Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001084961 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 000-26489 | ||
Entity Registrant Name | ENCORE CAPITAL GROUP, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 48-1090909 | ||
Entity Address, Address Line One | 350 Camino De La Reina | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92108 | ||
City Area Code | 877 | ||
Local Phone Number | 445-4581 | ||
Title of 12(b) Security | Common Stock, $0.01 Par Value Per Share | ||
Trading Symbol | ECPG | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,037.5 | ||
Entity Common Stock, Shares Outstanding | 31,097,865 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement in connection with its annual meeting of stockholders to be held in 2020 are incorporated by reference in Items 10, 11, 12, 13, and 14 of Part III of this Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which proxy statement will be filed no later than 120 days after the close of the registrant’s fiscal year December 31, 2019. |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 192,335 | $ 157,418 |
Investment in receivable portfolios, net | 3,283,984 | 3,137,893 |
Deferred court costs, net | 100,172 | 95,918 |
Property and equipment, net | 120,051 | |
Property and equipment, net | 115,518 | |
Other assets | 329,223 | 257,002 |
Goodwill | 884,185 | 868,126 |
Total assets | 4,909,950 | 4,631,875 |
Liabilities: | ||
Accounts payable and accrued liabilities | 223,911 | 287,945 |
Borrowings | 3,513,197 | 3,490,633 |
Other liabilities | 147,436 | 33,609 |
Total liabilities | 3,884,544 | 3,812,187 |
Commitments and contingencies (Note 13) | ||
Equity: | ||
Convertible preferred stock, $0.01 par value, 5,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 75,000 and 50,000 shares authorized, 31,097 shares and 30,884 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively | 311 | 309 |
Additional paid-in capital | 222,590 | 208,498 |
Accumulated earnings | 888,058 | 720,189 |
Accumulated other comprehensive loss | (88,766) | (110,987) |
Total Encore Capital Group, Inc. stockholders’ equity | 1,022,193 | 818,009 |
Noncontrolling interest | 3,213 | 1,679 |
Total equity | 1,025,406 | 819,688 |
Total liabilities and equity | 4,909,950 | 4,631,875 |
VIEs | ||
Assets | ||
Cash and cash equivalents | 34 | 448 |
Investment in receivable portfolios, net | 539,596 | 501,489 |
Other assets | 4,759 | 9,563 |
Liabilities: | ||
Accounts payable and accrued liabilities | 0 | 4,556 |
Borrowings | 464,092 | 445,837 |
Other liabilities | $ 0 | $ 46 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | |||
Revenue from receivable portfolios | $ 1,269,288 | $ 1,167,132 | $ 1,053,373 |
Servicing revenue | 126,527 | 148,044 | 90,087 |
Other revenues | 9,974 | 5,381 | 2,342 |
Total revenues | 1,405,789 | 1,320,557 | 1,145,802 |
(Allowances) allowance reversals on receivable portfolios, net | (8,108) | 41,473 | 41,236 |
Total revenues, adjusted by net allowances | 1,397,681 | 1,362,030 | 1,187,038 |
Operating expenses | |||
Salaries and employee benefits | 376,365 | 369,064 | 315,742 |
Cost of legal collections | 202,670 | 205,204 | 200,058 |
General and administrative expenses | 148,256 | 158,352 | 158,080 |
Other operating expenses | 108,433 | 134,934 | 104,938 |
Collection agency commissions | 63,865 | 47,948 | 43,703 |
Depreciation and amortization | 41,029 | 41,228 | 39,977 |
Goodwill impairment | 10,718 | 0 | 0 |
Total operating expenses | 951,336 | 956,730 | 862,498 |
Income from operations | 446,345 | 405,300 | 324,540 |
Other (expense) income | |||
Interest expense | (226,760) | (240,048) | (204,161) |
Other (expense) income | (18,343) | (8,764) | 10,847 |
Total other expense | (245,103) | (248,812) | (193,314) |
Income from continuing operations before income taxes | 201,242 | 156,488 | 131,226 |
Provision for income taxes | (32,333) | (46,752) | (52,049) |
Income from continuing operations | 168,909 | 109,736 | 79,177 |
Loss from discontinued operations, net of tax | 0 | 0 | (199) |
Net income | 168,909 | 109,736 | 78,978 |
Net (income) loss attributable to noncontrolling interest | (1,040) | 6,150 | 4,250 |
Net income attributable to Encore Capital Group, Inc. stockholders | 167,869 | 115,886 | 83,228 |
Amounts attributable to Encore Capital Group, Inc.: | |||
Income from continuing operations | 167,869 | 115,886 | 83,427 |
Loss from discontinued operations, net of tax | 0 | 0 | (199) |
Net income attributable to Encore Capital Group, Inc. stockholders | $ 167,869 | $ 115,886 | $ 83,228 |
Basic earnings (loss) per share from: | |||
Continuing operations (USD per share) | $ 5.38 | $ 4.09 | $ 3.21 |
Discontinued operations (USD per share) | 0 | 0 | (0.01) |
Net basic earnings per share (USD per share) | 5.38 | 4.09 | 3.20 |
Diluted earnings (loss) per share from: | |||
Continuing operations (USD per share) | 5.33 | 4.06 | 3.16 |
Discontinued operations (USD per share) | 0 | 0 | (0.01) |
Net diluted earnings per share (USD per share) | $ 5.33 | $ 4.06 | $ 3.15 |
Weighted average shares outstanding: | |||
Basic (shares) | 31,210 | 28,313 | 25,972 |
Diluted (shares) | 31,474 | 28,572 | 26,405 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 168,909 | $ 109,736 | $ 78,978 |
Change in unrealized gains/losses on derivative instruments: | |||
Unrealized (loss) gain on derivative instruments | (5,029) | ||
Income tax effect | 761 | ||
Unrealized (loss) gain on derivative instruments, net of tax | (4,268) | ||
Unrealized (loss) gain on derivative instruments | (7,658) | 1,242 | |
Income tax effect | 1,743 | (200) | |
Unrealized (loss) gain on derivative instruments, net of tax | (5,915) | 1,042 | |
Change in foreign currency translation: | |||
Unrealized gain (loss) on foreign currency translation | 23,169 | (36,927) | 28,362 |
Unrealized gain (loss) on foreign currency translation, net of divestiture | (3,814) | (3,663) | 0 |
Unrealized gain (loss) on foreign currency translation, net of divestiture | 26,983 | (33,264) | 28,362 |
Other comprehensive income (loss), net of tax | 22,715 | (39,179) | 29,404 |
Comprehensive income | 191,624 | 70,557 | 108,382 |
Comprehensive (income) loss attributable to noncontrolling interest: | |||
Net (income) loss | (1,040) | 6,150 | 4,250 |
Unrealized (income) loss on foreign currency translation | (494) | 5,548 | (1,849) |
Comprehensive (income) loss attributable to noncontrolling interest | (1,534) | 11,698 | 2,401 |
Comprehensive income attributable to Encore Capital Group, Inc. stockholders | $ 190,090 | $ 82,255 | $ 110,783 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Earnings | Accumulated Other Comprehensive (Loss) Income | Noncontrolling Interest |
Balance (in shares) at Dec. 31, 2016 | 25,593 | |||||
Balance at Dec. 31, 2016 | $ 551,765 | $ 256 | $ 103,392 | $ 560,567 | $ (104,911) | $ (7,539) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 83,883 | 83,228 | 655 | |||
Other comprehensive income (loss), net of tax | 26,848 | 27,555 | (707) | |||
Change in fair value of redeemable noncontrolling interest | (108,296) | (81,074) | (27,222) | |||
Purchase of noncontrolling interest | (1,532) | 806 | (2,338) | |||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (in shares) | 208 | |||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes | (2,115) | $ 2 | (2,117) | |||
Stock-based compensation | 10,399 | 10,399 | ||||
Issuance of convertible senior notes/exchangeable notes | 12,341 | 12,341 | ||||
Settlement and repurchase of convertible senior notes (in shares) | 622 | |||||
Settlement and repurchase of convertible senior notes | (7,875) | $ 6 | (7,881) | |||
Reclassification of redeemable equity component of convertible senior notes | 2,995 | 2,995 | ||||
Reclassification of certain income tax effects of items within accumulated other comprehensive income to retained earnings | (259) | (259) | ||||
Convertible/Exchangeable notes hedge transactions (in shares) | (622) | |||||
Convertible/Exchangeable notes hedge transactions | 3,519 | $ (6) | 3,525 | |||
Other | 260 | 260 | ||||
Balance (in shares) at Dec. 31, 2017 | 25,801 | |||||
Balance at Dec. 31, 2017 | 571,933 | $ 258 | 42,646 | 616,314 | (77,356) | (9,929) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 114,527 | 115,886 | (1,359) | |||
Other comprehensive income (loss), net of tax | (36,374) | (37,294) | 920 | |||
Change in fair value of redeemable noncontrolling interest | 7,419 | 19,430 | (12,011) | |||
Purchase of noncontrolling interest | 9,626 | 9,626 | ||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (in shares) | 163 | |||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes | (2,508) | $ 2 | (2,510) | |||
Stock-based compensation | 12,980 | 12,980 | ||||
Issuance of convertible senior notes/exchangeable notes | 14,009 | 14,009 | ||||
Convertible/Exchangeable notes hedge transactions | (17,785) | (17,785) | ||||
Net equity adjustment on Cabot Transaction | (43,097) | (43,097) | ||||
Other | 7,771 | 1,687 | 3,663 | 2,421 | ||
Issuance of common stock (shares) | 4,920 | |||||
Issuance of common stock | 181,187 | $ 49 | 181,138 | |||
Balance (in shares) at Dec. 31, 2018 | 30,884 | |||||
Balance at Dec. 31, 2018 | 819,688 | $ 309 | 208,498 | 720,189 | (110,987) | 1,679 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 168,909 | 167,869 | 1,040 | |||
Other comprehensive income (loss), net of tax | 18,901 | 18,407 | 494 | |||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes (in shares) | 213 | |||||
Exercise of stock options and issuance of share-based awards, net of shares withheld for employee taxes | (4,872) | $ 2 | (4,874) | |||
Stock-based compensation | 12,557 | 12,557 | ||||
Issuance of convertible senior notes/exchangeable notes | 4,733 | 4,733 | ||||
Convertible/Exchangeable notes hedge transactions | 1,792 | 1,792 | ||||
Other | 3,698 | (116) | 3,814 | 0 | ||
Balance (in shares) at Dec. 31, 2019 | 31,097 | |||||
Balance at Dec. 31, 2019 | $ 1,025,406 | $ 311 | $ 222,590 | $ 888,058 | $ (88,766) | $ 3,213 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating activities: | |||
Net income | $ 168,909 | $ 109,736 | $ 78,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Loss from discontinued operations, net of income taxes | 0 | 0 | 199 |
Interest expense related to financing | 3,523 | 11,710 | 0 |
Depreciation and amortization | 41,029 | 41,228 | 39,977 |
Goodwill impairment | 10,718 | 0 | 0 |
Other non-cash interest expense, net | 30,299 | 38,549 | 47,437 |
Stock-based compensation expense | 12,557 | 12,980 | 10,399 |
Loss (gain) on derivative instruments, net | 5,009 | 10,789 | (3,915) |
Deferred income taxes | 22,339 | 16,814 | 28,970 |
Provision for (reversal of) allowances on receivable portfolios, net | 8,108 | (41,473) | (41,236) |
Other, net | 4,785 | (17,805) | (7,846) |
Changes in operating assets and liabilities | |||
Deferred court costs and other assets | 25,379 | (35,626) | (4,101) |
Prepaid income tax and income taxes payable | (25,678) | 24,284 | (26,699) |
Accounts payable, accrued liabilities and other liabilities | (62,244) | 15,605 | 1,655 |
Net cash provided by operating activities | 244,733 | 186,791 | 123,818 |
Investing activities: | |||
Cash paid for acquisitions, net of cash acquired | 0 | 0 | (96,390) |
Purchases of receivable portfolios, net of put-backs | (1,035,130) | (1,131,095) | (1,045,829) |
Collections applied to investment in receivable portfolios, net | 757,640 | 809,688 | 709,420 |
Purchases of property and equipment | (39,602) | (67,475) | (28,126) |
Proceeds from sale of portfolios | 107,937 | 0 | 0 |
Other, net | 6,822 | (8,634) | 8,794 |
Net cash used in investing activities | (202,333) | (397,516) | (452,131) |
Financing activities: | |||
Payment of loan and debt refinancing costs | (11,586) | (23,286) | (28,972) |
Proceeds from credit facilities | 603,634 | 942,186 | 1,434,480 |
Repayment of credit facilities | (586,429) | (571,144) | (1,168,069) |
Proceeds from senior secured notes | 454,573 | 0 | 325,000 |
Repayment of senior secured notes | (470,768) | (91,578) | (204,241) |
Proceeds from issuance of convertible and exchangeable senior notes | 100,000 | 172,500 | 150,000 |
Repayment of convertible senior notes | (84,600) | 0 | (125,407) |
Proceeds from other debt | 18,334 | 27,694 | 33,197 |
Repayment of other debt | (25,531) | (42,456) | (8,910) |
Payment for the purchase of PECs and noncontrolling interest | 0 | (234,101) | (29,731) |
Other, net | (17,397) | (13,438) | 870 |
Net cash (used in) provided by financing activities | (19,770) | 166,377 | 378,217 |
Net increase (decrease) in cash and cash equivalents | 22,630 | (44,348) | 49,904 |
Effect of exchange rate changes on cash and cash equivalents | 12,287 | (10,373) | 12,470 |
Cash and cash equivalents, beginning of period | 157,418 | 212,139 | 149,765 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations, Ending Balance | 157,418 | 212,139 | |
Cash and cash equivalents of continuing operations, end of period | 192,335 | 157,418 | 212,139 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 178,948 | 198,797 | 162,545 |
Cash paid for income taxes, net of refunds | 43,973 | 5,734 | 42,378 |
Supplemental schedule of non-cash investing and financing activities: | |||
Stock consideration for the Cabot Transaction | 0 | 180,559 | 0 |
Conversion of convertible senior notes | 0 | 0 | 28,277 |
Property and equipment acquired through finance leases | $ 5,299 | $ 3,283 | $ 3,577 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Convertible preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 50,000,000 |
Common stock, shares issued | 31,097,000 | 30,884,000 |
Common stock, shares outstanding | 31,097,000 | 30,884,000 |
Ownership, Description of Busin
Ownership, Description of Business, and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Ownership, Description of Business, and Summary of Significant Accounting Policies | Note 1: Ownership, Description of Business, and Summary of Significant Accounting Policies Encore Capital Group, Inc. (“Encore”), through its subsidiaries (collectively with Encore, the “Company”), is an international specialty finance company providing debt recovery solutions and other related services for consumers across a broad range of financial assets. The Company purchases portfolios of defaulted consumer receivables at deep discounts to face value and manages them by working with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial obligations to credit originators, including banks, credit unions, consumer finance companies and commercial retailers. Defaulted receivables may also include receivables subject to bankruptcy proceedings. The Company also provides debt servicing and other portfolio management services to credit originators for non-performing loans. Through Midland Credit Management, Inc. and its domestic affiliates (collectively, “MCM”), the Company is a market leader in portfolio purchasing and recovery in the United States. Through Cabot Credit Management plc (“CCM”) and its subsidiaries and European affiliates (collectively, “Cabot”) the Company is one of the largest credit management services providers in Europe and a market leader in the United Kingdom and Ireland. These are the Company’s primary operations. The Company also has investments and operations in Latin America and Asia-Pacific, which the Company refers to as “LAAP.” In August 2019, the Company completed the sale (the “Baycorp Transaction”) of its wholly-owned subsidiary Encore Australia Holdings I PTY LTD (together with its subsidiaries “Baycorp”), which represented the Company’s investments and operations in Australia and New Zealand and was a component of LAAP. Basis of Consolidation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates VIEs for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 9: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation. Translation of Foreign Currencies The financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations. Reclassifications Certain immaterial reclassifications have been made to the prior years’ consolidated financial statements to conform to current year presentation. Change in Accounting Principle As discussed in “Note 12: Leases” to the consolidated financial statements, effective January 1, 2019, the Company adopted Accounting Standard Codification 842 - Leases (“Topic 842”) using the modified retrospective method. The Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) in 2019. The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Recent Accounting Pronouncements Other than the adoption of the standards discussed in the “Change in Accounting Principle” section above, there have been no new accounting pronouncements made effective during the year ended December 31, 2019 that have significance, or potential significance, to the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13” or “CECL”). ASU 2016-13 introduces a new impairment approach for credit loss recognition based on current expected lifetime losses rather than incurred losses. ASU 2016-13 applies to all financial assets carried at amortized costs, including the Company’s investment in receivable portfolios, which are defined as purchased credit deteriorated (“PCD”) financial assets under CECL. For PCD financial assets, the unit of account is at individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company will apply its charge-off policy and fully write-off the amortized costs ( i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company will then record a negative allowance that represents the present value of expected all future recoveries on the aggregated portfolio level using a discounted approach. Revenue will be recognized over the life of the portfolio at an effective interest rate established at the time of purchase. Subsequent over and under-performance and changes in expected cash flows are recognized in the statements of operations as adjustments to the provision for credit losses. ASU 2016-13, including the effect of ongoing developments and amendments to the guidance, represents a significant change from existing U.S. GAAP and will result in changes to the Company’s accounting for its investment in receivable portfolios. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019. The Company will adopt ASU 2016-13 as of January 1, 2020 using a modified-retrospective approach, by recording a cumulative-effect adjustment to opening retained earnings. Implementation efforts have been substantially completed. As part of the adoption of CECL, the Company will change its current method of accounting for its court costs spent in its legal collection channel effective January 1, 2020. As of December 31, 2019, the Company capitalizes its upfront court costs spent in its consolidated financial statements (“Deferred Court Costs”) and provides a reserve for those costs that it believes will ultimately be uncollectible. For financial statements for reporting periods subsequent to January 1, 2020, the Company will expense all of its court costs as incurred and will include expected recoveries on these upfront court costs in the measurement of the investment in receivable portfolios at a discounted value. Upon transition, an adjustment will be made to retained earnings to reflect the net change from an undiscounted to discounted value prior to writing-off uncollectible receivables and establishing a balance for discounted value of future recoveries of amounts expected to be collected. The adoption of this new accounting policy will result in the write-off of existing Deferred Court Costs, an increase to investment in receivable portfolios, and a decrease to opening retained earnings estimated to be between $40 and $50 million. The Company expects that, subsequent to the adoption of CECL, revenue from receivable portfolios will be favorably impacted by including expected court costs recoveries in its estimated remaining collections, while expensing all court costs as incurred will result in higher operating expenses in 2020 as compared to prior years. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). The amendments in ASU 2019-04 clarify certain aspects of accounting for credit losses, hedging activities, and financial instruments. For clarifications around credit losses, the effective date will be the same as the effective date of ASU 2016-13. For entities that have adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, ASU 2019-04 is effective the first annual reporting period beginning after the date of issuance of ASU 2019-04 and may be early adopted. The amendments in ASU 2019-04 that are related to financial instruments are effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. The Company's adoption of ASU 2019-04 is not expected to have a material impact on its consolidated financial statements. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective as of December 31, 2019 that have significance, or potential significance, to the Company’s consolidated financial statements. Use of Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase. The Company maintains its cash and cash equivalents in multiple financial institutions and certain account balances exceed federally insurable limits. To date, the Company has experienced no loss or lack of access to cash in its bank accounts. The Company believes any risks are mitigated by maintaining cash with highly rated financial institutions. The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents approximate their fair value. Included in cash and cash equivalents is cash collected on behalf of and due to third-party clients. A corresponding balance is included in accounts payable and accrued liabilities. The balance of cash held for clients was $25.0 million and $21.8 million at December 31, 2019 and 2018, respectively. Investment in Receivable Portfolios Discrete receivable portfolio purchases during the same fiscal quarter are aggregated into pools based on common risk characteristics. Common risk characteristics include risk ratings ( e.g., FICO or similar scores), financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic region or location. Portfolios acquired in business combinations are also grouped into these pools. During any fiscal quarter in which the Company has an acquisition of an entity that has portfolio, the entire historical portfolio of the acquired company is aggregated into the pool groups for that quarter, based on common characteristics, resulting in pools for that quarter that may consist of several different vintages of portfolio. Once a static pool is established, the portfolios are permanently assigned to the pool. The discount ( i.e. , the difference between the cost of each static pool and the related aggregate contractual receivable balance) is not recorded because the Company expects to collect a relatively small percentage of each static pool’s contractual receivable balance. As a result, receivable portfolios are recorded at cost at the time of acquisition. The purchase cost of the portfolios includes certain fees paid to third parties incurred in connection with the direct acquisition of the receivable portfolios. The Company accounts for its investment in receivable portfolios using either the interest method or the cost recovery method. The interest method applies an internal rate of return (“IRR”) to the cost basis of the pool, which remains unchanged throughout the life of the pool, unless there is an increase in subsequent expected cash flows. Subsequent increases in expected cash flows are recognized prospectively through an upward adjustment of the pool’s IRR over its remaining life. Subsequent decreases in expected cash flows do not change the IRR, but are recognized as an allowance to the cost basis of the pool, and are reflected in the consolidated statements of operations as an adjustment to revenue, with a corresponding valuation allowance, offsetting the investment in receivable portfolios in the consolidated statements of financial condition. With gross collections being discounted at monthly IRRs, when collections are lower in the near term, even if substantially higher collections are expected later in the collection curve, an allowance charge could result. The Company accounts for each static pool as a unit for the economic life of the pool (similar to one loan) for recognition of revenue from receivable portfolios, for collections applied to the cost basis of receivable portfolios and for provision for loss or allowance. Revenue from receivable portfolios is accrued based on each pool’s IRR applied to each pool’s adjusted cost basis. The cost basis of each pool is increased by revenue earned and portfolio allowance reversals and decreased by gross collections and portfolio allowances. Once the net book value of a static pool has been fully recovered, it becomes zero basis portfolio (“ZBA”) and all subsequent collections are recognized as ZBA revenue. If the amount and timing of future cash collections on a pool of receivables are not reasonably estimable, the Company accounts for such portfolios on the cost recovery method as Cost Recovery Portfolios. The accounts in these portfolios have different risk characteristics than those included in other portfolios acquired during the same quarter, or the necessary information was not available to estimate future cash flows and, accordingly, they were not aggregated with other portfolios. Under the cost recovery method of accounting, no revenue is recognized until the carrying value of a Cost Recovery Portfolio has been fully recovered. See “Note 4: Investment in Receivable Portfolios, Net” for further discussion of investment in receivable portfolios. Effective January 1, 2020, the Company’s investment in receivable portfolios is accounted for under CECL. Transfers of Financial Assets The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s ongoing involvement with the assets transferred. Gains and losses stemming from transfers reported as sales are included in “Other revenues” in the Company’s consolidated statements of operations. Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the statements of financial condition at fair value. Transfers of financial assets that do not qualify for sale accounting are reported as collateralized borrowings. Accordingly, the related assets remain on the Company’s statements of financial condition and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as liabilities, with attributable interest expense recognized over the life of the related transactions. To date, the Company has not had any transfers of financial assets that did not qualify for sale accounting. Servicing Revenue Certain of the Company’s subsidiaries earn servicing revenue by providing portfolio management services to credit originators for non-performing loans. The Company recognizes servicing revenue when it satisfies the performance obligation over time by providing debt solution and credit management services. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the value assigned to the tangible and identifiable intangible assets, liabilities assumed, and noncontrolling interest of businesses acquired. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Goodwill and other indefinite-lived intangible assets are tested at the reporting unit level annually for impairment and in interim periods if certain events occur indicating the fair value of a reporting unit may be below its carrying value. See “Note 15: Goodwill and Identifiable Intangible Assets” for further discussion of the Company’s goodwill and other intangible assets. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Fixed Asset Category Estimated Useful Life Leasehold improvements Lesser of lease term, including periods covered Furniture, fixtures and equipment 5 to 10 years Computer hardware and software 3 to 5 years Maintenance and repairs are charged to expense in the year incurred. Expenditures for major renewals that extend the useful lives of fixed assets are capitalized and depreciated over the useful lives of such assets. Deferred Court Costs The Company pursues legal collections using a network of attorneys that specialize in collection matters and through its internal legal channel. The Company generally pursues collections through legal means only when it believes a consumer has sufficient assets to repay their indebtedness but has, to date, been unwilling to pay. In order to pursue legal collections the Company is required to pay certain upfront costs to the applicable courts that are recoverable from the consumer. The Company capitalizes Deferred Court Costs in its consolidated financial statements and provides a reserve for those costs that it believes will ultimately be uncollectible. The Company determines the reserve based on an estimated court cost recovery rate established based on its analysis of historical court costs recovery data. The Company estimates deferral periods for Deferred Court Costs based on jurisdiction and nature of litigation and writes off any Deferred Court Costs not recovered within the respective deferral period. Collections received from debtors are first applied against related court costs with the balance applied to the debtors’ account balance. See “Note 5: Deferred Court Costs, Net” for further details. Effective January 1, 2020, in connection with the adoption of CECL, the Company expenses all upfront court costs in its statements of operations and includes all future projected recoveries of these upfront court costs in the measurement of the investment in receivable portfolios, at a discounted value. Income Taxes The Company uses the liability method of accounting for income taxes in accordance with the authoritative guidance for Income Taxes. When the Company prepares its consolidated financial statements, it estimates income taxes based on the various jurisdictions and countries where it conducts business. This requires the Company to estimate current tax exposure and to assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. Deferred income taxes are recognized based on the differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company then assesses the likelihood that deferred tax assets will be realized. Valuation allowances are established, when it is more likely than not the deferred tax assets will not be realized. When the Company establishes a valuation allowance or increases this allowance in an accounting period, it records a corresponding tax expense in the consolidated statements of operations. The Company includes interest and penalties related to income taxes within its provision for income taxes. See “Note 11: Income Taxes” for further discussion. Management must make significant judgments to determine the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance to be recorded against deferred tax assets. Stock-Based Compensation The Company determines stock-based compensation expense for all share-based payment awards based on the measurement date fair value. The Company has certain share awards that include market conditions that affect vesting, the fair value of these shares is estimated using a lattice model. Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. For share awards that require service and performance conditions, the Company recognizes compensation cost only for those awards expected to meet the service and performance vesting conditions over the requisite service period of the award. Forfeiture rates are estimated based on the Company’s historical experience. Stock-based compensation expenses are included in “Salaries and Employee Benefits” in the Company’s consolidated statements of operations. See “Note 10: Stock-Based Compensation” for further discussion. Derivative Instruments and Hedging Activities The Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designates certain derivative instruments as cash flow hedges. The changes in fair value of derivatives designated as cash flow hedges is recorded each period, net of tax, in accumulated other comprehensive income or loss until the related hedged transaction occurs. If in the event the hedged cash flow does not occur, or it becomes probable that it will not occur, the Company would reclassify the amount of any gain or loss on the related cash flow hedge to income or expense at that time. If the hedged cash flows are still reasonably possible to occur, the hedged cash flows will continue to be recorded in accumulated other comprehensive income or loss until the hedged cash flows are no longer probable of occurring. See “Note 3: Derivatives and Hedging Instruments” for further discussion. Earnings Per Share Basic earnings per share is calculated by dividing net earnings attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, restricted stock, and the dilutive effect of the convertible and exchangeable senior notes, if applicable. A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts) : Year Ended December 31, 2019 2018 2017 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations $ 167,869 $ 115,886 $ 83,427 Loss from discontinued operations, net of tax — — (199) Net income $ 167,869 $ 115,886 $ 83,228 Total weighted-average basic shares outstanding 31,210 28,313 25,972 Dilutive effect of stock-based awards 264 259 255 Dilutive effect of convertible and exchangeable senior notes — — 178 Total weighted-average dilutive shares outstanding 31,474 28,572 26,405 Basic earnings (loss) per share from: Continuing operations $ 5.38 $ 4.09 $ 3.21 Discontinued operations — — (0.01) Net basic earnings per share $ 5.38 $ 4.09 $ 3.20 Diluted earnings (loss) per share from: Continuing operations $ 5.33 $ 4.06 $ 3.16 Discontinued operations — — (0.01) Net diluted earnings per share $ 5.33 $ 4.06 $ 3.15 Anti-dilutive employee stock options outstanding were approximately 64,000, 66,000 and 107,000 for the years ended December 31, 2019, 2018, and 2017, respectively. The Company has the following convertible and exchangeable senior notes outstanding: $89.4 million convertible senior notes due 2020 at a conversion price equivalent to approximately $45.72 per share of the Company’s common stock (the “2020 Convertible Notes”), $161.0 million convertible senior notes due 2021 at a conversion price equivalent to approximately $59.39 per share of the Company’s common stock (the “2021 Convertible Notes”), $150.0 million convertible senior notes due 2022 at a conversion price equivalent to approximately $45.57 per share of the Company’s common stock (the “2022 Convertible Notes”), $172.5 million exchangeable senior notes due 2023 at a conversion price equivalent to approximately $44.62 per share of the Company’s common stock (the “Exchangeable Notes”), and $100.0 million convertible senior notes due 2025 at a conversion price equivalent to approximately $40.00 per share of the Company's common stock (the “2025 Convertible Notes”). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 2: Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date ( i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions. Financial Instruments Required To Be Carried At Fair Value Financial assets and liabilities measured at fair value on a recurring basis are summarized below ( in thousands ): Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Foreign currency exchange contracts $ — $ 1,473 $ — $ 1,473 Interest rate cap contracts — 2,460 — 2,460 Liabilities Interest rate swap agreements — (9,116) — (9,116) Contingent consideration — — (66) (66) Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Interest rate cap contracts $ — $ 2,023 $ — $ 2,023 Liabilities Foreign currency exchange contracts — (237) — (237) Interest rate swap agreements — (4,881) — (4,881) Contingent consideration — — (6,198) (6,198) Derivative Contracts: The Company uses derivative instruments to manage its exposure to fluctuations in interest rates and foreign currency exchange rates. Fair values of these derivative instruments are estimated using industry standard valuation models. These models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves, foreign currency exchange rates, and forward and spot prices for currencies. Contingent Consideration: The Company carries certain contingent liabilities resulting from its mergers and acquisition activities. Certain sellers of the Company’s acquired entities could earn additional earn-out payments in cash based on the entities’ subsequent operating performance. The Company recorded the acquisition date fair values of these contingent liabilities, based on the likelihood of contingent earn-out payments, as part of the consideration transferred. The earn-out payments are subsequently remeasured to fair value at each reporting date, based on actual and forecasted operating performance. The following table provides a roll-forward of the fair value of contingent consideration for the years ended December 31, 2019, 2018 and 2017 (in thousands) : Amount Balance at December 31, 2016 $ 2,531 Issuance of contingent consideration in connection with acquisition 10,808 Change in fair value of contingent consideration (2,822) Time value amortization 381 Payment of contingent consideration (781) Effect of foreign currency translation 495 Balance at December 31, 2017 10,612 Issuance of contingent consideration in connection with acquisition 1,728 Change in fair value of contingent consideration (5,664) Payment of contingent consideration (271) Effect of foreign currency translation (207) Balance at December 31, 2018 6,198 Change in fair value of contingent consideration (2,300) Payment of contingent consideration (3,686) Effect of foreign currency translation (146) Balance at December 31, 2019 $ 66 Redeemable Noncontrolling Interest: Some minority shareholders in certain subsidiaries of the Company had the right, at certain times, to require the Company to acquire their ownership interest in those entities at fair value and, in some cases, to force a sale of the subsidiary if the Company chose not to purchase their interests at fair value. In connection with various business transactions, the Company redeemed or deconsolidated all of its redeemable noncontrolling interest during the year ended December 31, 2018 and no longer carried any redeemable noncontrolling interest as of December 31, 2018. The components of the change in the redeemable noncontrolling interest for the years ended December 31, 2019, 2018 and 2017 are presented in the following table (in thousands) : Amount Balance at December 31, 2016 $ 45,755 Addition to redeemable noncontrolling interest 277 Net loss attributable to redeemable noncontrolling interest (4,905) Adjustment of the redeemable noncontrolling interest to fair value 108,296 Effect of foreign currency translation attributable to redeemable noncontrolling interest 2,555 Balance at December 31, 2017 151,978 Redemption of redeemable noncontrolling interest (138,835) Deconsolidation upon sale of redeemable noncontrolling interest 5,535 Net loss attributable to redeemable noncontrolling interest (4,791) Adjustment of the redeemable noncontrolling interest to fair value (7,419) Effect of foreign currency translation attributable to redeemable noncontrolling interest (6,468) Balance at December 31, 2018 — Balance at December 31, 2019 $ — Non-Recurring Fair Value Measurement: Certain assets are measured at fair value on a nonrecurring basis. These assets include real estate-owned assets classified as held for sale at the lower of their carrying value or fair value less cost to sell. The fair value of the assets held for sale and estimated selling expenses were determined at the time of initial recognition and in each reporting period using Level 3 measurements. The fair value estimate of the assets held for sale was approximately $46.7 million and $26.7 million as of December 31, 2019 and December 31, 2018, respectively. Financial Instruments Not Required To Be Carried At Fair Value The table below summarizes fair value estimates for the Company’s financial instruments that are not required to be carried at fair value. The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying value of the Company. The carrying amounts in the following table are recorded in the consolidated statements of financial condition at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial Assets Investment in receivable portfolios $ 3,283,984 $ 3,464,050 $ 3,137,893 $ 3,525,861 Deferred court costs 100,172 100,172 95,918 95,918 Financial Liabilities Encore convertible notes and exchangeable notes (1) 642,547 693,708 619,639 553,744 Cabot senior secured notes (2) 1,127,435 1,170,945 1,109,922 1,036,905 ________________________ (1) Carrying amount represents the portion of the convertible and exchangeable notes classified as debt, while estimated fair value pertains to the face amount of the notes. (2) Carrying amount represents historical cost, adjusted for any related debt discount or debt premium. Investment in Receivable Portfolios: The fair value of investment in receivable portfolios is measured using Level 3 inputs by discounting the estimated future cash flows generated by its proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and discount rate. The Company estimates the average cost to collect and discount rates based on its estimate of what a market participant might use in valuing these portfolios. The determination of such inputs requires significant judgment, including assessing the assumed market participant’s cost structure, its determination of whether to include fixed costs in its valuation, its collection strategies, and determining the appropriate weighted average cost of capital. The Company evaluates the use of these key inputs on an ongoing basis and refines the data as it continues to obtain better information from market participants in the debt recovery and purchasing business. A 100 basis point increase in the cost to collect and discount rate used would result in a decrease in the fair value of U.S. and European portfolios by approximately $65.6 million and $77.3 million, respectively, as of December 31, 2019. This fair value calculation does not represent, and should not be construed to represent, the underlying value of the Company or the amount which could be realized if its investment in receivable portfolios were sold. Deferred Court Costs: The Company capitalizes deferred court costs and provides a reserve for those costs that it believes will ultimately be uncollectible. The carrying value of net deferred court costs was $100.2 million and $95.9 million as of December 31, 2019 and 2018, respectively, and approximated fair value. Borrowings: The majority of the Company’s borrowings are carried at historical amounts, adjusted for additional borrowings less principal repayments, which approximate fair value. These borrowings include Encore’s senior secured notes and borrowings under its revolving credit and term loan facilities and Cabot’s borrowings under its revolving credit facility. The carrying value of the Company’s revolving credit and term loan facilities approximates fair value due to the short-term nature of the interest rate periods. The fair value of the Company’s senior secured notes was estimated using widely accepted valuation techniques, including discounted cash flow analyses using available market information on discount and borrowing rates with similar terms, maturities, and credit ratings. Accordingly, the Company used Level 2 inputs for these debt instrument fair value estimates. The Company’s borrowings also include finance lease liabilities for which the carrying value approximates fair value. Encore’s convertible notes and exchangeable notes and Cabot’s senior secured notes are carried at historical cost, adjusted for the debt discount. The fair value estimate for these convertible and exchangeable notes incorporates quoted market prices using Level 2 inputs. |
Derivatives and Hedging Instrum
Derivatives and Hedging Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Instruments | Note 3: Derivatives and Hedging Instruments The Company may periodically enter into derivative financial instruments to manage risks related to interest rates and foreign currency. Certain of the Company’s derivative financial instruments qualify for hedge accounting treatment. The following table summarizes the fair value of derivative instruments as recorded in the Company’s consolidated statements of financial condition (in thousands): December 31, 2019 December 31, 2018 Balance Sheet Fair Value Balance Sheet Fair Value Derivatives designated as hedging instruments: Interest rate cap contracts Other assets $ 2,460 Other assets $ 2,023 Foreign currency exchange contracts Other assets 443 Other liabilities (237) Interest rate swap agreements Other liabilities (9,116) Other liabilities (4,881) Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other assets 1,030 Other assets — Derivatives Designated as Hedging Instruments The Company has operations in foreign countries, which expose the Company to foreign currency exchange rate fluctuations due to transactions denominated in foreign currencies. To mitigate a portion of this risk, the Company enters into derivative financial instruments, principally foreign currency forward contracts with financial counterparties. The Company adjusts the level and use of derivatives as soon as practicable after learning that an exposure has changed and reviews all exposures and derivative positions on an ongoing basis. Certain of the foreign currency forward contracts are designated as cash flow hedging instruments and qualify for hedge accounting treatment. Gains and losses arising from such contracts are recorded as a component of accumulated other comprehensive income (“OCI”) as gains and losses on derivative instruments, net of income taxes. The hedging gains and losses in OCI are subsequently reclassified into earnings in the same period in which the underlying transactions affect the Company’s earnings. If all or a portion of the forecasted transaction is cancelled, the accumulated gains or losses in OCI would be reclassified into earnings. As of December 31, 2019, the total notional amount of the foreign currency forward contracts that are designated as cash flow hedging instruments was $13.8 million. All of these outstanding contracts qualified for hedge accounting treatment. The Company estimates that approximately $0.4 million of net derivative gain included in OCI will be reclassified into earnings within the next 12 months. No gain or loss was reclassified from OCI into earnings as a result of forecasted transactions that failed to occur during the years ended December 31, 2019, 2018, or 2017. The Company may periodically enter into interest rate swap agreements to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. Under the swap agreements, the Company receives floating interest rate payments and makes interest payments based on fixed interest rates. The Company designates its interest rate swap instruments as cash flow hedges. As of December 31, 2019, there were four interest rate swap agreements outstanding with a total notional amount of $331.7 million. As of December 31, 2019, the Company also held three interest rate cap contracts with a notional amount of approximately $913.0 million that are used to manage its risk related to interest rate fluctuations on the Company’s variable interest rate bearing debt. Two of the interest rate cap contracts mature in 2021 (the “2018 Caps”) and one matures in 2024 (the “2019 Cap”). The 2018 Caps have a notional amount of £350.0 million (approximately $464.1 million) and the 2019 Cap has a notional amount of €400.0 million (approximately $448.9 million). The 2018 Caps are structured as a series of European call options (“Caplets”) such that if exercised, the Company will receive a payment equal to 3-months GBP-LIBOR on a notional amount equal to the hedged notional amount net of a fixed strike price. The 2019 Cap is also structured as a series of Caplets such that if exercised, the Company will receive a payment equal to 3-months EURIBOR on a notional amount equal to the hedged notional amount net of a fixed strike price. Each interest rate reset date, the Company will elect to exercise the Caplet or let it expire. The potential cash flows from each Caplet are expected to offset any variability in the cash flows of the interest payments to the extent GBP-LIBOR or EURIBOR exceeds the strike price of the Caplets. The Company expects the hedge relationship to be highly effective and designates the 2018 Caps and 2019 Cap as cash flow hedge instruments. The following table summarizes the effects of derivatives in cash flow hedging relationships designated as hedging instruments in the Company’s consolidated financial statements for the years ended December 31, 2019 and 2018 (in thousands): Gain (Loss) Location of Gain (Loss) Reclassified from OCI into Income Gain (Loss) 2019 2018 2019 2018 Foreign currency exchange contracts $ 1,100 $ (1,253) Salaries and employee benefits $ 383 $ 794 Foreign currency exchange contracts (56) (100) General and administrative expenses (19) 2 Interest rate swap agreements (6,347) (5,228) Interest expense (2,560) (384) Interest rate cap contracts (1,752) (643) Interest expense 146 — Derivatives Not Designated as Hedging Instruments The Company enters into currency exchange forward contracts to reduce the effects of currency exchange rate fluctuations between the British Pound and Euro. These derivative contracts generally mature within one three In May 2018, in anticipation of the completion of the Cabot Transaction, Encore entered into a foreign exchange forward contract with a notional amount of £176.0 million, which was approximately the amount of cash consideration for the Cabot Transaction. The forward contract settled in August 2018 at a total loss of $9.3 million. This loss was substantially offset by a decrease in the final purchase price in U.S. dollars for the Cabot Transaction. The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 (in thousands) : Derivatives Not Designated as Hedging Instruments Location of Derivative Gain (Loss) Recognized in Income Amount of Derivative Gain (Loss) Recognized in Income 2019 2018 2017 Foreign currency exchange contracts Other (expense) income $ (2,959) $ (9,221) $ 1,755 Interest rate cap contracts Interest expense — (1,568) 2,026 Interest rate swap agreements Interest expense — — 110 |
Investment in Receivable Portfo
Investment in Receivable Portfolios, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Investment in Receivable Portfolios, Net | Note 4: Investment in Receivable Portfolios, Net The following tables summarize the changes in the balance of the investment in receivable portfolios during the following periods ( in thousands, except percentages ): Year Ended December 31, 2019 Accrual Basis Cost Recovery Zero Basis Total Balance, beginning of period $ 3,129,502 $ 8,391 $ — $ 3,137,893 Purchases of receivable portfolios 1,046,696 — — 1,046,696 Transfer of portfolios (1) (78,980) 78,980 — — Deconsolidation of receivable portfolios (2) (51,935) — — (51,935) Disposals or transfers to held for sale (6,178) (5,317) — (11,495) Sale of receivable portfolios (3) (98,636) — — (98,636) Collections on receivable portfolios (4) (1,930,539) (4,201) (92,188) (2,026,928) Put-backs and Recalls (5) (11,566) — (25) (11,591) Foreign currency adjustments 37,224 1,596 (20) 38,800 Revenue recognized 1,185,681 — 83,607 1,269,288 Portfolio (allowance) reversals, net (16,734) — 8,626 (8,108) Balance, end of period $ 3,204,535 $ 79,449 $ — $ 3,283,984 Revenue as a percentage of collections (6) 61.4 % — 90.7 % 62.6 % Year Ended December 31, 2018 Accrual Basis Cost Recovery Zero Basis Total Balance, beginning of period $ 2,879,170 $ 11,443 $ — $ 2,890,613 Purchases of receivable portfolios 1,131,898 — — 1,131,898 Disposals or transfers to held for sale (10,852) (1,604) — (12,456) Collections on receivable portfolios (4) (1,832,539) (1,826) (133,255) (1,967,620) Put-backs and Recalls (5) (14,253) — (176) (14,429) Foreign currency adjustments (98,298) (420) — (98,718) Revenue recognized 1,041,947 — 125,185 1,167,132 Portfolio allowance reversals, net 32,429 — 9,044 41,473 Reclassification from prior period — 798 (798) — Balance, end of period $ 3,129,502 $ 8,391 $ — $ 3,137,893 Revenue as a percentage of collections (6) 56.9 % — 93.9 % 59.3 % Year Ended December 31, 2017 Accrual Basis Cost Recovery Zero Basis Total Balance, beginning of period $ 2,368,366 $ 14,443 $ — $ 2,382,809 Purchases of receivable portfolios 1,057,066 1,169 — 1,058,235 Disposals or transfers to held for sale (12,695) (493) — (13,188) Collections on receivable portfolios (4) (1,613,351) (3,511) (150,782) (1,767,644) Put-backs and Recalls (5) (2,577) — (294) (2,871) Foreign currency adjustments 138,828 (165) — 138,663 Revenue recognized 909,239 — 144,134 1,053,373 Portfolio allowance reversals, net 34,294 — 6,942 41,236 Balance, end of period $ 2,879,170 $ 11,443 $ — $ 2,890,613 Revenue as a percentage of collections (6) 56.4 % — 95.6 % 59.6 % ________________________ (1) Represents all portfolios in Mexico, which were transferred from accrual basis portfolios to cost recovery portfolios as the timing of future collections were determined to not be currently reasonably estimable, due to the changing political and economic conditions in Mexico. (2) Deconsolidation of receivable portfolios as a result of the Baycorp Transaction. (3) Represents the sale of certain portfolios in the Company’s European operations under the co-investment framework. (4) Does not include amounts collected on behalf of others. (5) Put-backs (“Put-Backs”) and recalls (“Recalls”) represent ineligible accounts that are returned by us or recalled by the seller pursuant to specific guidelines as set forth in the respective purchase agreements. (6) Revenue as a percentage of collections excludes the effects of net portfolio allowances or net portfolio allowance reversals. Accretable yield represents the amount of revenue the Company expects to generate over the remaining life of its existing investment in receivable portfolios based on estimated future cash flows. Total accretable yield is the difference between future estimated collections and the current carrying value of a portfolio. All estimated cash flows on portfolios where the cost basis has been fully recovered are classified as zero basis cash flows. The following table summarizes the Company’s accretable yield and an estimate of zero basis future cash flows at the beginning and end of the period presented (in thousands) : Accretable Yield Estimate of Total Balance at December 31, 2017 $ 3,695,069 $ 369,632 $ 4,064,701 Revenue from receivable portfolios (1,041,947) (125,185) (1,167,132) Allowance reversals on receivable portfolios, net (32,429) (9,044) (41,473) Net additions on existing portfolios 144,726 18,114 162,840 Additions for current purchases, net 1,155,451 — 1,155,451 Effect of foreign currency translation (147,699) (482) (148,181) Balance at December 31, 2018 3,773,171 253,035 4,026,206 Revenue from receivable portfolios (1,185,681) (83,607) (1,269,288) Allowance (allowance reversals) on receivable portfolios, net 16,734 (8,626) 8,108 Additions (reductions) on existing portfolios, net 549,253 (24,289) 524,964 Additions for current purchases, net 1,081,774 — 1,081,774 Effect of foreign currency translation 77,340 (33) 77,307 Balance at December 31, 2019 $ 4,312,591 $ 136,480 $ 4,449,071 During the year ended December 31, 2019, the Company purchased receivable portfolios with a face value of $11.6 billion for $1.0 billion, or a purchase cost of 8.6% of face value. The estimated future collections at acquisition for all portfolios purchased during the year amounted to $2.1 billion. During the year ended December 31, 2018, the Company purchased receivable portfolios with a face value of $8.5 billion for $1.1 billion, or a purchase cost of 13.3% of face value. The estimated future collections at acquisition for all portfolios purchased during the year amounted to $2.3 billion. After the net book value of a portfolio has been fully recovered, all collections are recorded as ZBA revenue. During the years ended December 31, 2019, 2018, and 2017, ZBA revenue was approximately $83.6 million, $125.2 million, and $144.1 million, respectively. The following table summarizes the change in the valuation allowance for investment in receivable portfolios during the periods presented ( in thousands ): Valuation Balance at December 31, 2017 $ 102,576 Provision for portfolio allowances 14,421 Reversal of prior allowances (55,894) Effect of foreign currency translation (472) Balance at December 31, 2018 60,631 Provision for portfolio allowances 36,806 Reversal of prior allowances (28,698) Baycorp Transaction (1,036) Effect of foreign currency translation 1,776 Balance at December 31, 2019 $ 69,479 |
Deferred Court Costs, Net
