in ones) ^(a)
Short-term loans ^(b)	$	418	$	452
Installment loans ^(b)(d)					$	762	$	730
Line of credit accounts ^(c)		416		351		407		357
Installment loans ^(b)(d)		2,014		1,631
Total loans ^(b)(d)	$	613	$	572	$	570	$	586

The average loan origination amount ~~increased~~decreased to ~~$613~~$570 from ~~$572~~$586 during the current quarter compared to the prior year quarter, due primarily to a greater mix of ~~installment loans, which have higher principal amounts than other products, and~~ line of credit account draws, which ~~have increased as larger small business draws make up a larger portion of~~are generally lower than installment loan originations partially offset by an increase in the average origination amount for both installment and line of credit account ~~portfolio.~~draws.

~~The allowance and liability for estimated losses as a percentage~~We monitor the performance of ~~combined loans and RPAs decreased to 14.5% as of September 30, 2019 from 15.1% as of September 30, 2018.~~

The cost of revenue in the current quarter was $171.3 million, which was primarily composed of $171.3 million related to Company-owned loans and finance receivables. The cost of revenue in the prior year quarter was $163.8 million, which was composed of $163.6 million related to Company-owned loans and finance receivables and a $0.2 million increase in the liability for estimated losses related to loans we guaranteed through the CSO programs. Total charge-offs, net of recoveries, were $153.3 million and $133.4 million in the current quarter and the prior year quarter, respectively.

~~The following tables show~~our loan and finance ~~receivable balances~~receivable. Internal factors such as portfolio composition (e.g., interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels (e.g., product, vintage). We also weigh the impact of relevant, internal business decisions on portfolio. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal/regulatory requirements are also reviewed on a regular basis.

The payment status of a customer, including the degree of any delinquency, is a significant factor in determining estimated charge-offs in the cash flow models that we use to determine fair value. The following table shows payment status on outstanding principal, interest and fees ~~receivable and the relationship~~as of the ~~allowance and liability for losses to the combined balances~~end of ~~loans and finance receivables for~~ each of the last five quarters (in thousands):

2018

2019

Third

Fourth

First

Second

Third

Quarter

Quarter

Quarter

Quarter

Quarter

Loans and finance receivables:

Gross - Company owned

$
990,368

$
1,023,254

$
957,257

$
1,047,762

$
1,173,538

Gross - Guaranteed by the Company^(a)

30,106

29,704

22,296

21,463

23,648

Combined loans and finance receivables, gross^(b)

1,020,474

1,052,958

979,553

1,069,225

1,197,186

Allowance and liability for losses on loans and finance receivables

153,829

165,474

142,665

156,906

174,087

Combined loans and finance receivables, net^(b)

$
866,645

$
887,484

$
836,888

$
912,319

$
1,023,099

Allowance and liability for losses as a % of loans and finance receivables, gross^(b)

15.1
%

15.7
%

14.6
%

14.7
%

14.5
%

	2019												2020
	First			Second			Third			Fourth			First
	Quarter			Quarter			Quarter			Quarter			Quarter
Ending combined loans and finance receivables, including principal and accrued fees/interest outstanding:
Company owned	$	856,608		$	945,881		$	1,086,163		$	1,210,262		$	1,145,748
Guaranteed by the Company^(a)		22,296			21,463			23,648			27,560			11,798
Ending combined loan and finance receivables balance^(b)	$	878,904		$	967,344		$	1,109,811		$	1,237,822		$	1,157,546
> 30 days delinquent		52,631			49,974			77,772			83,315			86,294
> 30 days delinquency rate		6.0	%		5.2	%		7.0	%		6.7	%		7.5	%

We evaluate loss rates for all financing products in our portfolio to determine credit quality and evaluate trends. For our products, we evaluate loans and finance receivables losses as a percentage of the average loan and finance receivable balance outstanding or the average combined loan and finance receivable balance outstanding, whichever is applicable, for each portfolio.

Demand for our short-term loan product in the United States has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds.

Our gross profit margin for short-term loans is typically highest in the first quarter of each year, corresponding to the seasonal decline in consumer loan balances outstanding. The cost of revenue as a percentage of the average combined loan balance for short-term loans outstanding is typically lower in the first quarter and generally peaks in the second half of the year with higher loan demand. Both the gross profit margin and the cost of revenue as a percentage of the average combined loan balance improved in the current quarter, compared to the prior year quarter. Improved profitability in the second and third quarter of 2019 is due primarily to the decreasing loan book and mix of new and existing customers.

The following table includes financial information ~~related only to short-term~~for our installment loans and ~~shows our loss experience trends for short-term loans for each of the last five quarters~~RPAs. Delinquency metrics include principal, interest, and fees, and only amounts that are past due (in thousands):

	2019												2020
	First			Second			Third			Fourth			First
	Quarter			Quarter			Quarter			Quarter			Quarter
Installment loans and RPAs:
Installment and RPA combined loan and finance receivable principal balance:
Company owned	$	609,668		$	655,031		$	720,721		$	792,397		$	748,422
Guaranteed by the Company^(a)		22,130			21,372			23,549			27,455			10,287
Total combined loan and finance receivable principal balance^(b)	$	631,798		$	676,403		$	744,270		$	819,852		$	758,709
Installment and RPA combined loan and finance receivable fair value balance:
Company owned	$	—		$	—		$	—		$	—		$	772,469
Guaranteed by the Company^(a)		—			—			—			—			12,445
Ending combined loan and finance receivable fair value balance^(b)	$	—		$	—		$	—		$	—		$	784,914
Fair value as a % of principal^(b)(c)		—	%		—	%		—	%		—	%		103.5	%
Installment and RPA combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:
Company owned	$	637,754		$	681,860		$	749,324		$	820,430		$	776,692
Guaranteed by the Company^(a)		22,296			21,463			23,648			27,560			11,798
Ending combined loan and finance receivable balance^(b)	$	660,050		$	703,323		$	772,972		$	847,990		$	788,490
Ending allowance and liability for losses (prior to FVO adoption)	$	82,390		$	87,572		$	86,027		$	87,448		$	—
Allowance for losses as a % of combined loan and finance receivable balance^(b)(c)		12.5	%		12.5	%		11.1	%		10.3	%		—	%
Average installment and RPA combined loan and finance receivable balance, including principal and accrued fees/interest outstanding:
Company owned^(d)	$	665,249		$	655,360		$	718,307		$	783,362		$	803,018
Guaranteed by the Company^(a)(d)		26,856			21,486			23,031			24,723			17,846
Average combined loan and finance receivable balance^(b)(d)	$	692,105		$	676,846		$	741,338		$	808,085		$	820,864

Revenue	$	159,642		$	148,531		$	159,025		$	168,917		$	174,034
Cost of revenue/change in fair value		(59,130	)		(54,748	)		(55,670	)		(67,369	)		(115,441	)
Gross profit/net revenue		100,512			93,783			103,355			101,548			58,593
Gross profit margin/net revenue margin		63.0	%		63.1	%		65.0	%		60.1	%		33.7	%
Cost of revenue/change in fair value as a % of average combined loan and finance receivable balance^(b)(d)		8.5	%		8.1	%		7.5	%		8.3	%		14.1	%

Delinquencies:
> 30 days delinquent	$	36,044		$	32,889		$	44,904		$	46,783		$	47,502
> 30 days delinquent as a % of combined loan and finance receivable balance^(b)(c)		5.5	%		4.7	%		5.8	%		5.5	%		6.0	%

Charge-offs:
Charge-offs (net of recoveries)	$	93,913		$	69,761		$	79,577		$	89,114		$	96,272
Charge-offs (net of recoveries) as a % of average combined loan and finance receivable balance^(b)(d)		13.6	%		10.3	%		10.7	%		11.0	%		11.7	%

2018

2019

Third

Fourth

First

Second

Third

Quarter

Quarter

Quarter

Quarter

Quarter

Short-term loans:

Cost of revenue

$
26,174

$
25,386

$
17,090

$
12,199

$
12,096

Charge-offs (net of recoveries)

21,835

26,822

24,101

13,591

14,310

Average short-term combined loan balance, gross:

Company owned^(a)

73,476

72,952

59,848

49,689

46,641

Guaranteed by the Company^(a)(b)

25,913

25,286

22,628

15,484

13,877

Average short-term combined loan balance, gross^(a)(c)

$
99,389

$
98,238

$
82,476

$
65,173

$
60,518

Ending short-term combined loan balance, gross:

Company owned

$
78,508

$
67,725

$
49,148

$
50,263

$
41,065

Guaranteed by the Company^(b)

25,533

25,388

18,339

13,304

13,922

Ending short-term combined loan balance, gross^(c)

$
104,041

$
93,113

$
67,487

$
63,567

$
54,987

Ending allowance and liability for losses

$
24,981

$
23,384

$
16,524

$
15,030

$
12,690

Short-term loan ratios:

Cost of revenue as a % of average short-term combined loan balance, gross^(a)(c)

26.3
%

25.8
%

20.7
%

18.7
%

20.0
%
Charge-offs (net of recoveries) as a % of average short-term combined loan balance, gross^(a)(c)

22.0
%

27.3
%

29.2
%

20.9
%

23.6
%
Gross profit margin

54.8
%

56.0
%

63.1
%

66.8
%

65.3
%
Allowance and liability for losses as a % of combined loan balance, gross^(c)(d)

24.0
%

25.1
%

24.5
%

23.6
%

23.1
%

The cost of revenue as a percentage of average loan balance for line of credit accounts exhibits a similar quarterly seasonal trend to short-term loan loss rates as the ratio is typically lower in the first quarter and increases throughout the remainder of the year, peaking in the second half of the year with higher loan demand. The gross profit margin is generally lower for line of credit accounts during a growth stage as compared to short-term loans because the highest levels of default are exhibited in the early stages of the account, while revenue is recognized over the term of the account.