Deferred Court Costs, Net | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deferred Court Costs, Net | Note 5: Deferred Court Costs, Net Deferred Court Costs for the deferral period consist of the following as of the dates presented ( in thousands ): December 31, December 31, Court costs advanced $ 891,207 $ 828,713 Court costs recovered (369,043) (336,335) Court costs reserve (421,992) (396,460) Deferred court costs $ 100,172 $ 95,918 A roll forward of the Company’s court cost reserve is as follows ( in thousands ): December 31, December 31, December 31, Balance at beginning of period $ (396,460) $ (364,015) $ (327,926) Provision for court costs (82,987) (90,026) (82,702) Charge-offs 60,618 53,383 50,743 Effect of foreign currency translation (3,163) 4,198 (4,130) Balance at end of period $ (421,992) $ (396,460) $ (364,015) |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 6: Property and Equipment, Net Property and equipment consist of the following, as of the dates presented ( in thousands ): December 31, December 31, Computer equipment and software $ 136,426 $ 156,769 Leasehold improvements 37,245 28,775 Furniture, fixtures and equipment 10,428 17,335 Telecommunications equipment and other 3,893 1,866 Construction in process 2,089 25,839 190,081 230,584 Less: accumulated depreciation and amortization (70,030) (115,066) $ 120,051 $ 115,518 Depreciation and amortization expense from continuing operations was $33.3 million, $29.5 million, and $31.1 million for the years ended December 31, 2019, 2018, and 2017, respectively. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Note 7: Other Assets Other assets consist of the following ( in thousands ): December 31, December 31, Operating lease right-of-use assets $ 75,254 $ — Identifiable intangible assets, net 51,371 60,581 Assets held for sale 46,717 26,664 Service fee receivables 27,705 28,035 Deferred tax assets 24,134 24,910 Prepaid expenses 22,272 24,989 Other financial receivables 17,308 47,363 Other 64,462 44,460 Total $ 329,223 $ 257,002 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Note 8: Borrowings The Company is in compliance in all material respects with all covenants under its financing arrangements as of December 31, 2019. The components of the Company’s consolidated borrowings were as follows (in thousands) : December 31, December 31, Encore revolving credit facility $ 492,000 $ 429,000 Encore term loan facility 171,677 195,056 Encore senior secured notes 308,750 325,000 Encore convertible notes and exchangeable notes 672,855 656,000 Less: debt discount (30,308) (36,361) Cabot senior secured notes 1,129,039 1,111,399 Less: debt discount (1,604) (1,477) Cabot senior revolving credit facility 285,749 298,005 Cabot securitisation senior facility 464,092 445,837 Other 54,151 107,920 Finance lease liabilities 8,121 7,563 3,554,522 3,537,942 Less: debt issuance costs, net of amortization (41,325) (47,309) Total $ 3,513,197 $ 3,490,633 Encore Revolving Credit Facility and Term Loan Facility The Company has a revolving credit facility (the “Revolving Credit Facility”) and term loan facility (the “Term Loan Facility,” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”) pursuant to a Third Amended and Restated Credit Agreement dated December 20, 2016 (as amended, the “Restated Credit Agreement”). Provisions of the Restated Credit Agreement as of December 31, 2019 include, but are not limited to: • Revolving Credit Facility commitments of $884.2 million that expire in December 2021 with interest at a floating rate equal to, at the Company’s option, either: (a) reserve adjusted London Interbank Offered Rate (“LIBOR”), plus a spread that ranges from 250 to 300 basis points depending on the cash flow leverage ratio of Encore and its restricted subsidiaries as defined in the Restated Credit Agreement; or (b) alternate base rate, plus a spread that ranges from 150 to 200 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. “Alternate base rate,” as defined in the Restated Credit Agreement, means the highest of (i) the per annum rate which the administrative agent publicly announces from time to time as its prime lending rate, (ii) the federal funds effective rate from time to time, plus 0.5% per annum, (iii) reserved adjusted LIBOR determined on a daily basis for a one month interest period, plus 1.0% per annum and (iv) zero; • A $194.6 million term loan maturing in December 2021, with interest at a floating rate equal to, at the Company’s option, either: (1) reserve adjusted LIBOR, plus a spread that ranges from 250 to 300 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries; or (2) alternate base rate, plus a spread that ranges from 150 to 200 basis points, depending on the cash flow leverage ratio of Encore and its restricted subsidiaries. Principal amortizes $15.3 million in each of 2019 and 2020 with the remaining principal due in 2021; • A borrowing base under the Revolving Credit Facility equal to 35% of all eligible non-bankruptcy estimated remaining collections plus 55% of eligible estimated remaining collections for consumer receivables subject to bankruptcy; • A maximum cash flow leverage ratio permitted of 3.00:1.00; • A maximum cash flow first-lien leverage ratio of 2.00:1.00; • A minimum interest coverage ratio of 1.75:1.00; • The allowance of indebtedness in the form of senior secured notes not to exceed $350.0 million; • The allowance of additional unsecured or subordinated indebtedness not to exceed $1.1 billion, including junior lien indebtedness not to exceed $400.0 million; • Restrictions and covenants, which limit the payment of dividends and the incurrence of additional indebtedness and liens, among other limitations; • Repurchases of up to $150.0 million of Encore’s common stock after July 9, 2015, subject to compliance with certain covenants and available borrowing capacity; • A change of control definition, that excludes acquisitions of stock by Red Mountain Capital Partners LLC, JCF FPK I, LP and their respective affiliates of up to 50% of the outstanding shares of Encore’s voting stock; • Events of default which, upon occurrence, may permit the lenders to terminate the facility and declare all amounts outstanding to be immediately due and payable; • A pre-approved acquisition limit of $225.0 million per fiscal year; • A basket to allow for investments not to exceed the greater of (1) 200% of the consolidated net worth of Encore and its restricted subsidiaries; and (2) an unlimited amount such that after giving effect to the making of any investment, the cash flow leverage ratio is less than 1.25:1:00; • A basket to allow for investments in persons organized under the laws of Canada in the amount of $50.0 million; • Collateralization by all assets of the Company, other than the assets of certain foreign subsidiaries and all unrestricted subsidiaries as defined in the Restated Credit Agreement. At December 31, 2019, the outstanding balance under the Revolving Credit Facility was $492.0 million, which bore a weighted average interest rate of 5.27% and 5.01% for the years ended December 31, 2019 and 2018, respectively. Available capacity under the Revolving Credit Facility, after taking into account borrowing base and applicable debt covenants, was $272.3 million as of December 31, 2019. At December 31, 2019, the outstanding balance under the Term Loan Facility was $171.7 million. Encore Senior Secured Notes In August 2017, Encore entered into $325.0 million in senior secured notes with a group of insurance companies (the “Senior Secured Notes”). The Senior Secured Notes bear an annual interest rate of 5.625%, mature in 2024 and beginning in November 2019, require quarterly principal payments of $16.3 million. As of December 31, 2019, $308.8 million of the Senior Secured Notes remained outstanding. The Senior Secured Notes are guaranteed in full by certain of Encore’s subsidiaries. The Senior Secured Notes are pari passu with, and are collateralized by the same collateral as the Senior Secured Credit Facilities. The Senior Secured Notes may be accelerated and become automatically and immediately due and payable upon certain events of default, including certain events related to insolvency, bankruptcy, or liquidation. Additionally, any series of the Senior Secured Notes may be accelerated at the election of the holder or holders of a majority in principal amount of such series of Senior Secured Notes upon certain events of default by Encore, including the breach of affirmative covenants regarding guarantors, collateral, minimum revolving credit facility commitment or the breach of any negative covenant. Encore may prepay the Senior Secured Notes at any time for any reason. If Encore prepays the Senior Secured Notes, payment will be at the higher of par or the present value of the remaining scheduled payments of principal and interest on the portion being prepaid. The discount rate used to determine the present value is 50 basis points over the then current Treasury Rate corresponding to the remaining average life of the Senior Secured Notes. The covenants and material terms in the purchase agreement for the Senior Secured Notes are substantially similar to those in the Restated Credit Agreement. The holders of the Senior Secured Notes and the administrative agent for the lenders of the Restated Credit Agreement have an intercreditor agreement related to their pro rata rights to the collateral, actionable default, powers and duties and remedies, among other topics. Encore Convertible Notes and Exchangeable Notes The following table provides a summary of the principal balance, maturity date and interest rate for the outstanding convertible and exchangeable senior notes ( $ in thousands ): December 31, 2019 December 31, 2018 Maturity Date Interest Rate 2020 Convertible Notes $ 89,355 $ 172,500 Jul 1, 2020 3.000 % 2021 Convertible Notes 161,000 161,000 Mar 15, 2021 2.875 % 2022 Convertible Notes 150,000 150,000 Mar 15, 2022 3.250 % Exchangeable Notes 172,500 172,500 Sep 1, 2023 4.500 % 2025 Convertible Notes 100,000 — Oct 1, 2025 3.250 % $ 672,855 $ 656,000 In June and July 2013, Encore issued $172.5 million aggregate principal amount of 3.000% convertible senior notes that mature on July 1, 2020 in private placement transactions (the “2020 Convertible Notes”). In March 2014, Encore issued $161.0 million aggregate principal amount of 2.875% convertible senior notes that mature on March 15, 2021 in private placement transactions (the “2021 Convertible Notes”). In March 2017, Encore issued $150.0 million aggregate principal amount of 3.250% convertible senior notes that mature on March 15, 2022 in private placement transactions (the “2022 Convertible Notes”). In September 2019, Encore issued $100.0 million aggregate principal amount of 3.250% convertible senior notes that mature on October 1, 2025 in private placement transactions (the “2025 Convertible Notes” and together with the 2020 Convertible Notes the 2021 Convertible Notes, and the 2022 Convertible Notes, the “Convertible Notes”). The interest on the Convertible Notes is payable semi-annually. The Company used a portion of the net proceeds from the issuance of the 2025 Convertible Notes to repurchase, in separate privately negotiated transactions, approximately $83.1 million aggregate principal amount of its 2020 Convertible Notes for approximately $85.0 million, including accrued and unpaid interest. Additionally, the Company received proceeds of $1.8 million from the unwind of the capped call options associated with the repurchased portion of the 2020 Convertible Notes. Based on the fair value allocated to the debt and equity components of the 2020 Convertible Notes at the time of repurchase, the Company recognized a pre-tax loss on the repurchase of approximately $1.7 million, which was recorded to other expense in the consolidated statements of operations during the year ended December 31, 2019. In addition, the Company recognized approximately $0.4 million of interest expense to record the write-off of unamortized debt issuance costs associated with the repurchase of the 2020 Convertible Notes in the consolidated statements of operations during the year ended December 31, 2019. Since the capped call options were determined to be equity instruments, the partial unwind of the capped call options was recorded as an increase in additional paid-in capital in the consolidated statements of financial condition as of December 31, 2019. In July 2018, Encore Finance (defined below), a 100% owned finance subsidiary of Encore, issued $172.5 million aggregate principal amount of exchangeable senior notes due 2023 (the “Exchangeable Notes”) which are fully and unconditionally guaranteed by Encore. The Exchangeable Notes mature on September 1, 2023 and bear interest at a rate of 4.500% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2019. Unless otherwise indicated in connection with a particular offering of debt securities, Encore will fully and unconditionally guarantee any debt securities issued by Encore Capital Europe Finance Limited (“Encore Finance”), a 100% owned finance subsidiary of Encore. Amounts related to Encore Finance are included in the consolidated financial statements of Encore subsequent to April 30, 2018, the date of the incorporation of Encore Finance. Prior to the close of business on the business day immediately preceding their respective conversion or exchange date (listed below), holders may convert or exchange their Convertible Notes or Exchangeable Notes under certain circumstances set forth in the applicable indentures. On or after their respective conversion or exchange dates until the close of business on the scheduled trading day immediately preceding their respective maturity date, holders may convert or exchange their notes at any time. Certain key terms related to the convertible and exchangeable features as of December 31, 2019 are listed below: 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes 2025 Convertible Notes Initial conversion or exchange price $ 45.72 $ 59.39 $ 45.57 $ 44.62 $ 40.00 Closing stock price at date of issuance $ 33.35 $ 47.51 $ 35.05 $ 36.45 $ 32.00 Closing stock price date Jun 24, 2013 Mar 5, 2014 Feb 27, 2017 Jul 20, 2018 Sep 4, 2019 Conversion or exchange rate (shares per $1,000 principal amount) 21.8718 16.8386 21.9467 22.4090 25.0000 Conversion or exchange date Jan 1, 2020 Sep 15, 2020 Sep 15, 2021 Mar 1, 2023 Jul 1, 2025 In the event of conversion or exchange, holders of the Company’s Convertible Notes or Exchangeable Notes will receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The Company’s current intent is to settle conversions and exchanges through combination settlement ( i.e., convertible or exchangeable into cash up to the aggregate principal amount, and shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes and Exchangeable Notes, for the remainder). As a result, and in accordance with authoritative guidance related to derivatives and hedging and earnings per share, only the conversion or exchange spread is included in the diluted earnings per share calculation, if dilutive. Under such method, the settlement of the conversion or exchange spread has a dilutive effect when, during any quarter, the average share price of the Company’s common stock exceeds the initial conversion or exchange prices listed in the above table. The Company separately accounts for the liability and equity components in a manner that will reflect the entity’s nonconvertible or nonexchangeable debt borrowing rate when interest cost is recognized in subsequent periods. Additionally, debt issuance costs are allocated in proportion to the allocation of the liability and equity components and accounted for as debt issuance costs and equity issuance costs, respectively. As discussed above, upon exchange of the Exchangeable Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The debt and equity components, the issuance costs related to the equity component, the stated interest rate, and the effective interest rate for each of the Convertible Notes and Exchangeable Notes at the time of the original offering are listed below ( in thousands, except percentages ): 2020 Convertible Notes (1) 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes 2025 Convertible Notes Debt component $ 140,247 $ 143,645 $ 137,266 $ 157,971 $ 91,024 Equity component $ 32,253 $ 17,355 $ 12,734 $ 14,009 $ 8,976 Equity issuance cost $ 1,106 $ 581 $ 398 $ — $ 224 Stated interest rate 3.000 % 2.875 % 3.250 % 4.500 % 3.250 % Effective interest rate 6.350 % 4.700 % 5.200 % 6.500 % 5.000 % ________________________ (1) The Company used a portion of the net proceeds from the issuance of the 2025 Convertible Notes to repurchase approximately $83.1 million aggregate principal amount of its 2020 Convertible Notes. As a result, the remaining principal amount of the 2020 Convertible Notes was $89.4 million as of December 31, 2019. The balances of the liability and equity components of all the Convertible Notes and Exchangeable Notes outstanding were as follows (in thousands) : December 31, December 31, Liability component—principal amount $ 672,855 $ 656,000 Unamortized debt discount (30,308) (36,361) Liability component—net carrying amount $ 642,547 $ 619,639 Equity component $ 83,127 $ 76,351 The debt discount is being amortized into interest expense over the remaining life of the Convertible Notes and Exchangeable Notes using the effective interest rates. Interest expense related to the Convertible Notes and Exchangeable Notes was as follows (in thousands) : Year ended December 31, 2019 2018 Interest expense—stated coupon rate $ 23,845 $ 17,518 Interest expense—amortization of debt discount 12,780 10,888 Interest expense—Convertible Notes and Exchangeable Notes $ 36,625 $ 28,406 Hedge Transactions In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion or exchange prices of the Convertible Notes and the Exchangeable Notes, the Company maintains a hedge program that increases the effective conversion or exchange price for the 2020 Convertible Notes, the 2021 Convertible Notes and the Exchangeable Notes. The Company did not hedge the 2022 Convertible Notes or the 2025 Convertible Notes. As discussed above, the Company unwound the capped call options associated with the portion of the 2020 Convertible Notes repurchased by the Company in September 2019. The details of the hedge program are listed below (in thousands, except conversion or exchange price) : 2020 Convertible Notes 2021 Convertible Notes 2023 Exchangeable Notes Cost of the hedge transaction(s) $ 18,113 $ 19,545 $ 17,785 Initial conversion or exchange price $ 45.72 $ 59.39 $ 44.62 Effective conversion or exchange price $ 61.55 $ 83.14 $ 62.48 Cabot Senior Secured Notes The following table provides a summary of the Cabot senior secured notes ( $ in thousands ): December 31, 2019 December 31, 2018 Maturity Date Interest Rate Floating rate senior secured notes due 2024 $ 448,921 $ — Jun 1, 2024 EURIBOR +6.375% Floating rate senior secured notes due 2021 — 356,067 Nov 15, 2021 EURIBOR +5.875% Senior secured notes due 2023 680,118 653,355 Oct 1, 2023 7.500 % Senior secured notes due 2021 — 101,977 Apr 1, 2021 6.500 % $ 1,129,039 $ 1,111,399 In June 2019, Cabot Financial (Luxembourg) II S.A. (“Cabot Financial II”), an indirect subsidiary of Encore, issued €400.0 million (approximately $452.0 million) in aggregate principal amount of Senior Secured Floating Rate Notes due 2024 (the “Cabot 2024 Floating Rate Notes”). The Cabot 2024 Floating Rate Notes mature in June 2024 and bear interest at a rate equal to the sum of (i) three-month EURIBOR (subject to a 0% floor) plus (ii) 6.375%, reset quarterly. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The weighted average interest rate was 6.375% for the year ended December 31, 2019. The proceeds from the issuance of the Cabot 2024 Floating Rate Notes, together with cash on hand, were used to (1) fully redeem existing €310.0 million (approximately $350.3 million) floating rate notes due in November 2021 and pay premium and accrued interest thereon, (2) fully redeem existing £80.0 million (approximately $101.6 million) senior secured notes due in April 2021 and pay accrued interest thereon, and (3) pay commissions, fees and other expenses. The transaction was treated as a debt extinguishment and related fees of approximately $9.0 million were recorded as interest expense in the Company’s consolidated statements of operations during the year ended December 31, 2019. The weighted average interest rate was 5.875% for the years ended December 31, 2019 and 2018. The Cabot 2024 Floating Rate Notes are fully and unconditionally guaranteed on a senior secured basis by the following indirect subsidiaries of the Company: CCM, Cabot Financial Limited and all material subsidiaries of Cabot Financial Limited (other than Cabot Financial II, Marlin Intermediate Holdings plc, Cabot Securitisation UK Limited and Cabot Securitisation (UK) II Limited). The Cabot 2024 Floating Rate Notes are secured by a first-ranking security interest in all the outstanding shares of Cabot Financial II and the guarantors (other than CCM and Marlin Midway Limited) and substantially all the assets of Cabot Financial II and the guarantors (other than CCM). Cabot Financial (Luxembourg) S.A. (“Cabot Financial”) has issued £512.9 million (approximately $651.3 million) in aggregate principal amount of 7.500% Senior Secured Notes due 2023 (the “Cabot 2023 Notes”). The Cabot 2023 Notes mature in October 2023. Interest on the Cabot 2023 Notes is payable semi-annually, in arrears, on April 1 and October 1 of each year. The Cabot 2023 Notes are fully and unconditionally guaranteed on a senior secured basis by the following indirect subsidiaries of the Company: CCM, Cabot Financial Limited, and all material subsidiaries of Cabot Financial Limited (other than Cabot Financial, Marlin Intermediate Holdings plc, Cabot Securitisation UK Limited and Cabot Securitisation (UK) II Limited). The Cabot 2023 Notes are secured by a first ranking security interest in all the outstanding shares of Cabot Financial and the guarantors (other than CCM and Marlin Midway Limited) and substantially all the assets of Cabot Financial and the guarantors (other than CCM). Subject to the Intercreditor Agreement described below under “Cabot Senior Revolving Credit Facility,” the guarantees provided in respect of the Cabot 2023 Notes are pari passu with each such guarantee given in respect of the Cabot 2024 Floating Rate Notes and the Cabot Credit Facility described below. Interest expense related to the Cabot senior secured notes was as follows (in thousands) : Year ended December 31, 2019 2018 Interest expense—stated coupon rate $ 76,897 $ 84,772 Interest expense—amortization of debt discount 532 343 Interest expense—Cabot senior secured notes $ 77,429 $ 85,115 Cabot Senior Revolving Credit Facility Cabot Financial (UK) Limited (“Cabot Financial UK”) has an amended and restated senior secured revolving credit facility agreement (as amended and restated, the “Cabot Credit Facility”). At December 31, 2019, the Cabot Credit Facility provided for a total committed facility of £375.0 million that expires in September 2023 and included the following key provisions: • Interest at LIBOR (or EURIBOR for any loan drawn in euro) plus 3.00% per annum; • A restrictive covenant that limits the loan to value ratio to 0.75 in the event that the Cabot Credit Facility is more than 20% utilized; • A restrictive covenant that limits the super senior loan (i.e. the Cabot Credit Facility and any super priority hedging liabilities) to value ratio to 0.275; • Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and • Events of default which, upon occurrence, may permit the lenders to terminate the Cabot Credit Facility and declare all amounts outstanding to be immediately due and payable. The Cabot Credit Facility is unconditionally guaranteed by the following indirect subsidiaries of the Company: CCM, Cabot Financial Limited, and all material subsidiaries of Cabot Financial Limited. The Cabot Credit Facility is secured by first ranking security interests in all the outstanding shares of Cabot Financial UK and the guarantors (other than CCM) and substantially all the assets of Cabot Financial UK and the guarantors (other than CCM). Pursuant to the terms of intercreditor agreements entered into with respect to the relative positions of the Cabot 2023 Notes, the Cabot 2024 Floating Rate Notes, and the Cabot Credit Facility, any liabilities in respect of obligations under the Cabot Credit Facility that are secured by assets that also secure the Cabot 2023 Notes, the Cabot 2024 Floating Rate Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets. At December 31, 2019, the outstanding borrowings under the Cabot Credit Facility were £215.5 million (approximately $285.7 million). The weighted average interest rate was 3.52% and 3.73% for the years ended December 31, 2019 and 2018, respectively. Available capacity under the Cabot Credit Facility, after taking into account borrowing base and applicable debt covenants, was £159.5 million (approximately $211.5 million) as of December 31, 2019. Cabot Securitisation Senior Facility Cabot’s wholly owned subsidiary Cabot Securitisation UK Ltd (“Cabot Securitisation”) entered into a senior facility agreement (the “Senior Facility Agreement”) for a committed amount of £300.0 million, of which £300.0 million was drawn as of December 31, 2019. The Senior Facility Agreement matures in September 2023. The obligations of Cabot Securitisation under the Senior Facility Agreement are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was £342.2 million (approximately $453.8 million) as of December 31, 2019. Funds drawn under the Senior Facility Agreement will bear interest at a rate per annum equal to LIBOR plus a margin of 2.85%. In November 2018, Cabot’s wholly owned subsidiary Cabot Securitisation UK II Ltd (“Cabot Securitisation II”) entered into a new non-recourse asset backed senior facility of £50.0 million, of which £50.0 million was drawn as of December 31, 2019. The senior facility matures in September 2023. The facility is secured by first ranking security interests over all of Cabot Securitisation II’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was £54.1 million (approximately $71.7 million) as of December 31, 2019. Funds drawn under this facility will bear interest at a rate per annum equal to LIBOR plus a margin of 4.075%. At December 31, 2019, the outstanding borrowings under the Cabot Securitisation Senior Facility were £350.0 million (approximately $464.1 million). The weighted average interest rate was 3.74% and 3.46% for the year ended December 31, 2019 and 2018. Cabot Securitisation and Cabot Securitisation II are securitized financing vehicles and are VIEs for consolidation purposes. Refer to “Note 9: Variable Interest Entities” for further details. Finance Lease Liabilities The Company has finance lease liabilities primarily for computer equipment. As of December 31, 2019, the Company’s finance lease liabilities were approximately $8.1 million. Refer to “Note 12: Leases” for further details. Maturity Schedule The aggregate amounts of the Company’s borrowings, maturing in each of the next five years and thereafter are as follows (in thousands) : 2020 $ 197,041 2021 900,114 2022 221,768 2023 1,669,840 2024 497,671 Thereafter 100,000 Total $ 3,586,434 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Note 9: Variable Interest Entities A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb expected losses, or the right to receive expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary. The Company evaluates its relationships with its VIEs on an ongoing basis to ensure that it continues to be the primary beneficiary. A reconsideration event is significant if it changes the design of the entity or the entity’s equity investment at risk. Prior to the purchase of all of the outstanding equity of CCM not owned by the Company, CCM’s indirect holding Company Janus Holdings S.a r.l. (“Janus Holdings”) was a VIE. Upon completion of the Cabot Transaction on July 24, 2018 and the subsequent change in organizational structure, Janus Holdings no longer qualified as a VIE and CCM is consolidated via the voting interest model. As of December 31, 2019, the Company’s VIEs include certain securitized financing vehicles and other immaterial special purpose entities that were created to purchase receivable portfolios in certain geographies. The Company is the primary beneficiary of these VIEs. The Company has the power to direct the activities of the VIEs which includes but is not limited to the ability to exercise discretion in the servicing of the financial assets. Most assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Conversely, liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of the VIE. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 10: Stock-Based Compensation In April 2017, Encore’s Board of Directors (the “Board”) approved the Encore Capital Group, Inc. 2017 Incentive Award Plan (the “2017 Plan”), which was then approved by the Company’s stockholders on June 15, 2017. The 2017 Plan superseded the Company’s 2013 Incentive Compensation Plan (as amended, the “2013 Plan”), which had previously superseded the Company’s 2005 Stock Incentive Plan (“2005 Plan”). Board members, employees, and consultants of Encore and its subsidiaries and affiliates are eligible to receive awards under the 2017 Plan. Subject to certain adjustments, the Company may grant awards for an aggregate of 5,713,571 shares of the Company’s common stock under the 2017 Plan. The aggregate number of shares available for issuance under the 2017 Plan will be reduced by 2.12 shares for each share delivered in settlement of any full value award and by one share for each share delivered in settlement of any stock option or stock appreciation right. If an award under the 2017 Plan or the 2013 Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, the unused shares covered by such award will again become or again be available for award grants under the 2017 Plan. Shares available under the 2017 Plan will be increased by 2.12 shares for each share subject to a full value award and by one share for each share subject to a stock option or a stock appreciation right, in each case, that become or again be available for issuance pursuant to the foregoing share counting provisions. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, dividend equivalent rights, stock appreciation rights, cash awards, performance-based awards and any other types of awards not inconsistent with the 2017 Plan. In accordance with authoritative guidance for stock-based compensation, compensation expense is recognized only for those shares expected to vest, based on the Company’s historical experience and future expectations. The Company has elected a policy of estimating expected forfeitures. Total stock-based compensation expense during the years ended December 31, 2019, 2018, and 2017 was $12.6 million, $13.0 million, and $10.4 million, respectively. The actual tax benefit from stock-based compensation arrangements totaled $1.2 million, $1.3 million, and $3.6 million for the years ended December 31, 2019, 2018, and 2017, respectively. Cash received from option exercise under all share-based payment arrangements for the years ended December 31, 2019, 2018 and 2017, was $0.3 million, $0.7 million and $0.5 million, respectively. The Company’s stock-based compensation arrangements are described below: Stock Options Under the 2005 Plan, option awards were generally granted with an exercise price equal to the market price of the Company’s stock at the date of issuance. They generally vest over three to five years of continuous service, and have ten-year contractual terms. Other than the Performance Options discussed below, no options have been awarded under the 2013 Plan or 2017 Plan. The Company uses the Black-Scholes option-pricing model to determine the fair-value of stock-based awards. All options are amortized ratably over the requisite service periods of the awards, which are generally the vesting periods. There were no options granted during the years ended December 31, 2019, 2018, or 2017. As of December 31, 2019, all outstanding stock options have been fully vested and all related compensation expense has been fully recognized. A summary of the Company’s stock option activity as of December 31, 2019, and changes during the year then ended, are presented below: Number of Shares Weighted Average Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 55,766 $ 15.21 Exercised (46,600) 13.84 Outstanding at December 31, 2019 9,166 $ 22.17 2.26 $ 121 Exercisable as of December 31, 2019 9,166 $ 22.17 2.26 $ 121 The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $1.0 million, $0.4 million and $0.8 million, respectively. Performance Stock Options Under the 2017 Plan and the 2013 Plan, the Company granted performance stock options, with an exercise price equal to the closing price of the Company’s stock at the date of issuance, that vest in equal annual installments over a three year service period but only if, within four years from the date of grant, the 20 trading day average of the closing price of the Company’s stock (subject to dividend-related adjustments) exceeds a target equal to a 25% increase from the closing price on the date of grant. These performance options have a seven-year contractual life. A summary of the Company’s performance stock option activity as of December 31, 2019, and changes during the year then ended, are presented below: Number of Weighted Average Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 216,582 $ 31.54 Exercised (10,952) 30.95 Cancelled/forfeited (13,872) 30.95 Expired (27,745) 30.95 Outstanding at December 31, 2019 164,013 $ 31.73 4.21 $ 665 Vested and expected to vest as of December 31, 2019 163,024 $ 31.73 4.21 $ 660 Exercisable as of December 31, 2019 105,696 $ 31.75 4.21 $ 427 As of December 31, 2019, there was $0.1 million of total unrecognized compensation cost related to non-vested performance stock options which is expected to be recognized over a period of approximately 0.2 years. The weighted average grant date fair value for performance stock options granted during the year ended December 31, 2017 was $31.32. No performance stock options were granted during the years ended December 31, 2019 or 2018. Non-Vested Shares The Company’s 2017 Plan (and previously, the 2013 Plan and 2005 Plan), permits restricted stock units, restricted stock awards, performance stock units, and performance stock awards (collectively “stock awards”). The fair value of non-vested shares with a service condition and/or a performance condition that affect vesting is equal to the closing sale price of the Company’s common stock on the grant date. Compensation cost is recognized only for the awards that ultimately vest. The Company has certain share awards that include market conditions that affect vesting. The fair value of these shares is estimated using a lattice model. Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. For the majority of non-vested shares, shares are issued on the vesting dates net of the number of shares needed to satisfy minimal statutory tax withholding requirements. The tax obligations are then paid by the Company on behalf of the employees. A summary of the status of the Company’s stock awards as of December 31, 2019, and changes during the year then ended, is presented below: Non-Vested Shares (1) Weighted Average Non-vested at December 31, 2018 859,932 $ 34.43 Awarded 569,872 $ 32.42 Vested (267,157) $ 35.32 Cancelled (240,117) $ 32.00 Non-vested at December 31, 2019 922,530 $ 33.11 ________________________ (1) Certain of the Company’s stock awards have a vesting matrix under which the stock awards can vest at a maximum level that is 200% of the shares that would vest for achieving the performance goals at target. The number of shares presented is based on achieving the performance goals at target levels as defined in the stock award agreements. As of December 31, 2019 and 2018, the maximum number of non-vested performance shares that could vest under the provisions of the agreements was 1,171,334 and 1,218,359, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11: Income Taxes Income before provision for income taxes consisted of the following (in thousands) : Year Ended December 31, 2019 2018 2017 US $ 144,495 $ 61,972 $ 71,794 Foreign 56,747 94,516 59,432 Total income before provision for income taxes $ 201,242 $ 156,488 $ 131,226 The income tax provision on earnings from continuing operations consisted of the following (in thousands) : Year Ended December 31, 2019 2018 2017 Current expense (benefit): Federal $ (2,917) $ 23,254 $ 9,969 State (6,464) 2,983 (794) Foreign 21,008 29,532 15,690 11,627 55,769 24,865 Deferred expense (benefit): Federal 27,640 (10,447) 16,563 State 5,535 (2,169) 784 Foreign (12,469) 3,599 9,837 20,706 (9,017) 27,184 Provision for income taxes $ 32,333 $ 46,752 $ 52,049 The reconciliation of federal statutory income tax rate to our effective tax rate was as follows: Year Ended December 31, 2019 2018 2017 Federal provision 21.0 % 21.0 % 35.0 % State provision 0.2 % 0.1 % 0.5 % Foreign rate differential (1) (2.2) % (11.7) % (20.0) % Transaction costs (2) 0.0 % 1.0 % 5.0 % Permanent items (3) 0.0 % 1.1 % 10.2 % Change in valuation allowance (4) (0.5) % 17.7 % 8.2 % IRS settlement (5) (2.4) % — % — % Other 0.0 % 0.7 % 0.8 % Effective rate 16.1 % 29.9 % 39.7 % ________________________ (1) Relates primarily to the lower tax rates on the income or loss attributable to international operations. (2) In 2018, relates primarily to transaction costs incurred in connection with the Cabot Transaction. In 2017, relates primarily to certain withdrawn IPO costs disallowed for U.K. tax purposes. (3) Represents a provision for nondeductible items, including nondeductible interest in a foreign subsidiary and certain foreign income taxable in the U.S. under Internal Revenue Code Section 951 (Subpart F) in 2017. (4) Net decrease in valuation allowance during 2019 is attributable to disposition of certain foreign subsidiaries with cumulative operating losses for tax purposes. In 2017 and 2018, valuation allowance net increase recorded as a result of certain foreign subsidiaries’ cumulative operating losses for tax purposes. (5) In 2019, includes tax benefit resulting from tax accounting method change. The Company’s subsidiary in Costa Rica is operating under a 100% tax holiday through December 31, 2026. The impact of the tax holiday in Costa Rica for the year ended December 31, 2019 was immaterial. The Company has not provided for applicable income or withholding taxes on the undistributed earnings from continuing operations for certain of its subsidiaries operating outside of the United States. Undistributed net income of these subsidiaries as of December 31, 2019, was approximately $151.3 million. Such undistributed earnings are considered permanently reinvested. The Company does not provide for deferred taxes on translation adjustments on unremitted earnings under the indefinite reversal exemption. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable due to the complexities of a hypothetical calculation. Subsidiaries operating outside of the United States, for which the Company does not consider under the indefinite reversal exemption, have no material undistributed earnings or outside basis differences, and therefore, no U.S. taxes have been provided. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts for income tax purposes. Significant components of the Company's deferred tax assets and liabilities were as follows (in thousands) : December 31, December 31, Deferred tax assets: Net operating losses $ 36,236 $ 42,013 Financing obligation 18,023 — Accrued expenses 10,050 17,715 Difference in basis of bond and loan costs 4,194 3,728 Stock-based compensation 2,882 2,796 State taxes 1 174 Differences in income recognition related to receivable portfolios — 13,857 Prepaid expenses — 2,949 Other 1,821 4,825 Total deferred tax assets 73,207 88,057 Valuation allowance (36,422) (46,516) Total deferred tax assets net of valuation allowance 36,785 41,541 Deferred tax liabilities: Deferred court costs (23,682) (23,484) Right-of-use asset (14,422) — Difference in basis of depreciable and amortizable assets (3,680) (1,937) Prepaid expenses (628) — Other (4,616) (3,403) Total deferred tax liabilities (47,028) (28,824) Net deferred tax (liability) asset (1) $ (10,243) $ 12,717 ________________________ (1) The Company operates in multiple jurisdictions. In accordance with authoritative guidance relating to income taxes, deferred tax assets and liabilities are netted for each tax-paying component of the Company within a particular tax jurisdiction and presented as a single amount in the statement of financial condition. As of December 31, 2019, certain of the Company’s foreign subsidiaries have net operating loss carry forwards of approximately $238.2 million, which will begin to expire in 2024. Certain of the Company's domestic subsidiaries have state net operating losses of approximately $2.2 million, which will generally begin to expire in 2020. Valuation allowances are recognized on deferred tax assets if the Company believes that it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2019, valuation allowances decreased to $36.4 million, as compared to $46.5 million as of December 31, 2018. The decrease was primarily related to the disposition of certain foreign entities with cumulative operating losses for tax purposes during the year ended December 31, 2019. A reconciliation of the beginning and ending amounts of unrecognized tax benefit is as follows (in thousands) : Amount Balance at December 31, 2016 $ 18,945 Increases related to current year tax positions 5,902 Decreases related to current year tax positions (4,599) Decreases related to settlements with taxing authorities (228) Balance at December 31, 2017 20,020 Increases related to prior year tax positions 256 Increases related to current year tax positions 1,958 Decrease related to expiration of statute of limitations (3,221) Decreases related to settlements with taxing authorities (461) Balance at December 31, 2018 18,552 Decreases related to prior year tax positions (10,673) Increases related to current year tax positions 4,442 Decrease related to expiration of statute of limitations (2,493) Decreases related to settlements with taxing authorities (1,920) Balance at December 31, 2019 $ 7,908 The Company had gross unrecognized tax benefits, inclusive of penalties and interest, of $8.2 million, $19.9 million and $22.2 million at December 31, 2019, 2018, and 2017 respectively. At December 31, 2019, 2018 and 2017, there was $7.6 million, $13.0 million and $9.9 million, respectively, of unrecognized tax benefit that if recognized, would result in a net tax benefit. During the year ended December 31, 2019, the decrease in the Company’s gross unrecognized tax benefit was primarily related to decreases in prior year tax positions resulting from exam resolutions. During the year ended December 31, 2018, the decrease in the Company’s gross unrecognized tax benefit was primarily related to expiration of state statute of limitations. During the year ended December 31, 2017, the increase in the Company’s gross unrecognized tax benefit was primarily related to prepaid services to be performed within three and a half months of December 31, 2017. The Company believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, it is reasonably possible that certain changes may occur within the next 12 months, which could significantly increase or decrease the balance of the Company’s gross unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of tax expense. The Company recognized a benefit of approximately $2.7 million, and expense of $0.6 million and $0.8 million in interest and penalties during the years ended December 31, 2019, 2018 and 2017, respectively. Interest and penalties accrued as of December 31, 2019 and 2018 were $0.3 million and $1.4 million, respectively. The Company files federal, state and non-U.S. income tax returns in jurisdictions with varying statutes of limitations. The Internal Revenue Service has completed examinations of the Company’s U.S. federal income tax returns for tax years 2012 through 2017, and the Company is no longer subject to federal tax examinations for years prior to 2018. For U.S. state tax returns, the Company is generally not subject to tax examinations for years prior to 2012. The Company is subject to the examination of its income tax returns by various taxing authorities, and the timing of the resolution of income tax examinations cannot be predicted with certainty. The Company’s management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of the Company’s provision for income taxes. If any issues addressed in the Company’s tax examinations are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. |
Leases (Notes)
Leases (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 12: Leases Effective January 1, 2019, the Company adopted Topic 842 using the modified retrospective method. As such, the Company recognized operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated statements of financial condition. Prior period financial statements were not adjusted under the new standard and therefore, those amounts are not presented below. The Company elected not to apply the recognition requirements to short-term leases, not to separate non-lease components from lease components, and elected the transition provisions available for existing contracts, which allowed the Company to carryforward its historical assessments of (1) whether contracts are or contain a lease, (2) lease classification, and (3) initial direct costs. ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets also include any advance lease payments made and are net of any lease incentives. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The majority of the Company’s leases are for corporate offices, various facilities and information technology equipment. The components of lease expense for the year ended December 31, 2019 were as follows (in thousands) : Year Ended Operating lease costs (1) $ 19,450 Finance lease costs Amortization of right-of-use assets 1,825 Interest on lease liabilities 563 Total lease costs $ 21,838 ________________________ (1) Operating lease expenses are included in general and administrative expenses in the Company’s consolidated statements of operations. Costs include short-term and variable lease components which were not material for the period. The following table provides supplemental consolidated statement of financial condition information related to leases as of December 31, 2019 (in thousands) : Classification December 31, 2019 Assets Operating lease right-of-use assets Other assets $ 75,254 Finance lease right-of-use assets Property and equipment, net 9,133 Total lease right-of-use assets $ 84,387 Liabilities Operating lease liabilities Other liabilities $ 93,847 Finance lease liabilities Borrowings 8,121 Total lease liabilities $ 101,968 Supplemental lease information is summarized below (in thousands, except rate and lease term) : Year Ended Right-of-use assets obtained in exchange for new operating lease obligations $ 123,477 Right-of-use assets obtained in exchange for new finance lease obligations 5,299 Cash paid for amounts included in the measurement of lease liabilities Operating leases - operating cash flows 14,874 Finance leases - operating cash flows 295 Finance leases - financing cash flows 1,898 December 31, 2019 Weighted-average remaining lease term Operating leases 8.1 years Finance leases 3.1 years Weighted-average discount rate Operating leases (1) 5.3 % Finance leases 4.7 % ________________________ (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. Minimum future payments on noncancelable leases as of December 31, 2019 are summarized as follows (in thousands) : Finance Leases Operating Leases Total 2020 $ 2,898 $ 17,898 $ 20,796 2021 2,736 16,845 19,581 2022 2,509 13,726 16,235 2023 597 12,534 13,131 2024 — 12,275 12,275 Thereafter — 41,497 41,497 Total undiscounted lease payments 8,740 114,775 123,515 Less: imputed interest (619) (20,928) (21,547) Lease obligations $ 8,121 $ 93,847 $ 101,968 As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and under the previous lease accounting standard, minimum future payments on noncancelable leases as of December 31, 2018 are summarized as follows (in thousands) : Finance Operating Total 2019 $ 2,507 $ 16,538 $ 19,045 2020 1,983 13,850 15,833 2021 1,844 13,044 14,888 2022 1,630 11,737 13,367 2023 204 9,741 9,945 Thereafter — 37,997 37,997 Total minimal leases payments 8,168 $ 102,907 $ 111,075 Less: interest (605) Present value of minimal lease payments $ 7,563 |
Leases | Note 12: Leases Effective January 1, 2019, the Company adopted Topic 842 using the modified retrospective method. As such, the Company recognized operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated statements of financial condition. Prior period financial statements were not adjusted under the new standard and therefore, those amounts are not presented below. The Company elected not to apply the recognition requirements to short-term leases, not to separate non-lease components from lease components, and elected the transition provisions available for existing contracts, which allowed the Company to carryforward its historical assessments of (1) whether contracts are or contain a lease, (2) lease classification, and (3) initial direct costs. ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. ROU assets also include any advance lease payments made and are net of any lease incentives. As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would expect to pay to borrow over a similar term, and on a collateralized basis, an amount equal to the lease payments in a similar economic environment. The majority of the Company’s leases are for corporate offices, various facilities and information technology equipment. The components of lease expense for the year ended December 31, 2019 were as follows (in thousands) : Year Ended Operating lease costs (1) $ 19,450 Finance lease costs Amortization of right-of-use assets 1,825 Interest on lease liabilities 563 Total lease costs $ 21,838 ________________________ (1) Operating lease expenses are included in general and administrative expenses in the Company’s consolidated statements of operations. Costs include short-term and variable lease components which were not material for the period. The following table provides supplemental consolidated statement of financial condition information related to leases as of December 31, 2019 (in thousands) : Classification December 31, 2019 Assets Operating lease right-of-use assets Other assets $ 75,254 Finance lease right-of-use assets Property and equipment, net 9,133 Total lease right-of-use assets $ 84,387 Liabilities Operating lease liabilities Other liabilities $ 93,847 Finance lease liabilities Borrowings 8,121 Total lease liabilities $ 101,968 Supplemental lease information is summarized below (in thousands, except rate and lease term) : Year Ended Right-of-use assets obtained in exchange for new operating lease obligations $ 123,477 Right-of-use assets obtained in exchange for new finance lease obligations 5,299 Cash paid for amounts included in the measurement of lease liabilities Operating leases - operating cash flows 14,874 Finance leases - operating cash flows 295 Finance leases - financing cash flows 1,898 December 31, 2019 Weighted-average remaining lease term Operating leases 8.1 years Finance leases 3.1 years Weighted-average discount rate Operating leases (1) 5.3 % Finance leases 4.7 % ________________________ (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. Minimum future payments on noncancelable leases as of December 31, 2019 are summarized as follows (in thousands) : Finance Leases Operating Leases Total 2020 $ 2,898 $ 17,898 $ 20,796 2021 2,736 16,845 19,581 2022 2,509 13,726 16,235 2023 597 12,534 13,131 2024 — 12,275 12,275 Thereafter — 41,497 41,497 Total undiscounted lease payments 8,740 114,775 123,515 Less: imputed interest (619) (20,928) (21,547) Lease obligations $ 8,121 $ 93,847 $ 101,968 As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and under the previous lease accounting standard, minimum future payments on noncancelable leases as of December 31, 2018 are summarized as follows (in thousands) : Finance Operating Total 2019 $ 2,507 $ 16,538 $ 19,045 2020 1,983 13,850 15,833 2021 1,844 13,044 14,888 2022 1,630 11,737 13,367 2023 204 9,741 9,945 Thereafter — 37,997 37,997 Total minimal leases payments 8,168 $ 102,907 $ 111,075 Less: interest (605) Present value of minimal lease payments $ 7,563 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13: Commitments and Contingencies Litigation and Regulatory The Company is involved in disputes, legal actions, regulatory investigations, inquiries, and other actions from time to time in the ordinary course of business. The Company, along with others in its industry, is routinely subject to legal actions based on the Fair Debt Collection Practices Act (“FDCPA”), comparable state statutes, the Telephone Consumer Protection Act (“TCPA”), state and federal unfair competition statutes, and common law causes of action. The violations of law investigated or alleged in these actions often include claims that the Company lacks specified licenses to conduct its business, attempts to collect debts on which the statute of limitations has run, has made inaccurate or unsupported assertions of fact in support of its collection actions and/or has acted improperly in connection with its efforts to contact consumers. Such litigation and regulatory actions could involve potential compensatory or punitive damage claims, fines, sanctions, injunctive relief, or changes in business practices. Many continue on for some length of time and involve substantial investigation, litigation, negotiation, and other expense and effort before a result is achieved, and during the process the Company often cannot determine the substance or timing of any eventual outcome. In certain legal proceedings, the Company may have recourse to insurance or third party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. The Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. The Company’s legal costs are recorded to expense as incurred. As of December 31, 2019, the Company has no material reserves for legal matters. Purchase Commitments In the normal course of business, the Company enters into forward flow purchase agreements and other purchase commitment agreements. As of December 31, 2019, the Company had entered into agreements to purchase receivable portfolios with a face value of approximately $2.4 billion for a purchase price of approximately $298.9 million. Most purchase commitments do not extend past one Guarantees Encore’s Certificate of Incorporation and indemnification agreements between the Company and its officers and directors provide that the Company will indemnify and hold harmless its officers and directors for certain events or occurrences arising as a result of the officer or director serving in such capacity. The Company has also agreed to indemnify certain third parties under certain circumstances pursuant to the terms of certain underwriting agreements, registration rights agreements, credit facilities, portfolio purchase and sale agreements, and other agreements entered into by the Company in the ordinary course of business. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company believes the estimated fair value of these indemnification agreements is minimal and, as of December 31, 2019, has no liabilities recorded for these agreements. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 14: Segment Information The Company conducts business through several operating segments. The Company’s management relies on internal management reporting processes that provide segment revenue, segment operating income, and segment asset information in order to make financial decisions and allocate resources. The Company determined its operating segments meet the aggregation criteria, and therefore, it has one reportable segment, portfolio purchasing and recovery, based on similarities among the operating units including economic characteristics, the nature of the services, the nature of the production process, customer types for their services, the methods used to provide their services and the nature of the regulatory environment. The following tables present information about geographic areas in which the Company operates (in thousands) : Year Ended December 31, 2019 2018 2017 Total revenues, adjusted by net allowances (1) : United States $ 817,693 $ 709,493 $ 665,564 International Europe (2) 520,433 556,265 427,655 Other geographies 59,555 96,272 93,819 Total $ 1,397,681 $ 1,362,030 $ 1,187,038 ________________________ (1) Revenues are attributed to countries based on consumer location. (2) Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable. December 31, December 31, Long-lived assets (1) : United States $ 84,118 $ 76,791 International United Kingdom 28,602 27,454 Other foreign countries 7,331 11,273 35,933 38,727 Total $ 120,051 $ 115,518 ________________________ (1) Long-lived assets consist of property and equipment, net and finance leases. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Identifiable Intangible Assets | Note 15: Goodwill and Identifiable Intangible Assets The Company’s goodwill is attributable to reporting units included in its portfolio purchasing and recovery segment. Goodwill is tested for impairment at the reporting unit level annually and in interim periods if certain events occur that indicate that the fair value of a reporting unit may be below its carrying value. Determining the number of reporting units and the fair value of a reporting unit requires the Company to make judgments and involves the use of significant estimates and assumptions. The Company performs its annual goodwill impairment assessment as of October 1. As of October 1, 2019, the Company had two reporting units, MCM and Cabot, that carried goodwill. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. The qualitative factors include economic environment, business climate, market capitalization, operating performance, competition, and other factors. The Company may proceed directly to the quantitative test without performing the qualitative test. For the goodwill impairment tests performed as of October 1, 2019, the Company performed qualitative analysis for the MCM reporting unit and proceeded directly to the quantitative test for its Cabot reporting unit. If goodwill is quantitatively assessed for impairment and a reporting unit’s carrying value exceeds its fair value, the difference is recorded as an impairment. The Company applies various valuation techniques to measure the fair value of each reporting unit, including the income approach and the market approach. For goodwill impairment analyses, the Company uses the income approach in determining fair value, specifically the discounted cash flow method, or DCF. In applying the DCF method, an identified level of future cash flow is estimated. Annual estimated cash flows and a terminal value are then discounted to their present value at an appropriate discount rate to obtain an indication of fair value. The discount rate utilized reflects estimates of required rates of return for investments that are seen as similar to an investment in the reporting unit. DCF analyses are based on management’s long-term financial projections and require significant judgments. Therefore, for the Company’s reporting units where the Company has access to reliable market participant data, the market approach is conducted in addition to the income approach in determining the fair value. The Company uses a guideline company method under the market approach to estimate the fair value of equity and the market value of invested capital (“MVIC”). The guideline company approach relies on estimated remaining collections data or the earnings before interest, tax, depreciation and amortization (“EBITDA”) for each of the selected guideline companies, which enables a direct comparison between the reporting unit and the selected peer group. The Company believes that the current methodology used in determining the fair value at its reporting units represent its best estimates. In addition, the Company compares the aggregate fair value of the reporting units to its overall market capitalization. Based on the annual goodwill impairment tests performed at October 1, 2019, no goodwill impairment existed at these two reporting units. On August 15, 2019, the Company completed the sale of Baycorp. The Company concluded that the fair value of Baycorp immediately prior to the Baycorp Transaction was less than its recorded book value and, as a result, the entire goodwill balance carried at the Baycorp reporting unit of $10.7 million was impaired. The goodwill impairment is included in operating expenses in the Company’s consolidated statements of operations during the year ended December 31, 2019. Management continues to evaluate and monitor all key factors impacting the carrying value of the Company’s recorded goodwill and long-lived assets. Further adverse changes in the Company’s actual or expected operating results, market capitalization, business climate, economic factors or other negative events that may be outside the control of management could result in a material non-cash impairment charge in the future. In December 2018, the Company completed the sale of all its interests in Refinancia S.A. and its subsidiaries (collectively, “Refinancia”) to the existing minority shareholders of Refinancia. As a result, the Company no longer consolidates Refinancia and the goodwill carried at Refinancia was eliminated from the Company’s consolidated statements of financial position. The following table summarizes the activity in the Company’s goodwill balance, as follows (in thousands): 2019 2018 Balance at beginning of period: $ 868,126 $ 928,993 Goodwill adjustment — (2,213) Goodwill eliminated in connection with divestiture — (13,347) Goodwill impairment (10,718) — Effect of foreign currency translation 26,777 (45,307) Balance at end of period: $ 884,185 $ 868,126 The Company’s acquired intangible assets are summarized as follows (in thousands) : As of December 31, 2019 As of December 31, 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships $ 67,897 $ (18,191) $ 49,706 $ 73,458 $ (17,025) $ 56,433 Developed technologies 4,734 (4,124) 610 7,461 (6,446) 1,015 Trade name and other 6,299 (5,244) 1,055 8,346 (5,213) 3,133 Total intangible assets $ 78,930 $ (27,559) $ 51,371 $ 89,265 $ (28,684) $ 60,581 The weighted-average useful lives of intangible assets at the time of acquisition were as follows (in years) : Weighted-Average Customer relationships 10 Developed technologies 5 Trade name and other 7 The amortization expense for intangible assets subject to amortization was $7.7 million, $11.7 million, and $8.9 million for the years ended December 31, 2019, 2018, and 2017, respectively. Estimated future amortization expense related to finite-lived intangible assets at December 31, 2019 is as follows ( in thousands ): 2020 $ 7,304 2021 7,168 2022 6,573 2023 6,187 2024 6,094 Thereafter 18,045 Total $ 51,371 |
Quarterly Information (Unaudite
Quarterly Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Information (Unaudited) | Note 16: Quarterly Information (Unaudited) The following table summarizes quarterly financial data for the periods presented ( in thousands, except per share amounts ): Three Months Ended March 31 June 30 September 30 December 31 2019 Gross collections $ 513,853 $ 514,881 $ 499,395 $ 498,799 Total revenues, adjusted by net allowances 347,077 346,874 355,936 347,794 Total operating expenses 236,019 233,142 247,591 234,584 Income from continuing operations 49,442 36,822 39,413 43,232 Net income 49,442 36,822 39,413 43,232 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations 49,254 36,661 38,869 43,085 Net income attributable to Encore Capital Group, Inc. stockholders 49,254 36,661 38,869 43,085 Earnings per share attributable to Encore Capital Group, Inc.: Basic earnings per share $ 1.58 $ 1.17 $ 1.24 $ 1.38 Diluted earnings per share 1.57 1.17 1.23 1.36 2018 Gross collections $ 489,102 $ 496,093 $ 498,843 $ 483,582 Total revenues, adjusted by net allowances 326,788 349,747 336,774 348,721 Total operating expenses 238,336 246,314 239,246 232,834 Income from continuing operations 23,713 26,974 13,016 46,033 Net income 23,713 26,974 13,016 46,033 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations 21,827 26,298 20,725 47,036 Net income attributable to Encore Capital Group, Inc. stockholders 21,827 26,298 20,725 47,036 Earnings per share attributable to Encore Capital Group, Inc.: Basic earnings per share $ 0.84 $ 1.01 $ 0.69 $ 1.51 Diluted earnings per share 0.83 1.00 0.69 1.50 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 17: Subsequent Event On February 18, 2020, Cabot Securitisation amended and restated its Senior Facility Agreement. Pursuant to the amendment and restatement of the Senior Facility Agreement, the total commitment amount was increased by £50.0 million from £300.0 million to £350.0 million, the repayment date was extended from September 15, 2023 to March 15, 2025 and SONIA (sterling overnight index average) replaced LIBOR as the reference rate. Funds drawn under the amended and restated Senior Facility Agreement bear interest at a rate per annum equal to SONIA plus a margin of 3.06% plus, for periods after March 15, 2023, a step-up margin ranging from zero to 1.00%. Cabot Securitisation has drawn down the additional £50.0 million and used the proceeds to purchase receivables from Cabot Securitisation II in order to effect the termination of the £50.0 million senior facility of Cabot Securitisation II. |
Ownership, Description of Bus_2
Ownership, Description of Business, and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the accounts and operations of the Company and those of its subsidiaries in which the Company has a controlling financial interest. The Company also consolidates VIEs for which it is the primary beneficiary. The primary beneficiary has both (a) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (b) either the obligation to absorb losses or the right to receive benefits. Refer to “Note 9: Variable Interest Entities” for further details. All intercompany transactions and balances have been eliminated in consolidation. |
Translation of Foreign Currencies | Translation of Foreign Currencies The financial statements of certain of the Company’s foreign subsidiaries are measured using their local currency as the functional currency. Assets and liabilities of foreign operations are translated into U.S. dollars using period-end exchange rates, and revenues and expenses are translated into U.S. dollars using average exchange rates in effect during each period. The resulting translation adjustments are recorded as a component of other comprehensive income or loss. Equity accounts are translated at historical rates, except for the change in retained earnings during the year which is the result of the income statement translation process. Intercompany transaction gains or losses at each period end arising from subsequent measurement of balances for which settlement is not planned or anticipated in the foreseeable future are included as translation adjustments and recorded within other comprehensive income or loss. Translation gains or losses are the material components of accumulated other comprehensive income or loss and are reclassified to earnings upon the substantial sale or liquidation of investments in foreign operations. |
Reclassifications | Reclassifications Certain immaterial reclassifications have been made to the prior years’ consolidated financial statements to conform to current year presentation. |
Change in Accounting Principle and Recent Accounting Pronouncements | Change in Accounting Principle As discussed in “Note 12: Leases” to the consolidated financial statements, effective January 1, 2019, the Company adopted Accounting Standard Codification 842 - Leases (“Topic 842”) using the modified retrospective method. The Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) in 2019. The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Recent Accounting Pronouncements Other than the adoption of the standards discussed in the “Change in Accounting Principle” section above, there have been no new accounting pronouncements made effective during the year ended December 31, 2019 that have significance, or potential significance, to the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Effective In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13” or “CECL”). ASU 2016-13 introduces a new impairment approach for credit loss recognition based on current expected lifetime losses rather than incurred losses. ASU 2016-13 applies to all financial assets carried at amortized costs, including the Company’s investment in receivable portfolios, which are defined as purchased credit deteriorated (“PCD”) financial assets under CECL. For PCD financial assets, the unit of account is at individual loan level. Since each loan is deeply delinquent and deemed uncollectible at the individual loan level, the Company will apply its charge-off policy and fully write-off the amortized costs ( i.e., face value net of noncredit discount) of the individual receivables immediately after purchasing the portfolio. The Company will then record a negative allowance that represents the present value of expected all future recoveries on the aggregated portfolio level using a discounted approach. Revenue will be recognized over the life of the portfolio at an effective interest rate established at the time of purchase. Subsequent over and under-performance and changes in expected cash flows are recognized in the statements of operations as adjustments to the provision for credit losses. ASU 2016-13, including the effect of ongoing developments and amendments to the guidance, represents a significant change from existing U.S. GAAP and will result in changes to the Company’s accounting for its investment in receivable portfolios. ASU 2016-13 is effective for reporting periods beginning after December 15, 2019. The Company will adopt ASU 2016-13 as of January 1, 2020 using a modified-retrospective approach, by recording a cumulative-effect adjustment to opening retained earnings. Implementation efforts have been substantially completed. As part of the adoption of CECL, the Company will change its current method of accounting for its court costs spent in its legal collection channel effective January 1, 2020. As of December 31, 2019, the Company capitalizes its upfront court costs spent in its consolidated financial statements (“Deferred Court Costs”) and provides a reserve for those costs that it believes will ultimately be uncollectible. For financial statements for reporting periods subsequent to January 1, 2020, the Company will expense all of its court costs as incurred and will include expected recoveries on these upfront court costs in the measurement of the investment in receivable portfolios at a discounted value. Upon transition, an adjustment will be made to retained earnings to reflect the net change from an undiscounted to discounted value prior to writing-off uncollectible receivables and establishing a balance for discounted value of future recoveries of amounts expected to be collected. The adoption of this new accounting policy will result in the write-off of existing Deferred Court Costs, an increase to investment in receivable portfolios, and a decrease to opening retained earnings estimated to be between $40 and $50 million. The Company expects that, subsequent to the adoption of CECL, revenue from receivable portfolios will be favorably impacted by including expected court costs recoveries in its estimated remaining collections, while expensing all court costs as incurred will result in higher operating expenses in 2020 as compared to prior years. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). The amendments in ASU 2019-04 clarify certain aspects of accounting for credit losses, hedging activities, and financial instruments. For clarifications around credit losses, the effective date will be the same as the effective date of ASU 2016-13. For entities that have adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, ASU 2019-04 is effective the first annual reporting period beginning after the date of issuance of ASU 2019-04 and may be early adopted. The amendments in ASU 2019-04 that are related to financial instruments are effective for fiscal years beginning after December 15, 2019, and interim periods within those years, with early adoption permitted. The Company's adoption of ASU 2019-04 is not expected to have a material impact on its consolidated financial statements. With the exception of the updated standards discussed above, there have been no new accounting pronouncements not yet effective as of December 31, 2019 that have significance, or potential significance, to the Company’s consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase. The Company maintains its cash and cash equivalents in multiple financial institutions and certain account balances exceed federally insurable limits. To date, the Company has experienced no loss or lack of access to cash in its bank accounts. The Company believes any risks are mitigated by maintaining cash with highly rated financial institutions. The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents approximate their fair value. |
Restricted Cash | Included in cash and cash equivalents is cash collected on behalf of and due to third-party clients. A corresponding balance is included in accounts payable and accrued liabilities. |
Investment in Receivable Portfolios | Investment in Receivable Portfolios Discrete receivable portfolio purchases during the same fiscal quarter are aggregated into pools based on common risk characteristics. Common risk characteristics include risk ratings ( e.g., FICO or similar scores), financial asset type, collateral type, size, interest rate, date of origination, term, and geographic location. The Company’s static pools are typically grouped into credit card, purchased consumer bankruptcy, and mortgage portfolios. The Company further groups these static pools by geographic region or location. Portfolios acquired in business combinations are also grouped into these pools. During any fiscal quarter in which the Company has an acquisition of an entity that has portfolio, the entire historical portfolio of the acquired company is aggregated into the pool groups for that quarter, based on common characteristics, resulting in pools for that quarter that may consist of several different vintages of portfolio. Once a static pool is established, the portfolios are permanently assigned to the pool. The discount ( i.e. , the difference between the cost of each static pool and the related aggregate contractual receivable balance) is not recorded because the Company expects to collect a relatively small percentage of each static pool’s contractual receivable balance. As a result, receivable portfolios are recorded at cost at the time of acquisition. The purchase cost of the portfolios includes certain fees paid to third parties incurred in connection with the direct acquisition of the receivable portfolios. The Company accounts for its investment in receivable portfolios using either the interest method or the cost recovery method. The interest method applies an internal rate of return (“IRR”) to the cost basis of the pool, which remains unchanged throughout the life of the pool, unless there is an increase in subsequent expected cash flows. Subsequent increases in expected cash flows are recognized prospectively through an upward adjustment of the pool’s IRR over its remaining life. Subsequent decreases in expected cash flows do not change the IRR, but are recognized as an allowance to the cost basis of the pool, and are reflected in the consolidated statements of operations as an adjustment to revenue, with a corresponding valuation allowance, offsetting the investment in receivable portfolios in the consolidated statements of financial condition. With gross collections being discounted at monthly IRRs, when collections are lower in the near term, even if substantially higher collections are expected later in the collection curve, an allowance charge could result. The Company accounts for each static pool as a unit for the economic life of the pool (similar to one loan) for recognition of revenue from receivable portfolios, for collections applied to the cost basis of receivable portfolios and for provision for loss or allowance. Revenue from receivable portfolios is accrued based on each pool’s IRR applied to each pool’s adjusted cost basis. The cost basis of each pool is increased by revenue earned and portfolio allowance reversals and decreased by gross collections and portfolio allowances. Once the net book value of a static pool has been fully recovered, it becomes zero basis portfolio (“ZBA”) and all subsequent collections are recognized as ZBA revenue. If the amount and timing of future cash collections on a pool of receivables are not reasonably estimable, the Company accounts for such portfolios on the cost recovery method as Cost Recovery Portfolios. The accounts in these portfolios have different risk characteristics than those included in other portfolios acquired during the same quarter, or the necessary information was not available to estimate future cash flows and, accordingly, they were not aggregated with other portfolios. Under the cost recovery method of accounting, no revenue is recognized until the carrying value of a Cost Recovery Portfolio has been fully recovered. See “Note 4: Investment in Receivable Portfolios, Net” for further discussion of investment in receivable portfolios. |
Fee-Based Income | Certain of the Company’s subsidiaries earn servicing revenue by providing portfolio management services to credit originators for non-performing loans. The Company recognizes servicing revenue when it satisfies the performance obligation over time by providing debt solution and credit management services. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over the value assigned to the tangible and identifiable intangible assets, liabilities assumed, and noncontrolling interest of businesses acquired. Acquired intangible assets other than goodwill are amortized over their useful lives unless the lives are determined to be indefinite. Goodwill and other indefinite-lived intangible assets are tested at the reporting unit level annually for impairment and in interim periods if certain events occur indicating the fair value of a reporting unit may be below its carrying value. See “Note 15: Goodwill and Identifiable Intangible Assets” for further discussion of the Company’s goodwill and other intangible assets. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Fixed Asset Category Estimated Useful Life Leasehold improvements Lesser of lease term, including periods covered Furniture, fixtures and equipment 5 to 10 years Computer hardware and software 3 to 5 years Maintenance and repairs are charged to expense in the year incurred. Expenditures for major renewals that extend the useful lives of fixed assets are capitalized and depreciated over the useful lives of such assets. |
Deferred Court Costs | Deferred Court Costs The Company pursues legal collections using a network of attorneys that specialize in collection matters and through its internal legal channel. The Company generally pursues collections through legal means only when it believes a consumer has sufficient assets to repay their indebtedness but has, to date, been unwilling to pay. In order to pursue legal collections the Company is required to pay certain upfront costs to the applicable courts that are recoverable from the consumer. The Company capitalizes Deferred Court Costs in its consolidated financial statements and provides a reserve for those costs that it believes will ultimately be uncollectible. The Company determines the reserve based on an estimated court cost recovery rate established based on its analysis of historical court costs recovery data. The Company estimates deferral periods for Deferred Court Costs based on jurisdiction and nature of litigation and writes off any Deferred Court Costs not recovered within the respective deferral period. Collections received from debtors are first applied against related court costs with the balance applied to the debtors’ account balance. See “Note 5: Deferred Court Costs, Net” for further details. |
Income Taxes | Income Taxes The Company uses the liability method of accounting for income taxes in accordance with the authoritative guidance for Income Taxes. When the Company prepares its consolidated financial statements, it estimates income taxes based on the various jurisdictions and countries where it conducts business. This requires the Company to estimate current tax exposure and to assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. Deferred income taxes are recognized based on the differences between the financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company then assesses the likelihood that deferred tax assets will be realized. Valuation allowances are established, when it is more likely than not the deferred tax assets will not be realized. When the Company establishes a valuation allowance or increases this allowance in an accounting period, it records a corresponding tax expense in the consolidated statements of operations. The Company includes interest and penalties related to income taxes within its provision for income taxes. See “Note 11: Income Taxes” for further discussion. Management must make significant judgments to determine the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance to be recorded against deferred tax assets. |
Stock-Based Compensation | Stock-Based Compensation The Company determines stock-based compensation expense for all share-based payment awards based on the measurement date fair value. The Company has certain share awards that include market conditions that affect vesting, the fair value of these shares is estimated using a lattice model. Compensation cost is not adjusted if the market condition is not met, as long as the requisite service is provided. For share awards that require service and performance conditions, the Company recognizes compensation cost only for those awards expected to meet the service and performance vesting conditions over the requisite service period of the award. Forfeiture rates are estimated based on the Company’s historical experience. Stock-based compensation expenses are included in “Salaries and Employee Benefits” in the Company’s consolidated statements of operations. See “Note 10: Stock-Based Compensation” for further discussion. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging ActivitiesThe Company recognizes all derivative financial instruments in its consolidated financial statements at fair value. Changes in the fair value of derivative instruments are recorded in earnings unless hedge accounting criteria are met. The Company designates certain derivative instruments as cash flow hedges. The changes in fair value of derivatives designated as cash flow hedges is recorded each period, net of tax, in accumulated other comprehensive income or loss until the related hedged transaction occurs. If in the event the hedged cash flow does not occur, or it becomes probable that it will not occur, the Company would reclassify the amount of any gain or loss on the related cash flow hedge to income or expense at that time. If the hedged cash flows are still reasonably possible to occur, the hedged cash flows will continue to be recorded in accumulated other comprehensive income or loss until the hedged cash flows are no longer probable of occurring. See “Note 3: Derivatives and Hedging Instruments” for further discussion. |
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing net earnings attributable to Encore by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options, restricted stock, and the dilutive effect of the convertible and exchangeable senior notes, if applicable. |
Fair Value Measurements | air value is defined as the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date ( i.e., the “exit price”). The Company uses a fair value hierarchy that prioritizes the inputs used in valuation techniques to measure fair value into three broad levels. The following is a brief description of each level: • Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs, including inputs that reflect the reporting entity’s own assumptions. |
Ownership, Description of Bus_3
Ownership, Description of Business, and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property and Equipment | The provision for depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Fixed Asset Category Estimated Useful Life Leasehold improvements Lesser of lease term, including periods covered Furniture, fixtures and equipment 5 to 10 years Computer hardware and software 3 to 5 years |
Reconciliation of Shares Used in Calculating Earnings Per Basic and Diluted Shares | A reconciliation of shares used in calculating earnings per basic and diluted shares follows (in thousands, except per share amounts) : Year Ended December 31, 2019 2018 2017 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations $ 167,869 $ 115,886 $ 83,427 Loss from discontinued operations, net of tax — — (199) Net income $ 167,869 $ 115,886 $ 83,228 Total weighted-average basic shares outstanding 31,210 28,313 25,972 Dilutive effect of stock-based awards 264 259 255 Dilutive effect of convertible and exchangeable senior notes — — 178 Total weighted-average dilutive shares outstanding 31,474 28,572 26,405 Basic earnings (loss) per share from: Continuing operations $ 5.38 $ 4.09 $ 3.21 Discontinued operations — — (0.01) Net basic earnings per share $ 5.38 $ 4.09 $ 3.20 Diluted earnings (loss) per share from: Continuing operations $ 5.33 $ 4.06 $ 3.16 Discontinued operations — — (0.01) Net diluted earnings per share $ 5.33 $ 4.06 $ 3.15 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below ( in thousands ): Fair Value Measurements as of December 31, 2019 Level 1 Level 2 Level 3 Total Assets Foreign currency exchange contracts $ — $ 1,473 $ — $ 1,473 Interest rate cap contracts — 2,460 — 2,460 Liabilities Interest rate swap agreements — (9,116) — (9,116) Contingent consideration — — (66) (66) Fair Value Measurements as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets Interest rate cap contracts $ — $ 2,023 $ — $ 2,023 Liabilities Foreign currency exchange contracts — (237) — (237) Interest rate swap agreements — (4,881) — (4,881) Contingent consideration — — (6,198) (6,198) |
Schedule of Fair Value of Contingent Consideration | The following table provides a roll-forward of the fair value of contingent consideration for the years ended December 31, 2019, 2018 and 2017 (in thousands) : Amount Balance at December 31, 2016 $ 2,531 Issuance of contingent consideration in connection with acquisition 10,808 Change in fair value of contingent consideration (2,822) Time value amortization 381 Payment of contingent consideration (781) Effect of foreign currency translation 495 Balance at December 31, 2017 10,612 Issuance of contingent consideration in connection with acquisition 1,728 Change in fair value of contingent consideration (5,664) Payment of contingent consideration (271) Effect of foreign currency translation (207) Balance at December 31, 2018 6,198 Change in fair value of contingent consideration (2,300) Payment of contingent consideration (3,686) Effect of foreign currency translation (146) Balance at December 31, 2019 $ 66 |
Change in Redeemable Noncontrolling Interests | The components of the change in the redeemable noncontrolling interest for the years ended December 31, 2019, 2018 and 2017 are presented in the following table (in thousands) : Amount Balance at December 31, 2016 $ 45,755 Addition to redeemable noncontrolling interest 277 Net loss attributable to redeemable noncontrolling interest (4,905) Adjustment of the redeemable noncontrolling interest to fair value 108,296 Effect of foreign currency translation attributable to redeemable noncontrolling interest 2,555 Balance at December 31, 2017 151,978 Redemption of redeemable noncontrolling interest (138,835) Deconsolidation upon sale of redeemable noncontrolling interest 5,535 Net loss attributable to redeemable noncontrolling interest (4,791) Adjustment of the redeemable noncontrolling interest to fair value (7,419) Effect of foreign currency translation attributable to redeemable noncontrolling interest (6,468) Balance at December 31, 2018 — Balance at December 31, 2019 $ — |
Schedule of Financial Instruments Not Required to Be Carried at Fair Value | The carrying amounts in the following table are recorded in the consolidated statements of financial condition at December 31, 2019 and December 31, 2018 (in thousands) : December 31, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial Assets Investment in receivable portfolios $ 3,283,984 $ 3,464,050 $ 3,137,893 $ 3,525,861 Deferred court costs 100,172 100,172 95,918 95,918 Financial Liabilities Encore convertible notes and exchangeable notes (1) 642,547 693,708 619,639 553,744 Cabot senior secured notes (2) 1,127,435 1,170,945 1,109,922 1,036,905 ________________________ (1) Carrying amount represents the portion of the convertible and exchangeable notes classified as debt, while estimated fair value pertains to the face amount of the notes. (2) Carrying amount represents historical cost, adjusted for any related debt discount or debt premium. |
Derivatives and Hedging Instr_2