~~The following table includes information related only to line of credit accounts and shows our loss experience trends for line of credit accounts for each of the last five quarters (in thousands):~~

2018

2019

Third

Fourth

First

Second

Third

Quarter

Quarter

Quarter

Quarter

Quarter

Line of credit accounts:

Cost of revenue

$
46,749

$
59,632

$
37,739

$
48,326

$
83,755

Charge-offs (net of recoveries)

36,321

50,102

47,385

38,269

59,761

Average loan balance^(a)

200,710

221,721

224,416

237,571

300,849

Ending loan balance

216,624

227,563

218,979

263,825

336,847

Ending allowance for losses balance

$
41,478

$
51,008

$
41,362

$
51,419

$
75,413

Line of credit account ratios:

Cost of revenue as a % of average loan balance^(a)

23.3
%

26.9
%

16.8
%

20.3
%

27.8
%
Charge-offs (net of recoveries) as a % of average loan balance^(a)

18.1
%

22.6
%

21.1
%

16.1
%

19.9
%
Gross profit margin

52.6
%

44.2
%

63.9
%

56.3
%

42.8
%
Allowance for losses as a % of loan balance^(b)

19.1
%

22.4
%

18.9
%

19.5
%

22.4
%

The cost of revenue as a percentage of average loan and finance receivable balance for installment loans and RPAs is typically more consistent throughout the year as compared to short-term loans and line of credit accounts. Due to the scheduled monthly or bi-weekly payments and delivery of receivables that are inherent with installment loans and RPAs, we do not experience the higher level of repayments in the first quarter for these products as we experience with short-term loans and, to a lesser extent, line of credit accounts.

The gross profit margin is generally lower for the installment loan product than for other loan products, primarily because the highest levels of default are exhibited in the early stages of the loan, while revenue is recognized over the term of the loan. In addition, installment loans and RPAs typically have higher average origination amounts. Another factor contributing to the lower gross profit margin is that the product yield for installment loans and RPAs is typically lower than the yield for the other financing products we offer. As a result, particularly in periods of higher growth for the installment loan and RPA portfolios, which has been the case in recent years, the gross profit margin is typically lower for this product than for our short-term loan and line of credit products. Our average installment combined loan and RPA portfolio balance outstanding at September 30, 2019 increased 16.6% in the current quarter compared to the prior year quarter.

The following table includes information related only to our installment loans and RPAs and shows our loss experience trends for installment loans and RPAs for each of the last five quarters (in thousands):

2018

2019

Third

Fourth

First

Second

Third

Quarter

Quarter

Quarter

Quarter

Quarter

Installment loans and RPAs:

Cost of revenue

$
90,840

$
92,172

$
84,216

$
77,772

$
75,415

Charge-offs (net of recoveries)

75,261

88,429

90,764

71,824

79,200

Average installment and RPA combined loan and finance receivable balance, gross:

Company owned^(a)

663,387

713,821

714,398

707,627

769,577

Guaranteed by the Company^(a)(b)

4,325

4,279

4,227

6,002

9,154

Average installment and RPA combined loan and finance receivable balance, gross^(a)(c)

$
667,712

$
718,100

$
718,625

$
713,629

$
778,731

Ending installment and RPA combined loan and finance receivable balance, gross:

Company owned

$
695,236

$
727,966

$
689,130

$
733,674

$
795,626

Guaranteed by the Company^(b)

4,573

4,316

3,957

8,159

9,726

Ending installment and RPA combined loan and finance receivable balance, gross ^(c)

$
699,809

$
732,282

$
693,087

$
741,833

$
805,352

Ending allowance and liability for losses

$
87,370

$
91,082

$
84,779

$
90,457

$
85,984

Installment and RPA loan ratios:

Cost of revenue as a % of average installment and RPA combined loan and finance receivable balance, gross^(a)(c)

13.6
%

12.8
%

11.7
%

10.9
%

9.7
%
Charge-offs (net of recoveries) as a % of average installment and RPA combined loan and finance receivable balance, gross^(a)(c)

11.3
%

12.3
%

12.6
%

10.1
%

10.2
%
Gross profit margin

33.7
%

37.6
%

40.7
%

43.7
%

49.1
%
Allowance and liability for losses as a % of combined loan and finance receivable balance, gross^(c)(d)

12.5
%

12.4
%

12.2
%

12.2
%

10.7
%

The combined ending loan balance, including principal and accrued fees/interest outstanding, of installment loans and RPAs at March 31, 2020 increased 19.5% to $788.5 million compared to $660.1 million at March 31, 2019, driven primarily by our near-prime and small business products. The percentage of loans greater than 30 days delinquent increased to 6.0% at March 31, 2020, compared to 5.5% at March 31, 2019. The increase was driven primarily by stronger demand and growth toward the end of 2019 and beginning of 2020, a higher mix of new customers, which generally have a higher risk of charge-off compared to existing customers, and slightly higher delinquency driven by the impact of COVID-19. Charge-offs (net of recoveries) as a percentage of average combined loan balance decreased to 11.7% for the three months ended March 31, 2020, compared to 13.6% in the prior year quarter, due primarily to a shift in the portfolio mix to near-prime and small business products, which have lower risk of charge-off compared to sub-prime products.

The following table includes financial information for our line of credit accounts. Delinquency metrics include principal, interest, and fees, and only amounts that are past due (in thousands):

	2019												2020
	First			Second			Third			Fourth			First
	Quarter			Quarter			Quarter			Quarter			Quarter
Line of credit accounts:
Total loan principal balance	$	184,822		$	223,545		$	282,556		$	329,011		$	312,986
Ending loan fair value balance		—			—			—			—			320,738
Fair value as a % of principal^(a)		—	%		—	%		—	%		—	%		102.5	%

Ending loan balance, including principal and accrued fees/interest outstanding	$	218,854		$	264,021		$	336,839		$	389,832		$	369,056
Ending allowance for losses (prior to FVO adoption)		41,363			51,419			75,413			91,002			—
Allowance for losses as a % of loan balance^(a)		18.9	%		19.5	%		22.4	%		23.3	%		—	%

Average loan balance^(b)	$	224,973		$	237,821		$	301,213		$	358,440		$	387,180

Revenue	$	104,483		$	110,670		$	146,362		$	174,227		$	185,772
Cost of revenue/change in fair value		(37,900	)		(48,549	)		(83,922	)		(107,940	)		(104,202	)
Gross profit/net revenue		66,583			62,121			62,440			66,287			81,570
Gross profit margin/net revenue margin		63.7	%		56.1	%		42.7	%		38.0	%		43.9	%
Cost of revenue/change in fair value as a % of average loan balance^(b)		16.8	%		20.4	%		27.9	%		30.1	%		26.9	%

Delinquencies:
> 30 days delinquent	$	16,587		$	17,085		$	32,868		$	36,532		$	38,792
> 30 days delinquent as a % of loan balance^(a)		7.6	%		6.5	%		9.8	%		9.4	%		10.5	%

Charge-offs:
Charge-offs (net of recoveries)	$	47,546		$	38,493		$	59,928		$	92,351		$	106,952
Charge-offs (net of recoveries) as a % of average loan balance^(b)		21.1	%		16.2	%		19.9	%		25.8	%		27.6	%

The combined ending loan balance, including principal and accrued fees/interest outstanding, of line of credit accounts at March 31, 2020 increased 68.6% to $369.1 million compared to $218.9 million at March 31, 2019, driven by our strong demand and growth in our consumer and small business products. The percentage of loans greater than 30 days delinquent increased to 10.5% at March 31,

Total expenses increased ~~$11.5~~$24.8 million, or ~~12.4%~~34.2%, to ~~$103.8~~$97.4 million in the current quarter, compared to ~~$92.3~~$72.6 million in the prior year quarter. On a constant currency basis, total expenses increased ~~$12.5~~$25.3 million, or ~~13.5%~~34.8%, in the current quarter as compared to the prior year quarter.