Derivatives and Hedging Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Fair Value of Derivative Instruments as Recorded on Company's Consolidated Statements of Financial Condition | The following table summarizes the fair value of derivative instruments as recorded in the Company’s consolidated statements of financial condition (in thousands): December 31, 2019 December 31, 2018 Balance Sheet Fair Value Balance Sheet Fair Value Derivatives designated as hedging instruments: Interest rate cap contracts Other assets $ 2,460 Other assets $ 2,023 Foreign currency exchange contracts Other assets 443 Other liabilities (237) Interest rate swap agreements Other liabilities (9,116) Other liabilities (4,881) Derivatives not designated as hedging instruments: Foreign currency exchange contracts Other assets 1,030 Other assets — |
Summary of Effects of Derivatives in Cash Flow Hedging Relationships in Company's Statements of Income | The following table summarizes the effects of derivatives in cash flow hedging relationships designated as hedging instruments in the Company’s consolidated financial statements for the years ended December 31, 2019 and 2018 (in thousands): Gain (Loss) Location of Gain (Loss) Reclassified from OCI into Income Gain (Loss) 2019 2018 2019 2018 Foreign currency exchange contracts $ 1,100 $ (1,253) Salaries and employee benefits $ 383 $ 794 Foreign currency exchange contracts (56) (100) General and administrative expenses (19) 2 Interest rate swap agreements (6,347) (5,228) Interest expense (2,560) (384) Interest rate cap contracts (1,752) (643) Interest expense 146 — The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s consolidated statements of operations for the years ended December 31, 2019, 2018 and 2017 (in thousands) : Derivatives Not Designated as Hedging Instruments Location of Derivative Gain (Loss) Recognized in Income Amount of Derivative Gain (Loss) Recognized in Income 2019 2018 2017 Foreign currency exchange contracts Other (expense) income $ (2,959) $ (9,221) $ 1,755 Interest rate cap contracts Interest expense — (1,568) 2,026 Interest rate swap agreements Interest expense — — 110 |
Investment in Receivable Port_2
Investment in Receivable Portfolios, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Accretable Yield and an Estimate of Zero Basis Future Cash Flows | The following table summarizes the Company’s accretable yield and an estimate of zero basis future cash flows at the beginning and end of the period presented (in thousands) : Accretable Yield Estimate of Total Balance at December 31, 2017 $ 3,695,069 $ 369,632 $ 4,064,701 Revenue from receivable portfolios (1,041,947) (125,185) (1,167,132) Allowance reversals on receivable portfolios, net (32,429) (9,044) (41,473) Net additions on existing portfolios 144,726 18,114 162,840 Additions for current purchases, net 1,155,451 — 1,155,451 Effect of foreign currency translation (147,699) (482) (148,181) Balance at December 31, 2018 3,773,171 253,035 4,026,206 Revenue from receivable portfolios (1,185,681) (83,607) (1,269,288) Allowance (allowance reversals) on receivable portfolios, net 16,734 (8,626) 8,108 Additions (reductions) on existing portfolios, net 549,253 (24,289) 524,964 Additions for current purchases, net 1,081,774 — 1,081,774 Effect of foreign currency translation 77,340 (33) 77,307 Balance at December 31, 2019 $ 4,312,591 $ 136,480 $ 4,449,071 |
Summary of Change in the Valuation Allowance for Investment in Receivable Portfolios | The following table summarizes the change in the valuation allowance for investment in receivable portfolios during the periods presented ( in thousands ): Valuation Balance at December 31, 2017 $ 102,576 Provision for portfolio allowances 14,421 Reversal of prior allowances (55,894) Effect of foreign currency translation (472) Balance at December 31, 2018 60,631 Provision for portfolio allowances 36,806 Reversal of prior allowances (28,698) Baycorp Transaction (1,036) Effect of foreign currency translation 1,776 Balance at December 31, 2019 $ 69,479 |
Deferred Court Costs, Net (Tabl
Deferred Court Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Deferred Court Costs | Deferred Court Costs for the deferral period consist of the following as of the dates presented ( in thousands ): December 31, December 31, Court costs advanced $ 891,207 $ 828,713 Court costs recovered (369,043) (336,335) Court costs reserve (421,992) (396,460) Deferred court costs $ 100,172 $ 95,918 |
Schedule of Court Cost Reserve | A roll forward of the Company’s court cost reserve is as follows ( in thousands ): December 31, December 31, December 31, Balance at beginning of period $ (396,460) $ (364,015) $ (327,926) Provision for court costs (82,987) (90,026) (82,702) Charge-offs 60,618 53,383 50,743 Effect of foreign currency translation (3,163) 4,198 (4,130) Balance at end of period $ (421,992) $ (396,460) $ (364,015) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following, as of the dates presented ( in thousands ): December 31, December 31, Computer equipment and software $ 136,426 $ 156,769 Leasehold improvements 37,245 28,775 Furniture, fixtures and equipment 10,428 17,335 Telecommunications equipment and other 3,893 1,866 Construction in process 2,089 25,839 190,081 230,584 Less: accumulated depreciation and amortization (70,030) (115,066) $ 120,051 $ 115,518 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Components of Other Assets | Other assets consist of the following ( in thousands ): December 31, December 31, Operating lease right-of-use assets $ 75,254 $ — Identifiable intangible assets, net 51,371 60,581 Assets held for sale 46,717 26,664 Service fee receivables 27,705 28,035 Deferred tax assets 24,134 24,910 Prepaid expenses 22,272 24,989 Other financial receivables 17,308 47,363 Other 64,462 44,460 Total $ 329,223 $ 257,002 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Obligation Under Borrowings | The components of the Company’s consolidated borrowings were as follows (in thousands) : December 31, December 31, Encore revolving credit facility $ 492,000 $ 429,000 Encore term loan facility 171,677 195,056 Encore senior secured notes 308,750 325,000 Encore convertible notes and exchangeable notes 672,855 656,000 Less: debt discount (30,308) (36,361) Cabot senior secured notes 1,129,039 1,111,399 Less: debt discount (1,604) (1,477) Cabot senior revolving credit facility 285,749 298,005 Cabot securitisation senior facility 464,092 445,837 Other 54,151 107,920 Finance lease liabilities 8,121 7,563 3,554,522 3,537,942 Less: debt issuance costs, net of amortization (41,325) (47,309) Total $ 3,513,197 $ 3,490,633 The following table provides a summary of the principal balance, maturity date and interest rate for the outstanding convertible and exchangeable senior notes ( $ in thousands ): December 31, 2019 December 31, 2018 Maturity Date Interest Rate 2020 Convertible Notes $ 89,355 $ 172,500 Jul 1, 2020 3.000 % 2021 Convertible Notes 161,000 161,000 Mar 15, 2021 2.875 % 2022 Convertible Notes 150,000 150,000 Mar 15, 2022 3.250 % Exchangeable Notes 172,500 172,500 Sep 1, 2023 4.500 % 2025 Convertible Notes 100,000 — Oct 1, 2025 3.250 % $ 672,855 $ 656,000 The following table provides a summary of the Cabot senior secured notes ( $ in thousands ): December 31, 2019 December 31, 2018 Maturity Date Interest Rate Floating rate senior secured notes due 2024 $ 448,921 $ — Jun 1, 2024 EURIBOR +6.375% Floating rate senior secured notes due 2021 — 356,067 Nov 15, 2021 EURIBOR +5.875% Senior secured notes due 2023 680,118 653,355 Oct 1, 2023 7.500 % Senior secured notes due 2021 — 101,977 Apr 1, 2021 6.500 % $ 1,129,039 $ 1,111,399 |
Convertible Debt, Features and Hedging | Certain key terms related to the convertible and exchangeable features as of December 31, 2019 are listed below: 2020 Convertible Notes 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes 2025 Convertible Notes Initial conversion or exchange price $ 45.72 $ 59.39 $ 45.57 $ 44.62 $ 40.00 Closing stock price at date of issuance $ 33.35 $ 47.51 $ 35.05 $ 36.45 $ 32.00 Closing stock price date Jun 24, 2013 Mar 5, 2014 Feb 27, 2017 Jul 20, 2018 Sep 4, 2019 Conversion or exchange rate (shares per $1,000 principal amount) 21.8718 16.8386 21.9467 22.4090 25.0000 Conversion or exchange date Jan 1, 2020 Sep 15, 2020 Sep 15, 2021 Mar 1, 2023 Jul 1, 2025 The details of the hedge program are listed below (in thousands, except conversion or exchange price) : 2020 Convertible Notes 2021 Convertible Notes 2023 Exchangeable Notes Cost of the hedge transaction(s) $ 18,113 $ 19,545 $ 17,785 Initial conversion or exchange price $ 45.72 $ 59.39 $ 44.62 Effective conversion or exchange price $ 61.55 $ 83.14 $ 62.48 |
Balances of the Liability and Equity Components | As discussed above, upon exchange of the Exchangeable Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The debt and equity components, the issuance costs related to the equity component, the stated interest rate, and the effective interest rate for each of the Convertible Notes and Exchangeable Notes at the time of the original offering are listed below ( in thousands, except percentages ): 2020 Convertible Notes (1) 2021 Convertible Notes 2022 Convertible Notes 2023 Exchangeable Notes 2025 Convertible Notes Debt component $ 140,247 $ 143,645 $ 137,266 $ 157,971 $ 91,024 Equity component $ 32,253 $ 17,355 $ 12,734 $ 14,009 $ 8,976 Equity issuance cost $ 1,106 $ 581 $ 398 $ — $ 224 Stated interest rate 3.000 % 2.875 % 3.250 % 4.500 % 3.250 % Effective interest rate 6.350 % 4.700 % 5.200 % 6.500 % 5.000 % ________________________ (1) The Company used a portion of the net proceeds from the issuance of the 2025 Convertible Notes to repurchase approximately $83.1 million aggregate principal amount of its 2020 Convertible Notes. As a result, the remaining principal amount of the 2020 Convertible Notes was $89.4 million as of December 31, 2019. The balances of the liability and equity components of all the Convertible Notes and Exchangeable Notes outstanding were as follows (in thousands) : December 31, December 31, Liability component—principal amount $ 672,855 $ 656,000 Unamortized debt discount (30,308) (36,361) Liability component—net carrying amount $ 642,547 $ 619,639 Equity component $ 83,127 $ 76,351 |
Interest Expense | Interest expense related to the Convertible Notes and Exchangeable Notes was as follows (in thousands) : Year ended December 31, 2019 2018 Interest expense—stated coupon rate $ 23,845 $ 17,518 Interest expense—amortization of debt discount 12,780 10,888 Interest expense—Convertible Notes and Exchangeable Notes $ 36,625 $ 28,406 Interest expense related to the Cabot senior secured notes was as follows (in thousands) : Year ended December 31, 2019 2018 Interest expense—stated coupon rate $ 76,897 $ 84,772 Interest expense—amortization of debt discount 532 343 Interest expense—Cabot senior secured notes $ 77,429 $ 85,115 |
Summary of Debt Including Capital Lease Obligations Maturities | The aggregate amounts of the Company’s borrowings, maturing in each of the next five years and thereafter are as follows (in thousands) : 2020 $ 197,041 2021 900,114 2022 221,768 2023 1,669,840 2024 497,671 Thereafter 100,000 Total $ 3,586,434 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity as of December 31, 2019, and changes during the year then ended, are presented below: Number of Shares Weighted Average Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 55,766 $ 15.21 Exercised (46,600) 13.84 Outstanding at December 31, 2019 9,166 $ 22.17 2.26 $ 121 Exercisable as of December 31, 2019 9,166 $ 22.17 2.26 $ 121 A summary of the Company’s performance stock option activity as of December 31, 2019, and changes during the year then ended, are presented below: Number of Weighted Average Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 216,582 $ 31.54 Exercised (10,952) 30.95 Cancelled/forfeited (13,872) 30.95 Expired (27,745) 30.95 Outstanding at December 31, 2019 164,013 $ 31.73 4.21 $ 665 Vested and expected to vest as of December 31, 2019 163,024 $ 31.73 4.21 $ 660 Exercisable as of December 31, 2019 105,696 $ 31.75 4.21 $ 427 |
Summary of Restricted Stock Units | A summary of the status of the Company’s stock awards as of December 31, 2019, and changes during the year then ended, is presented below: Non-Vested Shares (1) Weighted Average Non-vested at December 31, 2018 859,932 $ 34.43 Awarded 569,872 $ 32.42 Vested (267,157) $ 35.32 Cancelled (240,117) $ 32.00 Non-vested at December 31, 2019 922,530 $ 33.11 ________________________ (1) Certain of the Company’s stock awards have a vesting matrix under which the stock awards can vest at a maximum level that is 200% of the shares that would vest for achieving the performance goals at target. The number of shares presented is based on achieving the performance goals at target levels as defined in the stock award agreements. As of December 31, 2019 and 2018, the maximum number of non-vested performance shares that could vest under the provisions of the agreements was 1,171,334 and 1,218,359, respectively. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Pretax Income | Income before provision for income taxes consisted of the following (in thousands) : Year Ended December 31, 2019 2018 2017 US $ 144,495 $ 61,972 $ 71,794 Foreign 56,747 94,516 59,432 Total income before provision for income taxes $ 201,242 $ 156,488 $ 131,226 |
Components of Provision for Income Taxes | The income tax provision on earnings from continuing operations consisted of the following (in thousands) : Year Ended December 31, 2019 2018 2017 Current expense (benefit): Federal $ (2,917) $ 23,254 $ 9,969 State (6,464) 2,983 (794) Foreign 21,008 29,532 15,690 11,627 55,769 24,865 Deferred expense (benefit): Federal 27,640 (10,447) 16,563 State 5,535 (2,169) 784 Foreign (12,469) 3,599 9,837 20,706 (9,017) 27,184 Provision for income taxes $ 32,333 $ 46,752 $ 52,049 |
Schedule of Effective Tax Rates | : Year Ended December 31, 2019 2018 2017 Federal provision 21.0 % 21.0 % 35.0 % State provision 0.2 % 0.1 % 0.5 % Foreign rate differential (1) (2.2) % (11.7) % (20.0) % Transaction costs (2) 0.0 % 1.0 % 5.0 % Permanent items (3) 0.0 % 1.1 % 10.2 % Change in valuation allowance (4) (0.5) % 17.7 % 8.2 % IRS settlement (5) (2.4) % — % — % Other 0.0 % 0.7 % 0.8 % Effective rate 16.1 % 29.9 % 39.7 % ________________________ (1) Relates primarily to the lower tax rates on the income or loss attributable to international operations. (2) In 2018, relates primarily to transaction costs incurred in connection with the Cabot Transaction. In 2017, relates primarily to certain withdrawn IPO costs disallowed for U.K. tax purposes. (3) Represents a provision for nondeductible items, including nondeductible interest in a foreign subsidiary and certain foreign income taxable in the U.S. under Internal Revenue Code Section 951 (Subpart F) in 2017. (4) Net decrease in valuation allowance during 2019 is attributable to disposition of certain foreign subsidiaries with cumulative operating losses for tax purposes. In 2017 and 2018, valuation allowance net increase recorded as a result of certain foreign subsidiaries’ cumulative operating losses for tax purposes. (5) In 2019, includes tax benefit resulting from tax accounting method change. |
Components of Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities were as follows (in thousands) : December 31, December 31, Deferred tax assets: Net operating losses $ 36,236 $ 42,013 Financing obligation 18,023 — Accrued expenses 10,050 17,715 Difference in basis of bond and loan costs 4,194 3,728 Stock-based compensation 2,882 2,796 State taxes 1 174 Differences in income recognition related to receivable portfolios — 13,857 Prepaid expenses — 2,949 Other 1,821 4,825 Total deferred tax assets 73,207 88,057 Valuation allowance (36,422) (46,516) Total deferred tax assets net of valuation allowance 36,785 41,541 Deferred tax liabilities: Deferred court costs (23,682) (23,484) Right-of-use asset (14,422) — Difference in basis of depreciable and amortizable assets (3,680) (1,937) Prepaid expenses (628) — Other (4,616) (3,403) Total deferred tax liabilities (47,028) (28,824) Net deferred tax (liability) asset (1) $ (10,243) $ 12,717 ________________________ (1) The Company operates in multiple jurisdictions. In accordance with authoritative guidance relating to income taxes, deferred tax assets and liabilities are netted for each tax-paying component of the Company within a particular tax jurisdiction and presented as a single amount in the statement of financial condition. |
Unrecognized Tax Benefit | A reconciliation of the beginning and ending amounts of unrecognized tax benefit is as follows (in thousands) : Amount Balance at December 31, 2016 $ 18,945 Increases related to current year tax positions 5,902 Decreases related to current year tax positions (4,599) Decreases related to settlements with taxing authorities (228) Balance at December 31, 2017 20,020 Increases related to prior year tax positions 256 Increases related to current year tax positions 1,958 Decrease related to expiration of statute of limitations (3,221) Decreases related to settlements with taxing authorities (461) Balance at December 31, 2018 18,552 Decreases related to prior year tax positions (10,673) Increases related to current year tax positions 4,442 Decrease related to expiration of statute of limitations (2,493) Decreases related to settlements with taxing authorities (1,920) Balance at December 31, 2019 $ 7,908 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease cost | The components of lease expense for the year ended December 31, 2019 were as follows (in thousands) : Year Ended Operating lease costs (1) $ 19,450 Finance lease costs Amortization of right-of-use assets 1,825 Interest on lease liabilities 563 Total lease costs $ 21,838 ________________________ (1) Operating lease expenses are included in general and administrative expenses in the Company’s consolidated statements of operations. Costs include short-term and variable lease components which were not material for the period. Supplemental lease information is summarized below (in thousands, except rate and lease term) : Year Ended Right-of-use assets obtained in exchange for new operating lease obligations $ 123,477 Right-of-use assets obtained in exchange for new finance lease obligations 5,299 Cash paid for amounts included in the measurement of lease liabilities Operating leases - operating cash flows 14,874 Finance leases - operating cash flows 295 Finance leases - financing cash flows 1,898 |
Supplemental balance sheet information | The following table provides supplemental consolidated statement of financial condition information related to leases as of December 31, 2019 (in thousands) : Classification December 31, 2019 Assets Operating lease right-of-use assets Other assets $ 75,254 Finance lease right-of-use assets Property and equipment, net 9,133 Total lease right-of-use assets $ 84,387 Liabilities Operating lease liabilities Other liabilities $ 93,847 Finance lease liabilities Borrowings 8,121 Total lease liabilities $ 101,968 December 31, 2019 Weighted-average remaining lease term Operating leases 8.1 years Finance leases 3.1 years Weighted-average discount rate Operating leases (1) 5.3 % Finance leases 4.7 % ________________________ (1) Upon adoption of the new lease standard, discount rates used for existing operating leases were established at January 1, 2019. |
Lease maturities | Minimum future payments on noncancelable leases as of December 31, 2019 are summarized as follows (in thousands) : Finance Leases Operating Leases Total 2020 $ 2,898 $ 17,898 $ 20,796 2021 2,736 16,845 19,581 2022 2,509 13,726 16,235 2023 597 12,534 13,131 2024 — 12,275 12,275 Thereafter — 41,497 41,497 Total undiscounted lease payments 8,740 114,775 123,515 Less: imputed interest (619) (20,928) (21,547) Lease obligations $ 8,121 $ 93,847 $ 101,968 |
Lease maturities | Minimum future payments on noncancelable leases as of December 31, 2019 are summarized as follows (in thousands) : Finance Leases Operating Leases Total 2020 $ 2,898 $ 17,898 $ 20,796 2021 2,736 16,845 19,581 2022 2,509 13,726 16,235 2023 597 12,534 13,131 2024 — 12,275 12,275 Thereafter — 41,497 41,497 Total undiscounted lease payments 8,740 114,775 123,515 Less: imputed interest (619) (20,928) (21,547) Lease obligations $ 8,121 $ 93,847 $ 101,968 |
Future minimum lease payments for operating leases | As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and under the previous lease accounting standard, minimum future payments on noncancelable leases as of December 31, 2018 are summarized as follows (in thousands) : Finance Operating Total 2019 $ 2,507 $ 16,538 $ 19,045 2020 1,983 13,850 15,833 2021 1,844 13,044 14,888 2022 1,630 11,737 13,367 2023 204 9,741 9,945 Thereafter — 37,997 37,997 Total minimal leases payments 8,168 $ 102,907 $ 111,075 Less: interest (605) Present value of minimal lease payments $ 7,563 |
Future minimum lease payments for capital leases | As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and under the previous lease accounting standard, minimum future payments on noncancelable leases as of December 31, 2018 are summarized as follows (in thousands) : Finance Operating Total 2019 $ 2,507 $ 16,538 $ 19,045 2020 1,983 13,850 15,833 2021 1,844 13,044 14,888 2022 1,630 11,737 13,367 2023 204 9,741 9,945 Thereafter — 37,997 37,997 Total minimal leases payments 8,168 $ 102,907 $ 111,075 Less: interest (605) Present value of minimal lease payments $ 7,563 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Geographical Areas of Which Company Operates | The following tables present information about geographic areas in which the Company operates (in thousands) : Year Ended December 31, 2019 2018 2017 Total revenues, adjusted by net allowances (1) : United States $ 817,693 $ 709,493 $ 665,564 International Europe (2) 520,433 556,265 427,655 Other geographies 59,555 96,272 93,819 Total $ 1,397,681 $ 1,362,030 $ 1,187,038 ________________________ (1) Revenues are attributed to countries based on consumer location. (2) Based on the financial information that is used to produce the general-purpose financial statements, providing further geographic information is impracticable. |
Schedule of Long-lived Assets by Geographic Areas | December 31, December 31, Long-lived assets (1) : United States $ 84,118 $ 76,791 International United Kingdom 28,602 27,454 Other foreign countries 7,331 11,273 35,933 38,727 Total $ 120,051 $ 115,518 ________________________ (1) Long-lived assets consist of property and equipment, net and finance leases. |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the activity in the Company’s goodwill balance, as follows (in thousands): 2019 2018 Balance at beginning of period: $ 868,126 $ 928,993 Goodwill adjustment — (2,213) Goodwill eliminated in connection with divestiture — (13,347) Goodwill impairment (10,718) — Effect of foreign currency translation 26,777 (45,307) Balance at end of period: $ 884,185 $ 868,126 |
Summary of Acquired Intangible Assets | The Company’s acquired intangible assets are summarized as follows (in thousands) : As of December 31, 2019 As of December 31, 2018 Gross Accumulated Net Gross Accumulated Net Customer relationships $ 67,897 $ (18,191) $ 49,706 $ 73,458 $ (17,025) $ 56,433 Developed technologies 4,734 (4,124) 610 7,461 (6,446) 1,015 Trade name and other 6,299 (5,244) 1,055 8,346 (5,213) 3,133 Total intangible assets $ 78,930 $ (27,559) $ 51,371 $ 89,265 $ (28,684) $ 60,581 |
Weighted-Average Useful Lives of Intangible Assets | The weighted-average useful lives of intangible assets at the time of acquisition were as follows (in years) : Weighted-Average Customer relationships 10 Developed technologies 5 Trade name and other 7 |
Estimated Future Amortization Expense | Estimated future amortization expense related to finite-lived intangible assets at December 31, 2019 is as follows ( in thousands ): 2020 $ 7,304 2021 7,168 2022 6,573 2023 6,187 2024 6,094 Thereafter 18,045 Total $ 51,371 |
Quarterly Information (Unaudi_2
Quarterly Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Data | The following table summarizes quarterly financial data for the periods presented ( in thousands, except per share amounts ): Three Months Ended March 31 June 30 September 30 December 31 2019 Gross collections $ 513,853 $ 514,881 $ 499,395 $ 498,799 Total revenues, adjusted by net allowances 347,077 346,874 355,936 347,794 Total operating expenses 236,019 233,142 247,591 234,584 Income from continuing operations 49,442 36,822 39,413 43,232 Net income 49,442 36,822 39,413 43,232 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations 49,254 36,661 38,869 43,085 Net income attributable to Encore Capital Group, Inc. stockholders 49,254 36,661 38,869 43,085 Earnings per share attributable to Encore Capital Group, Inc.: Basic earnings per share $ 1.58 $ 1.17 $ 1.24 $ 1.38 Diluted earnings per share 1.57 1.17 1.23 1.36 2018 Gross collections $ 489,102 $ 496,093 $ 498,843 $ 483,582 Total revenues, adjusted by net allowances 326,788 349,747 336,774 348,721 Total operating expenses 238,336 246,314 239,246 232,834 Income from continuing operations 23,713 26,974 13,016 46,033 Net income 23,713 26,974 13,016 46,033 Amounts attributable to Encore Capital Group, Inc.: Income from continuing operations 21,827 26,298 20,725 47,036 Net income attributable to Encore Capital Group, Inc. stockholders 21,827 26,298 20,725 47,036 Earnings per share attributable to Encore Capital Group, Inc.: Basic earnings per share $ 0.84 $ 1.01 $ 0.69 $ 1.51 Diluted earnings per share 0.83 1.00 0.69 1.50 |
Ownership, Description of Bus_4
Ownership, Description of Business, and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2020 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Restricted cash | $ 25,000 | $ 21,800 | ||
Anti-dilutive employee stock options outstanding (in shares) | 64 | 66 | 107 | |
Decrease to retained earnings | $ (888,058) | $ (720,189) | ||
Minimum | Accounting Standards Update 2016-13 | Subsequent Event | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Decrease to retained earnings | $ 40,000 | |||
Maximum | Accounting Standards Update 2016-13 | Subsequent Event | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Decrease to retained earnings | $ 50,000 | |||
2020 Convertible Senior Notes | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Convertible/exchangeable debt | $ 89,400 | |||
Initial conversion price (in dollars per share) | $ 45.72 | |||
2020 Convertible Senior Notes | Adjusted Debt Conversion Rate Following Hedge Transactions | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Initial conversion price (in dollars per share) | $ 61.55 | |||
2021 Convertible Senior Notes | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Convertible/exchangeable debt | $ 161,000 | |||
Initial conversion price (in dollars per share) | $ 59.39 | |||
2021 Convertible Senior Notes | Adjusted Debt Conversion Rate Following Hedge Transactions | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Initial conversion price (in dollars per share) | $ 83.14 | |||
2022 Convertible Senior Notes | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Convertible/exchangeable debt | $ 150,000 | |||
Initial conversion price (in dollars per share) | $ 45.57 | |||
Exchange Notes Due 2023 | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Convertible/exchangeable debt | $ 172,500 | |||
Initial conversion price (in dollars per share) | $ 44.62 | |||
Exchange Notes Due 2025 | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Convertible/exchangeable debt | $ 100,000 | |||
Initial conversion price (in dollars per share) | $ 40 | |||
Exchange Notes | Adjusted Debt Conversion Rate Following Hedge Transactions | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Initial conversion price (in dollars per share) | $ 62.48 |
Ownership, Description of Bus_5
Ownership, Description of Business, and Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Furniture, fixtures and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture, fixtures and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Ownership, Description of Bus_6
Ownership, Description of Business, and Summary of Significant Accounting Policies - Reconciliation of Shares Used in Calculating Earnings Per Basic and Diluted Shares (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||||||||||
Income from continuing operations | $ 43,085 | $ 38,869 | $ 36,661 | $ 49,254 | $ 47,036 | $ 20,725 | $ 26,298 | $ 21,827 | $ 167,869 | $ 115,886 | $ 83,427 |
Loss from discontinued operations, net of tax | 0 | 0 | (199) | ||||||||
Net income attributable to Encore Capital Group, Inc. stockholders | $ 43,085 | $ 38,869 | $ 36,661 | $ 49,254 | $ 47,036 | $ 20,725 | $ 26,298 | $ 21,827 | $ 167,869 | $ 115,886 | $ 83,228 |
Weighted average common shares outstanding-basic (in shares) | 31,210 | 28,313 | 25,972 | ||||||||
Dilutive effect of stock-based awards (in shares) | 264 | 259 | 255 | ||||||||
Dilutive effect of convertible and exchangeable senior notes (in shares) | 0 | 0 | 178 | ||||||||
Weighted average common shares outstanding-diluted (in shares) | 31,474 | 28,572 | 26,405 | ||||||||
Earnings per share | |||||||||||
Basic (USD per share) | $ 5.38 | $ 4.09 | $ 3.21 | ||||||||
Discontinued operations (USD per share) | 0 | 0 | (0.01) | ||||||||
Net basic earnings per share (USD per share) | $ 1.38 | $ 1.24 | $ 1.17 | $ 1.58 | $ 1.51 | $ 0.69 | $ 1.01 | $ 0.84 | 5.38 | 4.09 | 3.20 |
Continuing operations (USD per share) | 5.33 | 4.06 | 3.16 | ||||||||
Discontinued operations (USD per share) | 0 | 0 | (0.01) | ||||||||
Net diluted earnings per share (USD per share) | $ 1.36 | $ 1.23 | $ 1.17 | $ 1.57 | $ 1.50 | $ 0.69 | $ 1 | $ 0.83 | $ 5.33 | $ 4.06 | $ 3.15 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Recurring - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||
Contingent consideration | $ (66) | $ (6,198) |
Level 1 | ||
Liabilities | ||
Contingent consideration | 0 | 0 |
Level 2 | ||
Liabilities | ||
Contingent consideration | 0 | 0 |
Level 3 | ||
Liabilities | ||
Contingent consideration | (66) | (6,198) |
Foreign currency exchange contracts | ||
Assets | ||
Foreign currency exchange contracts | 1,473 | |
Liabilities | ||
Foreign currency exchange contracts | (237) | |
Foreign currency exchange contracts | Level 1 | ||
Assets | ||
Foreign currency exchange contracts | 0 | |
Liabilities | ||
Foreign currency exchange contracts | 0 | |
Foreign currency exchange contracts | Level 2 | ||
Assets | ||
Foreign currency exchange contracts | 1,473 | |
Liabilities | ||
Foreign currency exchange contracts | (237) | |
Foreign currency exchange contracts | Level 3 | ||
Assets | ||
Foreign currency exchange contracts | 0 | |
Liabilities | ||
Foreign currency exchange contracts | 0 | |
Interest rate cap contracts | ||
Assets | ||
Interest rate cap contracts | 2,460 | 2,023 |
Interest rate cap contracts | Level 1 | ||
Assets | ||
Interest rate cap contracts | 0 | 0 |
Interest rate cap contracts | Level 2 | ||
Assets | ||
Interest rate cap contracts | 2,460 | 2,023 |
Interest rate cap contracts | Level 3 | ||
Assets | ||
Interest rate cap contracts | 0 | 0 |
Interest rate swap agreements | ||
Liabilities | ||
Interest rate swap agreements | (9,116) | (4,881) |
Interest rate swap agreements | Level 1 | ||
Liabilities | ||
Interest rate swap agreements | 0 | 0 |
Interest rate swap agreements | Level 2 | ||
Liabilities | ||
Interest rate swap agreements | (9,116) | (4,881) |
Interest rate swap agreements | Level 3 | ||
Liabilities | ||
Interest rate swap agreements | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Contingent Consideration Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Time value amortization | $ 381 | ||
Contingent Consideration | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning of period | $ 6,198 | $ 10,612 | 2,531 |
Issuance of contingent consideration in connection with acquisition | 1,728 | 10,808 | |
Change in fair value of contingent consideration | (2,300) | (5,664) | (2,822) |
Payment of contingent consideration | (3,686) | (271) | (781) |
Effect of foreign currency translation | (146) | (207) | 495 |
End of period | $ 66 | $ 6,198 | $ 10,612 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Redeemable Noncontrolling Interests (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Change in Redeemable Noncontrolling Interests [Roll Forward] | ||
Balance, beginning of period | $ 151,978 | $ 45,755 |
Addition to redeemable noncontrolling interest | 277 | |
Redemption of redeemable noncontrolling interest | (138,835) | |
Net loss attributable to redeemable noncontrolling interest | (4,791) | (4,905) |
Adjustment of the redeemable noncontrolling interest to fair value | (7,419) | 108,296 |
Effect of foreign currency translation attributable to redeemable noncontrolling interest | (6,468) | 2,555 |
Deconsolidation upon sale of redeemable noncontrolling interest | 5,535 | |
Balance, end of period | $ 0 | $ 151,978 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets held for sale | $ 46,717 | $ 26,664 | ||
Investment in receivable portfolios, carrying amount | $ 3,283,984 | 3,137,893 | $ 2,890,613 | $ 2,382,809 |
Fluctuation in discount rate (basis points) | 1.00% | |||
Deferred court costs, net | $ 100,172 | 95,918 | ||
Unamortized debt discount | 30,308 | 36,361 | ||
Senior notes, carrying value | 308,750 | 325,000 | ||
United States | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Decrease of the fair value | 65,600 | |||
Europe | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Decrease of the fair value | 77,300 | |||
Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Convertible and exchangeable senior notes, carrying value | 642,547 | 619,639 | ||
Secured Debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior notes, carrying value | 1,129,039 | 1,111,399 | ||
Level 2 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value estimate of convertible senior notes incorporates quoted market prices | 693,708 | 553,744 | ||
Cabot senior secured notes | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior notes, carrying value | 1,129,039 | |||
Cabot senior secured notes | Secured Debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior notes, carrying value | 1,127,435 | 1,109,922 | ||
Cabot senior secured notes | Level 2 | Secured Debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior notes, estimated fair value | 1,170,945 | 1,036,905 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment in receivable portfolios, carrying amount | 3,283,984 | 3,137,893 | ||
Fair Value | Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment in receivable portfolios, estimated fair value | $ 3,464,050 | $ 3,525,861 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Financial Instruments Not Required to Be Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in receivable portfolios, carrying amount | $ 3,283,984 | $ 3,137,893 | $ 2,890,613 | $ 2,382,809 |
Deferred court costs | 100,172 | 95,918 | ||
Senior notes, carrying value | 308,750 | 325,000 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in receivable portfolios, carrying amount | 3,283,984 | 3,137,893 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities | Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Investment in receivable portfolios, estimated fair value | 3,464,050 | 3,525,861 | ||
Senior Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Convertible and exchangeable senior notes, carrying value | 642,547 | 619,639 | ||
Secured Debt | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Senior notes, carrying value | 1,129,039 | 1,111,399 | ||
Level 2 | Senior Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Convertible and exchangeable senior notes, estimated fair value | 693,708 | 553,744 | ||
Cabot senior secured notes | Senior Notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Senior notes, carrying value | 1,129,039 | |||
Cabot senior secured notes | Secured Debt | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Senior notes, carrying value | 1,127,435 | 1,109,922 | ||
Cabot senior secured notes | Level 2 | Secured Debt | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Senior notes, estimated fair value | $ 1,170,945 | $ 1,036,905 |
Derivatives and Hedging Instr_3
Derivatives and Hedging Instruments - Summary of Fair Value of Derivative Instruments as Recorded in Company's Consolidated Statements of Financial Condition (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Designated as Hedging Instrument | Other assets | Interest rate cap contracts | ||
Derivative [Line Items] | ||
Interest rate cap contracts | $ 2,460 | $ 2,023 |
Designated as Hedging Instrument | Other assets | Foreign currency exchange contracts | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts | 443 | |
Designated as Hedging Instrument | Other liabilities | Foreign currency exchange contracts | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts | (237) | |
Designated as Hedging Instrument | Other liabilities | Interest rate swap agreements | ||
Derivative [Line Items] | ||
Interest rate swap agreements | (9,116) | (4,881) |
Not Designated as Hedging Instruments | Other assets | Foreign currency exchange contracts | ||
Derivative [Line Items] | ||
Foreign currency exchange contracts | $ 1,030 | $ 0 |
Derivatives and Hedging Instr_4
Derivatives and Hedging Instruments - Additional Information (Detail) € in Millions, £ in Millions | Aug. 03, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019EUR (€)instrument | Dec. 31, 2019USD ($)instrument | Dec. 31, 2019GBP (£)instrument | May 08, 2018GBP (£) |
Cash Flow Hedges | Foreign currency exchange contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 13,800,000 | |||||||
Net derivative gain (loss) included in OCI to be reclassified into earnings | $ 400,000 | |||||||
Derivative gain (loss) reclassified from OCI into earnings as a result of forecasted transactions | $ 0 | $ 0 | $ 0 | |||||
Cash Flow Hedges | Interest rate swap agreements | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 331,700,000 | |||||||
Number of interest rate cap contracts | instrument | 4 | 4 | 4 | |||||
Cash Flow Hedges | Interest rate cap contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 913,000,000 | |||||||
Number of interest rate cap contracts | instrument | 3 | 3 | 3 | |||||
Not Designated as Hedging Instruments | Foreign currency exchange contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | £ | £ 176 | |||||||
Loss on forward contract settlement | $ 9,300,000 | |||||||
Minimum | Not Designated as Hedging Instruments | Cash Flow Hedges | ||||||||
Derivative [Line Items] | ||||||||
Derivative term of contract | 1 month | |||||||
Maximum | Not Designated as Hedging Instruments | Cash Flow Hedges | ||||||||
Derivative [Line Items] | ||||||||
Derivative term of contract | 3 months | |||||||
2018 Caps | Cash Flow Hedges | Interest rate cap contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | $ 464,100,000 | £ 350 | ||||||
2019 Cap | Cash Flow Hedges | Interest rate cap contracts | ||||||||
Derivative [Line Items] | ||||||||
Derivative notional amount | € 400 | $ 448,900,000 |
Derivatives and Hedging Instr_5
Derivatives and Hedging Instruments - Summary of Effects of Derivatives on Cash Flow Hedging Relationships in Company's Statements of Income, Derivatives Designated as Hedging Instruments (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Gain (Loss) Recognized in OCI | $ (7,658) | $ 1,242 | |
Cash Flow Hedges | Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Gain (Loss) Recognized in OCI | $ 1,100 | ||
Gain (Loss) Recognized in OCI | (1,253) | ||
Cash Flow Hedges | Foreign currency exchange contracts | Salaries and employee benefits | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from OCI into Income | 383 | ||
Gain (Loss) Reclassified from OCI into Income | 794 | ||
Cash Flow Hedges | Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Gain (Loss) Recognized in OCI | (56) | ||
Gain (Loss) Recognized in OCI | (100) | ||
Cash Flow Hedges | Foreign currency exchange contracts | General and administrative expenses | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from OCI into Income | (19) | ||
Gain (Loss) Reclassified from OCI into Income | 2 | ||
Cash Flow Hedges | Interest rate swap agreements | |||
Derivative [Line Items] | |||
Gain (Loss) Recognized in OCI | (6,347) | ||
Gain (Loss) Recognized in OCI | (5,228) | ||
Cash Flow Hedges | Interest rate swap agreements | Interest expense | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from OCI into Income | (2,560) | ||
Gain (Loss) Reclassified from OCI into Income | (384) | ||
Cash Flow Hedges | Interest rate cap contracts | |||
Derivative [Line Items] | |||
Gain (Loss) Recognized in OCI | (1,752) | ||
Gain (Loss) Recognized in OCI | (643) | ||
Cash Flow Hedges | Interest rate cap contracts | Interest expense | |||
Derivative [Line Items] | |||
Gain (Loss) Reclassified from OCI into Income | $ 146 | ||
Gain (Loss) Reclassified from OCI into Income | $ 0 |
Derivatives and Hedging Instr_6
Derivatives and Hedging Instruments Derivatives and Hedging Instruments - Summary of Effects of Derivatives on Cash Flow Hedging Relationships in Company's Statements of Income, Derivatives Not Designated as Hedging Instruments (Details) - Not Designated as Hedging Instruments - Cash Flow Hedges - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other (expense) income | Foreign currency exchange contracts | |||
Derivative [Line Items] | |||
Amount of Derivative Gain (Loss) Recognized in Income | $ (2,959) | $ (9,221) | $ 1,755 |
Interest expense | Interest rate cap contracts | |||
Derivative [Line Items] | |||
Amount of Derivative Gain (Loss) Recognized in Income | 0 | (1,568) | 2,026 |
Interest expense | Interest rate swap agreements | |||
Derivative [Line Items] | |||
Amount of Derivative Gain (Loss) Recognized in Income | $ 0 | $ 0 | $ 110 |
Investment in Receivable Port_3
Investment in Receivable Portfolios, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Face value of receivable portfolios | $ 11,600,000 | $ 8,500,000 | |
Purchase price of receivable portfolios | $ 1,046,696 | $ 1,131,898 | $ 1,058,235 |
Purchase cost as a percentage of face value | 8.60% | 13.30% | |
Estimated future collections at acquisition for receivable portfolios | $ 2,100,000 | $ 2,300,000 | |
Zero basis revenue | $ (83,600) | $ 125,200 | $ 144,100 |
Investment in Receivable Port_4
Investment in Receivable Portfolios, Net - Summary of Accretable Yield and an Estimate of Zero Basis Future Cash Flows (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield and Estimate of Zero Basis Future Cash Flows Movement Schedule [Roll Forward] | |||
Beginning balance | $ 4,026,206 | $ 4,064,701 | |
Revenue from receivable portfolios | (1,269,288) | (1,167,132) | $ (1,053,373) |
Provision for (reversal of) allowances on receivable portfolios, net | 8,108 | (41,473) | (41,236) |
Net additions on existing portfolios | 524,964 | 162,840 | |
Additions for current purchases, net | 1,081,774 | 1,155,451 | |
Effect of foreign currency translation | 77,307 | (148,181) | |
Ending balance | 4,449,071 | 4,026,206 | 4,064,701 |
Accretable Yield | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield and Estimate of Zero Basis Future Cash Flows Movement Schedule [Roll Forward] | |||
Beginning balance | 3,773,171 | 3,695,069 | |
Revenue from receivable portfolios | (1,185,681) | (1,041,947) | |
Provision for (reversal of) allowances on receivable portfolios, net | 16,734 | (32,429) | |
Net additions on existing portfolios | 549,253 | 144,726 | |
Additions for current purchases, net | 1,081,774 | 1,155,451 | |
Effect of foreign currency translation | 77,340 | (147,699) | |
Ending balance | 4,312,591 | 3,773,171 | 3,695,069 |
Estimate of Zero Basis Cash Flows | |||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield and Estimate of Zero Basis Future Cash Flows Movement Schedule [Roll Forward] | |||
Beginning balance | 253,035 | 369,632 | |
Revenue from receivable portfolios | (83,607) | (125,185) | |
Provision for (reversal of) allowances on receivable portfolios, net | (8,626) | (9,044) | |
Net additions on existing portfolios | (24,289) | 18,114 | |
Additions for current purchases, net | 0 | 0 | |
Effect of foreign currency translation | (33) | (482) | |
Ending balance | $ 136,480 | $ 253,035 | $ 369,632 |
Investment in Receivable Port_5
Investment in Receivable Portfolios, Net - Summary of Changes in Balance of Investment in Receivable Portfolios (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investment in Receivables Portfolio [Roll Forward] | |||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | $ 3,137,893 | $ 2,890,613 | $ 3,137,893 | $ 2,890,613 | $ 2,382,809 | ||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Purchases Of Receivable Portfolios | 1,046,696 | 1,131,898 | 1,058,235 | ||||||||
Transfer of portfolios | 0 | ||||||||||
Deconsolidation of receivable portfolios | (51,935) | ||||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Disposals Or Transfers To Held-For-Sale | (11,495) | (12,456) | (13,188) | ||||||||
Collections on receivable portfolios | $ (498,799) | $ (499,395) | $ (514,881) | (513,853) | $ (483,582) | $ (498,843) | $ (496,093) | (489,102) | (2,026,928) | (1,967,620) | (1,767,644) |
Put-backs and Recalls | (11,591) | (14,429) | (2,871) | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Foreign Currency Translation Adjustment Gain (Loss) | 38,800 | (98,718) | 138,663 | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Revenue Recognized | 1,269,288 | 1,167,132 | 1,053,373 | ||||||||
Portfolio (allowance) reversals, net | (8,108) | 41,473 | 41,236 | ||||||||
Reclassification from prior period | 0 | ||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | 3,283,984 | 3,137,893 | $ 3,283,984 | $ 3,137,893 | $ 2,890,613 | ||||||
Revenue as a percentage of collections | 62.60% | 59.30% | 59.60% | ||||||||
Accrual Basis Portfolios [Member] | |||||||||||
Investment in Receivables Portfolio [Roll Forward] | |||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | 3,129,502 | 2,879,170 | $ 3,129,502 | $ 2,879,170 | $ 2,368,366 | ||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Purchases Of Receivable Portfolios | 1,046,696 | 1,131,898 | 1,057,066 | ||||||||
Transfer of portfolios | (78,980) | ||||||||||
Deconsolidation of receivable portfolios | (51,935) | ||||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Disposals Or Transfers To Held-For-Sale | (6,178) | (10,852) | (12,695) | ||||||||
Collections on receivable portfolios | (1,930,539) | (1,832,539) | (1,613,351) | ||||||||
Put-backs and Recalls | (11,566) | (14,253) | (2,577) | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Foreign Currency Translation Adjustment Gain (Loss) | 37,224 | (98,298) | 138,828 | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Revenue Recognized | 1,185,681 | 1,041,947 | 909,239 | ||||||||
Portfolio (allowance) reversals, net | (16,734) | 32,429 | 34,294 | ||||||||
Reclassification from prior period | 0 | ||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | 3,204,535 | 3,129,502 | $ 3,204,535 | $ 3,129,502 | $ 2,879,170 | ||||||
Revenue as a percentage of collections | 61.40% | 56.90% | 56.40% | ||||||||
Cost Recovery Portfolios [Member] | |||||||||||
Investment in Receivables Portfolio [Roll Forward] | |||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | 8,391 | 11,443 | $ 8,391 | $ 11,443 | $ 14,443 | ||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Purchases Of Receivable Portfolios | 0 | 0 | 1,169 | ||||||||
Transfer of portfolios | 78,980 | ||||||||||
Deconsolidation of receivable portfolios | 0 | ||||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Disposals Or Transfers To Held-For-Sale | (5,317) | (1,604) | (493) | ||||||||
Collections on receivable portfolios | (4,201) | (1,826) | (3,511) | ||||||||
Put-backs and Recalls | 0 | 0 | 0 | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Foreign Currency Translation Adjustment Gain (Loss) | 1,596 | (420) | (165) | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Revenue Recognized | 0 | 0 | 0 | ||||||||
Portfolio (allowance) reversals, net | 0 | 0 | 0 | ||||||||
Reclassification from prior period | 798 | ||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | 79,449 | 8,391 | $ 79,449 | $ 8,391 | $ 11,443 | ||||||
Revenue as a percentage of collections | 0.00% | 0.00% | 0.00% | ||||||||
Zero Basis Portfolios [Member] | |||||||||||
Investment in Receivables Portfolio [Roll Forward] | |||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Purchases Of Receivable Portfolios | 0 | 0 | 0 | ||||||||
Transfer of portfolios | 0 | ||||||||||
Deconsolidation of receivable portfolios | 0 | ||||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Disposals Or Transfers To Held-For-Sale | 0 | 0 | 0 | ||||||||
Collections on receivable portfolios | (92,188) | (133,255) | (150,782) | ||||||||
Put-backs and Recalls | (25) | (176) | (294) | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Foreign Currency Translation Adjustment Gain (Loss) | (20) | 0 | 0 | ||||||||
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Revenue Recognized | 83,607 | 125,185 | 144,134 | ||||||||
Portfolio (allowance) reversals, net | 8,626 | 9,044 | 6,942 | ||||||||
Reclassification from prior period | (798) | ||||||||||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Carrying Amount, Net | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Revenue as a percentage of collections | 90.70% | 93.90% | 95.60% |
Investment in Receivable Port_6
Investment in Receivable Portfolios, Net - Summary of Change in Valuation Allowance for Investment in Receivable Portfolios (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Receivable Portfolio, Valuation Allowance [Roll Forward] | ||
Balance at beginning of period | $ 60,631 | $ 102,576 |
Provision for portfolio allowances | 36,806 | 14,421 |
Reversal of prior allowances | (28,698) | (55,894) |
Effect of foreign currency translation | 1,776 | (472) |
Baycorp Transaction | (1,036) | |
Balance at end of period | $ 69,479 | $ 60,631 |
Deferred Court Costs, Net - Sch
Deferred Court Costs, Net - Schedule of Deferred Court Costs (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Court costs advanced | $ 891,207 | $ 828,713 | ||
Court costs recovered | (369,043) | (336,335) | ||
Court costs reserve | (421,992) | (396,460) | $ (364,015) | $ (327,926) |
Deferred court costs | $ 100,172 | $ 95,918 |
Deferred Court Costs, Net - S_2
Deferred Court Costs, Net - Schedule of Court Cost Reserve (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Roll Forward] | |||
Balance at beginning of period | $ (396,460) | $ (364,015) | $ (327,926) |
Provision for court costs | (82,987) | (90,026) | (82,702) |
Charge-offs | 60,618 | 53,383 | 50,743 |
Effect of foreign currency translation | (3,163) | 4,198 | (4,130) |
Balance at end of period | $ (421,992) | $ (396,460) | $ (364,015) |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 230,584 | ||
Property, plant, and equipment gross | $ 190,081 | ||
Less: accumulated depreciation and amortization | (70,030) | ||
Property and equipment, net | 120,051 | ||
Less: accumulated depreciation and amortization | (115,066) | ||
Property and equipment, net | 115,518 | ||
Depreciation and amortization expense | 33,300 | 29,500 | $ 31,100 |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 136,426 | 156,769 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 37,245 | 28,775 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 10,428 | 17,335 | |
Telecommunications equipment and other | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3,893 | 1,866 | |
Construction in process | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,089 | $ 25,839 |
Other Assets (Detail)
Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Operating lease right-of-use assets | $ 75,254 | |
Identifiable intangible assets, net | 51,371 | $ 60,581 |
Assets held for sale | 46,717 | 26,664 |
Service fee receivables | 27,705 | 28,035 |
Deferred tax assets | 24,134 | 24,910 |
Prepaid expenses | 22,272 | 24,989 |
Other financial receivables | 17,308 | 47,363 |
Other | 64,462 | 44,460 |
Total | $ 329,223 | $ 257,002 |
Borrowings - Components of Debt
Borrowings - Components of Debt (Detail) $ in Thousands, £ in Millions | Dec. 31, 2019USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Senior secured notes | $ 308,750 | $ 325,000 | |
Encore convertible and exchangeable notes | 672,855 | 656,000 | |
Less: debt discount | (30,308) | (36,361) | |
Other debt | 54,151 | 107,920 | |
Finance lease liabilities | 8,121 | ||
Finance lease liabilities | 7,563 | ||
Debt and capital lease obligations, before debt issuance costs | 3,554,522 | 3,537,942 | |
Less: debt issuance costs, net of amortization | (41,325) | (47,309) | |
Total | 3,513,197 | 3,490,633 | |
Encore revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings for credit facility | 492,000 | 429,000 | |
Cabot senior revolving credit facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings for credit facility | 285,749 | £ 215.5 | 298,005 |
Cabot securitisation senior facility | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings for credit facility | 445,837 | ||
Cabot senior secured notes | |||
Debt Instrument [Line Items] | |||
Senior secured notes | 1,111,399 | ||
Less: debt discount | (1,604) | (1,477) | |
Term Loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 171,677 | $ 195,056 | |
Other debt | $ 171,700 |
Borrowings - Encore Revolving C
Borrowings - Encore Revolving Credit Facility and Term Loan Facility (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Percentage to be added to base rate for alternate base rate | 0.50% | |
Percentage to be added to adjusted base rate for alternate base rate | 1.00% | |
Term loan facility | $ 54,151,000 | $ 107,920,000 |
Principal amortization in 2020 | 197,041,000 | |
Principal amortization in 2021 | $ 900,114,000 | |
Borrowing base as percentage of eligible estimated collection range end | 35.00% | |
Eligible estimated remaining collections for consumer receivables | 55.00% | |
Maximum cash flow leverage ratio | 300.00% | |
Maximum cash flow secured leverage ratio | 200.00% | |
Minimum interest coverage ratio | 175.00% | |
Maximum senior secured notes | $ 350,000,000 | |
Allowance of additional unsecured indebtedness | 1,100,000,000 | |
Company's repurchases, common stock | $ 150,000,000 | |
Percentage of acquisitions excluded | 50.00% | |
Acquisition limit | $ 225,000,000 | |
Maximum percentage of consolidated net worth | 200.00% | |
Basket allowed for investments under laws of Canada | $ 50,000,000 | |
Weighted average interest rate | 5.27% | 5.01% |
Minimum | ||
Debt Instrument [Line Items] | ||
Maximum cash flow leverage ratio | 125.00% | |
Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Junior Lien Portion | ||
Debt Instrument [Line Items] | ||
Allowance of additional unsecured indebtedness | $ 400,000,000 | |
Revolving Credit Facility One | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | $ 884,200,000 | |
Revolving Credit Facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Revolving Credit Facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Term Loan One | ||
Debt Instrument [Line Items] | ||
Term loan facility | $ 194,600,000 | |
Principal amortization in 2020 | 15,300,000 | |
Principal amortization in 2021 | $ 15,300,000 | |
Term Loan One | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.50% | |
Term Loan One | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Term Loan One | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Term Loan One | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 2.00% | |
Encore revolving credit facility | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings for credit facility | $ 492,000,000 | $ 429,000,000 |
Restated Credit Agreement | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Available borrowing capacity | $ 272,300,000 |
Borrowings - Encore Senior Secu
Borrowings - Encore Senior Secured Notes (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | |||
Encore convertible and exchangeable notes | $ 672,855,000 | $ 656,000,000 | |
Senior secured notes | $ 308,750,000 | $ 325,000,000 | |
Basis spread over the current Treasury Rate (percent) | 0.50% | ||
2017 Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Encore convertible and exchangeable notes | $ 325,000,000 | ||
Debt instrument, interest rate (percent) | 5.625% | ||
Senior Secured Notes, periodic principal repayment | $ 16,300,000 |
Borrowings - Encore Convertible
Borrowings - Encore Convertible Notes and Exchangeable Notes (Detail) | 1 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 20, 2018 | Mar. 31, 2017USD ($) | Mar. 31, 2015USD ($) | Jul. 31, 2013USD ($) | |
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 672,855,000 | $ 656,000,000 | ||||||
Unamortized debt discount | (30,308,000) | (36,361,000) | ||||||
Total interest expense | 3,523,000 | 11,710,000 | $ 0 | |||||
Convertible Notes | 2020 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 89,355,000 | 172,500,000 | ||||||
Stated interest rate (percent) | 3.00% | |||||||
Extinguishment of debt | $ 83,100,000 | |||||||
Payment for debt extinguishment | 85,000,000 | |||||||
Loss on extinguishment of debt | 1,700,000 | |||||||
Write off of deferred debt issuance cost | 400,000 | |||||||
Initial conversion price (in dollars per share) | $ / shares | $ 45.72 | |||||||
Closing stock price at date of issuance (in dollars per share) | $ / shares | $ 33.35 | |||||||
Conversion or exchange rate (shares per $1,000 principal amount) | 0.0218718 | |||||||
Debt component | $ 140,247,000 | |||||||
Equity component | 32,253,000 | |||||||
Equity issuance cost | $ 1,106,000 | |||||||
Effective interest rate | 6.35% | |||||||
Equity component | $ 32,253,000 | |||||||
Convertible Notes | 2021 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 161,000,000 | 161,000,000 | $ 161,000,000 | |||||
Stated interest rate (percent) | 2.875% | 2.875% | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 59.39 | |||||||
Closing stock price at date of issuance (in dollars per share) | $ / shares | $ 47.51 | |||||||
Conversion or exchange rate (shares per $1,000 principal amount) | 0.0168386 | |||||||
Debt component | $ 143,645,000 | |||||||
Equity component | 17,355,000 | |||||||
Equity issuance cost | $ 581,000 | |||||||
Effective interest rate | 4.70% | |||||||
Equity component | $ 17,355,000 | |||||||
Convertible Notes | 2022 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 150,000,000 | 150,000,000 | $ 150,000,000 | |||||
Stated interest rate (percent) | 3.25% | 3.25% | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 45.57 | |||||||
Closing stock price at date of issuance (in dollars per share) | $ / shares | $ 35.05 | |||||||
Conversion or exchange rate (shares per $1,000 principal amount) | 0.0219467 | |||||||
Debt component | $ 137,266,000 | |||||||
Equity component | 12,734,000 | |||||||