Marketing expense increased to ~~$37.0~~$34.5 million in the current quarter compared to ~~$36.0~~$19.1 million in the prior year quarter. ~~The~~Prior to utilization of the fair value option on our loan portfolio, certain direct costs associated with originating loans were deferred and amortized against revenue over the life of the underlying loans. Subsequent to the election of the fair value option, these fees and costs are no longer eligible for deferral, resulting in higher marketing expenses in 2020. To a lesser extent, the increase in marketing expenses was due ~~primarily~~ to higher domestic marketing spend, driven by higher direct mail costs, television advertising and digital marketing expenses. ~~The increase in domestic marketing spend was partially offset by lower international marketing spend.~~

Operations and technology expense increased to ~~$34.3~~$31.3 million in the current quarter compared to ~~$28.3~~$20.6 million in the prior year quarter, due primarily to higher selling expense ~~which included ongoing expenses associated with customer complaints in the United Kingdom,~~ and higher underwriting costs primarily related to growth in ~~domestic~~ loan balances. ~~The increases were partially offset by lower personnel-related costs primarily driven by lower contract labor.~~

General and administrative expense ~~increased $4.4~~decreased $1.1 million, or ~~18.2%~~3.8%, to ~~$28.8~~$27.9 million in the current quarter compared to ~~$24.4~~$29.0 million in the prior year quarter, due primarily to ~~higher~~lower corporate services personnel costs, driven primarily by ~~an increase in headcount,~~lower incentive accruals, and ~~higher~~lower legal and compliance expenses.

Depreciation and amortization expense was flat compared to the prior year quarter.

Interest expense, net ~~decreased $2.0~~increased $0.9 million, or ~~9.9%~~4.5%, to ~~$18.2~~$20.4 million in the current quarter compared to ~~$20.2~~$19.5 million in the prior year quarter. The ~~decrease~~increase was due primarily to aan increase in the average amount of debt outstanding, which increased $131.4 million to $1,008.3 million during the current quarter from $876.9 million during the prior year quarter, partially offset by an decrease in the weighted average interest rate on our outstanding debt to ~~8.54%~~8.15% during the current quarter from 9.55% during the prior year quarter, partially offset by an increase in the average amount of debt outstanding, which increased $24.1 million to $847.5 million during the current quarter from $823.4 million9.03% during the prior year quarter.

The effective tax rate from continuing operations of ~~25.2%~~34.3% in the current quarter was higher than the ~~(199.4%)~~23.6% rate recorded in the prior year quarter due primarily to ~~the acceleration~~nondeductible executive and stock compensation being a higher proportion of ~~tax deductions in the third~~lower first quarter ~~2018, for prior-year loan- and fixed asset-related deferred tax items coupled with the overall decrease in the federal tax rate from 35% to 21% resulting from the Tax Cuts and Jobs Act~~operating income..

As of ~~September 30, 2019,~~March 31, 2020, the balance of unrecognized tax benefits was ~~$51.3~~$53.5 million ~~($50.3 million net of~~which is included in “Accounts payable and accrued expenses” on the ~~federal benefit of state matters)~~consolidated balance sheet, ~~$15.1~~$16.3 million of which, if recognized, would favorably affect the effective tax rate in the period of recognition. We had ~~$13.9~~$41.3 million and ~~$13.3~~$53.6 million of unrecognized tax benefits as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2018,~~2019, respectively. We believe it is reasonably possible that, within the next twelve months, unrecognized domestic tax benefits could change by a significant amount. The principal uncertainties are related to the timing of recognition of income and losses related to our loan portfolio. ~~During~~We are currently under a Joint Committee on Taxation review of certain tax returns that were filed during 2018 in conjunction with the ~~third quarter of 2019, an IRS examination began in connection with our 2017 tax return and related carryback claim.~~ ~~During the first quarter of 2019, we received an expected refund from the Internal Revenue Service of $45.7 million.~~ refunds claimed on those returns. Depending upon the outcome of the review and any related agreements or settlements with the relevant taxing authorities, the amount of the uncertainty, including amounts that would be recognized as a component of the effective tax rate, could change significantly. While the total amount of uncertainty to be resolved is not clear, it is reasonably possible that the uncertainties pertaining to this matter will be resolved in the next twelve months. ~~We believe~~The Company believes that ~~we have~~it has adequately accounted for any material tax uncertainties in ~~our~~its existing reserves for all open tax years.

For the three months ended March 31, 2020, we had an increase in the net deferred tax liability balance of $23.0M. The increase is primarily attributable to our election of the fair value option to account of all of the loans and finance receivables.

Our U.S. tax returns are subject to examination by federal and state taxing authorities. The statute of limitations related to our consolidated Federal income tax returns is closed for all tax years up to and including 2015. However, the 2015 tax year is still open to the extent of the net operating loss that was carried back from the 2017 tax return. The years open to examination by state, local and

foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed. For jurisdictions that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized. In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized. In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted and signed into U.S. law to provide economic relief to individuals and businesses facing economic hardship as a result of the COVID-19 pandemic. The CARES Act did not have a material tax impact on our consolidated financial condition as of and for the three months ended March 31, 2020. We plan to defer the timing of federal tax estimates and payroll taxes as permitted by the CARES Act and will avail ourselves of net operating loss carryback provisions to the extent possible, which may include changes to the uncertain tax position reserves.

Net income ~~increased $11.8~~decreased $29.5 million, or ~~77.0%~~84.4%, to ~~$27.1~~$5.5 million during the current quarter compared to ~~$15.3~~$35.0 million during the prior year quarter. The ~~increase~~decrease was due primarily to ~~profitable growth~~a reduction in fair value on our loan portfolio due to the ~~business,~~impact of COVID-19, partially offset by increased operating leverage through expense management ~~lower interest expense~~ and lower loss on early extinguishment of debt.

~~NINE MONTHS ENDED SEPTEMBER 30, 2019 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2018~~

Revenue increased $106.9 million, or 13.3%, to $908.4 million for the nine-month period ended September 30, 2019, or current nine-month period, as compared to $801.5 million for the nine-month period ended September 30, 2018, or prior year nine-month period. On a constant currency basis, revenue increased by $113.4 million, or 14.1%, for the current nine-month period compared to the prior year nine-month period. Our domestic operations contributed an increase of $135.1 million, primarily due to a 40.9% increase in line of credit revenue and a 13.7% increase in domestic installment loan and RPA revenue in the current nine-month period compared to the prior year nine-month period driven by strong customer demand for these products. Our international operations decreased $28.2 million ~~(a decrease of $21.8 million on a constant currency basis), primarily resulting from a 50.5% decrease in short-term loan revenue, partially offset by a 3.6% increase in installment loan and RPA revenue as we decreased marketing spend in the United Kingdom.~~

Our gross profit increased by $52.1 million to $459.8 million for the current nine-month period from $407.7 million for the prior year nine-month period. On a constant currency basis, gross profit increased by $54.8 million for the current nine-month period compared to the prior year nine-month period. Our consolidated gross profit margin was relatively flat, decreasing only slightly to 50.6% for the current nine-month period, from 50.9% for the prior year nine-month period. Management expects the consolidated gross profit margin will continue to be influenced by the mix of loans to new and returning customers, the mix of lower-yielding and higher-yielding loan products, and loan originations.

The following tables set forth the components of revenue and gross profit, separated by product and between domestic and international for the current nine-month period and the prior year nine-month period (in thousands):

The average loan origination amount is calculated as the total amount of combined loans originated and renewed for the period divided by the total number of combined loans originated and renewed for the period. The following table shows the average loan origination amount by product for the current nine-month period compared to the prior year nine-month period:

The average loan origination amount increased to $589 during the current nine-month period compared to $573 during the prior year nine-month period, due primarily to a greater mix of installment loans, which have higher principal amounts than other products, and line of credit account draws, which have increased as larger small business draws make up a larger portion of the line of credit account portfolio.

The cost of revenue in the current nine-month period was $448.6 million, which was composed of $449.1 million related to Company-owned loans and finance receivables offset by a $0.5 million decrease in the liability for estimated losses related to loans we guarantee through the CSO programs. The cost of revenue in the prior year nine-month period was $393.8 million, which was primarily composed of $393.8 million related to Company-owned loans and finance receivables. Total charge-offs, net of recoveries, were $439.2 million and $363.9 million in the current nine-month period and the prior year nine-month period, respectively.

Total expenses increased $22.9 million, or 8.6%, to $288.0 million in the current nine-month period, compared to $265.1 million in the prior year nine-month period. On a constant currency basis, total expenses increased $26.2 million, or 9.9%, for the current nine-month period compared to the prior year nine-month period.

Marketing expense decreased to $92.6 million in the current nine-month period compared to $93.1 million in the prior year nine-month period. The decrease was due primarily to lower international spend, driven primarily by lower volume from lead providers and lower television and radio advertising. Lower marketing spend in our international business was partially offset by higher spend for our domestic business, driven by higher television advertising, direct mail and digital marketing expenses.

Operations and technology expense increased to $96.3 million in the current nine-month period compared to $81.0 million in the prior year nine-month period, due primarily to higher international selling expense, which includes ongoing expenses associated with complaints in the United Kingdom and higher underwriting costs primarily related to growth in domestic loan balances.