Equity issuance cost | $ 398,000 | |||||||
Effective interest rate | 5.20% | |||||||
Equity component | $ 12,734,000 | |||||||
Convertible Notes | 2023 Senior Secured Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 44.62 | |||||||
Convertible Notes | 2025 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 100,000,000 | $ 100,000,000 | 0 | |||||
Stated interest rate (percent) | 3.25% | 3.25% | ||||||
Initial conversion price (in dollars per share) | $ / shares | $ 40 | |||||||
Closing stock price at date of issuance (in dollars per share) | $ / shares | $ 32 | |||||||
Conversion or exchange rate (shares per $1,000 principal amount) | 0.025 | |||||||
Debt component | $ 91,024,000 | |||||||
Equity component | 8,976,000 | |||||||
Equity issuance cost | $ 224,000 | |||||||
Effective interest rate | 5.00% | |||||||
Equity component | $ 8,976,000 | |||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Liability component—principal amount | 642,547,000 | 619,639,000 | ||||||
Senior Notes | 2023 Senior Secured Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 172,500,000 | 172,500,000 | ||||||
Stated interest rate (percent) | 4.50% | |||||||
Initial conversion price (in dollars per share) | $ / shares | $ 44.62 | |||||||
Closing stock price at date of issuance (in dollars per share) | $ / shares | $ 36.45 | |||||||
Conversion or exchange rate (shares per $1,000 principal amount) | 0.022409 | |||||||
Debt component | $ 157,971,000 | |||||||
Equity component | 14,009,000 | |||||||
Equity issuance cost | $ 0 | |||||||
Effective interest rate | 6.50% | |||||||
Equity component | $ 14,009,000 | |||||||
Call Option | 2020 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from hedge, financing activities | $ 1,800,000 | |||||||
Convertible Notes And Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Equity component | 83,127,000 | 76,351,000 | ||||||
Liability component—principal amount | 672,855,000 | 656,000,000 | ||||||
Unamortized debt discount | (30,308,000) | (36,361,000) | ||||||
Liability component—net carrying amount | 642,547,000 | 619,639,000 | ||||||
Equity component | 83,127,000 | 76,351,000 | ||||||
Interest expense—stated coupon rate | 23,845,000 | 17,518,000 | ||||||
Interest income— amortization of debt discount (accretion of debt premium) | 12,780,000 | 10,888,000 | ||||||
Total interest expense | $ 36,625,000 | $ 28,406,000 | ||||||
Subsidiaries | Encore Finance | ||||||||
Debt Instrument [Line Items] | ||||||||
Ownership percentage | 100.00% | |||||||
Encore Finance | Convertible Notes | 2020 Convertible Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible senior notes sold | $ 172,500,000 | |||||||
Stated interest rate (percent) | 3.00% |
Borrowings - Hedge Transactions
Borrowings - Hedge Transactions (Details) - Convertible Notes $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
2020 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 18,113 |
Conversion or exchange price (in dollars per share) | $ 45.72 |
2020 Convertible Senior Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion or exchange price (in dollars per share) | $ 61.55 |
2021 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 19,545 |
Conversion or exchange price (in dollars per share) | $ 59.39 |
2021 Convertible Senior Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion or exchange price (in dollars per share) | $ 83.14 |
2023 Senior Secured Notes | |
Debt Instrument [Line Items] | |
Cost of the hedge transaction(s) | $ | $ 17,785 |
Conversion or exchange price (in dollars per share) | $ 44.62 |
2023 Senior Secured Notes | Hedging of Convertible Debt Instrument | |
Debt Instrument [Line Items] | |
Conversion or exchange price (in dollars per share) | $ 62.48 |
Borrowings - Cabot Senior Debt
Borrowings - Cabot Senior Debt (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||||
Senior secured notes | $ 325,000 | $ 308,750 | ||||||
Convertible senior notes sold | 656,000 | $ 672,855 | ||||||
Debt issuance and redemption costs | $ 9,000 | |||||||
Total interest expense | 3,523 | 11,710 | $ 0 | |||||
Senior Notes | Senior secured notes due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate (percent) | 7.50% | 7.50% | ||||||
Senior Notes | 2024 Cabot Floating Rate Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate (percent) | 6.375% | 6.375% | ||||||
Convertible senior notes sold | € 400,000,000 | $ 452,000 | ||||||
Senior Notes | Cabot senior secured notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | $ 1,129,039 | |||||||
Total interest expense | $ 77,429 | 85,115 | ||||||
Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 1,111,399 | 1,129,039 | ||||||
Secured Debt | Floating rate senior secured notes due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 0 | 448,921 | ||||||
Secured Debt | Floating rate senior secured notes due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 356,067 | 0 | ||||||
Secured Debt | Senior secured notes due 2023 | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 653,355 | $ 680,118 | ||||||
Debt instrument, interest rate (percent) | 7.50% | 7.50% | ||||||
Convertible senior notes sold | € 512,900,000 | $ 651,300 | ||||||
Secured Debt | Senior secured notes due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Extinguishment of debt | 310,000,000 | $ 350,300 | ||||||
Secured Debt | Senior secured notes due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 101,977 | $ 0 | ||||||
Debt instrument, interest rate (percent) | 6.50% | 6.50% | ||||||
Extinguishment of debt | € 80,000,000 | $ 101,600 | ||||||
Secured Debt | Cabot senior secured notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | 1,109,922 | $ 1,127,435 | ||||||
Three-Month EURIBOR | Secured Debt | Floating rate senior secured notes due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 6.375% | |||||||
Three-Month EURIBOR | Secured Debt | Floating rate senior secured notes due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 5.875% | |||||||
Interest expense | Senior Notes | Cabot senior secured notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest expense—stated coupon rate | $ 76,897 | 84,772 | ||||||
Interest income— amortization of debt discount (accretion of debt premium) | $ 532 | 343 | ||||||
Cabot senior secured notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes | $ 1,111,399 |
Borrowings - Cabot Senior Revol
Borrowings - Cabot Senior Revolving Credit Facility & Securitisation Senior Facility (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019GBP (£) | Nov. 01, 2018GBP (£) | |
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 5.27% | 5.01% | ||
Assets | $ | $ 4,909,950 | $ 4,631,875 | ||
Cabot senior revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Maximum loan to value ratio | 75.00% | |||
Outstanding borrowings for credit facility | $ 285,749 | $ 298,005 | £ 215,500,000 | |
Weighted average interest rate | 3.52% | 3.73% | ||
Available capacity | $ 211,500 | 159,500,000 | ||
Senior Loans | Cabot senior revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Maximum loan to value ratio | 27.50% | |||
Cabot Credit Agreement, Tranche with Expiration in September 2022 | Secured Debt | Cabot senior revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | 375,000,000 | |||
Cabot Credit Agreement, Tranche with Expiration in September 2022 | LIBOR | Secured Debt | Cabot senior revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, initial spread percentage | 3.00% | |||
Cabot securitisation senior facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | 300,000,000 | |||
Outstanding borrowings for credit facility | $ 464,100 | 350,000,000 | ||
Amount drawn on facility | 300,000,000 | |||
Assets | $ 453,800 | 342,200,000 | ||
Long-term debt, weighted average interest rate, over time (percentage) | 3.74% | 3.46% | ||
Cabot securitisation senior facility | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, initial spread percentage | 2.85% | |||
Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | £ 50,000,000 | |||
Assets | $ 71,700 | 54,100,000 | ||
Available borrowing capacity | £ 50,000,000 | |||
Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, initial spread percentage | 4.075% |
Borrowings - Summary of Debt an
Borrowings - Summary of Debt and Capital Lease Obligations Maturities (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Finance lease liabilities | $ 8,121 |
Principal amortization in 2020 | 197,041 |
Principal amortization in 2021 | 900,114 |
Principal amortization in 2020 | 221,768 |
Principal amortization in 2022 | 1,669,840 |
Principal amortization in 2023 | 497,671 |
Thereafter | 100,000 |
Total | $ 3,586,434 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 12.6 | $ 13 | $ 10.4 | |
Tax benefit from stock-based compensation arrangements | 1.2 | 1.3 | 3.6 | |
Cash received from option exercise | 0.3 | 0.7 | 0.5 | |
Stock options intrinsic value | $ 1 | 0.4 | 0.8 | |
Performance stock options, threshold trading days | 20 days | |||
Performance stock options, threshold increase from closing price on date of grant | 25.00% | |||
Unrecognized compensation cost, expected period of recognition | 1 year 3 months 18 days | |||
Unrecognized compensation cost, non vested shares | $ 13 | |||
Fair value of restricted stock units and restricted stock awards vested | $ 8.9 | $ 8.8 | $ 7.8 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation, contractual term | 10 years | |||
Performance Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation cost related to non-vested performance stock options | $ 0.1 | |||
Unrecognized compensation cost, expected period of recognition | 2 months 12 days | |||
Minimum | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation, vesting period | 3 years | |||
Maximum | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation, vesting period | 5 years | |||
2017 Incentive Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for grant (in shares) | 5,713,571 | |||
Conversion ratio full value awards | 2.12 | |||
2017 Incentive Compensation Plan | Full Value Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Conversion ratio full value awards | 2.12 | |||
2017 Incentive Compensation Plan | Stock Options and Stock Appreciation Rights | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Conversion ratio full value awards | 1 | |||
2017 Plan and 2013 Plan | Performance Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation, vesting period | 3 years | |||
Share-based compensation, contractual term | 7 years | |||
Options performance measurement period | 4 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Number of Shares, Outstanding, Beginning Balance (in shares) | shares | 55,766 |
Number of Shares, Exercised (in shares) | shares | (46,600) |
Number of Shares, Outstanding, Ending Balance (in shares) | shares | 9,166 |
Number of Shares, Exercisable, Ending Balance (in shares) | shares | 9,166 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted Average Exercise Price, Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 15.21 |
Weighted Average Exercise Price, Exercised (in dollars per share) | $ / shares | 13.84 |
Weighted Average Exercise Price, Outstanding, Ending Balance (in dollars per share) | $ / shares | 22.17 |
Weighted Average Exercise Price, Exercisable, Ending Balance (in dollars per share) | $ / shares | $ 22.17 |
Weighted Average Remaining Contractual Term (in years), Outstanding | 2 years 3 months 3 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 2 years 3 months 3 days |
Aggregate intrinsic value, Outstanding | $ | $ 121 |
Aggregate intrinsic value, Exercisable | $ | $ 121 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Performance Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Number of Shares, Outstanding, Beginning Balance (in shares) | shares | 55,766 |
Number of Shares, Exercised (in shares) | shares | (46,600) |
Number of Shares, Outstanding, Ending Balance (in shares) | shares | 9,166 |
Number of Shares, Exercisable, Ending Balance (in shares) | shares | 9,166 |
Weighted Average Grant Date Fair Value | |
Weighted Average Exercise Price, Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 15.21 |
Weighted Average Exercise Price, Exercised (in dollars per share) | $ / shares | 13.84 |
Weighted Average Exercise Price, Outstanding, Ending Balance (in dollars per share) | $ / shares | 22.17 |
Weighted Average Exercise Price, Exercisable, Ending Balance (in dollars per share) | $ / shares | $ 22.17 |
Weighted Average Remaining Contractual Term (in years), Outstanding | 2 years 3 months 3 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 2 years 3 months 3 days |
Aggregate intrinsic value, Outstanding | $ | $ 121 |
Aggregate intrinsic value, Exercisable | $ | $ 121 |
Performance Stock Options | |
Number of Shares | |
Number of Shares, Outstanding, Beginning Balance (in shares) | shares | 216,582 |
Number of Shares, Exercised (in shares) | shares | (10,952) |
Number of Shares, Cancelled/Forfeited (in shares) | shares | (13,872) |
Number of Shares, Expired (in shares) | shares | (27,745) |
Number of Shares, Outstanding, Ending Balance (in shares) | shares | 164,013 |
Number of Shares, Vested or Expected to Vest (in shares) | shares | 163,024 |
Number of Shares, Exercisable, Ending Balance (in shares) | shares | 105,696 |
Weighted Average Grant Date Fair Value | |
Weighted Average Exercise Price, Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 31.54 |
Weighted Average Exercise Price, Exercised (in dollars per share) | $ / shares | 30.95 |
Weighted Average Exercise Price, Cancelled/Forfeited (in dollars per share) | $ / shares | 30.95 |
Weighted Average Exercise Price, Expired (in dollars per share) | $ / shares | 30.95 |
Weighted Average Exercise Price, Outstanding, Ending Balance (in dollars per share) | $ / shares | 31.73 |
Weighted Average Exercise Price, Vested and Expected to Vest (in dollars per share) | $ / shares | 31.73 |
Weighted Average Exercise Price, Exercisable, Ending Balance (in dollars per share) | $ / shares | $ 31.75 |
Weighted Average Remaining Contractual Term (in years), Outstanding | 4 years 2 months 15 days |
Weighted Average Remaining Contractual Term (in years), Vested or expected to vest | 4 years 2 months 15 days |
Weighted Average Remaining Contractual Term (in years), Exercisable | 4 years 2 months 15 days |
Aggregate intrinsic value, Outstanding | $ | $ 665 |
Aggregate intrinsic value, Vested or expected to vest | $ | 660 |
Aggregate intrinsic value, Exercisable | $ | $ 427 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock Awards (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Non-Vested Shares (1) | ||
Non-Vested Shares, Beginning Balance (in shares) | 859,932 | |
Non-Vested Shares, Awarded (in shares) | 569,872 | |
Non-Vested Shares, Vested (in shares) | (267,157) | |
Non-Vested Shares, Cancelled (in shares) | (240,117) | |
Non-Vested Shares, Ending Balance (in shares) | 922,530 | |
Weighted Average Grant Date Fair Value | ||
Weighted Average Grant Date Fair Value, Beginning Balance (in dollars per share) | $ 34.43 | |
Weighted Average Grant Date Fair Value, Awarded (in dollars per share) | 32.42 | |
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | 35.32 | |
Weighted Average Grant Date Fair Value, Cancelled (in dollars per share) | 32 | |
Weighted Average Grant Date Fair Value, Ending Balance (in dollars per share) | $ 33.11 | |
Performance Shares | ||
Weighted Average Grant Date Fair Value | ||
Maximum shares that could vest (percent) | 200.00% | |
Maximum number that could vest (in shares) | 1,171,334 | 1,218,359 |
Income Taxes Income Taxes - Inc
Income Taxes Income Taxes - Income Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 144,495 | $ 61,972 | $ 71,794 |
Foreign | 56,747 | 94,516 | 59,432 |
Income from continuing operations before income taxes | $ 201,242 | $ 156,488 | $ 131,226 |
Income Taxes Income Taxes - I_2
Income Taxes Income Taxes - Income Tax Provision for Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal | $ (2,917) | $ 23,254 | $ 9,969 |
State | (6,464) | 2,983 | (794) |
Foreign | 21,008 | 29,532 | 15,690 |
Total current income tax expense | 11,627 | 55,769 | 24,865 |
Federal | 27,640 | (10,447) | 16,563 |
State | 5,535 | (2,169) | 784 |
Foreign | (12,469) | 3,599 | 9,837 |
Total deferred income tax expense | 20,706 | (9,017) | 27,184 |
Provision for income taxes | $ 32,333 | $ 46,752 | $ 52,049 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rates (Detail) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal provision | 21.00% | 21.00% | 35.00% |
State provision | 0.20% | 0.10% | 0.50% |
Foreign rate differential | (2.20%) | (11.70%) | (20.00%) |
Transaction costs | 0.00% | 1.00% | 5.00% |
Permanent items | 0.00% | 1.10% | 10.20% |
Change in valuation allowance | (0.50%) | 17.70% | 8.20% |
Other | 0.00% | 0.70% | 0.80% |
Effective rate | 16.10% | 29.90% | 39.70% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Undistributed earnings | $ 151,300 | ||
Valuation allowance | 36,422 | $ 46,516 | |
Unrecognized tax benefits, including penalties and interest | 8,200 | 19,900 | $ 22,200 |
Net tax benefit from unrecognized tax benefits, if recognized | 7,600 | 13,000 | 9,900 |
Unrecognized tax benefits, income tax penalties and interest expense | 2,700 | 600 | $ 800 |
Unrecognized tax benefits, income tax penalties and interest accrued | 300 | $ 1,400 | |
Foreign Subsidiaries | |||
Income Taxes [Line Items] | |||
Net operating loss carry forward | 238,200 | ||
State and Local Jurisdiction | Domestic Subsidiaries | |||
Income Taxes [Line Items] | |||
Net operating loss carry forward | $ 2,200 | ||
Tax Holiday Through 2026 | Costa Rica | |||
Income Taxes [Line Items] | |||
Holiday tax rate | 100.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating losses | $ 36,236 | $ 42,013 |
Financing obligation | 18,023 | |
Accrued expenses | 10,050 | 17,715 |
Difference in basis of bond and loan costs | 4,194 | 3,728 |
Stock-based compensation | 2,882 | 2,796 |
State taxes | 1 | 174 |
Differences in income recognition related to receivable portfolios | 0 | 13,857 |
Prepaid expenses | 0 | 2,949 |
Other | 1,821 | 4,825 |
Total deferred tax assets | 73,207 | 88,057 |
Valuation allowance | (36,422) | (46,516) |
Total deferred tax assets net of valuation allowance | 36,785 | 41,541 |
Deferred tax liabilities: | ||
Deferred court costs | (23,682) | (23,484) |
Right-of-use asset | (14,422) | |
Difference in basis of depreciable and amortizable assets | (3,680) | (1,937) |
Prepaid expenses | (628) | 0 |
Other | (4,616) | (3,403) |
Total deferred tax liabilities | (47,028) | (28,824) |
Net deferred tax asset | $ (10,243) | |
Net deferred tax asset | $ 12,717 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefit (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning Balance | $ 18,552 | $ 20,020 | $ 18,945 |
Decreases related to prior year tax positions | (10,673) | ||
Increases related to prior year tax positions | 256 | ||
Increases related to current year tax positions | 4,442 | 1,958 | 5,902 |
Decreases related to settlements with taxing authorities | (1,920) | (461) | (228) |
Decreases related to current year tax positions | (4,599) | ||
Decrease related to expiration of statute of limitations | (2,493) | (3,221) | |
Ending Balance | $ 7,908 | $ 18,552 | $ 20,020 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease costs | $ 19,450 |
Amortization of right-of-use assets | 1,825 |
Finance Lease, Interest Expense | 563 |
Total lease costs | $ 21,838 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease right-of-use assets | $ 75,254 |
Finance lease right-of-use assets | 9,133 |
Total lease right-of-use assets | 84,387 |
Operating lease liabilities | 93,847 |
Finance lease liabilities | 8,121 |
Total lease liabilities | $ 101,968 |
Leases - Operating Information
Leases - Operating Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 123,477 |
Right-of-use assets obtained in exchange for new finance lease obligations | 5,299 |
Operating leases - operating cash flows | 14,874 |
Finance leases - operating cash flows | 295 |
Finance leases - financing cash flows | $ 1,898 |
Weighted-average remaining lease term, operating leases (years) | 8 years 1 month 6 days |
Weighted-average remaining lease term, finance leases (years) | 3 years 1 month 6 days |
Weighted-average discount rate, operating leases (percentage) | 5.30% |
Weighted-average discount rate, finance leases (percentage) | 4.70% |
Leases - Schedule of Lease Paym
Leases - Schedule of Lease Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Finance Lease, Liability, Payment, Due [Abstract] | |
2020 | $ 2,898 |
2021 | 2,736 |
2022 | 2,509 |
2023 | 597 |
2024 | 0 |
Thereafter | 0 |
Total undiscounted lease payments | 8,740 |
Less: imputed interest | (619) |
Finance lease liabilities | 8,121 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 | 17,898 |
2021 | 16,845 |
2022 | 13,726 |
2023 | 12,534 |
2024 | 12,275 |
Thereafter | 41,497 |
Total undiscounted lease payments | 114,775 |
Less: imputed interest | (20,928) |
Operating lease liabilities | 93,847 |
2020 | 20,796 |
2021 | 19,581 |
2022 | 16,235 |
2023 | 13,131 |
2024 | 12,275 |
Thereafter | 41,497 |
Total undiscounted lease payments | 123,515 |
Less: imputed interest | (21,547) |
Total lease liabilities | $ 101,968 |
Leases - Schedule of Lease Pa_2
Leases - Schedule of Lease Payments as of Prior Year End (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Capital Lease Obligations [Abstract] | |
Capital lease obligation, 2019 | $ 2,507 |
Capital lease obligation, 2020 | 1,983 |
Capital lease obligation, 2021 | 1,844 |
Capital lease obligation, 2022 | 1,630 |
Capital lease obligation, 2023 | 204 |
Capital lease obligation, Thereafter | 0 |
Total minimal leases payments, Capital Leases | 8,168 |
Less: interest | (605) |
Present value of minimal lease payments | 7,563 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Operating lease obligation, 2019 | 16,538 |
Operating lease obligation, 2020 | 13,850 |
Operating lease obligation, 2021 | 13,044 |
Operating lease obligation, 2022 | 11,737 |
Operating lease obligation, 2023 | 9,741 |
Operating lease obligation, Thereafter | 37,997 |
Total minimal leases payments, Operating Leases | 102,907 |
Total lease, 2019 | 19,045 |
Total lease, 2020 | 15,833 |
Total lease, 2021 | 14,888 |
Total lease, 2022 | 13,367 |
Total lease, 2023 | 9,945 |
Total lease, Thereafter | 37,997 |
Contractual Obligation, Total | $ 111,075 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Loss Contingencies [Line Items] | |
Material reserves for legal matters | $ 0 |
Purchase price of receivable portfolios | 2,400,000,000 |
Purchase price | 298,900,000 |
Estimated fair value, liability | $ 0 |
Maximum | |
Loss Contingencies [Line Items] | |
Purchase commitment term (years) | 1 year |
Segment Information - Narrative
Segment Information - Narrative (Detail) | 12 Months Ended |
Dec. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Segment Information - Schedule
Segment Information - Schedule of Geographical Areas of Which Company Operates (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 1,397,681 | $ 1,362,030 | $ 1,187,038 |
United States | |||
Segment Reporting Information [Line Items] | |||
Revenues | 817,693 | 709,493 | 665,564 |
Europe | |||
Segment Reporting Information [Line Items] | |||
Revenues | 520,433 | 556,265 | 427,655 |
Other geographies | |||
Segment Reporting Information [Line Items] | |||
Revenues | $ 59,555 | $ 96,272 | $ 93,819 |
Segment Information - Schedul_2
Segment Information - Schedule of Long-lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 120,051 | |
Property and equipment, net | $ 115,518 | |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 84,118 | |
Property and equipment, net | 76,791 | |
United Kingdom | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 28,602 | |
Property and equipment, net | 27,454 | |
Other foreign countries | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 7,331 | |
Property and equipment, net | 11,273 | |
International | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 35,933 | |
Property and equipment, net | $ 38,727 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangible Assets - Narrative (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Line Items] | |||
Goodwill impairment | $ 10,718,000 | $ 0 | $ 0 |
Amortization expense | 7,700,000 | $ 11,700,000 | $ 8,900,000 |
MCM And Cabot | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 0 |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangible Assets - Schedule of Reportable Segments by Reporting Units (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | |||
Balance at beginning of period: | $ 868,126 | $ 928,993 | |
Goodwill adjustment | 0 | (2,213) | |
Goodwill eliminated in connection with divestiture | 0 | (13,347) | |
Goodwill impairment | (10,718) | 0 | $ 0 |
Effect of foreign currency translation | 26,777 | (45,307) | |
Balance at end of period: | $ 884,185 | $ 868,126 | $ 928,993 |
Goodwill and Identifiable Int_5
Goodwill and Identifiable Intangible Assets - Summary of Acquired Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (27,559) | $ (28,684) |
Net Carrying Amount | 51,371 | |
Gross Carrying Amount | 78,930 | 89,265 |
Net Carrying Amount | 51,371 | 60,581 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 67,897 | 73,458 |
Accumulated Amortization | (18,191) | (17,025) |
Net Carrying Amount | 49,706 | 56,433 |
Developed technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,734 | 7,461 |
Accumulated Amortization | (4,124) | (6,446) |
Net Carrying Amount | 610 | 1,015 |
Trade name and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,299 | 8,346 |
Accumulated Amortization | (5,244) | (5,213) |
Net Carrying Amount | $ 1,055 | $ 3,133 |
Goodwill and Identifiable Int_6
Goodwill and Identifiable Intangible Assets - Weighted-Average Useful Lives of Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-average useful lives | 10 years |
Developed technologies | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-average useful lives | 5 years |
Trade name and other | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-average useful lives | 7 years |
Goodwill and Identifiable Int_7
Goodwill and Identifiable Intangible Assets - Estimated Future Amortization Expense (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 7,304 |
2021 | 7,168 |
2022 | 6,573 |
2023 | 6,187 |
2024 | 6,094 |
Thereafter | 18,045 |
Net Carrying Amount | $ 51,371 |
Quarterly Information (Unaudi_3
Quarterly Information (Unaudited) - Summary of Quarterly Financial Data for Periods (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Gross collections | $ 498,799 | $ 499,395 | $ 514,881 | $ 513,853 | $ 483,582 | $ 498,843 | $ 496,093 | $ 489,102 | $ 2,026,928 | $ 1,967,620 | $ 1,767,644 |
Total revenues, adjusted by net allowances | 347,794 | 355,936 | 346,874 | 347,077 | 348,721 | 336,774 | 349,747 | 326,788 | 1,405,789 | 1,320,557 | 1,145,802 |
Total operating expenses | 234,584 | 247,591 | 233,142 | 236,019 | 232,834 | 239,246 | 246,314 | 238,336 | 951,336 | 956,730 | 862,498 |
Income from continuing operations | 43,232 | 39,413 | 36,822 | 49,442 | 46,033 | 13,016 | 26,974 | 23,713 | 168,909 | 109,736 | 79,177 |
Net income | 43,232 | 39,413 | 36,822 | 49,442 | 46,033 | 13,016 | 26,974 | 23,713 | 168,909 | 109,736 | 78,978 |
Amounts attributable to Encore Capital Group, Inc.: | |||||||||||
Income from continuing operations | 43,085 | 38,869 | 36,661 | 49,254 | 47,036 | 20,725 | 26,298 | 21,827 | 167,869 | 115,886 | 83,427 |
Net income attributable to Encore Capital Group, Inc. stockholders | $ 43,085 | $ 38,869 | $ 36,661 | $ 49,254 | $ 47,036 | $ 20,725 | $ 26,298 | $ 21,827 | $ 167,869 | $ 115,886 | $ 83,228 |
Basic (USD per share) | $ 1.38 | $ 1.24 | $ 1.17 | $ 1.58 | $ 1.51 | $ 0.69 | $ 1.01 | $ 0.84 | $ 5.38 | $ 4.09 | $ 3.20 |
Diluted (USD per share) | $ 1.36 | $ 1.23 | $ 1.17 | $ 1.57 | $ 1.50 | $ 0.69 | $ 1 | $ 0.83 | $ 5.33 | $ 4.06 | $ 3.15 |
Subsequent Event (Details)
Subsequent Event (Details) - GBP (£) | Feb. 18, 2020 | Dec. 31, 2019 | Nov. 01, 2018 |
Cabot securitisation senior facility | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | £ 300,000,000 | ||
Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | £ 50,000,000 | ||
Subsequent Event | Cabot securitisation senior facility | |||
Subsequent Event [Line Items] | |||
Increase (decrease) in borrowing capacity | £ 50,000,000 | ||
Maximum borrowing capacity | 350,000,000 | ||
Proceeds from lines of credit | £ 50,000,000 | ||
Subsequent Event | Cabot securitisation senior facility | Sterling Overnight Index Average (SONIA) | Debt Instrument, Redemption, Period One | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate | 3.06% | ||
Subsequent Event | Cabot securitisation senior facility | Sterling Overnight Index Average (SONIA) | Debt Instrument, Redemption, Period Two | Minimum | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate | 0.00% | ||
Subsequent Event | Cabot securitisation senior facility | Sterling Overnight Index Average (SONIA) | Debt Instrument, Redemption, Period Two | Maximum | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Subsequent Event | Cabot Securitisation Non-Recourse Asset-Backed Senior Facility | |||
Subsequent Event [Line Items] | |||
Repayments of lines of credit | £ 50,000,000 |
Uncategorized Items - ecpg-2019
Label | Element | Value |
Redeemable Noncontrolling Interest, Equity, Carrying Amount | us-gaap_RedeemableNoncontrollingInterestEquityCarryingAmount | $ 0 |