~~General and administrative expense increased $7.6 million, or 9.6%, to $87.2 million in the current nine-month period compared to $79.6 million in the prior year nine-month period, due primarily to~~ ~~higher corporate services personnel costs, driven primarily by an increase in headcount, and higher legal and compliance expenses.~~

Depreciation and amortization expense increased $0.5 million, or 4.2%, in the current nine-month period compared to the prior year nine-month period, due primarily to increased amortization on higher capitalized software development costs.

Interest expense, net decreased $3.5 million, or 5.8%, to $55.8 million in the current nine-month period compared to $59.3 million in the prior year nine-month period. The decrease was due primarily to a decrease in the weighted average interest rate on our outstanding debt to 8.74% during the current nine-month period from 9.80% during the prior year nine-month period, partially offset by an increase in the average amount of debt outstanding, which increased $75.5 million to $865.5 million during the current nine-month period from $790.0 million during the prior year nine-month period.

~~The effective tax rate of 23.2% in the current nine-month period was higher than the effective tax rate of 3.9% in the prior year nine-month period due primarily~~ to the acceleration of tax deductions in 2018 for prior-year loan-and fixed asset-related deferred tax items, coupled with the overall decrease in the federal tax rate from 35% to 21% resulting from the Tax Cuts and Jobs Act.

Net income increased $25.8 million, or 41.9%, to $87.2 million during the current nine-month period compared to $61.4 million during the prior year nine-month period. The increase was due primarily to profitable growth in the business, increased operating leverage through expense management, lower interest expense and lower loss on early extinguishment of debt.

Given the unprecedented economic circumstances resulting from the COVID-19 pandemic and high degree of uncertainty, we have taken several actions to create a stable and flexible balance sheet that ensures liquidity and funding available to meet our business obligations. We elected to access our committed funding lines prior to March 31, 2020, to preserve optionality in the face of uncertainty. As of March 31, 2020, we had cash, cash equivalents, and restricted cash of $203.8 million, of which $42.7 million was restricted, compared to $81.0 million, of which $45.1 million was restricted, as of December 31, 2019. As of March 31, 2020, we had committed and undrawn funding capacity of $156.8 million. Based on numerous stressed-case modeling scenarios, we believe we have sufficient liquidity to run our operations for the foreseeable future. Further, we have no recourse debt obligations due until 2024 and no non-recourse secured lending facilities with maturities before February 2022.

Historically, we have generated significant cash flow through normal operating activities for funding both long-term and short-term needs. Our near-term liquidity is managed to ensure that adequate resources are available to fund our seasonal working capital growth, which is driven by demand for our loan and financing products, and to meet the continued growth in the demand for our near-prime installment products. On May 30, 2014, we issued and sold $500.0 million in aggregate principal amount of 9.75% senior notes due 2021 (the “2021 Senior Notes”). On September 1, 2017, we issued and sold $250.0 million in aggregate principal amount of 8.50% Senior Notes due 2024 (the “2024 Senior Notes”) and used the net proceeds, in part, to retire $155.0 million in 2021 Senior Notes. On January 21, 2018, we redeemed an additional $50.0 million in principal amount of the outstanding 2021 Senior Notes. On September 19, 2018, we issued and sold $375.0 million in aggregate principal amount of 8.50% Senior Notes due 2025 (the “2025 Senior Notes”) and used the net proceeds, in part, to retire the remaining $295.0 million in principal amount of the outstanding 2021 Senior Notes.

On June 30, 2017, we entered into a secured revolving credit agreement (as amended, the “Credit Agreement”). On April 13, 2018, October 5, 2018 and July 1, 2019, we and certain of our operating subsidiaries entered into amendments to our Credit Agreement, as further described below. As of ~~October 28, 2019,~~April 30, 2020, our available borrowings under the Credit Agreement were ~~$123.8~~$18.8 million. Since 2016, we have entered into several consumer loan securitization facilities and offered asset-backed notes to fund our growth, primarily in our near-prime consumer installment loan business, as further described below under “Consumer Loan Securitization.” As of ~~October 28, 2019,~~April 30, 2020, the outstanding balance under our securitization facilities was ~~$341.4~~$337.8 million. We expect that our operating needs, including satisfying our obligations under our debt agreements and funding our working capital growth, will be satisfied by a combination of cash flows from operations, borrowings under the Credit Agreement, or any refinancing, replacement thereof or increase in borrowings thereunder, and securitization or sale of loans and finance receivables under our consumer loan securitization facilities.

As of ~~September 30, 2019,~~March 31, 2020, we were in compliance with all financial ratios, covenants and other requirements set forth in our debt agreements. Unexpected changes in our financial condition or other unforeseen factors may result in our inability to obtain third-party financing or could increase our borrowing costs in the future. To the extent we experience short-term or long-term funding disruptions, we have the ability to adjust our volume of lending and financing to consumers and small businesses that would reduce cash outflow requirements while increasing cash inflows through repayments. Additional alternatives may include the securitization or sale of assets, increased borrowings under the Credit Agreement, or any refinancing or replacement thereof, and reductions in capital spending, which could be expected to generate additional liquidity.

On September 19, 2018, we issued and sold the 2025 Senior Notes. The 2025 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States pursuant to Regulation S under the Securities Act. The 2025 Senior Notes bear interest at a rate of 8.50% annually on the principal amount payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2019. The 2025 Senior Notes were sold at a price of 100%. The 2025 Senior Notes will mature on September 15, 2025. The 2025 Senior Notes are unsecured debt obligations of ours, and are unconditionally guaranteed by certain of our domestic subsidiaries.

The 2025 Senior Notes are redeemable at our option, in whole or in part, (i) at any time prior to September 15, 2021 at 100% of the aggregate principal amount of 2025 Senior Notes redeemed plus the applicable “make whole” premium specified in the indenture that governs our 2025 Senior Notes (the “2025 Senior Notes Indenture”), plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after September 15, 2021 at the premium, if any, specified in the 2025 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to September 15, 2021, at our option, we may redeem up to 40% of the aggregate principal amount of the 2025 Senior Notes at a redemption price of 108.5% of the aggregate principal amount of 2025 Senior Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2025 Senior Notes Indenture.

We used a portion of the net proceeds of the 2025 Senior Notes offering to retire the remaining outstanding 2021 Senior Notes balance of $295.0 million, to pay the related accrued interest, premiums, fees and expenses associated therewith. The remaining amount was used for general corporate purposes.

On September 1, 2017, we issued and sold the 2024 Senior Notes. The 2024 Senior Notes were sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act. The 2024 Senior Notes bear interest at a rate of 8.50% annually on the principal amount payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2018. The 2024 Senior Notes were sold at a price of 100%. The 2024 Senior Notes will mature on September 1, 2024. The 2024 Senior Notes are unsecured debt obligations of ours, and are unconditionally guaranteed by certain of our domestic subsidiaries.

The 2024 Senior Notes are redeemable at our option, in whole or in part, (i) at any time prior to September 1, 2020 at 100% of the aggregate principal amount of 2024 Senior Notes redeemed plus the applicable “make whole” premium specified in the indenture that governs our 2024 Senior Notes (the “2024 Senior Notes Indenture”), plus accrued and unpaid interest, if any, to the redemption date and (ii) at any time on or after September 1, 2020 at the premium, if any, specified in the 2024 Senior Notes Indenture that will decrease over time, plus accrued and unpaid interest, if any, to the redemption date. In addition, prior to September 1, 2020, at our option, we may redeem up to 40% of the aggregate principal amount of the 2024 Senior Notes at a redemption price of 108.5% of the aggregate principal amount of 2024 Senior Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date, with the proceeds of certain equity offerings as described in the 2024 Senior Notes Indenture.

We used the net proceeds of the 2024 Senior Notes offering to retire a portion of our outstanding 2021 Senior Notes, to pay the related accrued interest, premiums, fees and expenses associated therewith and for general corporate purposes.

We securitize consumer loan receivables originated by certain of our subsidiaries, which are sold to bankruptcy remote special purpose subsidiaries. Each of these securitizations provides that (i) the lenders to a securitization subsidiaries have no recourse to seek repayment or recovery from our operating entities for credit losses on the receivables; (ii) except for certain limited indemnities, such lenders have recourse only to assets of the applicable securitization subsidiary to which they have lent; (iii) such lenders maintain a security interest in all assets of the applicable securitization subsidiary; (iv) cash flows from the assets transferred to such

securitization subsidiaries represent the sole source of payment to such securitization subsidiaries. The collections on assets sold to securitization subsidiaries are not available to satisfy the debts or other obligations of the Company unless such amounts have been released from the lien of the lenders.

On October 17, 2019 (the “2019-A Closing Date”), we issued $138,888,000 Class A Asset Backed Notes (the “2019-A Class A Notes”), $44,445,000 Class B Asset Backed Notes (the “2019-A Class B Notes”), and $16,667,000 Class C Asset Backed Notes (the “2019-A Class C Notes” and, collectively with the 2019-A Class A Notes and the 2019-A Class B Notes, the “2019-A Notes”) through an indirect subsidiary. The 2019-A Class A Notes bear interest at 3.96%, the 2019-A Class B Notes bear interest at 6.17%, and the 2019-A Class C Notes bear interest at 7.62%. The 2019-A Notes are backed by a pool of unsecured consumer installment loans (“Securitization Receivables”) and represent obligations of the issuer only. The 2019-A Notes are not be guaranteed by us.

The net proceeds of the offering of the 2019-A Notes on the 2019-A Closing Date were used to acquire the Securitization Receivables from us, fund a reserve account and pay fees and expenses incurred in connection with the transaction. The amount of Securitization Receivables sold to the issuer on the 2019-A Closing Date was approximately $200.0 million. Additional Securitization Receivables totaling approximately $22.2 million ~~are expected to be~~were sold to the issuer ~~by January 17, 2020.~~prior to December 31, 2019.

bear interest at 7.37%. The 2018-A Notes are backed by a pool of Securitization Receivables and represent obligations of the issuer only. The 2018-A Notes are not guaranteed by us. Under the 2018-A Notes, Securitization Receivables are sold to a wholly-owned subsidiary of ours and serviced by another subsidiary of ours.

The net proceeds of the offering of the 2018-A Notes on the 2018-A Closing Date were used to acquire the Securitization Receivables from us, fund a reserve account and pay fees and expenses incurred in connection with the transaction.

The 2018-A Notes were offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons outside of the United States in compliance with Regulation S under the Securities Act. The 2018-A Notes have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws.

On February 25, 2019 (the “2019-1 Closing Date”), we and several of our subsidiaries entered into a receivables securitization (the “2019-1 Facility”) with PCAM Credit II, LLC, as lender (the “2019-1 Lender”). The 2019-1 Lender is an affiliate of Park Cities Asset Management, LLC. The 2019-1 Facility finances Securitization Receivables that have been and will be originated or acquired under our NetCredit and CashNetUSA brands by several of our subsidiaries and that meet specified eligibility criteria. Under the 2019-1 Facility, eligible Securitization Receivables are sold to a wholly-owned subsidiary of our (the “2019-1 Debtor”) and serviced by another subsidiary of us.

The 2019-1 Debtor has issued a delayed draw term note with an initial maximum principal balance of $30.0 million and a revolving note with an initial maximum principal balance of $20.0 million for an aggregate initial maximum principal balance of $50.0 million, which is required to be secured by eligible Securitization Receivables. The 2019-1 Facility has an accordion feature that, with the consent of the 2019-1 Lender, allows for the maximum principal balance of the delayed draw term note to increase to $50.0 million and the maximum principal balance of the revolving note to increase to $25.0 million, for an aggregate maximum principal balance of $75.0 million. The 2019-1 Facility is non-recourse to us and matures three years after the 2019-1 Closing Date.

The 2019-1 Facility is governed by a loan and security agreement, dated as of the 2019-1 Closing Date, between the 2019-1 Lender and the 2019-1 Debtor. The 2019-1 Facility bears interest at a rate per annum equal to LIBOR (subject to a floor) plus an applicable margin, which applicable margin is initially 9.75%. In addition, the 2019-1 Debtor is required to pay certain customary upfront closing fees to the 2019-1 Lender. Interest payments on the 2019-1 Facility will be made monthly. Subject to certain exceptions, the 2019-1 Debtor is not permitted to prepay the delayed draw term note prior to two years after the 2019-1 Closing Date. Following such date, the 2019-1 Debtor is permitted to voluntarily prepay the 2019-1 Facility without penalty. The revolving note may be paid in whole or in part at any time after the delayed draw term note has been fully drawn.

All amounts due under the 2019-1 Facility are secured by all of the 2019-1 Debtor’s assets, which include the eligible Securitization Receivables transferred to the 2019-1 Debtor, related rights under the eligible Securitization Receivables, a bank account and certain other related collateral. We have issued a limited indemnity to the 2019-1 Lender for certain “bad acts,” and we have agreed for the benefit of the 2019-1 Lender to meet certain ongoing financial performance covenants.

The 2019-1 Facility documents contain customary provisions for securitizations, including representations and warranties as to the eligibility of the eligible Securitization Receivables and other matters; indemnification for specified losses not including losses due to the inability of consumers to repay their loans; covenants regarding special purpose entity matters; and default and termination provisions which provide for the acceleration of the 2019-1 Facility in circumstances including, but not limited to, failure to make payments when due, certain insolvency events, breaches of representations, warranties or covenants, failure to maintain the security interest in the eligible Securitization Receivables, defaults under other material indebtedness of the 2019-1 Debtor and a default by us under our financial performance covenants.

On October 31, 2018 (the “2018-A Closing Date”), we issued $95,000,000 Class A Asset Backed Notes (the “2018-A Class A Notes”) and $30,400,000 Class B Asset Backed Notes (the “2018-A Class B Notes” and, collectively with the 2018-A Class A Notes, the “2018-A Notes”), through an indirect subsidiary. The 2018-A Class A Notes bear interest at 4.20%, and the 2018-A Class B Notes bear interest at 7.37%. The 2018-A Notes are backed by a pool of Securitization Receivables and represent obligations of the issuer only. The 2018-A Notes are not guaranteed by us. Under the 2018-A Notes, Securitization Receivables are sold to a wholly-owned subsidiary of ours and serviced by another subsidiary of ours.

On October 23, 2018, we and several of our subsidiaries entered into a receivables funding agreement (the “2018‑2 Facility”) with Credit Suisse AG, New York Branch, as agent (the “2018‑2 Agent”). The 2018‑2 Facility collateralizes Securitization Receivables that have been and will be originated or acquired under our NetCredit brand by several of our subsidiaries and that meet specified eligibility criteria in exchange for a revolving note. Under the 2018‑2 Facility, Securitization Receivables are sold to a wholly-owned subsidiary of ours (the “2018‑2 Debtor”) and serviced by another subsidiary of ours.

On July 23, 2018, we and several of our subsidiaries entered into a receivables funding agreement (the “2018‑1 Facility”) with Pacific Western Bank, as lender (the “2018‑1 Lender”). The 2018‑1 Facility collateralizes Securitization Receivables that have been and will be originated or acquired under our NetCredit brand by several of our subsidiaries and that meet specified eligibility criteria in exchange for a revolving note. Under the 2018‑1 Facility, Securitization Receivables are sold to a wholly-owned subsidiary of ours (the “2018‑1 Debtor”) and serviced by another subsidiary of ours.

which rate per annum is initially 4.00%. In addition, the 2018‑1 Debtor paid certain customary upfront closing fees to the 2018‑1 Lender. Interest payments on the 2018‑1 Facility are made monthly. The 2018‑1 Debtor is permitted to prepay the 2018‑1 Facility, subject to certain fees and conditions. In the event of prepayment for the purposes of securitizations, no fees shall apply. Any remaining amounts outstanding will be payable no later than July 22, 2023, the final maturity date.

On January 15, 2016, we and certain of our subsidiaries entered into a receivables securitization (as amended, the “2016‑1 Securitization Facility”) with certain purchasers, Jefferies Funding LLC, as administrative agent (the “2016‑1 Agent”) and Bankers Trust Company, as indenture trustee and securities intermediary (the “Indenture Trustee”). The 2016‑1 Securitization Facility securitized Securitization Receivables that were originated or acquired under our NetCredit brand and that met specified eligibility criteria. Under the 2016‑1 Securitization Facility, Securitization Receivables were sold to a wholly-owned special purpose subsidiary of ours (the “2016‑1 Issuer”) and serviced by another subsidiary of ours. The 2016‑1 Securitization Facility, as amended on October 20, 2017, provided for a maximum principal amount of $275 million, an initial term note with an with an initial principal amount of $181.1 million and the ability to subsequently issue term notes thereafter, variable funding notes with an aggregate committed availability of $75 million per quarter with an option to increase the commitment to $90 million and a revolving period of the facility ending in April 2019.

On October 31, 2018, the ~~2016~~‑2016‑1 Issuer resold a substantial portion of the Securitization Receivables it owned to Enova International, Inc., and used the proceeds to redeem all of the outstanding 2017 Quarterly Term Notes and to repay all amounts owed on the 2017 Variable Funding Notes.

Subject to certain exceptions, the 2016‑1 Issuer was not permitted to prepay or redeem any of the 2016-1 Facility prior to April 15, 2019, but the 2016-1 Agent, the Indenture Trustee, and the holders of the notes agreed to permit an early repayment. On March 29, 2019, the 2016-1 Facility was repaid in full.

On December 1, 2016, we and certain of our subsidiaries entered into a receivables securitization (the “2016‑2 Facility”) with Redpoint Capital Asset Funding, LLC, as lender (the “Lender”). The 2016‑2 Facility securitized Securitization Receivables that were originated or acquired under our NetCredit brand by several of our subsidiaries and that meet specified eligibility criteria, including that the annual percentage rate for each securitized consumer loan was greater than or equal to 90%. Under the 2016‑2 Facility, Securitization Receivables were sold to a wholly-owned subsidiary of ours and serviced by another subsidiary of ours. In October 2018, the 2016‑2 Facility was repaid in full and there is no remaining amount available to be borrowed.

On June 30, 2017, we and certain of our operating subsidiaries entered into a secured revolving credit agreement with a syndicate of banks including TBK Bank, SSB (“TBK”), as administrative agent and collateral agent, Jefferies Finance LLC and TBK as joint lead arrangers and joint lead bookrunners, and Veritex Community Bank (as successor in interest to Green Bank, N.A.), as lender. On April 13, 2018 and October 5, 2018, the Credit Agreement was amended to include Pacific Western Bank and Axos Bank, respectively, as lenders, in the syndicate of lenders. Additionally, on July 1, 2019, the Credit Agreement was amended to, amongst other changes, extend the maturity date to June 30, 2022 from May 1, 2020 and increase the advance rate to 65% from 53%.

The Credit Agreement is secured by domestic receivables. The borrowing limit in the Credit Agreement, as amended, is $125 million and its maturity date is June 30, 2022. We had outstanding ~~borrowings~~$105.3 million of ~~$25.0 million~~borrowings under the Credit Agreement as of ~~September 30, 2019.~~March 31, 2020.

The Credit Agreement provides for a revolving credit line with interest on borrowings under the facility at prime rate plus 1.00%. In addition, the Credit Agreement provides for payment of a commitment fee calculated with respect to the unused portion of the line, and ranges from 0.30% to 0.50% per annum depending on usage. A portion of the revolving credit facility, up to a maximum of $20 million, is available for the issuance of letters of credit. We had outstanding letters of credit under the Credit Agreement of ~~$1.2~~$1.0 million as of ~~September 30, 2019.~~ ~~The Credit Agreement provides for certain prepayment penalties if it is terminated on or before its first and second anniversary date, subject to certain exceptions.~~March 31, 2020.

The Credit Agreement contains certain limitations on the incurrence of additional indebtedness, investments, the attachment of liens to our property, the amount of dividends and other distributions, fundamental changes to us or our business and certain other of our activities. The Credit Agreement contains standard financial covenants for a facility of this type based on a leverage ratio and a fixed charge coverage ratio. The Credit Agreement also provides for customary affirmative covenants, including financial reporting requirements, and certain events of default, including payment defaults, covenant defaults and other customary defaults.

Our cash flows and other key indicators of liquidity are summarized as follows (dollars in thousands):

	Nine Months Ended September 30,						Three Months Ended March 31,
	2019			2018			2020			2019
Cash flows provided by operating activities	$	605,905		$	468,160
Cash flows from operating activities - continuing operations							$	252,802		$	206,591
Cash flows from operating activities - discontinued operations								(288	)		14,489
Total cash flows provided by operating activities								252,514			221,080
Cash flows used in investing activities
Loans and finance receivables	$	(570,532	)	$	(505,938	)		(178,185	)		(94,901	)
Acquisitions, net of cash acquired								(3,597	)		—
Purchases of property and equipment		(16,459	)		(11,303	)		(5,156	)		(4,425	)
Other investing activities		4			93			57			—
Cash flows from investing activities - continuing operations								(186,881	)		(99,326	)
Cash flows from investing activities - discontinued operations								—			(4,829	)
Total cash flows used in investing activities	$	(586,987	)	$	(517,148	)		(186,881	)		(104,155	)
Cash flows provided by financing activities	$	2,616		$	141,234		$	57,335		$	(77,913	)

Net cash provided by operating activities from continuing operations increased ~~$137.7~~$46.2 million, or ~~29.4%~~22.4%, to ~~$605.9~~$252.8 million ~~for~~in the current ~~nine-month period~~quarter from ~~$468.2~~$206.6 million for the prior year ~~nine-month period.~~quarter. The increase was driven primarily by overall growth in the business with interest and fees paid by customers outpacing operating cash outflows.

We believe cash flows from operations and available cash balances and borrowings under our consumer loan securitization facilities and Credit Agreement, which may include increased borrowings under our Credit Agreement, any refinancing or replacement thereof, and additional securitization of consumer loans, will be sufficient to fund our future operating liquidity needs, including to fund our working capital growth.

Net cash used in investing activities from continuing operations increased ~~$69.8~~$87.6 million, or ~~13.5%~~88.1%, for the current ~~nine-month period~~quarter compared to the prior year ~~nine-month period.~~quarter. This increase was due primarily to ~~a $64.6 million increase in net cash invested in loans and finance receivables, reflecting a $134.1 million increase in the amount~~higher originations or acquisitions of loans and finance receivables ~~originated or acquired in addition to a $69.5~~of $76.6 million ~~increase in payments received~~ from ~~customers. Additionally, purchases of property~~strong customer demand and ~~equipment increased $5.2 million for the current nine-month period compared to the prior year nine-month period.~~effective marketing.

Cash flows ~~used in~~provided by financing activities for the current ~~nine-month period~~quarter were driven primarily by ~~$8.8~~$66.0 million in net borrowings under our securitization facilities ~~$3.0~~and $33.3 million in net borrowings under the Credit Agreement, ~~and $10.6~~partially offset by $41.7 million in treasury shares purchased. Cash flows used in financing activities for the prior year ~~nine-month period~~quarter were driven primarily by ~~$375.0~~$46.3 million in ~~borrowings related to the issuance of~~net repayments under our ~~2025 Senior Notes, $9.2~~securitization facilities, $22.0 million in ~~debt issuance costs primarily related to~~net repayments under the ~~issuance our 2025 Senior Notes,~~ ~~$6.7~~Credit Agreement and $8.2 million ~~of proceeds from the exercise of stock options and the $3.0 million payment of our promissory note related to a previous acquisition.~~in treasury shares purchased.

On September 15, 2017, we announced the Board of Directors had authorized a share repurchase program for the repurchase of up to $25.0 million of our common stock through December 31, 2019. The $25.0 million limit was reached in January 2019, with all share repurchases having been through open market transactions. On January 31, 2019, we announced the Board of Directors had authorized a share repurchase program for the repurchase of up to $50.0 million of our common stock through December 31, 2020. On October 24, 2019, we announced the Board of Directors had authorized a new share repurchase program totaling $75.0 million that expires December 31, 2020. The new program ~~replaces~~replaced the prior authorization of $50.0 million. During the current ~~nine-month period~~quarter, we paid ~~$8.7~~$41.7 million to repurchase common stock under the share repurchase programs.

In certain markets, we arrange for consumers to obtain consumer loan products from independent third-party lenders through our CSO programs. For consumer loan products originated by third-party lenders under the CSO programs, each lender is responsible for providing the criteria by which the customer’s application is underwritten and, if approved, determining the amount of the consumer loan. We are responsible for assessing whether or not we will guarantee such loan. When a customer executes an agreement with us under our CSO programs, we agree, for a fee payable to us by the customer, to provide certain services to the customer, one of which is to guarantee the customer’s obligation to repay the loan received by the customer from the third-party lender if the customer fails to do so. The guarantee represents an obligation to purchase specific loans if they go into default, which generally occurs after one payment is missed. As of ~~September 30,~~March 31, 2020 the consumer loans guaranteed by the Company had an outstanding principal balance of

$10.3 million. As of March 31, 2019, ~~and 2018,~~ the outstanding amount of active consumer loans originated by third-party lenders under the CSO programs was ~~$23.6~~$22.3 million, ~~and $30.1 million, respectively,~~ which were guaranteed by us. ~~The estimated fair value of the liability for estimated losses on consumer~~These loans ~~guaranteed by us of $1.7 million and $2.2 million, as of September 30, 2019 and 2018, respectively, is~~are not included in ~~“Accounts payable and accrued expenses” in the~~our consolidated balance ~~sheets.~~sheets as we do not own the loans prior to default. Our CSO programs are further described under the caption “Products and Services” above.

TWith the exception of the following, there have been no material changes to the information on critical accounting estimates described in our Annual Report on Form 10‑K for the year ended December 31,~~2018~~ 2019.

Beginning January 1, 2020, we have elected the fair value option for our loans and finance receivables. We estimate the fair value of our loans and finance receivables primarily using discounted cash flow analyses that utilize machine-learning technology at an individual loan level to more accurately predict future payments. We adjust contractual cash flows for estimated losses, prepayments and servicing costs over the estimated duration of the underlying assets and discount the future cash flows using a rate of return that we believe a market participant would require. Model results may be adjusted by management if we do not believe the output reflects the fair value of the instrument, as defined under U.S. GAAP. The models are re-trained and re-scored at each measurement date to capture any changes in internal factors such as nature, term, volume, payment trends, remaining time to maturity, and portfolio mix, as well as changes in underwriting or observed trends expected to impact future performance. We have validated model performance by comparing past valuations with actual performance noted after each valuation.

The following describes the primary inputs to the discounted cash flow analyses that require significant judgment:

Management continuously monitors factors that may impact the fair values of its products. Internal factors such as portfolio composition (for example, interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels, including product and vintage. The Company also weighs the impact of relevant, internal business decisions on estimated fair value. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal or regulatory requirements are also reviewed on a regular basis. Management also reviews the results of its fair value model output compared to prior periods for unusual trends, potential model over- or under-reaction, outlier results and other distorting factors. Based on these analyses, management may deem it appropriate to adjust model output to derive management’s best estimate of fair value.

See Note 1 in the Notes to Consolidated Financial Statements included in this report for a discussion of recent accounting pronouncements.

Market risk is a broad term related to economic losses due to adverse changes in the fair value of a financial instrument. While market risk may embody several elements, including liquidity and basis risk, the SEC’s market risk rules focus on pricing risk, which relates to changes in the level of prices due to changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market risk-sensitive instruments.

Prior to January 1, 2020, market risks relating to our operations ~~result~~resulted primarily from changes in foreign currency exchange ~~rates. We do not engage in speculative or leveraged transactions, nor do we hold or issue financial instruments for trading purposes. There have been no material changes~~rates and interest rates related to our ~~exposure~~long-term debt.As disclosed in Note 1 to the Consolidated Financial Statements, we elected the fair value option as of January 1, 2020 and, as a result going forward, carry our loans and finance receivables at fair value with changes in fair value recognized directly in earnings. As of March 31, 2020, we were exposed to interest rate risk on our loans and finance receivables, which have fixed interest rates. The fair values of loans are estimated using a discounted cash flow methodology, where the discount rate represents an estimate of the required rate of return by market ~~risks since December 31, 2018.~~participants. The pricing on many fixed income securities is highly dependent upon interest rates and credit spreads that change on a daily basis. The discount rates utilized in the valuation of our products are not as reactive to minor shifts in underlying interest rates as i.) the interest component is relatively minor in size compared with the non-interest rate component of the discount rate and ii.) a market participant’s basis for adjusting the required rate of return is less likely to be impacted by minor shifts in the underlying interest rates.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the “Exchange Act”) as of ~~September 30, 2019~~March 31, 2020 (the “Evaluation Date”). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective and provide reasonable assurance (i) to ensure that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms; and (ii) to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

There was no change in our internal control over financial reporting during the quarter ended ~~September 30, 2019~~March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls will prevent or detect all possible misstatements due to error or fraud. Our disclosure controls and procedures and internal controls are, however, designed to provide reasonable assurance of achieving their objectives, and our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

See the “Litigation” section of Note 98 of the notes to our consolidated financial statements (unaudited) of Part I, “Item 1 Financial Statements.”

The following ~~description of risk factors includes any~~include material changes to the risk factors associated with the Company’s business previously disclosed in Part I, Item 1A of the Annual Report on Form 10 K for the year ended December 31, ~~2018~~2019.

Our business and future results may be affected by a number of risks and uncertainties that should be considered carefully in evaluating us. In addition, this report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including the risks faced by us described below and in our Annual Report on Form 10 K for the year ended December 31, ~~2018.~~2019. The occurrence of one or more of the events listed below and in our Annual Report on Form 10 K for the year ended December 31, ~~2018~~2019 could also have a material adverse effect on our business, prospects, results of operations, financial condition and cash flows.

~~Given~~The COVID-19 pandemic has begun to negatively impact our operations and financial results. The ultimate extent of the ~~level~~impact on our business, financial position, results of ~~legal settlement expenses incurred~~operations, liquidity, and prospects is uncertain.

The COVID-19 pandemic has, and will likely continue to, severely impact global economic conditions, resulting in substantial volatility in the global financial markets, increased unemployment, and operational challenges resulting from measures that governments and other authorities have imposed to control its spread, such as travel bans, business and school closures, quarantines, and shelter-in-place orders. As our customers are located in the United States and Brazil, we began to see the initial impacts of the pandemic and governmental response on our business toward the end of the first quarter of 2020.

Various governmental bodies have reacted to the economic crisis caused by the ~~subsidiary conducting our U.K.~~pandemic by implementing stimulus and liquidity programs, and the Federal Reserve of the United States has reduced interest rates. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted March 27, 2020 to provide $2.2 trillion of economy-wide financial stimulus in the form of financial aid to individuals, business, nonprofits, states, and ~~unsuccessful discussions with U.K regulators, we made~~municipalities. However, it is uncertain whether these actions or future actions will be successful in countering the ~~decision to exit~~economic disruptions and these actions could have a further negative impact on the ~~U.K. market, thereby decreasing~~economy in the ~~size~~long term. Many of our ~~total addressable market~~customers are experiencing layoffs, furloughs, and ~~curtailing growth plans~~other changes in ~~the U.K.~~

~~Effective October 25, 2019, in accordance with the provisions of the U.K. Insolvency Act 1986 (the “U.K Insolvency Act”)~~work and ~~pursuant~~financial situations, which may negatively impact their ability to approval by the board of directors of our subsidiary, CashEuroNet UK, LLC (“CashEuroNet”), due to unsuccessful discussions with U.K. regulators, insolvency practitioners from Grant Thornton UK LLP were appointed as administrators of CashEuroNet. The effect of CashEuroNet’s entry into administration was to place the management, affairs, business and property of CashEuroNet under the direct control of the administrators. Accordingly, we will deconsolidate CashEuroNet beginning with the Annual Report on Form 10‑K for the year ended December 31, 2019 and will present CashEuroNet as discontinued operations in the fourth quarter of 2019. These actions decrease the size of our total addressable market and curtail our growth plans in the U.K.

~~The administration of our subsidiary, CashEuroNet, through which we conducted our U.K. business, could~~repay us. Higher delinquency or default rates would have an adverse impact on the fair value of our ~~liquidity~~portfolio.

While we have seen the initial impact of the pandemic to our operations, the extent of its impact is highly dependent on variables that are difficult to predict, such as the scope and duration of the pandemic, and the success rate of measures taken by the governments to control its spread and stabilize the economy. If the pandemic is prolonged or the actions of government are unsuccessful, the adverse impact on the global economy will deepen. We could experience further reduced demand and availability of our products, higher credit losses in our portfolio, impairments of other financial assets, and other negative impacts to our financial position.

Effective October 25, 2019, in accordance with the provisions of the U.K. Insolvency Act and pursuant to approval by the board of directors of CashEuroNet, insolvency practitioners from Grant Thornton UK LLP were appointed as administrators in respect of CashEuroNet. In conjunction with the administration, claims related to the management and We could have issues meeting our financial ~~support of CashEuroNet prior to the administration could be asserted,~~performance covenants, which would require waiver/amendment or could result in ~~additional expense~~default on our financing agreements. We are highly reliant on our employees for our continued operations, and to ~~us. We also~~the extent our employee population is impacted by the pandemic, or the actions by governmental bodies taken in reaction to the pandemic, this could adversely affect our ability to service our customers and to offer our products. Our access to capital markets could be hampered and could lead to a higher cost of capital.

The determination of the fair values of the Company’s loan and finance receivables portfolio involves unobservable inputs that can be highly subjective and may prove to be ~~required~~materially different than the actual economic outcome.

As disclosed in Note 1 to ~~provide certain administrative, technical~~the Consolidated Financial Statements, we began utilizing the fair value option for our loan and ~~other services,~~finance receivables portfolio effective January 1, 2020. The fair values of our loans and ~~incur other exit~~finance receivables are determined using Level 3 inputs for which changes could significantly impact our fair value measurements. Valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies. A variety of factors including, but not limited to, estimated customer default rates, the timing of expected payments, estimated costs to service the portfolio, discount rates, and ~~expenses related~~valuations of comparable portfolios may ultimately affect the fair values of our loans and finance receivables. Modifications to ~~CashEuroNet during its administration. While we do not believe such claims or costs beyond~~our assumptions due to the ~~initial anticipated charge~~passage of ~~$74.0 million are likely~~time and more information becoming available could result in material changes to ~~have a material adverse impact on~~our fair value calculations. These changes to fair value could adversely affect our results of ~~operations or financial condition, we cannot provide complete assurance we will not experience significant additional claims or costs related~~operations. Additionally, under the fair value option, these changes are generally recorded directly to the ~~administration of CashEuroNet and its prior business conducted~~income statement, which may make our financial statements less comparable to others in the ~~U.K.~~industry that do not record their loan balances under the fair value option.

The following table provides the information with respect to purchases made by us of shares of our common stock.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		45-3190813
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

175 West Jackson Blvd. Chicago, Illinois		60604
(Address of principal executive offices)		(Zip Code)

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.00001 par value per share	ENVA	New York Stock Exchange


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets – ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ and December 31, ~~2018~~2019	1
	Consolidated Statements of Income – Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	3
	Consolidated Statements of Comprehensive Income – Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	4
	Consolidated Statements of Stockholders’ Equity – Three ~~and Nine~~ Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	5
	Consolidated Statements of Cash Flows – ~~Nine~~Three Months Ended ~~September 30, 2019~~March 31, 2020 and ~~2018~~2019	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2826
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5146
Item 4.	Controls and Procedures	5146

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	5247
Item 1A.	Risk Factors	5247
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5248
Item 3.	Defaults upon Senior Securities	5348
Item 4.	Mine Safety Disclosures	5348
Item 5.	Other Information	5348
Item 6.	Exhibits	5349

SIGNATURES		5450

	As of September 30, 2019
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Current receivables	$	22,628		$	312,860		$	738,466		$	1,073,954
Delinquent receivables:
Delinquent payment amounts⁽¹⁾		—			18,670			3,142			21,812
Receivables on non-accrual status		18,437			5,317			54,018			77,772
Total delinquent receivables		18,437			23,987			57,160			99,584
Total loans and finance receivables, gross		41,065			336,847			795,626			1,173,538
Less: Allowance for losses		(11,488	)		(75,413	)		(85,483	)		(172,384	)
Loans and finance receivables, net	$	29,577		$	261,434		$	710,143		$	1,001,154

	As of September 30, 2018
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Current receivables	$	46,679		$	203,960		$	638,910		$	889,549
Delinquent receivables:
Delinquent payment amounts⁽¹⁾		—			10,270			2,531			12,801
Receivables on non-accrual status		31,829			2,394			53,795			88,018
Total delinquent receivables		31,829			12,664			56,326			100,819
Total loans and finance receivables, gross		78,508			216,624			695,236			990,368
Less: Allowance for losses		(23,004	)		(41,478	)		(87,103	)		(151,585	)
Loans and finance receivables, net	$	55,504		$	175,146		$	608,133		$	838,783

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

	Increase
	(decrease)
Assets
Other receivables and prepaid expenses	$	(35	)
Operating lease right-of-use assets		22,332
Total assets	$	22,297
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses	$	(16,860	)
Operating lease liabilities		39,605
Deferred tax liabilities, net		(102	)
Total liabilities		22,643
Stockholders' equity:
Retained earnings		(346	)
Total stockholders' equity		(346	)
Total liabilities and stockholders' equity	$	22,297

	As of December 31, 2018
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Current receivables	$	37,558		$	213,896		$	672,538		$	923,992
Delinquent receivables:
Delinquent payment amounts⁽¹⁾		—			10,783			2,696			13,479
Receivables on non-accrual status		30,167			2,884			52,732			85,783
Total delinquent receivables		30,167			13,667			55,428			99,262
Total loans and finance receivables, gross		67,725			227,563			727,966			1,023,254
Less: Allowance for losses		(21,420	)		(51,008	)		(90,880	)		(163,308	)
Loans and finance receivables, net	$	46,305		$	176,555		$	637,086		$	859,946

	Three Months Ended March 31, 2020
	Installment Loans and			Line of Credit
	RPAs			Accounts			Total
Balance at beginning of period	$	848,818		$	338,765		$	1,187,583
Originations or acquisitions		248,871			170,870			419,741
Interest and fees⁽¹⁾		174,034			185,772			359,806
Repayments		(364,515	)		(270,467	)		(634,982	)
Charge-offs, net⁽²⁾		(96,272	)		(106,952	)		(203,224	)
Net change in fair value⁽²⁾		(35,245	)		2,750			(32,495	)
Effect of foreign currency translation		(3,222	)		—			(3,222	)
Balance at end of period	$	772,469		$	320,738		$	1,093,207

	As of December 31, 2019
	Installment Loans and			Line of Credit
	RPAs			Accounts			Total
Current receivables	$	775,390		$	365,820		$	1,141,210
Delinquent receivables:
Delinquent payment amounts⁽¹⁾		1,924			22,441			24,365
Receivables on non-accrual status		69,438			4,576			74,014
Total delinquent receivables		71,362			27,017			98,379
Total loans and finance receivables, gross		846,752			392,837			1,239,589
Less: Allowance for losses		(85,937	)		(91,002	)		(176,939	)
Loans and finance receivables, net	$	760,815		$	301,835		$	1,062,650

	Three Months Ended September 30, 2018
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Allowance for losses for Company-owned loans and finance receivables:
Balance at beginning of period	$	18,861		$	31,050		$	71,873		$	121,784
Cost of revenue		26,080			46,749			90,782			163,611
Charge-offs		(27,906	)		(40,010	)		(90,090	)		(158,006	)
Recoveries		6,071			3,689			14,829			24,589
Effect of foreign currency translation		(102	)		—			(291	)		(393	)
Balance at end of period	$	23,004		$	41,478		$	87,103		$	151,585
Liability for third-party lender-owned loans:
Balance at beginning of period	$	1,883		$	—		$	209		$	2,092
Increase in liability		94			—			58			152
Balance at end of period	$	1,977		$	—		$	267		$	2,244

	Nine Months Ended September 30, 2019
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Allowance for losses for Company-owned loans and finance receivables:
Balance at beginning of period	$	21,420		$	51,008		$	90,880		$	163,308
Cost of revenue		42,147			169,820			237,104			449,071
Charge-offs		(67,587	)		(159,429	)		(306,674	)		(533,690	)
Recoveries		15,585			14,014			64,886			94,485
Effect of foreign currency translation		(77	)		—			(713	)		(790	)
Balance at end of period	$	11,488		$	75,413		$	85,483		$	172,384
Liability for third-party lender-owned loans:
Balance at beginning of period	$	1,964		$	—		$	202		$	2,166
(Decrease) increase in liability		(762	)		—			299			(463	)
Balance at end of period	$	1,202		$	—		$	501		$	1,703

	Nine Months Ended September 30, 2018
	Short-term			Line of Credit			Installment Loans and
	Loans			Accounts			RPAs			Total
Allowance for losses for Company-owned loans and finance receivables:
Balance at beginning of period	$	19,917		$	31,148		$	71,979		$	123,044
Cost of revenue		67,011			103,343			223,470			393,824
Charge-offs		(82,006	)		(103,371	)		(251,040	)		(436,417	)
Recoveries		18,332			10,358			43,820			72,510
Effect of foreign currency translation		(250	)		—			(1,126	)		(1,376	)
Balance at end of period	$	23,004		$	41,478		$	87,103		$	151,585
Liability for third-party lender-owned loans:
Balance at beginning of period	$	2,105		$	—		$	153		$	2,258
(Decrease) increase in liability		(128	)		—			114			(14	)
Balance at end of period	$	1,977		$	—		$	267		$	2,244

Year	Amount
2019	$	1,866
2020		7,383
2021		7,326
2022		7,018
2023		7,115
Thereafter		23,464
Total lease payments	$	54,172
Less: interest		17,402
Present value of lease liabilities	$	36,770

	~~September 30,~~
	~~2019~~

~~Weighted average remaining lease term (years)~~
~~Operating leases~~		~~7.4~~
~~Weighted average discount rate~~
~~Operating leases~~		~~10.80~~	%

	Foreign
	currency
	translation
	loss			Total
Balance at June 30, 2018	$	(10,905	)	$	(10,905	)
Other comprehensive loss, before reclassifications and tax		(2,019	)		(2,019	)
Tax impact		456			456
Balance at September 30, 2018	$	(12,468	)	$	(12,468	)

Balance at June 30, 2019	$	(14,774	)	$	(14,774	)
Other comprehensive loss, before reclassifications and tax		(3,350	)		(3,350	)
Tax impact		966			966
Balance at September 30, 2019	$	(17,158	)	$	(17,158	)

	Gains (Losses)								Gains (Losses)
	Recognized in				Gains (Losses)				Reclassified From
	Income				Recognized in AOCI				AOCI into Income
	Nine Months Ended				Nine Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,
	2019		2018		2019		2018		2019		2018
Non-designated derivatives:
Forward currency exchange contracts⁽¹⁾	$	—	$	243	$	—	$	—	$	—	$	—
Total	$	—	$	243	$	—	$	—	$	—	$	—

	March 31, 2020
							Weighted
	Minimum			Maximum			Average⁽¹⁾
Consumer near-prime⁽²⁾
Net loss rates⁽⁴⁾		31.2	%		39.6	%		34.8	%
Prepayment rates⁽⁴⁾		7.1	%		30.4	%		29.7	%
Servicing costs⁽⁴⁾		3.0	%		3.0	%		3.0	%
Discount rates		18.5	%		18.5	%		18.5	%

Consumer sub-prime⁽²⁾
Net loss rates⁽⁴⁾		19.6	%		39.6	%		35.1	%
Prepayment rates⁽⁴⁾⁽⁵⁾		7.1	%		25.4	%		11.3	%
Servicing costs⁽⁴⁾		6.5	%		28.0	%		7.2	%
Discount rates		18.5	%		23.5	%		23.3	%

Small business⁽³⁾
Net loss rates⁽⁴⁾		3.8	%		30.4	%		17.8	%
Prepayment rates⁽⁴⁾		6.5	%		22.1	%		18.7	%
Servicing costs⁽⁴⁾		1.7	%		1.7	%		1.7	%
Discount rates		13.5	%		13.5	%		13.5	%

Period	Total Number of Shares Purchased^(a)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan^(b)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan^(b) (in thousands)
July 1 – July 31, 2019		68,990		21.29		68,690		47,932
August 1 – August 31, 2019		—		—		—		47,932
September 1 – September 30, 2019		12,787		21.99		12,234		47,663
Total		81,777	$	21.40		80,924	$	47,663

Exhibit No.		Exhibit Description

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Date: ~~October 30, 2019~~May 5, 2020	ENOVA INTERNATIONAL, INC.

	By:	/s/ Steven E. Cunningham
		Steven E. Cunningham
		Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer)